In today’s briefing:
- Denso’s Big Multi-Year Toyota Industries (6201) Selldown
- SciClone Pharma (6600 HK): Privatisation At IPO Price
- Lee Seo-Hyun’s Unexpected Return: Implications for Samsung’s Conglomerate Dynamics
- If Rakuten (4755) Combines Financial Units… Who Wins and How? Well… It’s Complicated
- Updated Tool (31Mar24) & “Diff File Generator” For TSE “Mgmt Conscious of Capital Cost/Stock Price”
- KRX Imposes a 20% Cap on Weight Ceiling in Sector ETFs with Few Constituents
- Isetan Singapore (ISET SP): Isetan Mitsukoshi (3099 JP)’s 154% Premium Scheme Offer
- Gap Trades in Korean Prefs Vs Common Share Pairs in 2Q 2024
- IntelliCentrics (6819 HK): Special Dividend Vote on 18 April
- Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2024
Denso’s Big Multi-Year Toyota Industries (6201) Selldown
- We knew this was coming. We did not know HOW it was coming. The news today has to be seen as a bit of a disappointment.
- Why is it a disappointment? Toyota Industries (6201 JP) is not buying back a big chunk, and there is no offering to oblige new investors to take a look.
- This is long, slow, leakage on a company which is not overwhelmingly cheap, where it requires good governance to get out well, and even then…
SciClone Pharma (6600 HK): Privatisation At IPO Price
- After Sciclone Pharmaceuticals (6600 HK) was suspended on the 19th March pursuant to the Takeovers Code, I speculated a Scheme at the March 2021 IPO Price. And that’s what unfolded.
- Li Zhenfu (SciClone’s NED), Assicurazioni Generali (G IM) and concert parties (collectively controlling 36.61%) have made an Offer at $18.80/share, a 33.9% premium to last close. Terms are final.
- The long stop date is the 31 October. That’s too conservative. This could be wrapped up late July.
Lee Seo-Hyun’s Unexpected Return: Implications for Samsung’s Conglomerate Dynamics
- Today, Lee Seo-hyun returned as the top executive at Samsung C&T, which officially announced her as the head of its Strategic Planning Division.
- Her return to Samsung C&T might not just be a simple comeback – it could be seen as a setup for some big changes within the company.
- Considering Samsung C&T’s Value-up Momentum, aligning with Lee Seo-hyun’s return, we must position for potential price impact, focusing on portfolio streamlining.
If Rakuten (4755) Combines Financial Units… Who Wins and How? Well… It’s Complicated
- A couple of years ago, Rakuten (4755 JP) – burning through cash to start its mobile business – announced it would its Bank and Securities units. Bank listed. Securities didn’t.
- Mizuho ended up buying 49% of Securities. Today, it was announced there would be discussions to put Bank, Securities, Card, and Insurance in a new listed Holdco.
- How this works will end up being complicated. More complicated than it should be. But the complexity would make this more of a win-win for everyone.
Updated Tool (31Mar24) & “Diff File Generator” For TSE “Mgmt Conscious of Capital Cost/Stock Price”
- In mid-January, the TSE announced a “name-and-shame” list where they listed all the companies which had put forth a disclosure about 【資本コストや株価を意識した経営の実現に向けた対応】. But they did not actually shame.
- The list shows which companies have disclosed a policy/consideration. But no data/links. We have the links, and we are weeks ahead of the TSE. Working to get months ahead.
- We created a tool to name everyone, show their reports, provide links, and now a new tool. Put in a name, see the difference between the Old/New Reports.
KRX Imposes a 20% Cap on Weight Ceiling in Sector ETFs with Few Constituents
- KRX limits individual stock weight to 20% in ETFs with few constituents. KRX confirms working on it, with an official announcement expected soon.
- Excludes index ETFs like KOSPI 200. KRX hasn’t finalized criteria for constituent number but expected to involve fewer than 30 stocks.
- This could open new passive trading opportunities. Sector ETF cap at 30%, large AUM ones offer noteworthy trading potential.
Isetan Singapore (ISET SP): Isetan Mitsukoshi (3099 JP)’s 154% Premium Scheme Offer
- Isetan Singapore (ISET SP) disclosed privatisation through a scheme of arrangement from Isetan Mitsukoshi Holdings Ltd (3099 JP) at S$7.20 per share, a 153.5% premium to the last close.
- The high takeover premium reflects the fair value of investment properties of S$300.4 million, i.e., S$7.28 per share, marginally above the offer price.
- The offer is attractive and 2.1% higher than the all-time high. The vote should comfortably get up. The scheme meeting is from early to mid-July.
Gap Trades in Korean Prefs Vs Common Share Pairs in 2Q 2024
- In this insight, we discuss numerous gap trades involving Korean preferred and common shares in 2Q 2024.
- Although the discount on the preferred shares versus the common shares has been gradually narrowing in the past decade, this discount increased from end of 2021 to 1 April 2024.
- On a longer timeframe (3-4 years), we believe this discount could narrow further to the 20-25% range, which provides additional opportunities for the Korean preferred shares to further make gains.
IntelliCentrics (6819 HK): Special Dividend Vote on 18 April
- The IntelliCentrics Global Holding (6819 HK) IFA considers the terms for the disposal of assets to symplr software as fair and reasonable. The EGM vote is on 18 April.
- The consideration will be distributed to shareholders as a special dividend with a minimum and maximum of US$0.52 (HK$4.07) and US$0.55 (HK$4.30), respectively.
- Irrevocables ensure that the EGM vote will pass. At the last close and for a 7 May payment, the gross and annualised spread of the minimum dividend is 2.8%/33.6%.
Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2024
- In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 2Q 2024.
- Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months, suggesting increased capital allocation to Korean holdcos relative to their opcos.
- These pairs could generate trading opportunities in terms of their pricing gaps closing reversal. [CJ Corp vs CJ Cheiljedang & Hanjin KAL Corp vs Korean Air Lines].
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