In today’s briefing:
- Alibaba (9988 HK/BABA): Possible Softbank Sale and Passive Impact
- Solactive Global Lithium Index (LIT): Earlier Implementation Expected for LG Energy & LG Chem
- Huge Hogy Medical (3593) Buyback from the Founding Family
- Toa Corp (1885 JP) – Another Big Buyback for a Murakami Company
- FTSE UK Index Series: Leaderboard for March 2022 (2.0)
- SK Inc: Significant Gains of Nearly 1.1 Trillion Won in Londian Wason Holdings
Alibaba (9988 HK/BABA): Possible Softbank Sale and Passive Impact
- Alibaba Group (9988 HK) has filed a F-6EF Registration Statement to register an additional 1bn ADS. This will most likely be Softbank Group selling part (or all) of the stake.
- There is a possibility that Softbank Group (9984 JP) is looking to use the stock as collateral for a financing trade and moving their holdings to a more liquid market.
- If Softbank Group (9984 JP) sells some of their shares, there will be buying from MSCI and FTSE trackers. There will be minimal buying from HSI, HSCEI and HSTECH trackers.
Solactive Global Lithium Index (LIT): Earlier Implementation Expected for LG Energy & LG Chem
- As for LG Energy’s inclusion timing, Solactive made a rule change, presumably designed for LG Energy’s earlier entry on April 29.
- Since LG Chem also has a battery-related business, LG Chem may remain in this index. However, the possibility should be low because its battery business is small in total sales.
- LG Chem will experience an outflow of ₩250B (1.0x ADTV). And assuming that LG Energy receives 4.75%, a passive impact of 0.31x at a DTV of 1.5M shares is expected.
Huge Hogy Medical (3593) Buyback from the Founding Family
- Hogy Medical’s founder passed and there was a re-arranging of deckchairs among the Hoki family ownership in 2021.
- Earnings are not growing yet, but the mix is improving on a forward basis and consensus is decidedly more bullish than trend would suggest.
- Now the company is buying back a LOT of stock from the Hoki family. This changes things.
Toa Corp (1885 JP) – Another Big Buyback for a Murakami Company
- Toa Corp (1885) is a niche infrastructure construction play with a decent growing business and a recent change in shareholder return policy.
- They bought back back 6% of shares in 2019. Then launched another 6% buyback in 2021. And now have announced another 6% buyback for 2022.
- The shareholder structure and the return profile bear closer investigation.
FTSE UK Index Series: Leaderboard for March 2022 (2.0)
- The FTSE UK Index Series is a widely tracked family of sub-indices representing the performance of the public equity market in the UK.
- These indices are reviewed on a quarterly basis in March, June, September, and December.
- In this insight, we take a look at the potential constituency changes that can happen in the March 2022 Rebalance for the FTSE 100 and FTSE 250 Indices.
SK Inc: Significant Gains of Nearly 1.1 Trillion Won in Londian Wason Holdings
- It has been confirmed that Londian Wason Holdings Co, a Chinese copper foil material producer, is pushing for a listing on the Hong Kong Stock Exchange in 2022.
- Londian Wason Holdings’ value could reach nearly 5 trillion won. SK Inc’s 30% stake could be valued at about 1.5 trillion won.
- Our updated SoTP valuation of SK Inc suggests implied price of 294,591 won per share, representing a 34% upside from current levels.
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