In today’s briefing:
- Quiddity Leaderboard STAR 50/100 Mar 25: LONGs Up ~12% Vs SHORTs in a Month; More to Come
- Korea: Short Selling Is Back in March; Trade Ideas
- Trip.com (TCOM, 9961HK): 4Q24, Even Better Results, But Plunged as Expected
- Nidec Says It Won’t Raise Price on Makino (6135)
- MIXUE Group (2097 HK) IPO: Small Float to Keep Stock Out of Most Indices
- China A50 ETFs Rebalance Preview: China Rally Takes Cambricon Up, Up & Away
- FXI Rebalance Preview: Two Sets of Changes as ZTE Breaks Out, China Coal Dumps
- Pentamaster (1665 HK) Breaks Ahead Of Vote. Yet Pricing IS Fair
- JX Advance Metals Pre-IPO – Peer Comparison or Lack Thereof
- JX Advanced Metals (5016 JP) IPO: Valuation Insights
Quiddity Leaderboard STAR 50/100 Mar 25: LONGs Up ~12% Vs SHORTs in a Month; More to Come
- STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
- STAR 100 index tracks the next 100 names (51st-150th ranks) and it represents the mid-cap segment of the STAR market.
- In this insight, we take a look at the potential ADDs/DELs for the STAR 50 and STAR 100 indices for the March 2025 index rebal event.
Korea: Short Selling Is Back in March; Trade Ideas
- Since short selling was banned in November 2023, short interest has plunged in Korea as shorts were covered. Markets have not done much over the last 16 months though.
- Foreign investor holdings have dropped from 32.05% in July to 28.57%. The top 25 stocks bought by foreign investors outperformed the top 25 stocks sold by 128% in 16 months.
- There will be trade opportunities across indices, pref/ords, index migrations and deletions, potential market upgrades and overvalued stocks being sold.
Trip.com (TCOM, 9961HK): 4Q24, Even Better Results, But Plunged as Expected
- Total revenue grew by 24% in 4Q24, higher than 19% we expected.
- The stock price plunged in Hong Kong as we expect in our preview note.
- However, we believe, any stock decline over 11% means overreacted.
Nidec Says It Won’t Raise Price on Makino (6135)
- Nidec Corp (6594 JP) released a multi-page document regarding its bid for Makino Milling Machine Co (6135 JP) yesterday.
- It talked a bit about the back-and-forth with Makino, and gave Nidec’s side of the story. Makino has been making their side public too. A meeting is due early March.
- In the document, there was a line suggesting Nidec won’t raise price even against a counteroffer. They didn’t need to say that. The question is what Makino will do.
MIXUE Group (2097 HK) IPO: Small Float to Keep Stock Out of Most Indices
- Mixue Group (MIX HK) has priced its IPO at HK$202.5/share and will raise up to HK$3.97bn (US$511m) if the oversubscription option is exercised, valuing the company at HK$76.35bn (US$9.8bn).
- Despite a US$10bn market cap, the stock will find it difficult to be added to global and local indices since 60% of the shares are unlisted.
- The stock is likely to remain in the shadows for one global index and could be added to the other in December. HSCI inclusion could take place in September.
China A50 ETFs Rebalance Preview: China Rally Takes Cambricon Up, Up & Away
- With the review cutoff done, there could be three changes for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK) ETFs in March.
- Cambricon Technologies, Guotai Junan Securities and China United Network could replace Inner Mongolia Yili Industrial Group, CGN Power and Luzhou Laojiao in the ETFs.
- Guotai Junan Securities (2611 HK) is expected to be added to the iShares China Large-Cap (FXI) (FXI US) in March, so there should be inflows for the A-shares and H-shares.
FXI Rebalance Preview: Two Sets of Changes as ZTE Breaks Out, China Coal Dumps
- With the review cutoff done, there could be two changes for the iShares China Large-Cap (FXI) (FXI US) in March.
- Guotai Junan Securities (2611 HK) and ZTE Corp H (763 HK) are expected to replace China Tourism Group Duty Free (1880 HK) and China Coal Energy Co H (1898 HK).
- ZTE Corp H (763 HK) has broken out to new highs (possibly on short covering) while China Coal Energy Co H (1898 HK) continues to sell off.
Pentamaster (1665 HK) Breaks Ahead Of Vote. Yet Pricing IS Fair
- Back on the 19th December 2024, Pentamaster Corp (PENT MK) announced an Offer, by way of a Scheme, to take out its pseudo dual-listed twin, Pentamaster International (1665 HK).
- The Offer Price was HK$1.00/share – including a HK$0.07/share dividend – a 45.3% premium to last close, but arguably more like a 61% premium to undisturbed.
- The Court Meeting is the 28th February. Shares are down 15%+ in recent days. On no news. Not a great look.
JX Advance Metals Pre-IPO – Peer Comparison or Lack Thereof
- JX Advanced Metals (5016 JP)’s parent, ENEOS Holdings (5020 JP), is looking to raise around US$2.6bn via selling more than half of its stake in JXAM in its Japan IPO.
- JXAM engages in business activities primarily focused on the development, manufacture and sale of materials made from copper and rare metals, which are used in the semiconductor and ICT fields.
- We looked at the company’s past performance in our previous notes. In this note, we undertake a peer comparison.
JX Advanced Metals (5016 JP) IPO: Valuation Insights
- JX Advanced Metals (5016 JP) is a global leader in the semiconductor and ICT materials sector. It is seeking to raise up to US$2.6 billion.
- We previously discussed the IPO in JX Advanced Metals (5016 JP) IPO: The Bull Case and JX Advanced Metals (5016 JP) IPO: The Bear Case.
- In this note, we discuss valuation. My analysis suggests that JXAM is attractively valued at the IPO price compared to peer multiples.
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