In today’s briefing:
- Mapletree Commercial Trust – Heads I Win Tails I Win?
- SPH Shareholders – A Good Deal For Waiting (After a Good Deal of Waiting)
- Ping An A/H: At Parity Now; Position for Premium Expansion
- 2022 High Conviction – Shinsei Bank Update
- Seibu Holdings – Asset Heavy To Asset Lighter if Not Fully Asset Light
- Short Selling Full Resumption Schedule & Immediate Candidates Filtering
- STAR50 Index Rebalance Preview (March 2022): Falling Knives
- LG Energy & LG Chem Passive Flow In/Out Estimations & Trading Considerations on February 9
- Seven & I: Selling Sogo Seibu Is Just the Start
Mapletree Commercial Trust – Heads I Win Tails I Win?
- Then-Underperforming Mapletree Commercial Trust (MCT SP) and Mapletree North Asia Commercial Trust (MAGIC SP) announced a merger on the last day of 2021. Then it underperformed some more.
- The price uplift for MAGIC unitholders was lost. FYQ3 Earnings announced in late January were good for both (better for MNACT), but MCT is still underperforming the sector.
- That seems to set MCT buyers up for a Heads I Win Tails I Win scenario.
SPH Shareholders – A Good Deal For Waiting (After a Good Deal of Waiting)
- The Combination Cuscaden – Keppel Scheme Offer Meetings for Singapore Press Holdings (SPH SP) shareholders should come imminently.
- Time has passed and that should be worth something. Astute shareholders have likely already made their feelings known. Everyone should.
- In the meantime, there is a good spread, with a put option on a portion of it, and the possibility of a little upside.
Ping An A/H: At Parity Now; Position for Premium Expansion
- After trading at a 12% premium as recently as a month ago, Ping An Insurance Group Of China (601318 CH) is trading at parity to Ping An Insurance (2318 HK).
- There is still some room left to reach the lower target on the A-share buyback. Once done, there could be more buying to reach the upper end of the target.
- Northbound Stock Connect holdings on the A-shares have been increasing over the last few months, though there will be outflows from FTSE China A50 Index (XIN9I INDEX) trackers in March.
2022 High Conviction – Shinsei Bank Update
- Shinsei Bank (8303 JP) is/was my High Conviction call for 2022.
- SBI went to 47.77% in the Tender and is higher as Shinsei has bought back stock. Shinsei has more to go and could get funkier to buy back more.
- 8 February is the EGM to approve a new board and explicit SBI control. Delisting expectations will rise after that, but practically it will take time.
Seibu Holdings – Asset Heavy To Asset Lighter if Not Fully Asset Light
- Seibu Holdings created a new Medium Term Management Plan in May 2021 including what it called Big, Hairy, Audacious Goals, or BHAGs.
- That goal was to move a longtime asset-heavy business to an asset-light model by selling hotel and leisure assets, securitising others, and undergoing a Whole Business Restructuring.
- Seibu Construction was sold in January and now it looks like 30 out of 40-odd Japan hotel and leisure facilities are nearly a done deal with a sale to GIC.
Short Selling Full Resumption Schedule & Immediate Candidates Filtering
- The local regulators will likely announce a full resumption of short selling within this month, and it will likely be implemented either next month or at the latest within April.
- Immediate candidates filtering on KOSPI (outside KOSPI 200): Huchems Fine Chemical, Hana Tour, Samyang Foods, and Douzone Bizon.
- Immediate candidates filtering on KOSDAQ (outside KOSDAQ 150): UniTest and Kolon Life Science.
STAR50 Index Rebalance Preview (March 2022): Falling Knives
- The review period ended last week. There will either be 4 or 5 changes to the SSE STAR50 (STAR50 INDEX) depending on the minimum listing history period used.
- Shanghai Medicilon Inc (688202 CH) is a high probability inclusion while there are 4 high probability deletions, irrespective of the minimum listing history period used.
- The potential inclusions have continued to drop and have underperformed the potential deletions. The next couple of weeks could see a reversal in that trend.
LG Energy & LG Chem Passive Flow In/Out Estimations & Trading Considerations on February 9
- There is recently a growing view that the ETF operators (KODEX and TIGER) will conduct most of the rebalancing trading on February 9 to avoid excessive tracking errors.
- LG Chem will face an outflow of ₩0.38T (0.8% of SO and 1.37x ADTV). LG Energy would be 0.36x ADTV and 0.31% of SO, assuming a DTV of 2M shares.
- This is definitely a clear long/short setup opportunity: LG Energy LONG/LG Chem SHORT position. Alternatively, we can also consider approaching this event with Battery ETFs LONG/LG Chem Short setup.
Seven & I: Selling Sogo Seibu Is Just the Start
- Numerous reports indicate that Seven & I is preparing its Sogo Seibu department store subsidiary for sale.
- This follows years of calls from major investors to dispose of underperforming assets at Japan’s second largest retail conglomerate.
- Seven & I still has many problems to solve in its domestic business. Ito-Yokado remains the biggest problem but perhaps won’t be disposed of while the company’s 98-year old founder lives.
Before it’s here, it’s on Smartkarma
