In today’s briefing:
- KOSDAQ150 Ad Hoc Index Rebalance: Humasis (205470 KS) To Replace Cellivery (268600 KS)
- Index Rebalance & ETF Flow Recap: Nikkei225, KOSDAQ150, KT Corp
- Socionext Lock-Up – Up 2.67x Since IPO. US$930m Worth of Shares to Be Unlocked
- Short Interest Movements (Q1 2023): HK, Korea, Taiwan, Australia
- Merger Arb Mondays (03 Apr) – Toshiba, Toyo, AAG, Origin, United Malt, Liontown, Mincor, Healius
- Rakuten Bank IPO: Valuation Insights
- MSCI Korea May QCIR: Potential Adds, Deletes & ‘Extreme Price Increase’ Triggers
- Good Morning Japan |Energy Leads SPX to Gains; NUGGET: Watch FY3/24 JP Payout Ratios-The Heat Is On!
- Merdeka Battery Materials IPO Peer Comparison & Valuation – Might Be Worth a Shot
- JD Property Inc IPO: Debt-Loaded and Overvalued at Previous Private Market Valuation
KOSDAQ150 Ad Hoc Index Rebalance: Humasis (205470 KS) To Replace Cellivery (268600 KS)
- Following Cellivery Therapeutics (268600 KS) designation as an Administrative Issue and an Investment Attention Issue, the stock will be deleted from the KOSDAQ 150 Index and replaced with Humasis (205470 KS).
- The timing of the index change is currently uncertain but will be implemented latest by the close of trading on 17 April.
- Humasis (205470 KS) was limit up on Friday following the ex-date of a 1:3 scrip issue. The stock could continue to move higher over the next week.
Index Rebalance & ETF Flow Recap: Nikkei225, KOSDAQ150, KT Corp
- The March rebalances of the NIFTY indices and the Nikkei 225 (NKY INDEX) were implemented last week. Plus some ad hoc rebalances for the KOSPI2 INDEX and KOSDQ150 INDEX.
- A quieter week coming up with multiple market holidays across markets. We also near the start of the review period for the MSCI May QCIR.
- There were inflows to Tracker Fund of Hong Kong Ltd (2800 HK) and iShares FTSE/Xinhua A50 China (2823 HK) during the week while there were outflows from some Korea ETFs.
Socionext Lock-Up – Up 2.67x Since IPO. US$930m Worth of Shares to Be Unlocked
- Socionext (6526 JP) was listed on 12th Oct 2022, when it raised US$457m in its upsized Japan IPO. Its six-month lockup will expire on 9th Apr 2023.
- Socionext is a fabless semiconductor provider which commenced operations after integrating the system on a chip (SoC) businesses of Fujitsu Semiconductor Limited and Panasonic Holding Corporation in 2015.
- Coming up for six-month lockup expiry are the Development Bank of Japan, Fujitsu and Panasonic, the trio had each trimmed their respective stakes in the IPO.
Short Interest Movements (Q1 2023): HK, Korea, Taiwan, Australia
- Total short interest in Hong Kong is HK$435.1bn, marginally higher from end-December. Short notional has moved in line with the Hong Kong Hang Seng Index (HSI INDEX).
- Total short notional of the KOSPI and KOSDAQ market has moved up since end-December and is in line with the move higher in the KOSPI2 INDEX and KOSDAQ 150 Index.
- Short notional in Taiwan is lower over the quarter even as the TWSE INDEX has moved higher over the period. There has been big short covering on some stocks.
Merger Arb Mondays (03 Apr) – Toshiba, Toyo, AAG, Origin, United Malt, Liontown, Mincor, Healius
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads – 111 Inc (YI US), Alliance Aviation Services (AQZ AU), Genesis Minerals (GMD AU), Estia Health (EHE AU), Tyro Payments (TYR AU), Aag Energy Holdings (2686 HK), Toyo.
- Lowest spreads Healius (HLS AU), Liontown Resources (LTR AU), Golden Energy & Resources (GER SP), Mincor Resources NL (MCR AU), GK Goh Holdings (GKG SP), SHL Japan Ltd (4327 JP).
Rakuten Bank IPO: Valuation Insights
- Rakuten Bank (5838 JP) is an online bank in Japan. It is looking to raise up to $878m. Pricing is on 5 April and the listing is on 21 April.
- We previously discussed the IPO in Rakuten Bank IPO: The Investment Case and Rakuten Bank Vs SBI Sumishin Net Bank.
- In this note, we discuss valuation. Our analysis suggests that Rakuten Bank is fairly valued at the IPO price range of JPY1,630-1,960 per share. We would participate in the IPO.
MSCI Korea May QCIR: Potential Adds, Deletes & ‘Extreme Price Increase’ Triggers
- Based on closing price from 3 April, we forecast 5 adds and 4 deletes for the MSCI Korea Index at the May QCIR.
- Three of the adds are close to triggering the extreme price increase criteria – if triggered, index inclusion could be deferred to a subsequent index review.
- Retail investors have been buying three of the potential adds, while foreign investors have taken the lead on two. Foreign investors have been sellers on all the potential deletions.
Good Morning Japan |Energy Leads SPX to Gains; NUGGET: Watch FY3/24 JP Payout Ratios-The Heat Is On!
- OVERSEAS. SPX rose +0.4% lead by gains in Energy, which was well bid on OPEC+ surprise cut; ISM Manf PMI print weaker; Rates retreat as US 2Yr dips below 4%
- JAPAN. NKY Futs +0.1% vs Cash; USDJPY 132.4; BOJ Tankan reading points to weaker manufacturing; Potentially complicates BOJ exit; Activist ValueAct Presses Seven & I
- NUGGET. Watch FY3/24 Japan Total Payout Ratios – The Heat is On ! as JP Corporate significantly lags in Total Payout Ratios, while also sitting on ¥100 trn of cash.
Merdeka Battery Materials IPO Peer Comparison & Valuation – Might Be Worth a Shot
- Merdeka Battery Materials (2012725D IJ) is looking to raise around US$580m in its Indonesian IPO.
- It has the largest resource globally in terms of contained nickel at the Konawe Nickel Mine (the SCM Mine), according to Wood Mackenzie
- In this note, we undertake a quick peer comparison, talk about our earnings assumptions, and share our thoughts on valuation.
JD Property Inc IPO: Debt-Loaded and Overvalued at Previous Private Market Valuation
- Just after Alibaba’s big news of a business split and possible fundraising and IPOs for spun-out entities, JD.com announced that they will list its Properties and Industrials businesses in HK.
- The pre-IPO funding round of $800m, led by Hillhouse and Warburg Pincus valued Jingdong Property (JDP HK) at RMB 7.15 per-share, which valued the company at RMB 46.8bn market cap.
- This implies a price-to-book multiple of 1.1x, which is towards the high side considering that the sector is trading at an average discount of roughly 10% to its book value.
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