In today’s briefing:
- Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 18% One-Way Turnover & US$2.74bn Trade
- Large GS Yuasa (6674) Placement – 20% Dilution, Needs Lots of Love
- What Should We Do About the Futures Basis Spread Caused by Hanwha Ocean’s Rights Offering?
- FXI Rebalance Preview: One Potential Change in December
- Hollysys (HOLI US): In Court Today …
- Taiwan Top 50 ETF Rebalance: Alchip (3661 TT) Going Back-To-Back?
- Trip.com Q3 Quick Take: Net Inc > Consensus | Progress on Expenses | But Not a Game-Changer
- Zeekr Pre-IPO – Peer Comparison – Catching up with Little Spending
- Tata Consultancy Services (TCS IN): US$2bn Mega Buyback; Two More Trading Days Before Ex-Date
- Healius Taps The Market. ACL Should Walk
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 18% One-Way Turnover & US$2.74bn Trade
- Using data from the close on 20 November, there could be 6 adds and 5 deletes to the Yuanta/P-Shares Taiwan Dividend Plus ETF in December.
- There will also be capping and funding flows that will lead to a one-way turnover of 17.8% and a one-way trade of US$1.37bn.
- There are 16 stocks with at least 3 days ADV to trade from passive trackers and another 10 stocks that have at least 1-day ADV to trade.
Large GS Yuasa (6674) Placement – 20% Dilution, Needs Lots of Love
- Today after the close, noted Japanese battery maker Gs Yuasa Corp (6674 JP) announced a public equity offering accompanied by a 3rd party placement to Honda Motor (7267 JP).
- Total $300mm+ raise is nearly 20.0mm shares against ~80mm shares out now. That’s 20% EPS dilution at a still-decent discount to book value.
- This creates a weird situation of a low ROE stock becoming lower ROE, at a lower PBR, with “more growth ahead” in a hyper-competitive space.
What Should We Do About the Futures Basis Spread Caused by Hanwha Ocean’s Rights Offering?
- The day the basis spread disappears is this Friday, the 24th of November. This mirrors a comparable pattern observed during Korean Air’s rights offering in 2020.
- If the spot price does not fall below the futures price of our entry until this Friday, we could potentially be in a profitable range.
- There has been a notable pattern where the spread continues to exist until just before the moment when new share selling becomes feasible.
FXI Rebalance Preview: One Potential Change in December
- With the review period complete, BeiGene (6160 HK) could replace Anhui Conch Cement (914 HK) in the iShares China Large-Cap (FXI) (FXI US) in December.
- There will be over 2 days of ADV to buy in BeiGene (6160 HK) and nearly 2 days of ADV to sell in Anhui Conch Cement (914 HK).
- Short interest has been increasing in BeiGene (6160 HK) and dropping in Anhui Conch Cement (914 HK) over the last few months.
Hollysys (HOLI US): In Court Today …
- A fortnight after co-COOs pitched a US$25/share indicative Offer for Hollysys (HOLI US), Ascendent Capital, holding 13.7%, tabled a US$26/share Offer. The Recco/Dazheng consortium offered US$26.50 a week later.
- There is currently a dispute over the ownership and control of Ace Lead’s shares in Hollysys, which was subject to an injunction hearing in the Hong Kong High Court.
- That hearing took place today. So I went along to hear first-hand the key arguments from both sides.
Taiwan Top 50 ETF Rebalance: Alchip (3661 TT) Going Back-To-Back?
- Alchip Technologies (3661 TT) could replace Feng Tay Enterprise (9910 TT) in the Yuanta/P-Shares Taiwan Top 50 ETF at the December rebalance.
- This ETF inclusion for Alchip Technologies (3661 TT) could come back-to-back with another index inclusion scheduled for the end of November.
- Shorts in Alchip Technologies (3661 TT) have been building up while shorts in Feng Tay Enterprise (9910 TT) have surged over the last few months.
Trip.com Q3 Quick Take: Net Inc > Consensus | Progress on Expenses | But Not a Game-Changer
- Trip.com reported strong Q3 earnings, reflecting 2023’s ongoing tourism revival
- Net Income beat expectations, and company made progress on expense control
- But we don’t see “game-changing” numbers in Trip.com’s latest earnings release
Zeekr Pre-IPO – Peer Comparison – Catching up with Little Spending
- ZEEKR (ZK US), a premium EV brand by Geely Auto (175 HK), aims to raise around US$500m in its US listing.
- Zeekr was formed in Mar 2021 as a JV between Geely and its founder. Its first model was launched in Apr 21 with deliveries starting in Oct 21.
- We have looked at the company’s past performance in our earlier notes . In this note, we will undertake a peer comparison.
Tata Consultancy Services (TCS IN): US$2bn Mega Buyback; Two More Trading Days Before Ex-Date
- Indian IT services giant Tata Consultancy Svcs (TCS IN) launched a US$2bn Buyback last week.
- The company will buy up to 40,963,855 shares in a Tender Offer-style Buyback at a Buyback Price of INR4,150/share (an 18% premium to today’s close).
- In this insight, we take a closer look at the indicative timeline of key events in this Buyback, the company’s Buybacks history, proration details, and what this means for investors.
Healius Taps The Market. ACL Should Walk
- Back on the 20 March, Australian Clinical Labs (ACL AU) announced a merger proposal for Healius (HLS AU), the completion of which would create Australia’s largest pathology provider.
- In its Target Statement on the 4 May, Healius’ board unanimously recommended that Healius shareholders reject the Offer. A forthcoming ACCC decision may also conclude a merger is verboten.
- Now Healius has announced a “capital restructure reset” via issuing new shares at $1.20/share, a hefty 34.6% discount to last close. This breaches a number of prescribed occurrences.
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