In today’s briefing:
- The Bigly March 2024 “Wednesday-Friday Trade” (Surprising Flows)
- Chilled & Frozen Logistics (9099) – Hostile Takeover Launched by AZ-Com Maruwa (9090)
- WT Micro GDR Early Look – Last Offering Had a Mixed Performance, This One Is Shaping up Better
- Link Admin (LNK AU): Scheme Vote on 24 April
- Chilled & Frozen Logistics (9099 JP): AZ-COM Maruwa (9090 JP)’s Hostile Offer
- Pop Mart (9992 HK): International Expansion Is For Real
- Back-Testing the Impact of National Assembly Elections on the Korean Stock Market
- IntelliCentrics (6819 HK): Clean, Illiquid “Arb”
- Quiddity Leaderboard ASX Jun 24: Can Codan Become an Intra-Review ASX 200 ADD?
- Special Changes in KOSDAQ 150: Deletion – STCube (052020) And Addition – PSK Holdings (031980)
The Bigly March 2024 “Wednesday-Friday Trade” (Surprising Flows)
- Every year it’s the same trade. This year it is Wednesday and Thursday. There are risks to the analysis – notably allocation.
- But there may be ¥1.0-1.2trln+ to buy on one day into the close later this month, then ad hoc buys of ¥630bn and index sells of ~¥600bn 2 days later.
- Over the past ten years, the two day return on the March trade is great. This year the Nikkei funding trade makes things more complicated.
Chilled & Frozen Logistics (9099) – Hostile Takeover Launched by AZ-Com Maruwa (9090)
- Chilled & Frozen Logistics Holdings (9099 JP) last week announced its “Action to Implement Management That is Conscious of Cost of Capital and Stock Price”.
- Today it announced AZ-Com Maruwa Holdings (9090 JP) had announced its intention to launch a Tender Offer on C&F Logistics without having contacted C&F first. A HOSTILE deal. Yum.
- The deal is proposed at a 50% premium, with the goal of getting to a minimum of 50.00%. This will be interesting.
WT Micro GDR Early Look – Last Offering Had a Mixed Performance, This One Is Shaping up Better
- WT Microelectronics (3036 TT) is looking to raise up to US$444m in its upcoming global depository receipts (GDRs) offering.
- WT Microelectronics recently announced its board’s resolution to issue between 68-85m new shares in the form of GDRs, with the use of proceeds geared towards purchasing of raw materials overseas.
- Similar to previous GDR listings, the deal is a long drawn out process with the firm required to jump through a number of board/shareholder/regulatory approval loops.
Link Admin (LNK AU): Scheme Vote on 24 April
- The Link Administration (LNK AU) IE considers Mitsubishi UFJ Financial (MUFG) (8306 JP)’s A$2.26 offer fair and reasonable as it is within its A$2.11-2.70 per share valuation range.
- The scheme remains conditional on several regulatory approvals – FIRB, Central Bank of Ireland, Isle of Man Financial Services Authority, India SEBI, and Financial Services Agency of Japan.
- Several substantial shareholders have sold or exited, lowering the scheme’s risk. At the last close and for the 16 May payment, the gross/annualised spread was 1.3%/9.7%.
Chilled & Frozen Logistics (9099 JP): AZ-COM Maruwa (9090 JP)’s Hostile Offer
- AZ-Com Maruwa Holdings (9090 JP) has launched a pre-conditional hostile offer for Chilled & Frozen Logistics Holdings (9099 JP) at JPY3,000 per share, a 47.0% premium to the last close.
- The pre-conditions primarily relate to regulatory approvals. The tender is expected to start in early May. The Board responded that it will evaluate the offer.
- The hostile offer was a reaction to the Board’s lack of engagement. The Board will struggle to reject an attractive offer, which is 37.5% higher than the all-time high.
Pop Mart (9992 HK): International Expansion Is For Real
- The thesis for Pop Mart International Group L (9992 HK) is the successful expansion of its international business, which made up 13% of sales in 1H23 but is growing exponentially.
- This has been proved true in the latest announced 2023 results, with a 135% growth in 2023 for the international business, and a further >100% growth guidance for 2024.
- The company is trading at 24x 2024 earnings, assuming a 35% net profit growth in 2024.
Back-Testing the Impact of National Assembly Elections on the Korean Stock Market
- In this insight, we provide a back-testing analysis of the impact of the National Assembly Elections on the Korean stock market.
- KOSPI tends to display positive price performance one month and three months prior to the election date leading up to the election date.
- On the other hand, KOSPI tends to decline one month and three months post the election date. We believe that post National Assembly Election, KOSPI could face greater headwinds.
IntelliCentrics (6819 HK): Clean, Illiquid “Arb”
- Back on 9th Feb 2024, healthcare technology platform IntelliCentrics Global Holding (6819 HK) announced the proposed disposal of its key operations to Symplr Software Holdings for at least US$246.5mn.
- Upon completion of the sale, IntelliCentrics will declare a special dividend, then seek a listing withdrawal. A key condition to the sale was FTC/DOJ approval. That is now satisfied.
- The sale/dividend/delisting requires a Scheme-like vote, with 72.1% of shares out supportive. This is a super-clean pseudo arb. Pushback? Very illiquid.
Quiddity Leaderboard ASX Jun 24: Can Codan Become an Intra-Review ASX 200 ADD?
- In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run-up to the June 2024 index rebal event.
- Prior to the June 2024 review, there could be one intra-review change triggered by the completion of the Silver Lake Resources (SLR AU) / Red 5 Ltd (RED AU) deal.
- Separately, I see one ASX 20 change and two ASX 100 changes for the regular rebalance in June 2024.
Special Changes in KOSDAQ 150: Deletion – STCube (052020) And Addition – PSK Holdings (031980)
- KRX announced special changes to KOSDAQ 150. Since STCube (052020 KS) has been designated as “administrative issue,” the Korea Exchange will exclude it from KOSDAQ 150 on 26 March 2024.
- PSK Holdings Inc (031980 KS) will be new addition to KOSDAQ 150 index, replacing ST Cube.
- PSK Holdings’ core business is providing process technology, source, and hardware for semiconductor packaging equipment.
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