In today’s briefing:
- Keyence(6861 JP) | The Rise of the Phoenix – A Company like No Other
- CSI500 Index Rebalance Preview: 50 Adds/Deletes in December
- Merger Arb Mondays (31 Oct) – Jinke, Fengxiang, Lifestyle, Kingston, Pushpay, Nitro, Elmo, DTAC/True
- Index Rebalance & ETF Flow Recap: S&P/ASX, STAR50, CSI300, SSE50, IDX, GOTO, SMM/KEP
- Fengxiang (9977 HK): PAG’s Unconditional MGO And Proposed Delisting
- Moya Holdings: 21 Nov EGM For Salim’s Exit Offer
- KOSDAQ150 Ad Hoc Index Rebalance: LX Semicon OUT, Nextin IN
- Pushpay: BGH/Sixth Street Keep The Faith With $1.34/Share Tilt
- Ad Hoc S&P500 Change on Twitter Deletion
- LX Semicon KOSPI Migration & KOSDAQ 150 Special Change
Keyence(6861 JP) | The Rise of the Phoenix – A Company like No Other
- Keyence reported record 2Q Sales and OP, thoroughly beating street expectations. The company recorded high double-digit growth in all regions – even in Europe.
- Pricing power is on display 10-35% price hikes to shore up the dip in GPM to 81.3%, depressed on higher raw material costs. Sets up for future earnings growth.
- The share price has underperformed the TOPIX -26%YTD. Valuations at the bottom of the recent range. We expect a share price recovery and are bullish.
CSI500 Index Rebalance Preview: 50 Adds/Deletes in December
- With a day left in the review period, we forecast 50 changes (the maximum permitted) for the CSI500 Index at the close on 9 December.
- We estimate a one-way turnover of 13.53% at the December rebalance leading to a one-way trade of CNY 8.01bn. The Materials, Consumer Discretionary and Information Technology sectors are net gainers.
- The potential adds and potential deletes have performed in line over the last few weeks, and we’d look to position for outperformance post the end of the review period.
Merger Arb Mondays (31 Oct) – Jinke, Fengxiang, Lifestyle, Kingston, Pushpay, Nitro, Elmo, DTAC/True
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads – 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), 111 Inc (YI US), Genex Power Ltd (GNX AU), O2Micro International (OIIM US), Shandong Fengxiang (9977 HK).
- Lowest spreads – Tyro Payments (TYR AU), Tassal (TGR AU), China Vast Industrial Urban Development (6166 HK), Singapore Medical (SMG SP), PTB Group Ltd (PTB AU), Nearmap Ltd (NEA AU).
Index Rebalance & ETF Flow Recap: S&P/ASX, STAR50, CSI300, SSE50, IDX, GOTO, SMM/KEP
- The review period for the MSCI Nov SAIR, Kospi 200 Index, KOSDAQ 150 Index, S&P BSE SENSEX Index and a bunch of mainland China indices ends on 31 October.
- The minor rebalancing of the IDX30, LQ45 and IDX80 indices takes place at the close on 31 October, while the KOSDAQ 150 Index ad hoc rebalance is on 2 November.
- There were outflows from IShares Core MSCI Asia Ex Japan ETF (3010 HK) and inflows to Tracker Fund (2800 HK) and Hang Seng H Share Index ETF (2828 HK).
Fengxiang (9977 HK): PAG’s Unconditional MGO And Proposed Delisting
- PAG Capital has won the judicial auction to acquire 70.92% of Shandong Fengxiang (9977 HK).
- The acquisition remains subject to regulatory clearance (including SAMR). Once greenlit, PAG will be required to make an unconditional Offer for the H-shares at HK$1.5132/share.
- Separately, it is PAG’s intention to delist Fengxiang which involves Scheme-like delisting resolutions.
Moya Holdings: 21 Nov EGM For Salim’s Exit Offer
- On the 14 September, Indonesian water treatment play Moya Holdings Asia (MHAL SP) announced a S$0.092/share Exit Offer from an Anthoni Salim-controlled entity. The Offer price will not be increased.
- The Offer requires approval from 75% of disinterested shareholders. Tamaris and its concert parties hold 72.84%.
- The Circular is now out. The EGM takes place on the 21 November. The IFA reckons the Offer is fair and reasonable.
KOSDAQ150 Ad Hoc Index Rebalance: LX Semicon OUT, Nextin IN
- Following its planned section transfer, LX Semicon (108320 KS) will be deleted from the KOSDAQ 150 Index at the close on 2 November and replaced by Nextin (348210 KS).
- Passive trackers will need to buy over 4.5 days of ADV on Nextin (348210 KS) and sell over 1.5 days of ADV on LX Semicon (108320 KS).
- Belonging to the Information Technology sector, there is zero chance of LX Semicon (108320 KS) being added to the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX).
Pushpay: BGH/Sixth Street Keep The Faith With $1.34/Share Tilt
- Church donor management tech play Pushpay (PPH NZ) has been fielding expressions of interest since April. Earlier this month, Pushpay announced it had received another proposal, reportedly from BGH/Sixth Street.
- On the 28 October, Puspay announced it had entered into a Scheme Implementation Agreement at NZ$1.34/share with BGH/Sixth Street, which collectively hold 20.34%. This is a 30.1% premium to undisturbed.
- The offer is subject to shareholder and regulatory approval, with a possible completion date in early 2Q23.
Ad Hoc S&P500 Change on Twitter Deletion
- S&P DJI announced late 27 October 2022 that Twitter Inc (TWTR US) would be deleted from the S&P500, replaced by Arch Capital (ACGL US).
- RXO would be added to the MidCap400 while Bread Financial Holdings (BFH) would move from MidCap400 to SmallCap600 and Unifi Inc (UFI US) would get deleted from the 600.
- This insight presents the issues and the flows, which are not to be separated.
LX Semicon KOSPI Migration & KOSDAQ 150 Special Change
- LX Semicon (108320 KS) will be traded on KOSPI from November 3rd. This event has no trade suspension. So, it will be traded on KOSDAQ until November 2nd.
- Nextin (348210 KS) will replace LX Semicon for KOSDAQ 150. Again, the effective date is November 3rd. So, the index trackers will rebalance-trade at the close on November 2nd.
- LX Semicon will see an outflow of -1.91x ADTV, whereas Nextin will enjoy an inflow of 3.93x ADTV. This Special Change will likely save AptaBio Therapeutics (293780 KS) from deletion.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
