In today’s briefing:
- Kokusai Electric (6525 JP): Placement Price Could Be Determined Today; Index Impact Could Be Delayed
- Canvest (1381 HK): Evaluating A Privatisation
- The Naspers/Tencent & Prosus/Tencent Stub: Entry Levels so Attractive It Looks Too Good to Be True
- KRX’s Plan to Integrate KOSPI & KOSDAQ into a Tiered System: Trading Considerations
- ASICS (7936 JP): The Current Playbook
- Fancl (4921 JP): Evaluating the Potential of Kirin (2503 JP) Offer Bump
- ASICS Placement Updates – Share Pop Done, Now Needs to Correct
- Nippon Yusen (9101) – Guidance Revision Up Still Conservative, Means More Capital Return Eventually
- Kakao’s Kim Beom-Su Arrested: Analyzing Its Impact on Related Companies
- True Wind Raises Partial TOB Price for Sun Corp (6736 JP) By 8%. Not Enough.
Kokusai Electric (6525 JP): Placement Price Could Be Determined Today; Index Impact Could Be Delayed
- Kokusai Electric (6525 JP) could price their secondary offering after market close today. The stock is down 10.5% since the rumors of the placement began 7 trading sessions ago.
- The Philadelphia Stock Exchange Semiconductor Index (SOX INDEX) has been dropping over the last few days and is 8.6% lower over the last 8 trading days.
- Kokusai Electric (6525 JP) has been trading higher on expectations of index inclusion in August, but that could move to November now.
Canvest (1381 HK): Evaluating A Privatisation
- Since waste-to-energy play Canvest Environmental Protection (1381 HK) announced a possible privatisation from Grandblue Environment (600323 CH) at $4.90/share (a 20.7% premium to undisturbed), shares are up just 6.4%.
- There’s a lot to pack in here, not the least being this is an indicative Pre-Conditional Offer.
- But the fact the announcement mentions rolling over a specific number of shares of the controlling shareholders (7.23%), suggests negotiations are well advanced. So we explore.
The Naspers/Tencent & Prosus/Tencent Stub: Entry Levels so Attractive It Looks Too Good to Be True
- Discounts likely set for a re-rating as market continues to overreact to appointment of CEO amid good set of results.
- The discounts of both Naspers and Prosus have continued to widen since the appointment of Fabricio Bloisi to Group CEO was announced in May (effective 10 July).
- At the end of June, the group released its strongest set of results in years, delivering on consolidated ecommerce profitability ahead of target.
KRX’s Plan to Integrate KOSPI & KOSDAQ into a Tiered System: Trading Considerations
- The major framework of this realignment is likely decided, integrating KOSPI and KOSDAQ into a tiered system based on liquidity, market cap, and financial status, with periodic replacements.
- The KOSPI 200’s continued existence is uncertain under the new realignment plan, which may shift its role to the value-up index, resembling Japan’s market restructuring model.
- The first-tier market’s entry requirements will likely reflect value-up index criteria, suggesting greater speculative money movement toward the value-up index starting in September.
ASICS (7936 JP): The Current Playbook
- Since the US$1.4 billion secondary placement announcement, ASICS Corp (7936 JP)’s shares are up 0.9% from the undisturbed price of JPY2,564 per share (12 July).
- Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Asics’ shares have deviated from the pattern of previous large placements.
- The offering will likely be priced on 23 July. Investors who have participated in previous large Japanese placements tend to secure positive returns.
Fancl (4921 JP): Evaluating the Potential of Kirin (2503 JP) Offer Bump
- Kirin Holdings (2503 JP)’s JPY8,620 offer for Fancl Corp (4921 JP) closes on 29 July. The shares have traded above terms for 25 out of the 26 trading days.
- MY.Alpha Management has amassed 10.3 million shares (8.51% ownership ratio) with several purchases above terms. MY.Alpha could catalyse other shareholders to rally against a light offer.
- The emergence of MY.Alpha, the high volume above terms, peers re-rating, the required minority acceptance rate, and an offer unattractive to historical trading ranges increase the probability of a bump.
ASICS Placement Updates – Share Pop Done, Now Needs to Correct
- A group of shareholders aims to raise around US$1.3bn via selling around 11% of ASICS Corp (7936 JP).
- In our earlier note, we talked about the placement and ran the deal through our ECM framework.
- In this note, we talk about the updates and share price performance since then.
Nippon Yusen (9101) – Guidance Revision Up Still Conservative, Means More Capital Return Eventually
- Nippon Yusen Kk (9101 JP) today announced an upward revision of H1 and full-year guidance. It was a dramatic increase.
- The breakdown of the OP and RP numbers suggests a huge gain in containers in Q1 and into Q2. The breakdown of revenue and OP changes suggested substantial H2 conservatism.
- On a capital-adjusted basis, Nippon Yusen is now slightly cheap vs its domestic peers and has shown a willingness to spend its excess cash on buybacks. Expect more.
Kakao’s Kim Beom-Su Arrested: Analyzing Its Impact on Related Companies
- Kakao’s Kim Beom-su has been arrested over alleged stock price manipulation in the SM Entertainment buyout, marking a new peak in the company’s legal troubles.
- Kakao Corp’s stock might drop due to the absence of a key figure. KakaoBank could also struggle from uncertainty about its largest shareholder and weakened business ties.
- Kakao’s potential sale of SM Entertainment shares could initially hurt the stock price, but potential bidding interest might boost it.
True Wind Raises Partial TOB Price for Sun Corp (6736 JP) By 8%. Not Enough.
- Today, the final day of the Tender Offer that True Wind Capital launched on 10 June 2024 to buy 19% of Sun Corp (6736 JP), TWC raised its price to ¥4,750/share./
- They also lowered their minimum from 3.7934mm shares (17.0%) to 3.3472mm shares (15.0%).
- As Cellebrite DI (CLBT US) had traded higher, SunCorp had too, and even though shares fell today, they are at ¥4,785/share.
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