In today’s briefing:
- KOSPI200 Index Rebalance Preview: A Busy December Rebalance
- Shinsei’s TOB Period Almost Done – What Next?
- Exploring Two Lucrative Arbitrage Trading Opportunities in CJ CGV’s Monumental Rights Offer
- HS Holdings (8699 JP) Buyback – Adds More to BVPS
- Quiddity Leaderboard ASX Sep 23: Many Changes Ahead
- Wuxi Biologics (2269.HK) – Investor Day Brings New Surprises
- Ricoh (7752 JP) – Long Term Structural Decliner with a Recent Boost in Inorganic Rev & Profits
- Keep Pre-IPO – Updates Since Our Last Note – Losses Have Been the Only Constant
- Hong Kong CEO & Director Dealings (21 June): China Feihe’s CFO Sells Around All-Time Low
- Ohayo Japan| Powell Drives Fear into Equities/Tech; NUGGET: Mit Motors(7211)-Fruitless Uphill Climb
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.
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.
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,
HS Holdings (8699 JP) Buyback – Adds More to BVPS
- HS Holdings (8699 JP) remains an interesting hodgepodge of assets. It owns just under 50% of Mongolia’s biggest bank, recently IPOed Khan Bank (KHAN MO).
- It has a pile of cash. And it has a glorified pawn shop business in Japan. The bank shares must be sold, to a significant degree, by end of year.
- Today it announced a buyback tomorrow of 6.4% of shares out. I expect it is one of two large individual holders. We’ll probably know more within a week.
Quiddity Leaderboard ASX Sep 23: Many Changes Ahead
- In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run up to the September 2023 Rebalance.
- I currently expect one change for the ASX 100 index and five changes (including one intra-review change) for the ASX 200 index.
- There could be 7 ADDs and 5 DELs for the ASX 300 index.
Wuxi Biologics (2269.HK) – Investor Day Brings New Surprises
- A major reason for investors’ disappointment is that the number of new projects in 23H1 were significantly lower-than-expected. The impact of slowdown in financing activity began to show in 23H1.
- Higher revenue growth of non-COVID projects is needed to achieve the performance guidance target.If the management fail to fulfill the commitment to accelerate business recovery in 23H2,they may lose creditability.
- It’s unlikely to receive AD drugs orders this year. The market would react directly to short-term sentiment. Without big catalysts, it’s difficult for WuXi Bio’s stock price to perform well.
Ricoh (7752 JP) – Long Term Structural Decliner with a Recent Boost in Inorganic Rev & Profits
- Large portion of the business is in secular decline and facing pricing pressure
- Ricoh Company Ltd (7752 JP) appears to be losing share in a shrinking market
- Estimates are above overly optimistic guidance making shares look optically inexpensive
Keep Pre-IPO – Updates Since Our Last Note – Losses Have Been the Only Constant
- Keep Inc (KEEP HK) is looking to raise around US$100m in its upcoming Hong Kong IPO.
- Keep is an online fitness platform, offering online fitness content, smart fitness devices and fitness products.
- In this note, we discuss the updates since our last note.
Hong Kong CEO & Director Dealings (21 June): China Feihe’s CFO Sells Around All-Time Low
- The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
- Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
- The key stock mentioned in this regular insight is China Feihe (6186 HK)
Ohayo Japan| Powell Drives Fear into Equities/Tech; NUGGET: Mit Motors(7211)-Fruitless Uphill Climb
- OVERSEAS. SPX -0.5% with Tech highflyers bearing the run of the decline; Fed Chair Powell thinking two more hikes this year; Tesla downgraded as rally not backed back fundamentals
- JAPAN. NKY Futs -0.1% Disc to Cash; Expect Japan tech to take the signal from the US; Kishida vow to deliver on wage growth; Panasonic and Mazda do battery deal
- NUGGET. Mitsubishi Motors(7211) – Issues in China fully capture the stuggles for OEMs without a competitive BEV product/strategy.
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