In today’s briefing:
- [JAPAN ACTIVISM] Keisei Elec (9009) AGM Result Not Salutary, Tough To Win On This Stance
- Solactive Global Uranium & Nuclear Components Index Rebalance: Two Adds & US$500m Trade
- India: Potential Free Float Changes & Passive Flows in August
- CPMC (906 HK): Champion’s Offer Now Open. But All Eyes On ORG’s Tilt
- Ola Electric IPO – RHP Updates – Growing Faster than Expected, Driven by GoI Policy
- STAR100 Index Rebalance Preview: Potential Adds Diverge Further from Potential Deletes
- Ola Electric: India’s First EV IPO – Key Facts, Financials & Valuation
- Reservoir Hogs: WH Group (288 HK) Mulls US/Mexican Spin-Off
- Block Deal Sale Of 2.3% Stake in Woori Financial and Highlights of Its Corporate Value Up Program
- Quiddity Leaderboard ES50 Sep 24: Billion Dollar Flows Now in the Money
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[JAPAN ACTIVISM] Keisei Elec (9009) AGM Result Not Salutary, Tough To Win On This Stance
- A week ago, the Keisei Electric Railway Co (9009 JP) AGM took place. The activist which had proposed a shareholder resolution saw ISS and Glass Lewis support.
- But that was to no avail as the shareholder proposal got 29.89% of the votes, and 26.15% of total voting rights. This likely informs the near-term future of such proposals.
- I expect the ask needs to change, and the agenda item needs to be difficult to be against.
Solactive Global Uranium & Nuclear Components Index Rebalance: Two Adds & US$500m Trade
- Solactive has announced the constituent changes for the Global Uranium & Nuclear Components Index with implementation at the close on 31 July.
- Oklo (OKLO US) and Western Uranium & Vanadium (WUC CN) will be added to the index. Estimated one-way turnover is 7.9% resulting in a round-trip trade of US$486m.
- There are only 4 trading days to implementation of the changes and we’d watch out for big moves on stocks that have more than 2x ADV to trade.
India: Potential Free Float Changes & Passive Flows in August
- Companies in India have disclosed their shareholding pattern as of end-June in July. There are companies with significant float changes from end-December and/or end-March.
- The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
- Depending on the date that the shareholding was published, there could be 12 stocks with passive inflows from global trackers while 5 could see passive outflows in August.
CPMC (906 HK): Champion’s Offer Now Open. But All Eyes On ORG’s Tilt
- Back on the 6th December 2023, packaging play CPMC Holdings (906 HK) announced a pre-conditional Offer of $6.87/share, in cash, from SASAC/NCSSF-backed Champion.
- The Offer Document is now out. This is not a Composite Document. A “Response Document” is expected in two weeks, which will include the IFA opinion.
- All the above is moot. ORG Technology Co., Ltd. A (002701 CH)‘s superior HK$7.21/share Offer is currently navigating the necessary regulatory approvals. With irrevocables, ORG has 46.44% in the bag.
Ola Electric IPO – RHP Updates – Growing Faster than Expected, Driven by GoI Policy
- Ola Electric is now looking to raise about US$730m in its upcoming India IPO.
- Ola Electric Mobility is a vertically integrated pure EV player in India with manufacturing capabilities for EVs and EV components, including cells.
- In our previous notes, we looked at the company’s performance, undertook a peer comparison and talked about valuations. In this note, we look at the updates from its recent filings.
STAR100 Index Rebalance Preview: Potential Adds Diverge Further from Potential Deletes
- The review period for the September rebalance ends 31 July. We expect the changes to be announced 30 August with the implementation taking place after the close on 13 September.
- We forecast 6 changes for the index, including migrations between the STAR100 Index and the STAR50 INDEX. There is uncertainty for a few adds given profitability (or lack of it).
- The outright potential adds have outperformed the outright potential deletes since the start of the calendar year with 12% outperformance in just the last 3 weeks.
Ola Electric: India’s First EV IPO – Key Facts, Financials & Valuation
- Ola Electric (1700674D IN) , India’s leading electric 2-wheeler backed by Softbank Group ‘s Vision Fund, will launch its USD 735 million IPO on Friday, August 2.
- The IPO pricing suggests a post-money equity valuation of around USD 4 billion, significantly lower than its earlier funding levels.
- Government incentives for EVs are being revised, with the current scheme valid only until the end of September, creating uncertainty that has possibly impacted valuations.
Reservoir Hogs: WH Group (288 HK) Mulls US/Mexican Spin-Off
- Earlier this month, WH Group (288 HK) announced it had submitted a plan to spin-off its Smithfield US and Mexican ops on the NYSE or NASDAQ,
- These ops accounted for 54% of WHG’s FY23 revenue and 22.4% of the operating profit; compared to 56% and 44.9% respectively in FY22.
- We’ve been here before. A Smithfield spin-off was touted in 4Q23 (in the media). WHG acquired Smithfield for US$4.7bn in 2013, ahead of its 2014 listing.
Block Deal Sale Of 2.3% Stake in Woori Financial and Highlights of Its Corporate Value Up Program
- On 30 July, it was reported that IMM Private Equity (PE) sold a 2.3% stake (16.78 million shares) of Woori Financial Group (WFG), which was worth 264 billion won.
- Block deal sale price was 15,737 won (0.4% higher than current price). Today’s block deal sale represents a second block deal sale of Woori Financial by IMM PE in 2024.
- Under the mid-to-long term Value Up program, Woori Financial Group aims to achieve a sustainable ROE of 10% and total shareholder returns of 50%.
Quiddity Leaderboard ES50 Sep 24: Billion Dollar Flows Now in the Money
- The ES50 Index is one of the most highly-tracked indices in Europe and the annual index review takes place in September every year.
- In this insight, we take a look at Quiddity’s estimation of the latest ranks of potential ADDs and DELs for the upcoming index rebal event in September 2024.
- We have been tracking these movements for several months and it seemed like index changes were unlikely to take place but our expectations have changed now.