In today’s briefing:
- Hong Kong: Where Have Shorts Increased & Decreased?
- SPH Releases EGM/Scheme “Substantial & Relevant Questions” – Beware Chain Offer Comments
- Korea Holding Companies: Stub Tradable Names
- GoTo Gojek Tokopedia IPO: Offering Details & Index Inclusion
- Uniti Group (UWL AU) And Morrison & Co Enter Into “Exclusive Discussions”
- Hollysys (HOLI US): Potential Suitors Didn’t Get The Memo
- Yashili’s Potential Pre-Conditional Privatisation Offer from Mengniu
- STOXX Europe Indices: March 2022 Rebalance Trade So Far So Good. What Next?
- Aslead To Exit Fuji Kosan, Leaving Would-Be Activist Shigeta-San
- A Long-Term M&A Battle Brewing Among the 3 Heirs of Hanmi Pharm Group?
Hong Kong: Where Have Shorts Increased & Decreased?
- Short notional in Hong Kong is HK$488bn and has been falling mainly as a result of a falling market. Short interest has increased substantially from end January.
- From 31 January to 4 March, the largest shorts have been built on Tencent, China Merchants Bank, AIA Group Ltd, Alibaba, JD.com, Meituan, Xiaomi, JD Health and Xinyi Solar.
- Over the same period, shorts have covered on COSCO Shipping Holdings, HKEX, Longfor Properties, China Construction Bank, Ping An Insurance, Yanzhou Coal Mining Company and HSBC Holdings.
SPH Releases EGM/Scheme “Substantial & Relevant Questions” – Beware Chain Offer Comments
- Singapore Press Holdings (SPH SP) has released a set of Q&A for holders as we approach the 22 March EGM/Scheme Meeting.
- Approval of both resolutions/votes is necessary to effect the Cuscaden Peak deal.
- The comments and answer about the SPH REIT Chain Offer may be misleading. Take care of the details!
Korea Holding Companies: Stub Tradable Names
- Korea has a total of 68 holding companies listed on KOSPI and KOSDAQ. We then have 14 holdcos with a high level of price cointegration with their respective listed subsidiaries.
- Three holding companies have sigma below zero on a 20D MA. Hanwha Corp is considered stub tradable as its share price relative to its subsidiaries was relatively flat.
- Four holdcos, including SK Square are over 70% NAV discount. Among them, SK Square is of the most interest as the price correlation with SK Hynix has been improving lately.
GoTo Gojek Tokopedia IPO: Offering Details & Index Inclusion
- GoTo (1379371D IJ) is offering 52bn shares in its IPO (plus a greenshoe of 7.8bn shares). The issue is being targeted at domestic investors and should list on 4 April.
- GoTo (1379371D IJ) will also look to list on an international exchange within the next two years by selling just over 8% of the company to those investors.
- Inclusion in domestic indices could take place in July, while inclusion in the MSCI and FTSE indices is expected in 2023 at the earliest.
Uniti Group (UWL AU) And Morrison & Co Enter Into “Exclusive Discussions”
- South Australian telecommunications company Uniti Group Ltd (UWL AU) has announced it has entered into “exclusive discussions” with infrastructure investor HRL Morrison & Co for a potential acquisition.
- Morrison & Co’s non-binding proposal has an indicative price of $4.50/share, valuing Uniti at A$3.1 billion.
- The proposal has an exclusivity period up to 22 April.
Hollysys (HOLI US): Potential Suitors Didn’t Get The Memo
- Hollysys Automation (HOLI US) said in January it would suspend further evaluation of all unsolicited buyout proposals. Two proposals have reportedly since emerged.
- According to Bloomberg, the latest tilt is from Beijing Infrastructure, the state-owned operator of Beijing’s railway and subway.
- Separately, Hollysys reported FY21 net income of US$44.3mn, a decrease of 14.6% to FY20.
Yashili’s Potential Pre-Conditional Privatisation Offer from Mengniu
- Yashili International Holdings (1230 HK) announced its controlling shareholder, China Mengniu Dairy Co (2319 HK), is in discussions regarding its holdings in Yashili and several potential transactions.
- If the transactions proceed, the potential privatisation offer is HK$1.20 per Yashili share, a 31.9% premium to the last close price of HK$0.91 (prior to the trading halt).
- The potential transactions are subject to a number of pre-conditions and conditions. We think the potential offer is attractive.
STOXX Europe Indices: March 2022 Rebalance Trade So Far So Good. What Next?
- The March 2022 constituent changes for the STOXX Europe 600 and the EURO STOXX Indices were announced on 1st March 2022.
- The Index Changes will be implemented (Inclusion Event) at the close of 18th March 2022 (Friday) and the changes will be effective from 21st March 2022 (Monday).
- So far, the LONG-SHORT baskets suggested by Quiddity have done extremely well. Below are my thoughts for the remainder of the timeline.
Aslead To Exit Fuji Kosan, Leaving Would-Be Activist Shigeta-San
- Last year, Aslead Capital tried a hostile partial tender offer on Fuji Kosan, perhaps to get in, or perhaps to try to trigger an overbid to exit.
- Fuji Kosan Company (5009 JP) made life difficult for them, and Aslead backed down. Now the stock has fallen 25% from where they made their Tender Offer.
- And now they are selling. That will leave ENEOS and SHIGETA Mitsutoki as the two largest shareholders…. 👀
A Long-Term M&A Battle Brewing Among the 3 Heirs of Hanmi Pharm Group?
- There is an interesting situation brewing at the Hanmi Pharm Group, which is one of the largest pharmaceutical companies in Korea.
- On 16 March, it was reported that Hanmi Pharm decided not to raise the agenda for re-appointment of CEO Lim Jong Yoon as an inside director at the Hanmi Science.
- In terms of trading, there appears to be more upside in Hanmi Science (008930 KS) as compared to Hanmi Pharm (128940 KS) in the next several months.
Before it’s here, it’s on Smartkarma
