In today’s briefing:
- The Bigly March 2024 “Wednesday-Friday Trade” (Surprising Flows)
- Shinko Electric (6967 JP): Tender State of Play
- Giordano (709 HK): A Closer Look At The Shareholder Register Ahead Of The SGM
- Trial Holdings IPO Trading – Demand and Valuation Are Towards the Higher Side
- Snow Peak: Cheap MBO
- IntelliCentrics (6819 HK): Delisting and Special Dividend
- Quiddity Leaderboard KOSPI 200 Jun 24: Up to Five Changes Possible
- Trial Holdings IPO: Trading Debut
- Contrarian Moves: Promoter Buying During Indian Equity Downturns
- Akeso Biopharma Placement (9926.HK) – Would Investors Be Willing to Take a Gamble?
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.
Shinko Electric (6967 JP): Tender State of Play
- Shinko Electric Industries (6967 JP) pre-conditional tender offer from the JIC alliance is JPY5,920 per share. The gross spread has narrowed from a high of 10.4% to the current 4.2%.
- The narrowing spread can be attributed to the JSR Corp (4185 JP) tender launch, which suggests likely China SAMR approval, and Ibiden Co Ltd (4062 JP) giving up recent gains.
- Like JSR, we expect China SAMR to allow JIC to withdraw its Shinko merger control filing. There is a good chance the tender launches before the guided late August start.
Giordano (709 HK): A Closer Look At The Shareholder Register Ahead Of The SGM
- Last month, a Cheng family vehicle with 24.06% of Giordano (709 HK), requisitioned an SGM to remove CEO Peter Lau, and install Colin Currie as CEO, plus three other NEDs/INEDs.
- That SGM will be held on the 3rd April. The director resolutions – both the removal and appointments – are “ordinary”, requiring a simple majority vote.
- The outcome will likely pivot off how the shareholders under Halcyon Securities will vote. So I dug a little deeper as to who these shareholders are, with some surprising results.
Trial Holdings IPO Trading – Demand and Valuation Are Towards the Higher Side
- Trial Holdings (5882 JP) (TH) raised around US$259m after pricing its IPO at the top-end in its Japan IPO.
- TH operates a network of retail stores that offer one-stop shopping under its everyday low price model, across a variety of daily necessities, food items and other products.
- We have looked at the company’s past performance in our previous notes. In this note, we talk about the trading dynamics.
Snow Peak: Cheap MBO
- Snow Peak agreement with Bain Capital to take the outdoor brand private next month seems to have been in the works for a couple of years.
- Although sales are expected to rebound this year to near record highs, Snow Peak insists the domestic camping boom is over and will look at long-term growth overseas instead.
- Even so, the MBO price looks cheap. Snow Peak is likely to see a rebound in domestic sales in FY2024 and its plans for overseas expansion are solid.
IntelliCentrics (6819 HK): Delisting and Special Dividend
- On 9 February, IntelliCentrics Global Holding (6819 HK) announced the disposal of most of its assets to symplr software. On 19 March, the antitrust condition was satisfied.
- The consideration will be distributed to shareholders as a special dividend. The minimum and maximum special interim dividends are US$0.52 (HK$4.08) and US$0.55 (HK$4.30) per share.
- The key condition is EGM shareholder approval. Due to the irrevocables from key shareholders, the EGM vote should comfortably pass. This is a done deal.
Quiddity Leaderboard KOSPI 200 Jun 24: Up to Five Changes Possible
- KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
- In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in June 2024.
- There could be up to five changes in the KOSPI 200 index during the June 2024 index rebal event.
Trial Holdings IPO: Trading Debut
- Trial Holdings (5882 JP) priced its IPO at JPY1,700 per share to raise gross proceeds of US$256 million. The shares will start trading on 21 March.
- We previously discussed the IPO in Trial Holdings IPO: The Investment Case and Trial Holdings IPO: Valuation Thoughts.
- The peers have modestly re-rated since the prospectus was released on February 19. The IPO price remains attractive.
Contrarian Moves: Promoter Buying During Indian Equity Downturns
- Promoter buying reflects insider confidence in the company’s future, often driven by access to undisclosed positive developments and growth opportunities.
- Increased promoter stake may indicate that the market has undervalued the company, potentially presenting an opportunity for investors to buy at a discount.
- Consider the broader market environment, company fundamentals, and industry trends alongside promoter buying activity to form a comprehensive investment thesis.
Akeso Biopharma Placement (9926.HK) – Would Investors Be Willing to Take a Gamble?
- Akeso’s product sales grew rapidly in 2023, mainly driven by off-label use of AK104. Since AK104’s commercialization potential on other indications was “overdrawn” in advance, sales growth would slow afterwards.
- The key investment logic of Akeso is whether/how much its BsAb pipelines would grab shares from PD-1. The high valuation has somewhat priced in AK112’s successful head-to-head trial with pembrolizumab.
- If AK112 does beat Keytruda, valuation will reach a new level. If AK112 fails in critical clinical trials, it would cast a shadow on the entire BsAb pipeline of Akeso.
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