In today’s briefing:
- Nintendo (7974) – Earnings Forecasts⬇︎ Stock Split, Buyback, and HOW TO SELL WELL
- Another BIG SONY (6758) Buyback, But…
- Link Admin (LNK AU): 13 July Scheme Meeting As Dye & Durham Takes A Bath
- S&P/ASX Indices: Quiddity Leaderboard for June 2022 Rebalance 2.0
- Thai Bev: Holdco Discount Narrows as Thai Bev Prepares to Restart the Beer Unit IPO
- MCB May Block the AGL De-Merger, But Think About the Alternative
- Link’s Scheme Meeting on 13 July, High Spread Reflects Deal Risk
- KOSPI 200 Rebalancing Last-Minute Change to Deletions: Poongsan Pushed Out for CJ CGV
- FTSE All-World/All-Cap Index Rebalance Preview: Potential IPO Inclusions in June
- Comany (7945) – Another Ridiculously Low-Priced MBO
Nintendo (7974) – Earnings Forecasts⬇︎ Stock Split, Buyback, and HOW TO SELL WELL
- Nintendo has announced in-line-ish results for March 2022, and quite disappointing forecasts for March 2023. Mio Kato called it on 30 March as a sell. Excellent timing.
- Nintendo has a buyback tomorrow and if you don’t like the guidance, you should DEFINITELY read on below.
- But Nintendo also announced something truly extraordinary – a stock split. Everyone pooh-poohs the impact of a stock split but… in this case it is probably not nothing.
Another BIG SONY (6758) Buyback, But…
- A release showed up on TDNET last week that Sony Corp (6758 JP) had completed its ¥200bn 25mm share (2.02%) buyback program announced 28 April 2021.
- The details showed they had actually bought back 8.2mm shares spending only ¥97bn, despite the shares trading below T-1 Announcement Date Price for four months straight.
- Today, with earnings, SONY announced a NEW buyback. ¥200bn, 25mm shares, 2.02%. Same as last year.
Link Admin (LNK AU): 13 July Scheme Meeting As Dye & Durham Takes A Bath
- The Supreme Court of New South Wales today approved the convening of a Scheme Meeting for Link Administration Holdings (LNK AU) on the 13 July.
- The Explanatory Booklet has been registered with ASIC. The Independent Expert (Deloitte) has concluded that the A$5.50/share Scheme Consideration is fair and reasonable.
- Separately, the Offeror, Canada’s Dye & Durham, has seen its shares decline 57% since the release of its 2Q22 results.
S&P/ASX Indices: Quiddity Leaderboard for June 2022 Rebalance 2.0
- The S&P/ASX Index family is a widely-tracked group of indices and sub-indices which represent the performance of ASX-listed companies. It rebalances four times a year.
- In June 2022, Index rebalance events will take place for the S&P/ASX capitalization-weighted indices including ASX 200, 100, 50, and 20. There is likely to be an intra-quarter change too.
- This is a follow-up insight to S&P/ASX Indices: Quiddity Leaderboard for June 2022 Rebalance. with updated expectations for inclusions/changes in the various indices in the next 6 weeks.
Thai Bev: Holdco Discount Narrows as Thai Bev Prepares to Restart the Beer Unit IPO
- In a regulatory filing last Thursday, Thai Beverage (THBEV SP) said that it had restarted its Beer Unit IPO at a much lower valuation than before.
- Based on the current NAV discount of 13%, we think this is already priced-in Thai Bev’s share price.
- Nonetheless, a 13% NAV discount could be too light in our opinion and there could be downside potential to the NAV discount following the completion of the Beer Unit IPO.
MCB May Block the AGL De-Merger, But Think About the Alternative
- AGL Energy Ltd (AGL AU) announced a de-merger of its power distribution and power generation segments on 30 March 2021 after a 1H21 results comment saying “conflicting dynamics necessitated a review.”
- So for a year, AGL prepared its de-merger and talked about it every quarter. 11.5 months later, MCB/Brookfield put a lowball bid on the table. Then upped it. Both rejected.
- MCB says the de-merger plan is bad, and some analysts now say it is “underwhelming.” Duh. Not much has changed in 12mos. But the alternative? Underwhelming too, but less independent.
Link’s Scheme Meeting on 13 July, High Spread Reflects Deal Risk
- The Link Administration Holdings (LNK AU) scheme meeting is scheduled for 13 July. The independent expert has concluded that the Dye & Durham (DND) offer is fair and reasonable.
- The offer faces significant risks which are ACCC review (findings delayed from the 26 May release date), a contract renewal potentially triggering the MAC clause and an ongoing FCA investigation.
- At the last close, the gross spread to the base offer is 10.7%. We would be buyers up to A$5.20 per share (implies 75% deal probability).
KOSPI 200 Rebalancing Last-Minute Change to Deletions: Poongsan Pushed Out for CJ CGV
- Poongsan was pushed out of the 110% threshold in the average daily market ranking at the last minute. So, CJ CGV gets to remain in the KOSPI 200.
- Additions: F&F (383220 KS), Meritz Fire & Marine (000060 KS), SD Biosensor (137310 KS), Iljin Hysolus (271940 KS), Hanil Cement (300720 KS), K Car (381970 KS), Hana Tour (039130 KS)
- Deletions: Nexen Tire (002350 KS), Yungjin Pharmaceutical (003520 KS), Poongsan Corp (103140 KS), Bukwang Pharmaceutical (003000 KS), SK Discovery (006120 KS), S&T Motiv (064960 KS), Cuckoo Holdings (192400 KS)
FTSE All-World/All-Cap Index Rebalance Preview: Potential IPO Inclusions in June
- We forecast 8 potential inclusions to the All-World Index and 11 potential inclusions to the All-Cap Index at the FTSE June QIR. Most are high probability inclusions.
- LG Energy Solution (373220 KS), Mitratel (MTEL IJ), Adani Wilmar (AWLTD IN), Kakao Pay (377300 KS) and FSN E-Commerce Ventures (Nykaa) (NYKAA IN) are expected to have the largest passive inflows.
- Local institutions have been selling LG Energy Solution (373220 KS) and Kakao Pay (377300 KS) over the last few weeks while retail investors have been buyers.
Comany (7945) – Another Ridiculously Low-Priced MBO
- Comany Inc (7945 JP)‘s Chairman Tsukamoto is 71. Together with younger Tsukamoto family members he is conducting an MBO to buy out minorities at a 76% premium.
- This most likely gets done, and it is tough to trade anyway because it is horribly illiquid.
- But it is another example of an MBO done at the wrong price. TOB PER is low. But the entire thing is financed by net receivables. Ex-receivables, EV is zero.
Before it’s here, it’s on Smartkarma
