In today’s briefing:
- Lee Family to Sell 2.6 Trillion Won in Samsung Companies to Pay for Inheritance Taxes
- Japan – Increasing Shorts on Some Interesting Stocks
- Lasertec (6920) Accelerated Block Offering – ¥60bn Likely Easily Taken Up
- Aequitas Japan IPOs + Placements Broker Performance 2023
- IJTT (7315) – Last Trading Day for Still Truly Offensive Tender Offer
- Taisho Pharmaceutical (4581 JP): Calm as Offer Heads for the 15 January Close
- Quiddity Leaderboard CSI 300/500 Jun 24: Some Changes in Rankings; US$2.3bn One-Way
- Fast Retailing: 1QFY24 Earnings
- Interglobe Aviation (Indigo) Lockup – Still Has US$3bn+ Stake Left, After Three Prior Selldowns
- Fast Retailing (9983) | Another Stylish Quarter
Lee Family to Sell 2.6 Trillion Won in Samsung Companies to Pay for Inheritance Taxes
- Lee family plans to sell additional 2.6 trillion won worth of Samsung Group companies as part of their fourth installment of inheritance taxes.
- This inheritance tax share sale is likely to have a negative impact on Samsung Electronics, Samsung C&T, Samsung SDS, and Samsung Life Insurance.
- This may be just a coincidence but the regulators announced today a temporary ban on stock short selling which should help the Lee family to unload their shares.
Japan – Increasing Shorts on Some Interesting Stocks
- There are a bunch of stocks that have underperformed the Nikkei 225 (NKY INDEX) and their peers and could be deleted from global passive portfolios early next year.
- The deletion from passive portfolios will lead to a liquidity event at the end of February where passive trackers will need to sell multiple days of ADV.
- Shorts have started to increase on some of the stocks and there will be further positioning as we near the liquidity event.
Lasertec (6920) Accelerated Block Offering – ¥60bn Likely Easily Taken Up
- Today after the close, there was word of an Accelerated Block Offering by two banks on Lasertec Corp (6920 JP), selling ¥61+bn or US$425mm of shares.
- The Nikkei 225 hit a new 34-year high today, and this caused some tech stocks and high-weights to perform very well vs their peers.
- This should cause the deal to get taken up easily. HOWEVER, it pays to know where the stock is. The register isn’t what volume tells you it might be.
Aequitas Japan IPOs + Placements Broker Performance 2023
- In this note, we will take a look at broker performance for Japanese IPOs and placements in 2023.
- The following dataset includes all Japanese IPOs and placements above US$100m, which amounted to a total of 32 deals.
- The deals you see in this note are based on our historical IPO and placement tracker. Feel free to drop us a message for additional information.
IJTT (7315) – Last Trading Day for Still Truly Offensive Tender Offer
- In IJTT (7315 JP) – A Truly Offensive Takeover Price and Process To Buy Out Minorities at 0.46x Book I laid it out like it was. It needed a bump.
- It got a bump (IJTT (7315 JP) – Truly Offensive Takeover Price Gets Bumped, Offensively) to ¥850/share. From 0.46x PBR it got bumped to 0.48x PBR. For a cash-rich company.
- Taking out net cash and securities, paying off deferred tax assets and UPBOs the deal is at 0.41x operating asset book for minorities. Still offensive. Beyond negligent.
Taisho Pharmaceutical (4581 JP): Calm as Offer Heads for the 15 January Close
- Taisho Pharmaceutical Holdin (4581 JP)’s MBO JPY8,620 offer closes on 15 January. Since announcing the offer, the shares have traded above terms for 21 out of the 30 trading days.
- Japan Catalyst has called the offer’s P/B of 0.85x too low. While shares trading above terms does not guarantee that the tender fails, it does increase the risk of failure.
- The offeror has no compelling reason to bump as other activists have not publicly supported Japan Catalyst, the high 55.5% premium to undisturbed price and an achievable minority acceptance rate.
Quiddity Leaderboard CSI 300/500 Jun 24: Some Changes in Rankings; US$2.3bn One-Way
- CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
- In this insight, we take a look at the potential ADDs/DELs for the CSI 300 and CSI 500 rebalance in June 2024.
- Since my December 2023 insight, a couple of names have left the CSI 300 Expected ADDs basket and have been replaced by two other names.
Fast Retailing: 1QFY24 Earnings
- Fast Retailing (9983 JP) announced its 1QFY24 results today, surpassing the consensus OP estimate by approximately 7%.
- Notably, Uniqlo International demonstrated robust growth, even from regions (North America & Europe) that were anticipated to underperform in this quarter.
- The domestic business OP also managed to top consensus expectations as they managed to improve the gross margin by 2.7% YoY.
Interglobe Aviation (Indigo) Lockup – Still Has US$3bn+ Stake Left, After Three Prior Selldowns
- InterGlobe Aviation Ltd (INDIGO IN)’s co-founder Rakesh Gangwal’s 25%+ stake will be released from lock-up tomorrow.
- He had earlier stated his intention to pare down his stake. He has sold shares in Sep 2022, Feb 2023 and Aug 2023.
- In this note, we will talk about the lockup dynamics and possible placement.
Fast Retailing (9983) | Another Stylish Quarter
- We had thought that Fast Retailing may just miss Q1 numbers due to the warm weather; it beat on strong November and 270bps improvement in gross margin.
- Following the slightly better results, we maintain our sales forecast at 3.1 trillion yen, but revise our operating profit estimate from 439 billion yen to 455 billion yen.
- Overall, we do not think the market will be overly surprised by the results and we maintain our view that the stock is over priced.
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