In today’s briefing:
- Hang Seng TECH Index Rebalance Preview: Big Impact as NIO (9866) Could Replace ASM Pacific (522)
- ToyoKen (1890) Mystery Bidder Is Yamauchi No. 10 Family Office – And That Changes Things
- Elon Musk Bids for All of Twitter 🤯
- SK Shieldus IPO: Index Inclusion Timeline
- Fast Retailing (9983) – Summer Is the Time for Shorts
Hang Seng TECH Index Rebalance Preview: Big Impact as NIO (9866) Could Replace ASM Pacific (522)
- NIO Inc (9866 HK) passes the velocity test and could replace ASM Pacific Technology (522 HK) in the Hang Seng Tech Index (HSTECH INDEX) at the June rebalance.
- Given the low trading volumes and the large assets tracking the Hang Seng Tech Index (HSTECH INDEX), passive trackers will need to buy around 10 days of ADV on NIO.
- Passive trackers need to sell around 7 days of ADV on ASM Pacific Technology (522 HK). Given implementation is two months away, sell the stock on rallies.
ToyoKen (1890) Mystery Bidder Is Yamauchi No. 10 Family Office – And That Changes Things
- A Nikkei article this morning says the mystery bidder behind WK1/2/3 Limited is Nintendo founding family’s Yamauchi No.10 Family Office. This changes things more than just knowing their identity does.
- To start, their website is the most fun investment management company website I have come across. It’s great. https://y-n10.com/. It’s also well worth reading. It’s also worth noting their history.
- Understanding the parameters here is key to understanding possible next steps.
Elon Musk Bids for All of Twitter 🤯
- Elon Musk has apparently sent a letter to Bret Taylor, Chairman of the Board of Twitter, saying he would make a bid for 100% of Twitter at US$54.20/share.
- Get it? Get it? Nudge nudge wink wink. That’s all part of the fun for him.
- The question is whether this bid, which creates problems of whether one should take it seriously vs literally, or vice versa, engenders more discussion about how the platform makes money.
SK Shieldus IPO: Index Inclusion Timeline
- SK Shieldus (ABFHIZ KS) is looking to raise up to US$860m selling a mix of primary and secondary shares. The stock is expected to in the second half of May.
- The company will be valued at US$2.87bn at the top end of the IPO range and will not get Fast Entry to any of the major indices.
- Entry to the KOSPI2 INDEX is unlikely, MSCI inclusion could take place at the November SAIR, while FTSE inclusion could take place at the December QIR.
Fast Retailing (9983) – Summer Is the Time for Shorts
- Interim results were surprisingly strong considering the headwinds from China and rising costs
- 2H guidance looks optimistic. China remains a key risk and we still see risks to the gross margin
- The “R” word. Rising inflation, Rising Interest rates = Recession. Probably not good for consumers and certainly not good for high stock multiples
Before it’s here, it’s on Smartkarma
