Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.</li>
<li>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the rankings of the potential ADDs/DELs every month.</li>
<li>Below is a look at potential ADDs/DELs for the JPX-Nikkei 400 Index Rebal to come in August 2024 based on trading data as of end-November 2023.</li>
</ul>


JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the rankings of the potential ADDs/DELs every month.
Below is a look at potential ADDs/DELs for the JPX-Nikkei 400 Index Rebal to come in August 2024 based on trading data as of end-November 2023.


Quiddity JPX-Nikkei 400 Rebal 2024: End-Nov 2023

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Event-Driven

<ul>
<li>Many months ago I suggested the JIC Tender Offer <a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a> was not overwhelmingly high-priced, but that it would be "heavy" for months to come. </li>
<li>FUD and Flows would widen the spread. And they did.</li>
<li>Now the time decay to expected approvals and tender offer start are getting steep. Time to Fight The FUD.</li>
</ul>


Many months ago I suggested the JIC Tender Offer JSR Corp (4185 JP) was not overwhelmingly high-priced, but that it would be "heavy" for months to come. 
FUD and Flows would widen the spread. And they did.
Now the time decay to expected approvals and tender offer start are getting steep. Time to Fight The FUD.


IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a>'s pre-conditional tender offer from JIC is JPY4,350 per share. Since the deal announcement on 26 June, the gross spread has averaged 6.4%.</li>
<li>The wide gross spread reflects the risk in satisfying the pre-conditions related to country approvals, particularly in China. JIC, unusually can waive all or part of the conditions precedent.</li>
<li>The wild card is geopolitical developments. There are three China approval scenarios. The likely scenario is the deal approval under a normal procedure with a delay to the tender start.</li>
</ul>



JSR Corp (4185 JP)'s pre-conditional tender offer from JIC is JPY4,350 per share. Since the deal announcement on 26 June, the gross spread has averaged 6.4%.
The wide gross spread reflects the risk in satisfying the pre-conditions related to country approvals, particularly in China. JIC, unusually can waive all or part of the conditions precedent.
The wild card is geopolitical developments. There are three China approval scenarios. The likely scenario is the deal approval under a normal procedure with a delay to the tender start.


JSR Corporation (4185 JP): Tender Offer Risk/Reward

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a> has recommended JIC’s pre-conditional tender offer of JPY4,350 per share, a 34.5% and 10.6% premium to the undisturbed price and last close, respectively.</li>
<li>The pre-conditions relate to various country approvals. China's approval should be challenging due to Japan’s recent curbs on Chinese exports of chipmaking equipment.</li>
<li>The offer is long-dated and opens in late December. The offer price is attractive compared to peer multiples and just a touch below the all-time share price high.</li>
</ul>



JSR Corp (4185 JP) has recommended JIC’s pre-conditional tender offer of JPY4,350 per share, a 34.5% and 10.6% premium to the undisturbed price and last close, respectively.
The pre-conditions relate to various country approvals. China's approval should be challenging due to Japan’s recent curbs on Chinese exports of chipmaking equipment.
The offer is long-dated and opens in late December. The offer price is attractive compared to peer multiples and just a touch below the all-time share price high.


JSR Corporation (4185 JP): JIC’s Pre-Conditional Tender Offer at JPY4,350

<ul>
<li>The Nikkei followed by other media outlets revealed Saturday that the JIC (株式会社産業革新投資機構) were in talks with <a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a> to acquire the photoresist maker for ¥1 trillion.</li>
<li>JSR's release (<a href="https://ssl4.eir-parts.net/doc/4185/tdnet/2302693/00.pdf" target="_blank" rel="noopener">Japanese</a>/<a href="https://ssl4.eir-parts.net/doc/4185/ir_material4/209830/00.pdf" target="_blank" rel="noopener">English</a>) noted that they are considering the matter, but no decision has been made. They note, however, a Board of Directors meeting on Monday 26 June 2023.</li>
<li>Articles suggest a Tender Offer "this year", delisting next. ¥1 trillion is a 50% premium. Or 35%. I expect shares go limit up, then we will get more news post-close.</li>
</ul>


The Nikkei followed by other media outlets revealed Saturday that the JIC (株式会社産業革新投資機構) were in talks with JSR Corp (4185 JP) to acquire the photoresist maker for ¥1 trillion.
JSR's release (Japanese/English) noted that they are considering the matter, but no decision has been made. They note, however, a Board of Directors meeting on Monday 26 June 2023.
Articles suggest a Tender Offer "this year", delisting next. ¥1 trillion is a 50% premium. Or 35%. I expect shares go limit up, then we will get more news post-close.


JIC To Launch ¥1 Trillion Takeover on JSR (4185)

Japan

TOKYO OHKA KOGYO CO., LTD. manufactures photoresist for semiconductors.  The Company also manufactures printing materials and semiconductor-assembling machines.

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Tokyo Ohka Kogyo (4186 JP)

Quiddity JPX-Nikkei 400 Rebal 2024: End-Nov 2023

In total, there are 39 Potential ADDs and 38 Potential DELs (unique names) presented in the current Quiddity Leaderboard.

Janaghan Jeyakumar, CFA

JSR (4185) - Time To Fight The FUD

JSR has been the victim of flows and FUD. It was a big position in active portfolios and long selling may have overwhelmed arb capacity, but China...

Travis Lundy

JSR Corporation (4185 JP): Tender Offer Risk/Reward

The wide gross spread reflects the risk in satisfying the pre-conditions related to country approvals, particularly in China. In this note, we...

Arun George

JSR Corporation (4185 JP): JIC’s Pre-Conditional Tender Offer at JPY4,350

The offer is long-dated and opens in late December. The offer price is attractive. Pre-conditions which require various country approvals are a risk.

Arun George

JIC To Launch ¥1 Trillion Takeover on JSR (4185)

News Saturday says govt-affiliated JIC will buy JSR (4185) for ¥1trln (EV or market cap?, either 50% or 35% premium). This may not be great for...

Travis Lundy

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