In today’s briefing:
- Allkem/Livent Merger Vote Tomorrow: Will Vote Get Past?
- Yuanta/P-Shares Taiwan Div+ ETF: Day 1 Flows & Stock Moves
- Index Rebalance & ETF Flow Recap: HSTECH, SIG/CWG, KQ150, REPT BATTERO
- China Consumption Weekly: East Buy, NIO, Tencent, PDD, Alibaba, JD.com
- WuXi AppTec (2359.HK/603259.CH) – How Bad Things Could Be?
- Hankook & Company (000240 KS): MBK Raises Partial Offer to KRW24,000
- Link Admin (LNK AU): Mitsubishi UFJ’s Bittersweet Scheme
- LG Display: Announces a Rights Offering Capital Raise of 1.36 Trillion Won
- Link Admin (LNK AU): MUFG’s Underwhelming Binding Offer
- Ohayo Japan | Nippon Steel Forges Ahead with Deal for U.S. Steel
Allkem/Livent Merger Vote Tomorrow: Will Vote Get Past?
- The vote is tomorrow. It is slightly contested. Shareholder proxies have recommended approving. Some others say Allkem is going too cheap.
- It probably should get done because of scale benefits, and if it breaks, it might be good for Allkem, which is “good risk arb risk”
- But the trade here is some combination of lithium rebound and index event, with index impact details here.
Yuanta/P-Shares Taiwan Div+ ETF: Day 1 Flows & Stock Moves
- The Yuanta/P-shares Dividend Plus ETF (0056 TT) started to rebalance its holdings on Friday and will continue to do so for the next 4 trading days.
- Stocks with buy flows dropped 0.51% on average on Friday while the stocks with sell flows dropped 0.92%. On a flow weighted basis, the numbers were -0.21% vs -0.75%.
- Since the start of November, the adds have outperformed the deletes and the TWSE INDEX. There has been significant outperformance in just the last week.
Index Rebalance & ETF Flow Recap: HSTECH, SIG/CWG, KQ150, REPT BATTERO
- It was a busy week with rebalance implementations at the close of trading on Thursday in Korea and then across the region on Friday.
- The SET 50 Index changes should be announced this week and the Yuanta TW Div+ ETF will continue to implement the changes till Thursday.
- There were inflows to China ETFs during the week while there were big outflows from Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) ETFs.
China Consumption Weekly: East Buy, NIO, Tencent, PDD, Alibaba, JD.com
- East Buy’s stock price plunged after a conflict broke out between the top broadcaster and the management team.
- NIO will launch another brand for low price products, following BYD’s low price and Li Auto’s price reduction.
- Tencent will move its unimportant assets to China Literature again.
WuXi AppTec (2359.HK/603259.CH) – How Bad Things Could Be?
- Recent business updates of WuXi Bio led to a decline in WuXi AppTec’s share price and changed investors’ expectations for CXO. Now is the time to adjust forecasts.
- We analyzed the growth rate of various business of WuXi AppTec in 2024. In a neutral scenario, growth next year could fall short of management’s guidance.Reversal in 2025 is uncertain.
- If WuXi AppTec “unexpectedly” receives blockbuster orders, which are large enough to hedge against the downward trend of WuXi AppTec’s other businesses, then it will help to change performance expectations.
Hankook & Company (000240 KS): MBK Raises Partial Offer to KRW24,000
- MBK Partners has increased its Hankook & Company (000240 KS) partial tender offer to KRW24,000 per share, 20.0% and 51.4% above its previous offer and the last close, respectively.
- While the offer is attractive, we estimate that the minimum acceptance condition of 19.3 million shares (20.35% of outstanding shares) requires an 84.3% minority acceptance rate.
- The minority acceptance rate is challenging unless MBK can secure a ruling preventing share purchases from Cho Yang-rai, who disclosed a 2.72% stake on 14 December and opposes the tender.
Link Admin (LNK AU): Mitsubishi UFJ’s Bittersweet Scheme
- Link Administration (LNK AU), the largest provider of services in Australia’s superannuation administration industry, has entered into a Scheme with Mitsubishi UFJ Financial Group.
- MUFJ is offering long-suffering Link shareholders A$2.10/share (in cash) plus a A$0.16/share dividend (25% franked), or a 32.9% premium, all-in, to the undisturbed price. It has not been declared final.
- The Offer has the board’s backing. A Scheme Meeting is expected to be held in May with possible completion in June 2024.
LG Display: Announces a Rights Offering Capital Raise of 1.36 Trillion Won
- LG Display announced today that it will conduct a rights offering capital raise worth 1.36 trillion won.
- The rights offering capital raise involves 142 million shares, which represent 39.7% of its existing outstanding shares.
- We believe this rights offering will have a negative impact on LG Display’s share price as it will significantly dilute existing shareholders.
Link Admin (LNK AU): MUFG’s Underwhelming Binding Offer
- Link Administration (LNK AU) has entered a SID with Mitsubishi UFJ Financial (MUFG) (8306 JP) at A$2.26 (A$2.10 scheme consideration + A$0.16 dividend), a 32.9% premium to the undisturbed price.
- The presence of several substantial shareholders, lack of irrevocables, a light offer, recent derisking of the business and a long-dated offer pose a challenge for the scheme to get up.
- MUFG’s offer could spark a rival offer, but Link’s long-suffering shareholders have endured a history of failed bids. At the last close, the risk/reward is unfavourable.
Ohayo Japan | Nippon Steel Forges Ahead with Deal for U.S. Steel
- Overseas: SPX +0.5%, M&A action drives market higher. Fed talks down interest rate cuts.
- Today: NKY Futs -0.1% v cash. JPY 142.9; Japan’s FSA wants to overhaul tender offer rules; Mit Elec to step up cross-share unwind
- Japan: Nippon Steel’s $15bn acquisition of U.S. Steel is a bold move; it secures a top-three global position & substantial share in the EV e-steel market.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Analytics and News
- ✓ Events & Webinars
