In today’s briefing:
- SK Hynix ADR Inclusions in the SMH ETF, VanEck Semi UCITS ETF, and KODEX US Semi ETF Rebalances
- Hong Ra-Hee Is Selling 1.9 Trillion Won of Samsung Electronics to Her Son Lee Jae-Yong
- HSCI Index Rebalance Preview: Southbound Stock Connect Additions; Momenta Needs a Moment
- [Japan M&A] Taiyo Holdings (4626 JP) – A Last Gasp of Likely Fruitless Optionality Remains
- A Tender Offer of 19% Stake in Hanwha Machinery & Service Holdings By Kim Dong-Seon
- Trading Strategies on Samsung Electronics and SK Hynix Amid Heightened Competition from CXMT
- SK HYNIX (000660 KS / SKHY US): The Solidigm Confusion Is a Gift. Average Down.
- HSTECH Index: Market Consultation Conclusions, Updated Potential Adds & The Borderline Names
- HSI Dec 2026 Index Rebalance Forecast
- [Japan M&A] Hulic Takes Out Riso Kyoiku at ¥295/Share – Small, Unsurprising, Fair Enough, One Quirk.
SK Hynix ADR Inclusions in the SMH ETF, VanEck Semi UCITS ETF, and KODEX US Semi ETF Rebalances
- There are several notable ETFs (SMH ETF, VanEck Semiconductor UCITS ETF, and KODEX US Semiconductor ETF) that will include SK Hynix (SKHY US) ADRs in their upcoming rebalances.
- The expected capital inflow from the passive funds is expected to be significant at about $3.8 billion (5.2 trillion won).
- A $3.8 billion inflow represents 11.3% of the total ADR market cap. ADTV is $4.3 billion. Flow/ADTV (no of days) is 0.88.
Hong Ra-Hee Is Selling 1.9 Trillion Won of Samsung Electronics to Her Son Lee Jae-Yong
- After the market close on 9 September, it was reported that Hong Ra-hee is selling a 0.11% stake in Samsung Electronics (worth 1.94 trillion won) to her son Lee Jae-yong.
- Her decision to transfer the shares directly to Chairman Lee rather than selling them on the open market is seen as a move to minimize the impact on the market.
- After this transaction is completed, Lee Jae-yong’s stake in Samsung Electronics will rise from 1.47% to 1.58%.
HSCI Index Rebalance Preview: Southbound Stock Connect Additions; Momenta Needs a Moment
- There were 31 new listings on the Hong Kong Exchanges and Clearing (388 HK) in Q3, of which 14 were A/H listings.
- We forecast 5 additions to the HSCI in December and 2 of those additions will then be added to Southbound Stock Connect. SHEIN was already added to the index earlier.
- As a stock with Weighted Voting Rights (WVR), Momenta Global (6880 HK) will need to wait till early February to be added to Southbound Stock Connect.
[Japan M&A] Taiyo Holdings (4626 JP) – A Last Gasp of Likely Fruitless Optionality Remains
- The Taiyo Holdings (4626 JP) tender offer was expected to start around now. It is delayed because “necessary procedures and actions” under Chinese antitrust and Japan Investment Approval remain incomplete.
- The latter is a trifle concerning, but I expect this gets done. Earnings will be better than originally guided and in the management forecast underpinning the FAs’ valuations.
- HOWEVER, they’d have to be a LOT better to trigger a re-rate. I don’t think they get there but passive is big enough to make traders Oliver Twisty.
A Tender Offer of 19% Stake in Hanwha Machinery & Service Holdings By Kim Dong-Seon
- Kim Dong-seon (third son of Hanwha Group Chairman Kim Seung-youn) has launched a tender offer of a 19% stake in Hanwha Machinery & Service Holdings (0220W0 KS) (HMSH).
- The tender offer is for 16.06 million common shares at 8,000 won per share, running from 12 October to 2 November.
- I have a positive view on this tender offer and on HMSH whose share price fell excessively post split and Kim Dong-seon is trying to capitalize on this price decline.
Trading Strategies on Samsung Electronics and SK Hynix Amid Heightened Competition from CXMT
- In this insight, I provide a near-term trading strategy on Samsung Electronics and SK Hynix amid heightened competition from CXMT.
- Prior to its 3Q 2026 conference call, I expect Samsung Electronics to trade in a box trading range of about 210,000 won to 240,000 won per share.
- I also expect SK Hynix to trade in a box trading range of about 1,300,000 won to 1,520,000 won prior to the the 3Q 2026 conference call.
SK HYNIX (000660 KS / SKHY US): The Solidigm Confusion Is a Gift. Average Down.
- Solidigm IPO rumours have hurt: ₩129tn of MCAP erased since 26 Sep. Investors clearly dislike it; and management adding no value by stating “nothing decided yet.”
- Our math: a US$100bn IPO moves value −1.7% to +1.1%; even a fire-sale costs 6.2%. Abandonment recovers ~₩176,000 per share.
- Maintain BULLISH, FV ₩2,700,000 (+60%). At 6.2x FY27E P/E, average down. Cyclicals are bought when the bad news is out.
HSTECH Index: Market Consultation Conclusions, Updated Potential Adds & The Borderline Names
- On 7 October, Hang Seng announced the conclusions of the market consultation to increase the number of Hang Seng TECH Index (HSTECH INDEX) constituents from 30 to 50.
- While most of the proposals will be implemented as proposed, a liquidity requirement has been tightened, and revenue thresholds have been imposed for companies qualifying through the Sales Growth Stream.
- The changes will be implemented in a single step at the December rebalance and that creates a lot of flow for all the index members, current and new.
HSI Dec 2026 Index Rebalance Forecast
- We screen for HSI ADD candidates ahead of the review result, due on 20 Nov 2026 after market close.
- Four stocks are screened as mid-conviction ADD candidates this cycle.
- Three of the four are in the most underweight industry group, and the fourth is in Healthcare.
[Japan M&A] Hulic Takes Out Riso Kyoiku at ¥295/Share – Small, Unsurprising, Fair Enough, One Quirk.
- Hulic Co Ltd (3003 JP) formed a Business+Capital Alliance with prep/cram/etc school operator Riso Kyoiku (4714 JP) in 2020. They bought 20% by 2021. Then went to 51% in 2024.
- Now they want the rest. This is utterly unsurprising. And will be easy. Nobody else really wants this and Hulic controls it already.
- This is fair enough as a price in my opinion. It is easy, small, illiquid, and roughly meaningless, except for one small quirk.
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