In today’s briefing:
- 7&I (3382 JP) – A York Holdings Deal And Warren Buffett?
- Sanrio (8136 JP) Placement: Potential Global Index Migration Leads to Interesting Dynamics
- Taiwan Top 50 ETF Rebalance Preview: Double Inclusion for Yang Ming Marine (2609 TT)
- HULIC (3003 JP) – Crossholders Show Up with a BIG (Relative) Secondary Offering
- Vitasoy (345 HK): Trading Rich As Ng & Yeo Hiap Seng Up Their Exposure
- Seven & I Holdings (3382 JP): Implications from the YORK Holdings Stake Sale
- Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Last-Second Changes to the Last-Minute Changes
- Shandong Hi-Speed New Energy (1250 HK): Shandong Hi-Speed Holdings (412 HK) Possible MGO
- Digging into the Year-End Divvy Arbitrage Game in Korea’s Market
- Hulic (3033 JP): A US$800 Million Secondary Offering
7&I (3382 JP) – A York Holdings Deal And Warren Buffett?
- The Seven & I Holdings (3382 JP) to rid itself of control of the Ito-Yokado, York Benimaru, Akachan Hompo, and Denny’s Japan businesses in York Holdings proceeds apace.
- The First Round of bids is due tomorrow, apparently, and all manner of bidders have assembled.
- This leads to the question of a deal for the rest of 7&i. If a TradingCo is a natural co-investor for the Ito family (or ACT), so is Berkshire Hathaway.
Sanrio (8136 JP) Placement: Potential Global Index Migration Leads to Interesting Dynamics
- Overnight, Sanrio (8136 JP) announced a placement of 25.87m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 3.88m shares.
- There will be limited passive buying in the short-term and the shares offered is a large percentage of real float of the stock.
- However, Sanrio (8136 JP) is the highest ranked non-constituent stock in a global index universe and a drop in the stock price could be used to accumulate positions.
Taiwan Top 50 ETF Rebalance Preview: Double Inclusion for Yang Ming Marine (2609 TT)
- Yang Ming Marine Transport (2609 TT) is forecast to be added to the Yuanta/P-Shares Taiwan Top 50 ETF in December, replacing Airtac International (1590 TT).
- Yang Ming Marine Transport (2609 TT) is also expected to be added to the Yuanta/P-shares Dividend Plus ETF in December, so there will be buying from multiple trackers.
- Shorts are near their lows in Yang Ming Marine Transport (2609 TT) while there has been covering in Airtac International (1590 TT) after an increase in the last few months.
HULIC (3003 JP) – Crossholders Show Up with a BIG (Relative) Secondary Offering
- Today, Hulic Co Ltd (3003 JP) announced a large secondary offering where about a quarter of the crossholdings will sell down holdings. Some exit entirely. Some partially.
- After this selldown, there is a fair bit more to go later, but more of that will be corporate. It’s a BIG offering: 55d of ADV and 55% of MRWF.
- It is “only” about $800mm and retail gets 80% of it. The high div yield will be a selling point but there is a lot of debt.
Vitasoy (345 HK): Trading Rich As Ng & Yeo Hiap Seng Up Their Exposure
- Yesterday, beverage maker Vitasoy Intl Holdings (345 HK) announced a 1H25E (Mar Y/E) net profit of HK$171mn, a 4.8% gain yoy. An interim dividend of HK$0.04/share (HK$0.014/share in 1H24), was declared.
- What was absent from the announcement/briefing was any comment on Philip Ng Chee-tat’s and Yeo Hiap Seng (YHS SP)‘s recent buying in Vitasoy.
- Ng, the younger brother of Sino Land (83 HK)‘s chairman Robert Ng Chee-siong, indirectly holds 12.26%, up from 5.22% on the 7th October. The share price is up 104% since.
Seven & I Holdings (3382 JP): Implications from the YORK Holdings Stake Sale
- NHK reports that Seven & I Holdings (3382 JP)‘s first bidding round for a YORK Holdings stake ends on 28 November. The sale provides a third-party valuation benchmark for the asset.
- It is an incremental positive for the founding family MBO as it supports the post-privatisation strategy and assists in securing bank financing.
- This is an incremental negative for Alimentation Couche-Tard (ATD CN) as it shows that the Board believes the restructuring plan will increase shareholder corporate value.
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Last-Second Changes to the Last-Minute Changes
- There are now new changes forecast for the Yuanta/P-Shares Taiwan Dividend Plus ETF in December for a total of 8 inclusions and 7 deletions.
- Constituent changes along with capping changes will lead to a one-way turnover of 21.8% and in a one-way trade of TWD 75.8bn (US$2.33bn).
- The potential changes had a big one-day move yesterday and we expect similar moves over the next couple of days.
Shandong Hi-Speed New Energy (1250 HK): Shandong Hi-Speed Holdings (412 HK) Possible MGO
- Shandong Hi-Speed New Energy G (1250 HK) disclosed a possible mandatory unconditional offer from Shandong Hi-Speed Holdings Gro (412 HK) at HK$1.78, a 7.2% premium to the undisturbed price.
- The offer is conditional on SDHS completing a sale and purchase agreement (SPA) to acquire CITIC Securities’ entire 13.52% stake at HK$1.78 per share.
- The key precondition of the SPA is SDHS shareholder approval of an ordinary resolution relating to the SPA and the possible offer. The vote is a formality.
Digging into the Year-End Divvy Arbitrage Game in Korea’s Market
- For March KOSPI 200 futures, expect a 0.95% to 1% yield for spot-futures arbitrage, with contango depending on year-end ex-div trends and passive inflows.
- Passive inflows into the value-up index in January and spillover effects into K200 futures, potentially fueling year-end contango due to overlap with KOSPI 200.
- Prop trader dynamics are cooling off: Tax-driven buying in December, selling in January likely to ease, reducing the past backwardation. Without it, expect higher volatility in K200 futures.
Hulic (3033 JP): A US$800 Million Secondary Offering
- Hulic Co Ltd (3003 JP) has announced a secondary offering of up to 85.4 million shares (98.2 million including overallotment), worth around US$800 million (US$920 million including overallotment).
- Unlike the 2021 offer, this is a pure secondary offering. It is smaller in terms of outstanding shares and 1-year ADV. The shares are hovering around all-time highs.
- Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and 12 December (likely 10 December).
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