In today’s briefing:
- Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins
- The Brand Spanking New Extra Spiffy 🦄H/A-Share Discount/Premium Weekly (As of 11 Aug 2023)
- Brilliance China (1114 HK): Driving Back Into Passive Portfolios
- Quiddity HSCEI Sep 23 Flow Expectations Update: US$367mn One-Way, Beigene Vs Peers Interesting
- KOSDAQ150 Ad Hoc Index Rebalance Preview: VAT Could Replace Lutronic
- Sea Ltd 2Q23: Revenue Should Align with Consensus, Profitability a Puzzle
- Quiddity HSTECH Sep 23 Flow Expectations Update: Last Trade Sucessful; Some New Trade Ideas
- S&P/ASX Index Rebalance Preview: Potential Adds Have Outperformed
- Sanei Architecture Planning (3228 JP): Open House’s JPY2,025 Tender Offer
- Splitit Pursues Split From The ASX
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Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins
- In March 2023, Japan Post Holdings (6178 JP) sold ¥1.1trln of shares in Japan Post Bank (7182 JP), lowering its stake considerably, raising float. There will be a TOPIX upweight.
- In May, with earnings, they announced their intention to buy back ¥300bn of shares or up to 10% of shares out. Today, they announced the details. ¥300bn through March end.
- In a ¥300bn ToSTNeT-3 tomorrow, the govt will sell back ¥105.7bn. That leaves a residual worth examining. So we examine.
The Brand Spanking New Extra Spiffy 🦄H/A-Share Discount/Premium Weekly (As of 11 Aug 2023)
- This is the Brand Spanking New and Extra Spiffy H/A-Share Discount/Premium Weekly designed to help investors see the relationships easily. We used to do it.
- We decided to bring it back better. There are lots of cool interactive tables, and charts, heat maps, and comparative data. And 19 Trade Recommendations.
- We hope this new version serves readers even better. Feedback is actively solicited to see if we can improve it from here.
Brilliance China (1114 HK): Driving Back Into Passive Portfolios
- Brilliance China Automotive (1114 HK) was deleted from local and global indices following its prolonged trading suspension from April 2021 to September 2022.
- Following the resumption of trading, Brilliance China Automotive (1114 HK) was added to the HSCI in March and subsequently to Southbound Stock Connect.
- The stock should be bought by global passive trackers over the next few months and there should be substantial passive inflows.
Quiddity HSCEI Sep 23 Flow Expectations Update: US$367mn One-Way, Beigene Vs Peers Interesting
- In three more weeks, the index changes and the indicative capping changes for the September 2023 rebalance will be officially announced.
- We first looked at the potential HSCEI index changes and the resultant capping flows for September 2023 in Quiddity HSCEI Sep 23 Flow Expectations: Two Changes Likely, US$276mn One-Way
- In this insight, we take a look at Quiddity’s updated flow expectations which account for the changes in prices in the last ~1.5 months.
KOSDAQ150 Ad Hoc Index Rebalance Preview: VAT Could Replace Lutronic
- Following the two tender offers, Han & Co now holds more than 90% of the common shares in Lutronic Corp (085370 KS) and is looking to buy the remaining shares.
- Lutronic Corp (085370 KS) is a member of the KOSDAQ 150 Index and delisting would mean an index replacement. Value Added Technologies (043150 KS) is a potential inclusion.
- Value Added Technologies (043150 KS) has underperformed its peers and trades cheaper on nearly all valuation parameters.
Sea Ltd 2Q23: Revenue Should Align with Consensus, Profitability a Puzzle
- We remain bearish on Sea (SE US) leading upto Q2 results on 15th August 2023.
- Our analysis suggests Sea Ltd could hit around $3.25bn revenue in 2Q23, in line with consensus. However, profitability could fall short of consensus expectations.
- Nonetheless, any downside stemming from a minor earnings shortfall could be rather limited given the existing low consensus and the lackluster price performance leading up to the Q2 earnings announcement.
Quiddity HSTECH Sep 23 Flow Expectations Update: Last Trade Sucessful; Some New Trade Ideas
- In Quiddity HSTECH Sep 23 Flow Expectations: Two ADDs/DELs Possible, I discussed my initial flow expectations and potential index changes for the September 2023 Rebalance.
- The suggested (previous insight) SHORT Ping An Healthcare and Technol (1833 HK) is down 10.6% vs the hedge JD Health International (6618 HK) in ~1.5 months.
- In this insight, I have presented my updated flow expectations and some new trade ideas for the next few weeks.
S&P/ASX Index Rebalance Preview: Potential Adds Have Outperformed
- We forecast 26 changes across the ASX50 Index, ASX100 Index, S&P/ASX 200 (AS51 INDEX) and ASX300 Index at the September rebalance.
- The review period ends tomorrow, so most changes are high probability. Though there are some changes that will be up to the discretion of the index committee.
- There will be a lot of stock to trade on the changes to the ASX200 and indices higher up the hierarchy. But there will be a lot of pre-positioning too.
Sanei Architecture Planning (3228 JP): Open House’s JPY2,025 Tender Offer
- Sanei Architecture Planning (3228 JP) has recommended Open House (3288 JP)’s tender offer of JPY2,025 per share, an 18.0% premium to the undisturbed price (15 August).
- The transaction is required to facilitate the exit of Mr Koike, the largest shareholder, and satisfy Article 27 of the Tokyo Metropolitan Organized Crime Exclusion Ordinance.
- Irrevocables represent a 64.21% ownership ratio, and the lower limit requires a 6.9% minority acceptance rate. The offer is a reasonable solution to the current predicament.
Splitit Pursues Split From The ASX
- Splitit Ltd (SPT AU) will seek approval from shareholders to delist the Buy Now, Pay Later micro-play from the ASX and redomicile to the Cayman Islands.
- Concurrent with the voluntary delisting proposal, PE outfit Motive Partners will pump in US$50mn in exchange for preference shares – assuming the delisting occurs and certain earnings targets are met.
- This is not an Offer for shares. If delisted, Splitit shareholders will hold scrip in an unlisted private vehicle.