In today’s briefing:
- Toshiba – ISS Advises Against Breakup Plan
- Jardine Matheson (JM SP): Reloading The Buyback?
- STAR50 Index Rebalance Preview (June): Back to the All Important Question
- KOSPI 200 Rebalancing Screening: Few Noticeable Changes in the Race
- PropertyGuru/Bridgetown 2 SPAC Listing/Merger – Peers Are Down a Lot, as the Deal Nears Completion
- Link’s Offer Spread Risk/Reward
- KOSPI Lockup Releases & Likelihood of Hitting the Market
Toshiba – ISS Advises Against Breakup Plan
- This morning Institutional Shareholder Services recommended against both Toshiba’s break up plan and 3D’s alternative proposal.
- Both proposals looked uncertain and with ISS coming out against them it now appears more likely that both will be rejected.
- That leaves Toshiba in limbo once again and we aren’t convinced the exit will be a privatisation.
Jardine Matheson (JM SP): Reloading The Buyback?
- Jardine Matheson Holdings (JM SP)‘s underlying net profit in FY21 was up 39% against 2020, and just 5% shy of 2019’s level.
- The latest US$250mn buyback program appears to have been completed.
- Shares are down ~5% since the FY21 results. At a ~28% discount to NAV, JMH is inexpensive here.
STAR50 Index Rebalance Preview (June): Back to the All Important Question
- There could be 3 or 5 changes to the STAR50 INDEX in June depending on the minimum listing history (6 months or 12 months) used by the index committee.
- Jinko Solar (688223 CH) is a high probability inclusion while Shanghai Microport Endovascular MedTech (688016 CH), ArcSoft Corp Ltd (688088 CH) and DBAPP Security Ltd (688023) are high probability deletions.
- The March rebalance will be implemented at the close tomorrow. The adds have outperformed the deletes post announcement and there could be a reversal from next week.
KOSPI 200 Rebalancing Screening: Few Noticeable Changes in the Race
- KOSPI 200’s June rebalancing review period is six months, from November 1 to April 30. So, we are now over 70% of the review period.
- The addition result is similar to the screening results last month. However, one stock was newly screened. Hana Tour Service sits at the filtering borderline within the Consumer Discretionary Sector.
- As for deletions, Bukwang Pharmaceutical is screened in the healthcare sector instead of Yungjin Pharmaceutical. S&T Motiv in the Consumer Discretionary Sector is additionally listed as a deletion candidate.
PropertyGuru/Bridgetown 2 SPAC Listing/Merger – Peers Are Down a Lot, as the Deal Nears Completion
- PropertyGuru and Bridgetown 2 announced, on 23rd Jul 2021, that they have entered into a business combination agreement which will see PropertyGuru go public in the US.
- Both the companies will hold their respective EGMs next week and aim to complete the listing by 18th Mar 2022.
- We have looked at the company’s prior listing attempt, in Australia in 2019, and the current SPAC merger. In this note, we will talk about the recent updates.
Link’s Offer Spread Risk/Reward
- Link Administration Holdings (LNK AU)’s 1HFY22 results on 24 February stated that the Dye & Durham/DND’s privatisation scheme remains on track to complete in June/July.
- Key hurdles are ACCC clearance and the Woodford investigation. Key catalysts are the scheme booklet (in the coming weeks) and an agreement to sell BCM.
- We would be buyers up to A$5.2 per share (implies 70% deal probability). The gross and annualised spread for a 31 July implementation is 8.6% and 23.8%, respectively.
KOSPI Lockup Releases & Likelihood of Hitting the Market
- KOSPI has seven lockup release events that are likely to hit the market. And all of them are IPO institutional and ESOP lockups.
- Whether these IPO institutional/ESOP lockups will hit the market directly correlates with the return size from the offering price. And most of them are still far above the offering price.
- Therefore, it is highly likely that a meaningful share price correction will occur on each release date. This correlation pattern has been more pronounced in recent lockup release events.
Before it’s here, it’s on Smartkarma
