In today’s briefing:
- MVIS Global Junior Gold Miners Index Rebalance: Two Adds, Four Deletes, Float Changes
- MVIS Global Rare Earth/Strategic Metals Index Rebalance: Float & Capping Changes
- Can Son-San Take Over Softbank Group Through Buybacks?
- Haidilao’s Spin-Off of Super Hi: Index Implications
- Index Rebalance & ETF Flow Recap: ASX, HSTECH, TWDiv+, EPRA Nareit, HSCEI, PCOMP, STAR50, REMX, GDXJ
- Good Morning Japan |+50bp Fed Hike in the Bag, but Watching Tuesday’s US CPI Print
- Weekly Deals Digest (11 Dec) – Toshiba, Bigtincan, Nitro, Warrego, Xingda, VinFast, Weilong
- LG Energy: ESOP Lockup Release (3.5% of SO) & Contrarian Approach Targeting NPS
- VinFast Auto IPO: The Bear Case
- Acotec Scientific Holdings (6669.HK) – A Game Changer with Solid Long-Term Logic
MVIS Global Junior Gold Miners Index Rebalance: Two Adds, Four Deletes, Float Changes
- Filo Mining (FIL CN) and Tietto Minerals (TIE AU) are adds while Fresnillo (FRES LN), Galiano Gold (GAU US), Jaguar Mining (JAG CN) and Novo Resources (NVO CN) are deletes.
- One way turnover is estimated at 4.3% resulting in a one-way trade of US$163m. There is over 1 day of ADV to trade on 24 stocks.
- Largest inflows are on Filo Mining (FIL CN) and Tietto Minerals Ltd (TIE AU) while largest outflows are on Fresnillo PLC (FRES LN) and Centerra Gold (CG CN).
MVIS Global Rare Earth/Strategic Metals Index Rebalance: Float & Capping Changes
- As expected, there are no adds or deletes for the MVIS Global Rare Earth/Strategic Metals Index at the December rebalance.
- There are free float and capping changes that will be implemented at the close on 16 December.
- One way turnover is estimated at 4.26% and will result in a one-way trade of US$31.5m.
Can Son-San Take Over Softbank Group Through Buybacks?
- On Thursday 8 December, an article showed up in Bloomberg suggesting Son-san had “increased his stake” as the company bought back shares, giving him more rights, “edging towards a buyout.”
- That is a stretch. He went from below one-third to above one-third, giving him an explicit veto on shareholder super-majority resolutions, but it’s minor. He now has 34.2%.
- The suggestion: if he got two-thirds, he could squeeze out minorities without a Tender Offer. Technically true, but not easy. I dig deeper and propose how it could be done.
Haidilao’s Spin-Off of Super Hi: Index Implications
- Haidilao (6862 HK) intends to spin-off its 90% holding in Super Hi International Holding (SHI HK) with an ex-date of 16 December.
- Super Hi International Holding (SHI HK) will be deleted from the Hong Kong Hang Seng Index and Hang Seng China Enterprises Index at the close on listing day.
- There could be nationality changes and selling from MSCI and FTSE trackers as well, though the timing is uncertain at this point.
Index Rebalance & ETF Flow Recap: ASX, HSTECH, TWDiv+, EPRA Nareit, HSCEI, PCOMP, STAR50, REMX, GDXJ
- The rebalance implementation of the KOSPI2, KOSDQ150, CSI 300, CSI 500, STAR50 and other indices took place on 8/9 December. Plus MSCI/FTSE deletes due to Northbound Stock Connect changes.
- Friday will see the implementation of the FTSE All-World/All-Cap, EPRA Nareit, S&P/ASX, KLCI, FTSE China and Sensex indices. The FTSE Taiwan Dividend+ Index will have the largest flows.
- Big weekly redemptions from the Mirae Asset Tiger Top 10 ETF (292150 KS), ChinaAMC China 50 ETF (510050 CH) and IShares Core MSCI Asia Ex Japan ETF (3010 HK).
Good Morning Japan |+50bp Fed Hike in the Bag, but Watching Tuesday’s US CPI Print
- Good Morning Japan: We strive to provide the best macro, stock and thematic overnight news that impacts your trading day in Japan. FOLLOW TO KEEP ABREAST.
- OVERSEAS. US recession fears dominate, SPX -0.7%/-3.7%WoW; Nov PPI print higher vs Cons, Cements +50bp Fed hike; China stocks win WoW amid COVID loosening + Property rescue; Tech looks supported
- JAPAN. NKY Futs -0.4% vs Cash, USDJPY ¥136.56; US asks JP to help curb China chip access; More Boeing orders, +ve JP related; FY23 Defense to rise by ¥1trn
Weekly Deals Digest (11 Dec) – Toshiba, Bigtincan, Nitro, Warrego, Xingda, VinFast, Weilong
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – VinFast (1905332D VN) pre-markets a US$1bn IPO, I-Tail (ITC TB) and Sunshine Insurance (6963 HK) have tepid debuts, Weilong Delicious Global (WDG HK) launches a US$141m IPO.
- Event-Driven developments – Bigtincan Holdings Ltd (BTH AU), Nitro Software Ltd (NTO AU), Warrego Energy (WGO AU), Xingda International (1899 HK), Chip Eng Seng Corp (CHIP SP).
LG Energy: ESOP Lockup Release (3.5% of SO) & Contrarian Approach Targeting NPS
- The ESOP’s 3.5% stake will be released on January 27. Considering the extremely tight flow situation, this is by no means small. 3.48% is 20 times the recent ADTV.
- NPS will likely move toward a minimum stake of 6% again for LG Energy, irrespective of LG Energy’s current valuation, despite its recent selling.
- We should consider the possibility that NPS will contrarily utilize this ESOP lockup release, and we should also design a contrarian position for this lockup release.
VinFast Auto IPO: The Bear Case
- VinFast (1905332D VN), a Vietnamese EV manufacturer and a majority-owned affiliate of Vingroup Jsc (VIC VN), has filed for a US$1.0 billion IPO to list on Nasdaq.
- In VinFast Auto IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The key elements of the bear case are a lack of brand recognition, questionable ability to generate profits, the precarious state of financing and liability exposure to ICE vehicles.
Acotec Scientific Holdings (6669.HK) – A Game Changer with Solid Long-Term Logic
- The peripheral vascular interventional device market in China is mainly dominated by foreign companies, but leading domestic company such as Acotec is the one to break the current market pattern.
- With more products getting CE/FDA approval in the future, Acotec Scientific Holdings (6669 HK) is able to enter more overseas markets. Acotec’s globalization process will diversify the revenue stream.
- Acotec has turned loss into profit by relying on product revenue. The Company has entered a new stage of innovation and harvest. We think Acotec has solid long term logic.
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