In today’s briefing:
- Shin Kong (2888 TT) / Taishin (2887 TT) – Waiting on the FSC
- Goodman Group (GMG AU): Much Bigger Index Impact of US$2.5bn Equity Offering
- Hang Seng Indexes: Announcement Today; Updated Flows (Some Big Ones)
- India: March Rebalance Announcement Tomorrow; Round-Trip Trade Over US$2.5bn
- CNBM (3323 HK): Whitewash Waiver Secured. Next Is The Proration
- Domain Holdings (DHG AU): CoStar Makes an NBIO; Buys 16.9% Stake; Short Covering Today
- Domain (DHG AU): CoStar’s A$4.20/Share NBIO
- MIXUE IPO – Decent Cornerstone, past Sentiment Overhang
- Mayne Pharma (MYX AU): Cosette’s A$7.40/Share Scheme
- StubWorld: REA Group Dives As CoStar Muscles Into Turf
Shin Kong (2888 TT) / Taishin (2887 TT) – Waiting on the FSC
- The TFTC approved in early January, The TFTC said market power would be limited and competition unrestricted. Another CNA article suggested the two FHCs were completing employee placement plans.
- Apparently, as of a month ago, only the Shin Kong Bank employee settlement plan had not been completed but the FSC has rules about that. Consideration likely proceeds.
- There are specific rules about how these things are dealt with. In the meantime, the spread – still wide – is narrowing.
Goodman Group (GMG AU): Much Bigger Index Impact of US$2.5bn Equity Offering
- Goodman Group went into a trading halt and then announced results and an underwritten equity placement of A$4bn (US$2.54bn) to pursue growth opportunities across logistics and data center operations.
- The stock has dropped since CIC’s stake sale in December but still continues to handily outperform peers.
- There will be some passive buying in the stock at the time of share settlement and more a few days later to mop up around 37% of the offering.
Hang Seng Indexes: Announcement Today; Updated Flows (Some Big Ones)
- Hang Seng Indexes announces changes to the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index, HSIII Index and HSCI Index (among others) post market close today.
- The net round-trip trade across the stocks is estimated to be HK$35bn (US$4.5bn) with big impact in a lot of stocks.
- Capping will lead to most inflows to Meituan (3690 HK) while the largest outflows will be from Alibaba Group Holding (9988 HK) and Xiaomi Corp (1810 HK).
India: March Rebalance Announcement Tomorrow; Round-Trip Trade Over US$2.5bn
- The Index Maintenance Sub-Committee of NSE Indices will meet on 21 February to conduct a semi-annual and quarterly review of stocks in various Nifty equity indices.
- The changes will be announced after market close tomorrow and will be implemented at the close of trading on 28 March.
- Based on the forecast index changes and capping changes for a few indices, the round-trip trade will be over US$2.5bn and many stocks will have over 0.5x ADV to trade.
CNBM (3323 HK): Whitewash Waiver Secured. Next Is The Proration
- On the 6th December 2024, China National Building Material (3323 HK) (CNBM), China’s leading building materials company, offered to buy back 841,749,304 H-shares at HK$4.03/share, a 15.1% premium to undisturbed.
- This elevated CNBM’s parent’s stake to 50.01% of total shares from 45.02% currently, necessitating a whitewash waiver so the parent would not be obliged to make a full blown offer.
- Independent H-shareholder overwhelmingly approved the waiver yesterday, the 19th February. Tendering closes on the 5th March. Minimum pro-ration is 19.24%. I’m estimating at least 35%. The Offer is now unconditional.
Domain Holdings (DHG AU): CoStar Makes an NBIO; Buys 16.9% Stake; Short Covering Today
- Costar Group (CSGP US) bought a 16.9% stake in Domain Holdings Australia (DHG AU) yesterday at A$4.2/share in cash. That is a 34.6% premium to the last close.
- Then, Costar Group (CSGP US) made a non-binding indicative proposal to buy all the Domain Holdings Australia (DHG AU) shares it did not own at A$4.2/share.
- Nine Entertainment Co Holdings (NEC AU) owns just over 60% of Domain Holdings Australia (DHG AU) and should move higher on the offer.
Domain (DHG AU): CoStar’s A$4.20/Share NBIO
- Domain Holdings Australia (DHG AU), Australia’s number two player in the online real estate market, has announced a non-binding proposal, by way of a Scheme, from CoStar Group (CSGP US).
- CoStar is offering A$4.20/share, in cash. A A$0.02/share dividend declared on the 13th Feb will be added (but now ex). CoStar also acquired 16.9% of shares out, also at A$4.20/share.
- Domain is 60% owned by Nine Entertainment Co Holdings (NEC AU), and has been known to be scoping out a buyer. A firm offer will require FIRB to sign off.
MIXUE IPO – Decent Cornerstone, past Sentiment Overhang
- Mixue Group is now looking to raise around US$450m in its upcoming Hong Kong IPO.
- MIXUE Group (MIXUE) is a freshly-made drinks company providing affordable products to consumers, including freshly-made fruit drinks, tea, ice cream and coffee, typically priced at around one USD per item.
- We have covered various aspects of the deal in our previous notes. In this note, we will talk about the IPO pricing.
Mayne Pharma (MYX AU): Cosette’s A$7.40/Share Scheme
- Mayne Pharma (MYX AU), a leader in dermatology and women’s health, has entered into a Scheme Implementation Deed with US-based pharmaceutical outfit, Cosette Pharmaceuticals.
- Cosette is offering A$7.40/share, a 37% premium to last close. Apart from Mayne’s shareholder approval, the Offer requires FIRB signing off.
- The Offer also has the backing of Mayne’s two largest shareholder, Viburnum and Bruce Mathieson, collectively holding 14.1%. Implementation is expected late May, early June 2025. This is done.
StubWorld: REA Group Dives As CoStar Muscles Into Turf
- A double dose of StubWorld this week: REA Group Ltd (REA AU)‘s rolls over as CoStar Group (CSGP US) bets big on key rival Domain Holdings Australia (DHG AU).
- Preceding my comments on REA and News Corp (NWSA US) are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
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