In today’s briefing:
- Haidilao’s Spin-Off of Super Hi: Index Implications
- S&P/ASX Index Rebalance Preview: A Busy March (Maybe January and February Too)
- China ADRs Delisting – Friday Could Be Judgment Day for over US$800bn Mcap of Stocks
- Toshiba (6502) – Funding Secured!
- CSI REITs Index: An Investable Benchmark Launches Today
- 2023 High Conviction – Anycolor (5032) Aiming at TSE Prime and TOPIX – And How!
- China ADRs Delisting – Christmas Came a Day Earlier than We Expected – No Delisting Risk for Now
- China ADRs: PCAOB Resets the Clock on Delistings; Implications
- Yashili/Mengniu: Are We There Yet?
- Adani Enterprise US$2.4bn Raising Early Look – Lots to Think About: Controversies, Debt, Grand Plans
Haidilao’s Spin-Off of Super Hi: Index Implications
- Haidilao (6862 HK) intends to spin-off its 90% holding in Super Hi International Holding (SHI HK) with an ex-date of 16 December.
- Super Hi International Holding (SHI HK) will be deleted from the Hong Kong Hang Seng Index and Hang Seng China Enterprises Index at the close on listing day.
- There could be nationality changes and selling from MSCI and FTSE trackers as well, though the timing is uncertain at this point.
S&P/ASX Index Rebalance Preview: A Busy March (Maybe January and February Too)
- We currently see one change each for the ASX20 and ASX100 indices, 4 changes for the S&P/ASX 200 and 10 adds/ 6 deletes for the ASX300 Index in March.
- There could be an addition to the S&P/ASX 200 (AS51 INDEX) in January following Pendal Group (PDL AU)‘s acquisition by Perpetual Ltd (PPT AU).
- PEXA Group (PXA AU) is a potential inclusion to the S&P/ASX 200 (AS51 INDEX) if Link Administration (LNK AU)‘s in-specie distribution of PEXA shares to its shareholders is approved.
China ADRs Delisting – Friday Could Be Judgment Day for over US$800bn Mcap of Stocks
- PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
- The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
- In this note, we’ll talk about the latest developments, possible outcomes and implications.
Toshiba (6502) – Funding Secured!
- A Nikkei article today suggests FUNDING SECURED for JIP’s deal for Toshiba Corp (6502 JP). Noises 2wks ago suggested this timing for a deal, but there are no terms yet.
- The syndicate, led by SMBC and Mizuho, “has agreed to ¥1.2trln in loans.” The two leads take two-thirds but details suggest not all is as smooth as the headline suggests.
- The remaining questions are whether the major holders will take the bait at that price, and/or whether JIC would come in over the top. I expect yes to the first.
CSI REITs Index: An Investable Benchmark Launches Today
- The China Securities Index (CSI) will launch the CSI REITs Index today. The index currently has 14 constituents, and the REITs will be capped at 15% of the index weight.
- We expect another 6 REITs to be added to the index at the March rebalance. And then at least another 3 more in June.
- The launch of the index should result in ETFs and other passive investment products being floated which should further enhance market liquidity and bring long-term benefits to the market.
2023 High Conviction – Anycolor (5032) Aiming at TSE Prime and TOPIX – And How!
- “VTuber” (Virtual Youtuber) animated influencer company Anycolor (5032 JP) was listed on 8 June 2022 at ¥1530. The stock popped 214% on Day1.It is up another 60% since then.
- Today Anycolor reported Q2 earnings (result, presentation) and revised its full-year forecast to 30 April. Revenues will be +7-18% vs forecast, OP +18-39%, NP +15-39%. Price is 43x forecast EPS.
- The company also announced it is preparing a Section Transfer application, but gave little more info. So we dig into what THAT means.
China ADRs Delisting – Christmas Came a Day Earlier than We Expected – No Delisting Risk for Now
- Today PCAOB announced that they had secured complete access to inspect and investigate Chinese Firms for the first time in history.
- This was on back of the Aug 2022 agreement between PCAOB, CSRC and MOF, which was followed up with a Hong Kong visit by PCAOB officials over Sep-Nov 2022.
- We wrote about this on 14th Dec 2022 and expected the results to be out on Friday (16th Dec), they have come out a day earlier than we expected.
China ADRs: PCAOB Resets the Clock on Delistings; Implications
- After getting ‘unprecedented access’ to inspect and investigate audit firms in the PRC, the PCAOB is vacating their 2021 determinations; there will be no ADR delistings in the near future.
- PCAOB inspectors have identified numerous potential deficiencies that are consistent with what the PCAOB has encountered in other first-time inspections around the world.
- The iShares MSCI China ETF (MCHI US), KraneShares CSI China Internet ETF (KWEB US) and NASDAQ Golden Dragon China Index (HXC INDEX) are trading lower in the U.S.
Yashili/Mengniu: Are We There Yet?
- Back on the 6 May, Yashili International Holdings (1230 HK) announced a pre-conditional Offer, by way of a Scheme, from China Mengniu Dairy Co (2319 HK).
- Pre-Conditions concern three sales and purchase agreements, all of which Yashili shareholders voted through on the 16 August.
- From a regulatory standpoint, various conditions attached to Dumex China remain outstanding. But the wording in the most recent monthly update suggests the process is getting to the pointy end.
Adani Enterprise US$2.4bn Raising Early Look – Lots to Think About: Controversies, Debt, Grand Plans
- Adani Enterprises (ADE IN) is looking to raise INR200bn (US$2.4bn) via a further public offering. The company has obtained board approval and is now awaiting shareholder approval.
- It is the flagship company of the Adani Group. The group’s listed entities’ stock performance over the past few years has made the founder one of the richest persons globally.
- However, the stock is expensive and has had some issues in the past. In this note, we take an early look at the possible placement and its impact.
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