In today’s briefing:
- Kokusai Elec (6525) – The Much-Anticipated Lockup Expiry
- Cash-Rich Exedy (7278) Sees Huge Offering Offset by Huge Buyback – Watch For Short-Term Games
- Taiwan Top 50 ETF Rebalance Preview: Asia Vital Components (3017 TT) In Back-To-Back Inclusion?
- Yuanta Taiwan Div+ ETF Rebalance Preview: 5 Changes as Names Move Around; US$2.35bn Round-Trip Trade
- ASMedia GDR Early Look – Momentum Has Been Strong, and Raising Would Grow Its Cash Base Almost 6x
- Huafa Property Services (982 HK)’s Knockout Offer
- S&P/ASX Index Rebalance Preview: Regular & Ad Hoc Changes in June
- Barito Renewables Lockup Expiry – US$8bn Lockup Expiry for Largest Indonesian Market Cap Stock
- FnGuide Top 5 Plus Index Rebalance Preview: Celltrion Could Replace KT&G
- ASMedia GDR Offering – Well Flagged, and Momentum Has Been Strong Leading into the Offering
Kokusai Elec (6525) – The Much-Anticipated Lockup Expiry
- Last autumn, Kokusai Electric (6525 JP) was IPOed by KKR. The lockup expires next week, on 21 April 2024 (a Sunday). That frees up about 70% of the stock.
- KKR’s own stake is worth about US$2.8bn. It is not clear that Applied Materials, Qatar, or the Koch Strategic Platforms stakes would be for sale (now, or near-term).
- There is an interesting schedule of events between here and a likely offering date. It pays to pay attention to the details.
Cash-Rich Exedy (7278) Sees Huge Offering Offset by Huge Buyback – Watch For Short-Term Games
- Toyota equity affiliate Aisin (7259 JP) last September said it would sell all its crossholdings. That now includes a 36.5% stake in Exedy Corp (7278 JP).
- Today, they announced an offering of all the shares (when including the greenshoe). That is nearly ¥50bn. That is offset by a ¥15bn buyback which could reduce the offering size.
- Games may be played, but there is considerable accretion, and Exedy will see higher float and still-high net cash.
Taiwan Top 50 ETF Rebalance Preview: Asia Vital Components (3017 TT) In Back-To-Back Inclusion?
- Asia Vital Components (3017 TT) could replace Chang Hwa Commercial Bank (2801 TT) in the Yuanta/P-Shares Taiwan Top 50 ETF at the June rebalance.
- This ETF inclusion for Asia Vital Components (3017 TT) could come back-to-back with another index inclusion scheduled for the end of May.
- Shorts in Asia Vital Components (3017 TT) have been increasing recently while shorts in Chang Hwa Commercial Bank (2801 TT) are near their lows.
Yuanta Taiwan Div+ ETF Rebalance Preview: 5 Changes as Names Move Around; US$2.35bn Round-Trip Trade
- With the review period now complete, there could be 5 changes to the Yuanta/P-Shares Taiwan Dividend Plus ETF in June.
- Price changes and changes to dividend estimates have led to names dropping off the list of potential adds and deletes over the last week.
- Constituent changes, capping and funding flows will lead to a one-way turnover of 12.7% and a one-way trade of US$1.17bn. There are 12 stocks with over 4x ADV to trade.
ASMedia GDR Early Look – Momentum Has Been Strong, and Raising Would Grow Its Cash Base Almost 6x
- Asmedia Technology (5269 TT) is looking to raise up to US$333m in its upcoming global depository receipts (GDRs) offering.
- ASMedia recently announced its board’s resolution to offer between 4.3-5.3m shares in the form of GDRs, with the proceeds geared towards purchasing raw materials and machinery, R&D and working capital.
- Similar to previous GDR listings, the deal is a long drawn out process with the firm required to jump through a number of board/shareholder/regulatory approval loops.
Huafa Property Services (982 HK)’s Knockout Offer
- After entering a trading halt on the 16th May pursuant to the Takeover’s Code, property manager Huafa Property Services (982 HK) has now announced a privatisation by way of a Scheme.
- The cancellation price of A$0.29/share is a 30.63% to last close, a 70.59% premium over the 30-day average close, and a life-time high price. The price is final.
- The Offeror, Zhuhai Huafa, a state-owned enterprise wholly-owned by Zhuhai SASAC, plus concert parties hold 42.63% of shares out. Clean deal.
S&P/ASX Index Rebalance Preview: Regular & Ad Hoc Changes in June
- With the review period complete, we take a look at the potential index changes at the June rebalance as well as potential index inclusions due to M&A.
- Timing is key for the ad hoc inclusions to the S&P/ASX 200 (AS51 INDEX) with an ad hoc inclusion being announced prior to the regular announcement.
- Passive trackers will need to buy 1.3-27x ADV on the expected adds and have 0.8-4.7x ADV to sell on the expected deletes. Shorts have built up on the potential deletes.
Barito Renewables Lockup Expiry – US$8bn Lockup Expiry for Largest Indonesian Market Cap Stock
- Barito Renewables Energy (BREN IJ) raised around US$200m in its Indonesian IPO, after pricing at the top end at IDR780/share. Its eight-month lockup will expire on 29th May 2024.
- Barito Renewables (BR) is Indonesia’s largest geothermal power producer, and the third-largest globally by installed capacity, as per the firm.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
FnGuide Top 5 Plus Index Rebalance Preview: Celltrion Could Replace KT&G
- The Samsung KODEX Top5Plus Total Return ETF (315930 KS) tracks the FnGuide Top 5 Plus Index and has an AUM of KRW 1,357bn (~US$1bn).
- We currently see a high probability of Celltrion Inc (068270 KS) replacing KT&G Corporation (033780 KS) in the index at the June rebalance.
- There is between 1-2 days of ADV to trade on the potential add and delete and smaller flows on the other index members due to capping and funding changes.
ASMedia GDR Offering – Well Flagged, and Momentum Has Been Strong Leading into the Offering
- Asmedia Technology (5269 TT) is looking to raise up to US$335m in its global depository receipts (GDRs) offering.
- Overall, the deal would be a relatively small one for the stock to digest at just 5.6 days of its three month ADV.
- In this note, we run the deal through our ECM framework and comment on deal dynamics.
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