In today’s briefing:
- JPX-Nikkei 400 Rebalance 2022: Leaderboard End-Feb 2022
- KRX K-New Deal Rebalancing: Latest Weight/Flow Update & LG Chem’s Complete Deletion
- ARA LOGOS/ESR-REIT Scheme Meeting on 21 March, IFA Opinion
- KOSDAQ 150 Rebalancing Screening & Passive Impacts: 10 Likely Changes
- Asia Pacific Telecom in Taiwan Takeunder by Far EasTone – Sector Remake Needs FTC+NCC Approval
- Zip to Acquire Sezzle: Buy Now, Pray Later?
- PAR3/VOW3/Potential Porsche IPO
- Tving: Value Surges by Nearly 6x to 2 Trillion Won in 7 Months – Impact on CJ ENM
JPX-Nikkei 400 Rebalance 2022: Leaderboard End-Feb 2022
- JPX-Nikkei 400 is composed of common stocks listed in the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
- A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year.
- Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022 based on trading data as of end-February 2022.
KRX K-New Deal Rebalancing: Latest Weight/Flow Update & LG Chem’s Complete Deletion
- The biggest story should be LG Chem’s complete deletion from the entire indexes. It’s been said locally that KRX finally decided to remove LG Chem from the battery index.
- AfreecaTV and Douzone Bizon will have the largest passive impacts, +1.72x and -3.89x ADTVs. The Chunbo and SoulBrain combo also seems in a sweet spot for a quick long/short setup.
- LG Energy’s inflow should be at least 0.33x ADTV. Yes, LG Chem’s outflow deserves special attention. The combined impact is 0.6x ADTV, enough to make a splash on the price.
ARA LOGOS/ESR-REIT Scheme Meeting on 21 March, IFA Opinion
- Under the revised scheme consideration, each ARA LOGOS (ALLT SP) unitholder will receive S$0.097 in cash and 1.7729 new ESR-REIT (EREIT SP) units at an issue price of S$0.4924.
- The IFA considers the revised scheme consideration to be fair. We think that IFA’s valuation approach is broadly sound with some areas for improvement.
- We think that the revised offer is reasonable. For a 28 April payment date, the gross and annualised spread is 2.9% and 18.2%, respectively.
KOSDAQ 150 Rebalancing Screening & Passive Impacts: 10 Likely Changes
- We have ten likely changes based on the average market cap from November 1 last year to the previous close.
- Among the additions, the passive impacts of NKMax (182400), Golfzon (215000), and Intellian Technologies (189300) are estimated to be relatively large.
- Amond the deletions, the passive impacts of JNTC (204270), Optoelectronics Solutions (138080), Wonik Holdings (030530), Unison (018000), and Toptec (108230) are expected to be relatively substantial at the current DTV.
Asia Pacific Telecom in Taiwan Takeunder by Far EasTone – Sector Remake Needs FTC+NCC Approval
- On Friday, Far Eastone Telecomm (4904 TT) announced in a Taiwan Stock Exchange filing that it would merge with long-suffering Asia Pacific Telecom (3682 TT) in a scrip merger.
- The ratio chosen is a takeunder vs Friday’s closing price terms. An 18.8% hit for APT shareholders.
- Shareholder structure suggests it gets done IF the FTC and NCC approve the deal, which would go against their approval last August of the FET capital injection into APT.
Zip to Acquire Sezzle: Buy Now, Pray Later?
- Zip Co Ltd (Z1P AU) has agreed to acquire Sezzle Inc (SZL AU) in an all-scrip deal where Sezzle shareholders will receive 0.98 shares of Z1P per shares of SZL.
- At last closing prices, the deal values Sezzle Inc (SZL AU) at A$2.1658/share, a 21.7% premium to the last close and a 31.7% premium to 30 day VWAP.
- Zip Co Ltd (Z1P AU) has also announced a A$148.7m fully underwritten institutional placement and a A$50m non-underwritten share placement plan to strengthen its balance sheet.
PAR3/VOW3/Potential Porsche IPO
- I would value Porsche on 18.9x €5.3 billion 22eEBIT, i.e. €100bn; Ferrari, which has moderately higher EBIT margins (25% vs. 16%), trades on 31.2x EV/22e EBIT (Capital IQ consensus).
- The current discount of VW prefs to ords is 23.2%. A Porsche IPO without major changes on VW share structure, would be positive for the preference shares. Long prefs/short ords.
- An IPO of Porsche would be beneficial for the Porsche SE shares and the current discount to NAV should tighten even more, in my view. Long 1 PAH3 GR/short 0.5136 VOW GR.
Tving: Value Surges by Nearly 6x to 2 Trillion Won in 7 Months – Impact on CJ ENM
- In the past week, it was announced that Tving, a leading local OTT service provider in Korea, received 250 billion won in investment, valuing it at about 2 trillion won.
- Previous to this investment, Tving was last valued at 350 billion won in July 2021. In other words, Tving’s value surged by nearly 6x in the past seven months.
- Our NAV per share of CJ ENM suggests a target price of 185,824 won, representing a 43% upside from current levels.
Before it’s here, it’s on Smartkarma
