In today’s briefing:
- Renesas (6723) – Denso Selldown Starts; Fourth Large Renesas Block in 6mos (Two More To Come)
- BHP/Anglo American: A Decarbonising Solution
- July Short Selling Resumption in Korea: Local Market Info & Trading Considerations
- Chilled & Frozen Logistics (9099) Gone Ballistic – Reminder of Structure, Price, and Incentives
- HKTV (1137 HK): $2.15/Share Buy-Back
- KOSPI Size Indices: Potential Migrations in September Are Moving
- Tax-Loss Selling in Australia 2024 – A Trade Basket [Updated]
- HKTV (1137 HK): Co-Founders’ Ruse to Increase Their Grip Through a Share Buyback at HK$2.15
- Go Digit IPO Trading – Low Subscription Rate, Not All Shares Are Locked Up
- Ohayo Japan | Nvidia Does Not Disappoint
Renesas (6723) – Denso Selldown Starts; Fourth Large Renesas Block in 6mos (Two More To Come)
- Today post-close, Denso Corp (6902 JP) (via BofA) announced a selldown of 78,127,800 shares of Renesas Electronics (6723 JP). This is the latest in a line of block exits.
- There was the 130mm offering in November last year by INCJ. There was 123mm shares in Jan 2024 by NEC and Hitachi. A month later, 50mm shares from Mitsubishi Electric.
- In general, they have been absorbed, but one hasn’t needed to buy in the market. Some have broken price. Here, the pricing range is aggressive.
BHP/Anglo American: A Decarbonising Solution
- BHP (BHP AU)‘s all-scrip unsolicited Offer for Anglo American (AAL LN), zeroes in on AAL’s copper assets as demand for the metal increases for use in EVs and renewable power.
- The proposal has been labelled highly opportunistic by some shareholders and South African politicians. And that the value of AAL’s Chilian/Peruvian copper mines are obscured by its sprawling business interests.
- The Offer remains conditional and non-binding. A transaction hinges off AAL spinning off its South African iron ore and platinum businesses. Expect AAL to reject terms, but remain engaged.
July Short Selling Resumption in Korea: Local Market Info & Trading Considerations
- According to market information confirmed so far, the resumption is set for July 1st, and short selling will be restricted to the constituents of KOSPI 200 and KOSDAQ 150.
- The surge in trading volume likely stemmed from the return of long-short positions post-short-selling ban, leading to an overall market volume increase.
- Another critical factor is the buying pressure on value-up stocks resuming in early July. We should aim at the price impacts of intersecting long-short flows and value-up stock purchases.
Chilled & Frozen Logistics (9099) Gone Ballistic – Reminder of Structure, Price, and Incentives
- In late March, AZ-Com Maruwa Holdings (9090 JP) made an unsolicited (“hostile”) bid for Chilled & Frozen Logistics Holdings (9099 JP) at a near 50% premium at ¥3,000/share.
- It traded through, then C&F ran a bid solicitation process, got four bids. Since the day AFTER that announcement, the stock is up 56%. We approach Alps Logistics multiples.
- This deal doesn’t get the split price benefit that HTS and Alps Logistics did. And it is a fundamentally different logistics business. And target management dynamics are different.
HKTV (1137 HK): $2.15/Share Buy-Back
- Online shopping platform play Hong Kong Television Network (1137 HK) (better known as HKTV) has announced a buy-back of 11.25% of shares out, at $2.15/share, a 20.8% premium to undisturbed.
- If successful, the Offer elevates co-founder Ricky Wong’s stake, together with concert parties, to 51.55% (before exercising options), up from 45.75% currently.
- HKTV has been in the news lately for all the wrong reasons: claims of non-payments to suppliers; and delaying its 2026 target after a 79% decline in FY23’s net profit.
KOSPI Size Indices: Potential Migrations in September Are Moving
- The review period for the September rebalance of the KOSPI Size Indices will run from 1 June to 31 August.
- We see 6 migrations from MidCap to LargeCap, 1 new addition to LargeCap, 6 stocks moving from SmallCap to MidCap and 3 new additions to MidCap.
- Stocks migrating upward have outperformed stocks migrating lower. But there are still stocks trading at a Price to Book of less than 1.
Tax-Loss Selling in Australia 2024 – A Trade Basket [Updated]
- Three weeks after instantiation of Phase 1, the ASX200 vs LiquidBasket is +1.8% if you traded the basket VWAP the next day. vs LessLiquid it is +8.5%.
- Equal weight all names in the two is +3.1%. Trade VWAP over two days it is +0.7%, +7.6%, and +2.7%. So far things are OK.
- Next week one would add another basket, then in the last week of June, one would cover and reverse the trade and hold on for 30-40 trading days or so.
HKTV (1137 HK): Co-Founders’ Ruse to Increase Their Grip Through a Share Buyback at HK$2.15
- Hong Kong Television Network (1137 HK) has launched a share buyback to acquire a maximum of 100.0m shares (11.25% of shares) at HK$2.15, a 20.8% premium to the undisturbed price.
- The offer is conditional on approval by the requisite majority of shareholders and the approval of the whitewash waiver. There is no minimum acceptance condition, and the offer price is final.
- The offer is unattractive and is an inefficient use of cash to increase the co-founders’ grip on the shares. Nevertheless, the EGM vote is likely to get up.
Go Digit IPO Trading – Low Subscription Rate, Not All Shares Are Locked Up
- Go Digit General Insurance raised around US$315m in its India IPO.
- Go Digit General Insurance is a digital full stack insurance company, offering motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products.
- We have looked at the company’s performance in our past note. In this note, we talk about the trading dynamics.
Ohayo Japan | Nvidia Does Not Disappoint
- U.S. stocks fell Wednesday as Fed minutes revealed concerns about persistent inflation, dimming hopes for imminent rate cuts
- Nvidia shares surged 5% as the company reported robust earnings, with data-center revenue skyrocketing 427% year-over-year to $22.6 billion, surpassing Wall Street’s expectations.
- Nissan to halt the development of two EVs initially set for production at its Canton plant in Mississippi, due to a slowdown in EV sales growth in North America
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