In today’s briefing:
- BPlant/KLK: This Is Getting (Even More) Political
- Doosan Robotics (454910 KS): Listing & Index Inclusion Timeline
- JMDC (4483) Partial Offer Update (Updated Pro-Ration Range)
- EOFLOW/Medtronic Tender: Proposed Preliminary Injunction Is a Problem
- Kokusai Electric Pre-IPO – Thoughts on Valuation
- PICC’s (1339 HK) Lifetime Low Implied Stub
- Eoflow: Ozempic and Wegovy Reducing Need for Disposable Insulin Injection Devices + Ongoing Lawsuit?
- CALB IPO Lock-Up – US$2.6bn Lockup Release but Mostly SOE Owned
- FAST RETAIL (9983) | 3 Reasons Why Guidance Could Miss
- Exploring the Launch of a Posco Group-Focused ETF: Flow Trading Insights
BPlant/KLK: This Is Getting (Even More) Political
- On the 24 August, Kuala Lumpur Kepong (KLK MK) entered an agreement with Boustead Holdings (BHB), Boustead Plantations (BPLANT MK)‘s largest shareholder, to acquire a 33% plus 1 share stake.
- Upon the completion of the agreement, KLK – together with BHB and LTAT – would make a Mandatory Offer for BPlant. The Offer Price would be RM1.55/share, a lifetime high
- It all looked pretty straightforward. However the BHB/LTAT agreement has twice been delayed. This may still get done. But there remain a number of political kinks to be ironed out.
Doosan Robotics (454910 KS): Listing & Index Inclusion Timeline
- Doosan Robotics (454910 KS) is principally engaged in the manufacture and sale of industrial robots.
- Doosan Robotics has raised KRW 421bn (US$311m) in its IPO, valuing the company at KRW 1,685bn (US$1.245bn). Float at listing will vary from 6%-21% depending on index provider.
- Inclusion in the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) and other global indices will take place between Feb (possibly May) and June next year.
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.
EOFLOW/Medtronic Tender: Proposed Preliminary Injunction Is a Problem
- The US judge has proposed a preliminary injunction which prevents Eoflow (294090 KS) from using Insulet Corp (PODD US)’s trade secrets and disclosing them to any third party.
- Eoflow and other defendants must respond by 5 October. The court hearing is set for 16 October. The potential trial is to be discussed in Spring of 2024.
- Medtronic Plc (MDT US) faces a difficult choice. If the injunction is enforced, Medtronic would acquire a ring-fenced asset exposed to potential court-determined liabilities.
Kokusai Electric Pre-IPO – Thoughts on Valuation
- KKR is looking to raise around US$750m via selling a stake in Kokusai Electric (6525 JP) (KE) in its Japan IPO.
- KE main business activities consist of the manufacturing, sales and maintenance service of semiconductor manufacturing equipment.
- In our previous notes we have looked at the company’s past performance and undertaken a peer comparison. In this note, we talk about valuations.
PICC’s (1339 HK) Lifetime Low Implied Stub
- People’s Insurance (PICC) (1339 HK) is currently trading at an all-time low implied stub.
- Stripping out PICC’s 68.98% stake in PICC Property & Casualty H (2328 HK), the market is assigning HK$35.6bn less for its steady and profitable life/health insurance stub ops, year-to-date.
- PICC is outperforming the HSI. It’s just that PICC P&C is on a hot streak, possibly driven (pun intended) by EV insurance.
Eoflow: Ozempic and Wegovy Reducing Need for Disposable Insulin Injection Devices + Ongoing Lawsuit?
- Eoflow’s share price has dropped 27% lower than the proposed tender offer price of 30,000 won. Two major factors have negatively impacted Eoflow (294090 KS)’s share price.
- First, in September 2023, there were new data that suggested that popular weight loss drugs including Ozempic and Wegovy could reduce the need for insulin injections with patients with diabetes.
- Second, the ongoing lawsuit by Insulet continues to remain a major headache. Eoflow is not a KISS (“Keep It Simple Stupid”) stock.
CALB IPO Lock-Up – US$2.6bn Lockup Release but Mostly SOE Owned
- CALB Group (3931 HK) raised around US$1.2bn in its Hong Kong IPO in Oct 2022. The lockup on its pre-IPO shareholders will expire tomorrow.
- CALB undertakes design, R&D, production and sales of EV batteries and Energy Storage Systems (ESS) products in China.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
FAST RETAIL (9983) | 3 Reasons Why Guidance Could Miss
- Fast Retail Full-Year Expectations: Anticipate strong FY results, but potential FY8/24 guidance headwinds include weather impacts and yen weakness.
- Management Guidance Risks: The key risk would seem to be China outlook; Japan/Europe’s heatwave impact on fall season; potential for gross margin pressures.
- Valuation: Despite growth prospects, concerns over cyclicality and valuation relative to peers persist.
Exploring the Launch of a Posco Group-Focused ETF: Flow Trading Insights
- KRX approved the listing of ACE POSCO Group Focus. This fund mirrors the performance of the FnGuide POSCO Group Focus Index. KRX will announce the listing date next week.
- This index encompasses 6 Posco affiliates and 4 non-Posco stocks. The top 3 constituents, each assigned a 25% weight, are POSCO Holdings, Posco International, and Posco Future M.
- We should explore various long-short setups for stocks within the local battery sector (long Posco affiliates and short others), starting with the listing of this ACE POSCO Group Focus ETF.
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