In today’s briefing:
- EcoPro Materials: IPO & Index Inclusion
- Information Received Through KRX Officials Regarding Changes in the KOSPI 200 Methodology
- Haitong Int’l Securities (665 HK): Possible Offer From Parent
- System Information Co (3677 JP) “MBO” By Bain an Exit Trade for Founder+CEO+Employees
- SK Square: M&A of 11st – Alibaba Out and Qoo10 In?
- Kokusai Electric IPO – Don’t Worry, This’ll Be Fine Too
- Seizing a Trading Opportunity Aimed at HMM’s New Stock Listing Date
- Doosan Robotics (454910 KS): Listing & Index Inclusion Timeline
- Cainiao Pre-IPO – The Postivies – Evolving into a Global Player, Decent Revenue Growth
- Cainiao Smart Logistics IPO: Lacks Viability as a Standalone Business
EcoPro Materials: IPO & Index Inclusion
- EcoPro Materials (ECO123 KS) was founded in 2017 and specializes in manufacturing cathode material precursors, a core material for lithium secondary cells.
- EcoPro Materials (ECO123 KS) could raise between US$387m-US$492m, valuing the company between US$1.9bn-US$2.42bn. Float will depend on voluntary lock-ups and allocation to strategic investors.
- Inclusion in global indices is likely to take place between February to June, while the highest probability of Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) inclusion is in December 2024.
Information Received Through KRX Officials Regarding Changes in the KOSPI 200 Methodology
- The official announcement from KRX regarding the KOSPI 200 rebalancing rule change is expected to be released shortly after the end of October.
- The rule change will take effect beginning with this year’s December rebalancing. An official from KRX has communicated that we can confidently regard this as confirmed.
- It is essential to be aware that during this December review, there exists a significant potential for generating substantial price fluctuations within a narrow timeframe.
Haitong Int’l Securities (665 HK): Possible Offer From Parent
- Haitong International Securities Group (665 HK) (HITSEC) is suspended pursuant to Hong Kong’s Code on Takeovers and Mergers.
- The rumour doing the rounds is that Haitong Securities Co Ltd (A) (600837 CH) (HSC) may take private its 73.4%-held Hong Kong-listed investment banking unit.
- HITSEC’s share performance since 1Q18 has been tragic. Financials have been dire since 2H20. But expect a punchy premium if HTS does seek to take HITSEC private.
System Information Co (3677 JP) “MBO” By Bain an Exit Trade for Founder+CEO+Employees
- The stock is down more than 50% from its high 3yrs ago. The founder is 79. The CEO is 75. Employees and former directors own another 10%.
- This is an exit vs an MBO. And the Target Side negotiating the exit were rolled by Bain. This is NOT an expensive purchase. Bain’s equity check is 2.3x EBIT.
- But it probably gets done anyway unless someone gets noisy. For that, they’d have to buy a 10-15% stake I expect.
SK Square: M&A of 11st – Alibaba Out and Qoo10 In?
- On 27 September, Maeil Business Daily reported that SK Square signed an MOU with Qoo10 to pursue a joint management of 11st.
- It appears that Alibaba may have been reviewing this deal but it is no longer interested in pursuing 11st.
- A deal between Qoo10 and 11st could occur, but this is not certain, which means some of the cash proceeds to FI would need to be burdened by SK Square.
Kokusai Electric IPO – Don’t Worry, This’ll Be Fine Too
- Early last year there were articles suggesting that KKR would IPO Kokusai Electric at a valuation of about ¥700bn.
- A year plus later the company is now set to IPO for something on the order of ¥436bn.
- We are sure KKR is breathing a sigh of relief that they didn’t unload shares 60% higher and can now offer other investors some “value”.
Seizing a Trading Opportunity Aimed at HMM’s New Stock Listing Date
- Should the stock conversion decision be reached this week, the new shares will be listed on the 15th of the upcoming month. So, they will officially debut on October 16th.
- On the day of the new share listing during the immediate previous case, the price dropped by 2.36%, and on the very next trading day, it declined by 3.72%.
- Given the present dilution rate of 30%, there is a higher probability of even more pronounced price movements in the same direction.
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.
Cainiao Pre-IPO – The Postivies – Evolving into a Global Player, Decent Revenue Growth
- Cainiao Smart Logistics , Alibaba Group Holding (9988 HK)’s logistics linked arm, is planning to raise at least US$1bn in its Hong Kong IPO.
- Cainiao is the largest provider of cross-border e-commerce logistics services globally and a leader in China logistics services, according to CIC.
- In this note, we talk about the positive aspects of the deal.
Cainiao Smart Logistics IPO: Lacks Viability as a Standalone Business
- Alibaba (ADR) (BABA US)‘s logistics arm, Cainiao Smart Logistics (1437124D HK), filed for an IPO with HKEX yesterday, aiming to raise $1bn to $2bn.
- Although efficient, Cainiao may face business challenges, as the majority of logistics costs and revenues stem from services outsourced to logistics partners.
- Despite the proposed IPO, we believe that Cainiao will always operate in the shadow of Alibaba’s primary e-commerce business.
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