In today’s briefing:
- NIFTY50 Index Rebalance Preview: Two’s Company; Three’s A Crowd
- JMDC (4483) Partial Offer Update (Updated Pro-Ration Range)
- Setting up to Target Exclusion Stock Post Doosan Robotics’ KOSPI 200 Fast Entry
- UPDATE: Kasumigaseki Capital (3498) Moving to TOPIX. Forward Earnings/Aggressive Forecast Surprise
- Cainiao IPO: Index Inclusion Timeline
- StubWorld: NWD (17 HK) Is Cheap. It May Get Cheaper Still
- NTT Docomo’s Deal with Monex (8698); The Goal Is Bigger and Better but Not Compelling Yet
- Doosan Robotics IPO Trading – Strong Insti Subscription Rates but Still Feels like a Punt
- Kokusai Electric IPO: Valuation Insights
- J&T Global Express Pre-IPO – PHIP Updates – Managed to Grow but Isn’t Sustainable Yet
NIFTY50 Index Rebalance Preview: Two’s Company; Three’s A Crowd
- There should be two changes for the NIFTY Index (NIFTY INDEX) in March. That could increase to three, but that would take some big price moves from now to January.
- Impact on the potential changes is pretty large at over 6 days of ADV to trade from passive trackers. The impact is over 11 days of delivery volume.
- Inclusion of Avenue Supermarts Ltd (DMART IN) in the F&O segment before January could lead to another change.
JMDC (4483) Partial Offer Update (Updated Pro-Ration Range)
- When this was launched, it traded more a fair bit on the first day, but then more volume traded than I expected. This could mean a couple of things.
- Re-Reading the original doc leaves nuances. The change in management responsibilities this past summer make some holders less certain. It’s complicated.
- There have been several blocks traded, and a large short instantiated. And if one has a more conservative estimate at a higher top-end participation, the back end gets uglier.
Setting up to Target Exclusion Stock Post Doosan Robotics’ KOSPI 200 Fast Entry
- Doosan Robotics has the potential to rise up to ₩104,000 on the listing date. The market cap would reach ₩6.74T, which fulfills the criteria for KOSPI 200 fast entry
- Based on this calculation, Zinus had the lowest average daily market cap during the previous rebalancing screening period. Therefore, Zinus will be excluded due to the inclusion of Doosan Robotics.
- KOSPI 200 passive trackers will need to conduct rebalancing trading reflecting this ad-hoc change on the closing price of November 9th.
UPDATE: Kasumigaseki Capital (3498) Moving to TOPIX. Forward Earnings/Aggressive Forecast Surprise
- Over the weekend I wrote about Kasumigaseki Capital (3498 JP)‘s move to TSE Prime and then move to TOPIX. I noted earnings would be out 3 October.
- I talked about the possibility of a surprise. They had revised full-year to end-Sep to ¥2bn. They got ¥2.05bn.
- But after growing revenue 79% last year, and growing net profit 101%, this year they expect revs +60% and Net Profit +144%.
Cainiao IPO: Index Inclusion Timeline
- Cainiao Smart Logistics (1437124D HK) has filed an application proof to list on the HKEX (388 HK) and could raise US$1bn at a valuation between US$15bn-20bn.
- Cainiao Smart Logistics (1437124D HK) could get Fast Entry to the HSCI and be included in Southbound Stock Connect once the price stabilisation period is complete.
- Inclusion in other indices will take longer with the highest probability of index inclusion in June. Earlier inclusion will depend on the IPO timing, size and allocation to strategic/cornerstone investors.
StubWorld: NWD (17 HK) Is Cheap. It May Get Cheaper Still
- New World Development (17 HK) nudges an all-time low P/B and implied stub; as the privatisation of NWS Holdings (659 HK) moves gradually forward.
- Preceding my comments on NWD/NWS are the current setup/unwind tables for Asia-Pacific Holdcos
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
NTT Docomo’s Deal with Monex (8698); The Goal Is Bigger and Better but Not Compelling Yet
- Today, Monex Group Inc (8698 JP) and NTT (Nippon Telegraph & Telephone) (9432 JP)‘s NTT Docomo announced a Capital and Business Alliance Agreement. It is a complicated deal.
- Monex GROUP will create a holdco which owns Monex Inc (the broker) and sell 51% to Docomo. Docomo will consolidate. Monex Group will own 49% as an equity method affiliate.
- Monex GROUP will then double its dividend, maybe buy back shares, and expects to grow as Docomo pushes and Monex invests. But what remains is a mixed bag.
Doosan Robotics IPO Trading – Strong Insti Subscription Rates but Still Feels like a Punt
- Doosan Robotics (454910 KS) raised around US$318m in its Korea IPO, after pricing its IPO at the top end of the range at KRW26,000/share.
- Doosan Robotics (DR) manufactures and sells collaborative robots (Cobots). The firm’s product portfolio primarily includes different series of robot arms as well as its coffee module.
- In this note, we will talk about the demand for the deal and other trading dynamics.
Kokusai Electric IPO: Valuation Insights
- Kokusai Electric (6525 JP) is a speciality manufacturer of semiconductor production equipment. KKR & (KKR US) seeks to raise about US$745 million through listing Kokusai.
- We previously discussed the IPO in Kokusai Electric IPO: The Bull Case and Kokusai Electric IPO: The Bear Case.
- In this note, we discuss valuation. Our analysis suggests that Kokusai is fully valued at the IPO reference price of JPY1,890 per share. We would pass on the IPO.
J&T Global Express Pre-IPO – PHIP Updates – Managed to Grow but Isn’t Sustainable Yet
- J&T Global Express, a global logistics service provider, is looking to raise about US$500m in its upcoming Hong Kong IPO.
- As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
- We have looked at the company’s past performance in our earlier notes. In this note we will look at its PHIP updates.
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