In today’s briefing:
- NZ AIR Rights Almost Done – Discounted Vs Regional “Shut-In” Peers
- Hitachi Transport (9086 JP) – Deciphering Takeover Price by Newspaper Article Language
- Kotak Mahindra Bank (KMB IN): Foreign Room Increases; FTSE Inclusion in Sep Possible
- Razer’s Scheme: And that Is a Pass
- Razer Inc (1337 HK): Storm In A Tea Cup
- KOSPI 200 June Rebalancing: Nearly Finalized Results with 7 Adds/Deletes
- AKM (1639 HK): Pre-Cons Fulfilled; Possible Early August Payment
- LG Energy Fails Inclusion in LIT’s April Rebalancing & Faces 3M Lockup Release (3.7x ADTV) Today
- Kakao Pay IPO Lock-Up – IPO Was Great, Performance Since Then Has Been Tepid
- Beijing Enterprises Urban Resources (3718 HK): Potential Offer
NZ AIR Rights Almost Done – Discounted Vs Regional “Shut-In” Peers
- The NZ Air Rights Trade is nearly done. Last day of trading is today.
- The Rights were super cheap. They ran as NZ AIR ran a bit.
- Now it is the time to trade NZ AIR Shares vs Peers.
Hitachi Transport (9086 JP) – Deciphering Takeover Price by Newspaper Article Language
- Hitachi has been in the process of selling Hitachi Transport System (9086 JP). An article in the Nikkei Thursday last suggested a deal was imminent (both companies report 28 April).
- Bloomberg carried an article this morning with more numbers and implied arithmetic. Then they revised the language in the article.
- There is STILL room for different interpretations of likely deal price if one tries to parse all the info provided and match it with history. But we may be there.
Kotak Mahindra Bank (KMB IN): Foreign Room Increases; FTSE Inclusion in Sep Possible
- Kotak Mahindra Bank (KMB IN) is not a part of the FTSE All-World Index since the foreign room was less 20% over the last couple of years.
- Foreign room is 19.8% as of end March and small foreign selling is needed for Kotak Mahindra Bank to be added to the FTSE All-World Index at the September SAIR.
- If added to the FTSE All-World Index, passive trackers will need to buy 38.2m shares (US$861m; 11.1 days ADV; 22 days delivery volume) of Kotak Mahindra Bank (KMB IN).
Razer’s Scheme: And that Is a Pass
- Razer Inc (1337 HK)’s scheme was approved at today’s court meeting. The value test passed with 94.74% of the total disinterested shareholders voting in favour of the scheme.
- Despite our reservations about the headcount test, the scheme comfortably passed the headcount test with 465 for and just 16 against the scheme.
- At the last close and for the 20 May payment date, the gross and annualised spread to the offer is 3.7% and 56.1%, respectively.
Razer Inc (1337 HK): Storm In A Tea Cup
- Razer Inc (1337 HK)‘s Scheme was comfortably voted through by shareholders.
- The overarching risk to the transaction, that it may fail the headcount test, largely turned out to be a storm in a tea cup.
- Tomorrow is the last day of trading with payment under the Scheme on or before the 20 May. Index sell flows come at the close.
KOSPI 200 June Rebalancing: Nearly Finalized Results with 7 Adds/Deletes
- The review period for the KOSPI 200 June rebalancing ends this Friday. This June rebalancing will have seven additions and seven deletions.
- Additions: F&F (383220 KS), Meritz Fire (000060 KS), SD Biosensor (137310 KS), Iljin Hysolus (271940 KS), Hanil Cement (300720 KS), K Car (381970 KS), and Hana Tour (039130 KS).
- Deletions: CJ CGV (079160 KS), Yungjin Pharmaceutical (003520 KS), Bukwang Pharmaceutical (003000 KS), Sk Discovery (006120 KS), S&T Motiv (064960 KS), Cuckoo Holdings (192400 KS), and Nexen Tire (002350 KS).
AKM (1639 HK): Pre-Cons Fulfilled; Possible Early August Payment
- Flexible printed board player AKM Industrial (1639 HK) has announced the pre-conditions attached to the Scheme have now been fulfilled.
- The despatch of the Scheme Document has been delayed until the 10 June.
- Trading at a gross/annualised spread of 2.5/9.6%, including the FY21 final dividend, and payment in early August.
LG Energy Fails Inclusion in LIT’s April Rebalancing & Faces 3M Lockup Release (3.7x ADTV) Today
- Solactive Global X Lithium (LIT) made an ordinary rebalancing announcement. LG Energy fails to join the Index this time. The inclusion seems to have been pushed back to October.
- LG Energy’s short-term flow is likely to receive downward pressure from the 3M IPO lockups to be released today as it cannot expect additional passive inflows in the short term.
- These are 1.87M shares (3.7x ADTV). As the share price is still up more than 40% from the IPO price, their profit realization incentives are expected to be quite strong.
Kakao Pay IPO Lock-Up – IPO Was Great, Performance Since Then Has Been Tepid
- Kakao Pay (KP), one of South Korea’s largest payment and financial services apps, raised US$1.3bn in its South Korean IPO in Nov 21. Its 6 month lock-up will expire soon.
- The stock more than doubled on listing, providing one of the best first day returns in 2021. However, its performance since then hasn’t been all that great.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
Beijing Enterprises Urban Resources (3718 HK): Potential Offer
- Beijing Enterprises Water Group (371 HK) (BEW) and Beijing Enterprises Urban Resources (3718 HK) (BEUR) were both suspended this morning, the latter pursuant to the Takeovers Code.
- BEW holds ~29% in BEUR, a stake largely unchanged since BEUR’s listing in January 2020.
- A possible privatisation of BEUR follows on the heels of the ongoing take-private transaction for Guodian Technology & Environment Group (1296 HK), another waste treatment and environmental play.
Before it’s here, it’s on Smartkarma
