In today’s briefing:
- Kyokuto Kaihatsu (7226 JP) Buyback – It’s Kinda Big, But There May Be More Behind
- Tunas Ridean (TURI IJ): JCNC & Tunas Andolan’s Quasi Delisting Proposal
- Toshiba – Surprise, Surprise, More Drama
- Zhuangyuan Pasture (1533 HK): 29th June EGM For H-Share Offer
- KOSPI200 Index Rebalance: Float Changes, Flows & Trades
- KOSPI 200 Rebalancing Minimal Flow at the Close on June 9 For Day Basket-Trading
- A Modest Proposal to the Nikkei Index Committee for Nikkei 225 Methodology Change
- SK Inc & SK Innovation Plan to Buy Stake in Bill Gates’ TerraPower + SKC Sells PET Film Business
Kyokuto Kaihatsu (7226 JP) Buyback – It’s Kinda Big, But There May Be More Behind
- Kyokuto Kaihatsu Kogyo Co (7226 JP) has always been cash-rich. Recently there are better noises. Sold real estate. New Mid-Term Plan. Raised the payout ratio to 50%. Slowly selling crossholdings.
- But it isn’t fast enough, and activist Strategic Capital this spring announced a flurry of AGM agenda items to extract value for shareholders.
- The company today announced a buyback – additive, but there is a lot to look at here. Shareholder structure is key. And forward cash-flows tell you more buybacks could come.
Tunas Ridean (TURI IJ): JCNC & Tunas Andolan’s Quasi Delisting Proposal
- Tunas Ridean (TURI IJ) announced a plan to change its status from an open company to a closed company.
- In effect, TURI will undertake a buyback of its shares at Rp1,700/share, a lifetime high. Those who do not tender will be left holding unlisted scrip.
- Jardine Cycle & Carriage (JCNC SP) and Tunas Andalan both hold 46.24%, leaving 7.52% in public hands. The proposal requires a shareholder vote. It appears no shareholder needs to abstain.
Toshiba – Surprise, Surprise, More Drama
- The days since Toshiba’s last briefing session have been eventful with METI expressing concern about foreign investor control and a split emerging in the board over director nominations.
- These developments create significant risk of activist-friendly director candidates being vetoed in our view.
- Toshiba stock has been trading in line with Hitachi’s strong performance of late despite being more expensive and thus risk has increased.
Zhuangyuan Pasture (1533 HK): 29th June EGM For H-Share Offer
- Back on the 25 April, PRC dairy farmer Lanzhou Zhuangyuan Pasture (1533 HK) announced a Conditional Cash Offer for all its H-shares at $10.89/share. The Offer Doc is now out.
- This two-step voluntary cash offer involves a Scheme-like vote and a 90% tendering condition. The EGM will be held on the 29 June.
- This transaction could potentially be wrapped up late-July. The FY21 dividend should also be added to the Offer terms.
KOSPI200 Index Rebalance: Float Changes, Flows & Trades
- There are 7 adds and 7 deletes for the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) rebalance to be implemented at the close on 9 June.
- There are also a bunch of stocks that will have changes applied to their free float. There were announced last week and are much less tracked.
- The flows and impact on some of the float change names are significant and pre-positioning and passive flows could move the stocks over the next few days.
KOSPI 200 Rebalancing Minimal Flow at the Close on June 9 For Day Basket-Trading
- Flows from the ETFs/index funds serve as a minimal flow for rebalancing trading at the close on June 9. The total AUM is ₩18.9T: ETFs ₩15.0T and index funds ₩3.9T.
- There are only three trading days left until the rebalancing trading. At this point, a setup aimed at the NPS/Insurance’s preemptive trading seems a bit off, timing-wise.
- It seems more appropriate at this point to design a day basket-trading based on the minimal flow size on the day of rebalancing trading, June 9.
A Modest Proposal to the Nikkei Index Committee for Nikkei 225 Methodology Change
- The Nikkei Index team proposed several changes to the Nikkei 225 Average methodology last week. They include capping, a semi-annual (vs annual) review, and a change in “liquidity” measure.
- It helps move membership away from the low price low weight names which populate the bottom of the index. Slowly. 6 names a year. That’s not enough.
- And it doesn’t fix the historical anomalies rendering the index unsuitable as benchmark (and BOJ tool). I propose more changes below. You can submit this or yours in the consultation.
SK Inc & SK Innovation Plan to Buy Stake in Bill Gates’ TerraPower + SKC Sells PET Film Business
- SK Group has been the the most active M&A player among the major chaebols in Korea in the past decade. SK Group is once again making some big M&A moves.
- In this insight, we discuss SK Inc and SK Innovation’s plans to purchase a minority stake in Bill Gates’ TerraPower nuclear SMR technology company.
- We also discuss the recent sale of the PET film business by SKC for 1.6 trillion won and how SKC may try to acquire the controlling interests of Iljin Materials.
Before it’s here, it’s on Smartkarma
