In today’s briefing:
- Canon Strikes Again. One Buyback Done, Another Begins. Shareholder Structure STILL Matters
- MOG Digitech (1942 HK): What the Flow Is Going On?
- Shinsei’s TOB Period Almost Done – What Next?
- StubWorld: EcoPro Continues To Defy Logic
- KOSPI200 Index Rebalance Preview: A Busy December Rebalance
- Alibaba’s Chairman & CEO, Daniel Zang Faces a Downgrade
- Doosan Bobcat Placement – Past Deals Have Been Mixed but the Stock Has Been Doing Well
- Exploring Two Lucrative Arbitrage Trading Opportunities in CJ CGV’s Monumental Rights Offer
- Shriram Finance Placement – Well Flagged Cleanup but Watch Out for the Recent Spike
- Ohayo Japan| US Back to an Equity Sell Off; NUGGET: Nintendo(7974) – Set to Track Disney’s Success ?
Canon Strikes Again. One Buyback Done, Another Begins. Shareholder Structure STILL Matters
- Canon Inc (7751 JP) has, as discussed in these pages, conducted 18 buybacks since the GFC. Every single one is ¥50bn. They are short and sharp. The longest? 23 days.
- The most recent took 18 days, and was only 15% of ADV, significantly lower than the average of the last dozen at 23-24%.
- This time, 3 days after the finished they launched another. The stock popped 5% the first day. There’s a reason for that. Shareholder structure STILL matters a lot.
MOG Digitech (1942 HK): What the Flow Is Going On?
- MOG Holdings (1942 HK) has been skyrocketing in price since the start of the year. Remarkably, there is little change in the number of shares that trade daily.
- MOG Holdings (1942 HK) has a market cap of US$6.44bn and trades at a modest Price/Sales ratio of 75x and an equally modest Price to Book Value of 89.5x.
- Liquidity has improved to the point where the stock could be added to some indices. However, there is a precedent of stocks not being added following market participant feedback.
Shinsei’s TOB Period Almost Done – What Next?
- The Tender Offer by SBI Holdings (8473 JP) to take private SBI Shinsei Bank (8303 JP) is almost done. The tender closes on 23 June.
- The stock has not traded below theTOB Price since the announcement. People have built positions. Expect minimal liquidity from here on out. I expect a somewhat ‘weak’ result.
- Now starts a series of ‘technical’ events and deadlines which will culminate for some in delisting at end-Q3/start-Q4 and for some ends in years after an Appraisal Rights case.
StubWorld: EcoPro Continues To Defy Logic
- EcoPro Co Ltd (086520 KS) has swatted aside analyst downgrades and the indictment of its chairman to touch an all-time high.
- Preceding my comments on EcoPro are the weekly setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
KOSPI200 Index Rebalance Preview: A Busy December Rebalance
- Just over a quarter of the way through the review period, we see six changes for the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) at the December rebalance.
- There are a few stocks that are close adds at the current time and a move higher can take them into inclusion zone leading to more deletions.
- While there is little to no short interest on the potential inclusions, short interest on the potential deletions ranges from 4.3-12.2 days of ADV and 0.5-3.5% of free float.
Alibaba’s Chairman & CEO, Daniel Zang Faces a Downgrade
- Daniel Zhang’s transition to a less prominent role within Alibaba’s Cloud business, after previously serving as CEO and Chairman of Alibaba Group (9988 HK), could be seen as a demotion.
- We suspect that there could be some government influence on these proposed leadership changes.
- Nonetheless, the situation is not encouraging, especially as the company enters a turbulent phase with multiple units poised to pursue IPOs in the near future.
Doosan Bobcat Placement – Past Deals Have Been Mixed but the Stock Has Been Doing Well
- Doosan Enerbility (034020 KS) aims to raise around US$220m via selling around 4.9% of Doosan Bobcat Inc (241560 KS) .
- This will be the third selldown in the company in less than a year with the previous two deals in Nov 22 and May 23 having delivered mixed results
- In this note, we will run the deal through our ECM framework and comment on other deal dynamics.
Exploring Two Lucrative Arbitrage Trading Opportunities in CJ CGV’s Monumental Rights Offer
- A capital increase event of this size allows for a classic arbitrage trading strategy involving the acquisition of subscription rights and the simultaneous sale of an equal amount of SSF.
- We can aim to profit from the price movements between warrants and SSF during the warrants trading period by getting out of the positions before the trading period ends.
- We will also likely encounter a significantly juicy price difference between warrants+subscription and SSF, given a discount rate of 25% with an enormous capital increase rate,
Shriram Finance Placement – Well Flagged Cleanup but Watch Out for the Recent Spike
- Piramal Enterprises (PIEL IN) plans to raise around US$600m via selling its entire 8.3% stake in Shriram Finance.
- The deal is very well flagged with Piramal having sold half its stake in 2019 and having publicly stated its intention to completely exit as well.
- In this note, we will run the deal through our ECM framework and comment on other deal dynamics.
Ohayo Japan| US Back to an Equity Sell Off; NUGGET: Nintendo(7974) – Set to Track Disney’s Success ?
- OVERSEAS. SPX -0.5% with most Sector in the Red; Residential Construction STRONG; China Rate Cut disappoints; TESLA +5.3% bags Rivian for Charging Network.
- JAPAN. NKY Futs -0.9% vs Cash; Blackrock’s Fink say Japan benefitting from China Flight; Labor market loosing as JP workers shying away from liftime employment; Yamato HD exits mail delivery
- NUGGET. Nintendo(7974) – Doing a Disney..using its IP…Now Mario out, Rumour are “Legend of Zelda” Movie in the works..
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