In today’s briefing:
- FTSE All-World/All-Cap Index Rebalance: Changes, Switches, Hits & Misses
- Atlas Arteria (ALX AU): Acquisition, ANREO & ASX50 Inclusion
- SBI (8473) Buys Back Into ARUHI (7198) In Partial Tender Offer
- Australia: S&P/ASX, FTSE, REMX, GDXJ Flows This Friday
- Semiconductors Just Beginning a Long Slide
- Genting Fancies A Flutter In Macau
- SAIC’s Unconditional Offer For Dongzheng Now Open
- Hyundai Heavy IPO Lock-Up – Last of the Lockups with Employees Coming Free
- KOSDAQ 150 Early Entry Candidates for December Rebalancing
- CALB IPO: Updates Support the Bull Case
FTSE All-World/All-Cap Index Rebalance: Changes, Switches, Hits & Misses
- FTSE announced the results of the September SAIR for the FTSE All-World/All-Cap indices on Friday. There are 243 changes (adds, deletes, migrations across AW/AC) across Asia-Pac.
- The largest inflows will go to PSMC (6770 TT), Sumber Alfaria Trijaya (AMRT IJ), Daqo New Energy (DQ US) and Tianqi Lithium (002466 CH).
- FTSE will switch index membership from the US ADRs to the HK listings for New Oriental Education & Technology Group (9901 HK) and XPeng (9868 HK).
Atlas Arteria (ALX AU): Acquisition, ANREO & ASX50 Inclusion
- Atlas Arteria (ALX AU) is acquiring 66.67% in Skyway Concession Company LLC, the concessionaire of the Chicago Skyway for an equity value of US$2.013bn (A$3.098bn).
- The acquisition will be funded by a fully underwritten 1:1.95 ANREO to raise A$3.098bn. The offer price of A$6.3/share is a 13.7% discount to TERP and 19.3% discount to last.
- The increase in market cap could result in Atlas Arteria (ALX AU) being added to the S&P/ASX 50 Index at the December rebalance.
SBI (8473) Buys Back Into ARUHI (7198) In Partial Tender Offer
- Yesterday, SBI Holdings (8473 JP) announced it would launch a tender offer to buy 33.4-51% of Aruhi Corp (7198 JP) at ¥1,500/share – a 48.5% premium to the close.
- ARUHI – Japan’s largest “mortgage bank” – was listed in late 2017. Long ago, its predecessor was named SBI Mortgage. This is SBI buying back in.
- Inside we look at valuations, shareholder structure, pro-ration. There are opportunities here.
Australia: S&P/ASX, FTSE, REMX, GDXJ Flows This Friday
- Changes to the S&P/ASX indices, FTSE All-World/All-Cap, VanEck Vectors Rare Earth/Strategic Metals (REMX US) and VanEck Vectors Junior Gold Miners (GDXJ US) will be implemented at the close on Friday.
- There are quite a few stocks that have over 5 days of ADV to trade from passive trackers. Pre-positions will be built up on a lot of names.
- Short interest has increased on a lot of additions/upweights and decreased on the deletions/downweights.
Semiconductors Just Beginning a Long Slide
- Semiconductor revenues continue to fall. which appears to be a repeat of the collapse in 2019
- Spot market prices, a leading indicator, are soft for both DRAM and NAND flash
- It is likely that semiconductor revenues will end the year by returning to the trendline of their historical growth of 3.9%
Genting Fancies A Flutter In Macau
- In a surprise move, Genting Bhd (GENT MK) – or Genting Malaysia (GENM MK) – has joined the six incumbents in bidding for new casino licences in Macau.
- The bidding process follows Macau’s record low monthly gaming revenue in July after casinos were closed for 12 days in response to a Covid outbreak.
- Casinos have re-opened, yet there is little to cheer about as business remains muted. The six winners are expected to be announced by the end of November or early December.
SAIC’s Unconditional Offer For Dongzheng Now Open
- Back on the 19 May, SAIC (600104 CH) acquired China Zhengtong Auto Services (1728 HK)‘s 71.04% stake in Dongzheng Automotive Finance (2718 HK) at a judicial auction. This triggered the mandatory Offer.
- SAIC confirmed a possible unconditional mandatory cash Offer for Dongzheng on the 26 May.
- The Composite Doc has now been dispatched. The Offer is open for tendering and closes on the 16 October
Hyundai Heavy IPO Lock-Up – Last of the Lockups with Employees Coming Free
- Hyundai Heavy Industries (HHI) was listed on Korea Exchange on 17th September, 2021. Its one year lock-up will expire on 17th Sep, 2022.
- Hyundai Heavy Industries (HHI) is a South Korean shipbuilder. The company is majority owned by Korea Shipbuilding & Offshore Engineering (009540 KS) after the latter’s spin-off in 2019.
- In this note, we will talk about the upcoming lock-up expiry, along with recent updates.
KOSDAQ 150 Early Entry Candidates for December Rebalancing
- HPSP (403870 KS) and Sungeel Hitech (365340 KS) are the candidates for Early Entry in the December rebalancing as they sit comfortably within the Early Entry zone.
- Rsupport (131370 KS) and Kona I (052400 KS) are safe deletion bets. If they are not deleted through the rebalancing process, they will most likely be excluded by Early Entry.
- HPSP and SungEel should see an inflow equivalent to 0.9x and 0.8x ADTVs, respectively. Rsupport and Kona I will likely suffer an outflow of 3.4x and 3.8x ADTVs, respectively.
CALB IPO: Updates Support the Bull Case
- CALB (CALBLZ CH), a leading EV battery manufacturer, is seeking to raise US$2.0 billion through an HKEx IPO, according to press reports.
- We previously discussed the IPO in CALB IPO: The Bull Case and CALB IPO: The Bear Case. This note updates our view for the PHIP and recent developments.
- The 1Q and truncated 1H numbers outline the highest growth among peers, customer diversification and sequential improvement in gross margin. The IPO is worth a look.
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