In today’s briefing:
- MOG Digitech (1942 HK): What the Flow Is Going On?
- LG Energy Solution (373220 KS) – Potential Float Increase Coming Up
- Index Rebalance & ETF Flow Recap: ASX, SK Telecom, Yuanta ETFs
- TRYT IPO: Trading Debut
- Tryt IPO Trading – Subscription Rates Mostly Outdid Recent Large Japan Deals
- Merger Arb Mondays (24 Jul) – JSR, 111, Estia, Newcrest, InvoCare, Origin, Golden Eagle, Dali Foods
- Travelsky (696): Time to Fly
- ECM Weekly (23rd July 2023) – Tryt, Genda, Rakuten, Mobovi, Samhi, Indigo, Federal Bank, Invincible
- Alpha Generation Through Share Buybacks in Korea: June & July 2023
- KOSPI Size Indices – Plenty of Overlap With Other Index Flows
MOG Digitech (1942 HK): What the Flow Is Going On?
- MOG Holdings (1942 HK) has been skyrocketing in price since the start of the year. Remarkably, there is little change in the number of shares that trade daily.
- MOG Holdings (1942 HK) has a market cap of US$6.44bn and trades at a modest Price/Sales ratio of 75x and an equally modest Price to Book Value of 89.5x.
- Liquidity has improved to the point where the stock could be added to some indices. However, there is a precedent of stocks not being added following market participant feedback.
LG Energy Solution (373220 KS) – Potential Float Increase Coming Up
- Selling from the ESOP program in the first quarter could result in an increase in LG Energy Solution (373220 KS)‘s float in local and global indices.
- The largest buying from passive trackers could take place next month with over 3% of the real float needing to be bought.
- Short interest has increased in the last month and short covering could take the stock higher ahead of the passive buying.
Index Rebalance & ETF Flow Recap: ASX, SK Telecom, Yuanta ETFs
- JFSL spun off from Reliance Industries (RIL IN) last week and Ventia (VNT AU) replaced Blackmores Ltd (BKL AU) in the S&P/ASX 200 (AS51 INDEX).
- The IDX should announce the changes to the IDX30, LQ45 and IDX80 indices early in the coming week.
- There were inflows to Tracker Fund of Hong Kong Ltd (2800 HK) and Hang Seng H Share Index ETF (2828 HK) while Taiwan focused ETFs had outflows.
TRYT IPO: Trading Debut
- Tryt Inc (9164 JP) priced its IPO at JPY1,200 per share to raise gross proceeds of US$339 million. The shares will start trading on 24 July.
- We previously discussed the IPO in TRYT IPO: The Bull Case, TRYT IPO: The Bear Case, TRYT IPO: Valuation Insights and TRYT IPO: Revised IPO Price Range Remains Unattractive.
- The market sentiment on the sector has broadly remained unchanged since the release of the prospectus. Our analysis suggests that Tryt is, at best, fully priced at the IPO price.
Tryt IPO Trading – Subscription Rates Mostly Outdid Recent Large Japan Deals
- Tryt Inc (9164 JP) raised around US$344m in its Japan IPO. The IPO consisted of 100% secondary shares.
- Tryt Inc (Tryt) offers employee placement services and temporary staffing services for the elderly care, nursing care and childcare workers segments.
- In this note we will talk about the trading dynamics.
Merger Arb Mondays (24 Jul) – JSR, 111, Estia, Newcrest, InvoCare, Origin, Golden Eagle, Dali Foods
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads – Chindata Group (CD US), Estia Health (EHE AU), 111 Inc (YI US), ENM Holdings (128 HK), JSR Corp (4185 JP), Costa Group Holdings (CGC AU).
- Lowest spreads Healius (HLS AU), Liontown Resources (LTR AU), Toyo Construction (1890 JP), Penguin International (PBS SP), ARTERIA Networks Corp (4423 JP), Inner Mongolia Yitai Coal Company Ltd (3948 HK).
Travelsky (696): Time to Fly
- Share price of Travelsky Technology Ltd H (696 HK) is still down YTD as investors are still overly cautious on Chinese travel data.
- YTD operational data shows that the number of flights processed is very close to the pre-COVID era.
- The company announced a profit alert recently, that should help to boost share price.
ECM Weekly (23rd July 2023) – Tryt, Genda, Rakuten, Mobovi, Samhi, Indigo, Federal Bank, Invincible
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- In the IPO space, the coming week will see Tryt Inc (9164 JP) and Genda Inc (9166 JP) listing, along with Fadu (440110 KS) bookbuild.
- For placements, Japan and India placements continue to flow, while there are no signs of any major Hong Kong activity.
Alpha Generation Through Share Buybacks in Korea: June & July 2023
- In this insight, we discuss the alpha generation through companies that announced share buybacks in Korea in June and July 2023.
- We provide a list of 38 stocks in the Korean stock market that have announced share buyback programs in June and July 2023.
- The top four market cap stocks that have announced share repurchases include Celltrion Inc, Celltrion Healthcare, Hyundai Elevator, and SFA.
KOSPI Size Indices – Plenty of Overlap With Other Index Flows
- The review period for the September rebalance of the KOSPI Size Indices started 1 June and will end 31 August. The changes will be implemented at the close 7 September.
- We see 8 migrations from MidCap to LargeCap, 7 migrations from LargeCap to MidCap, 6 new adds to MidCap, and 16 migrations from SmallCap to MidCap.
- Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.
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