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Smartkarma Daily Briefs

Feb 08
0

Daily Brief Thematic (Sector/Industry): Good Morning Japan |Peak Rates Still 5% Post Powell – Beta Roars Back; Inbound-China Excludes Japan and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Good Morning Japan |Peak Rates Still 5% Post Powell – Beta Roars Back; Inbound-China Excludes Japan
  • Antony Blinken, Balloon, China, Adani, Russia, Taiwan, Fed, US Dollar – We Didn’t Start the Fire

Good Morning Japan |Peak Rates Still 5% Post Powell – Beta Roars Back; Inbound-China Excludes Japan

By Mark Chadwick

  • OVERSEAS.  SPX resumes rally as Powell Speech affirms 5% Peak rates;   Beta dominates as Energy and Tech lead; Oil rebound as EIA sees higher Oil +  Saudis lift prices
  • JAPAN.  NKY Futs -0.1% (flat) vs Cash;  Inbound headwinds as China excludes Japan from Group tours;  Son skips Softbank brief in wake of Vision fund disaster; Nintendo/Switch – its Over!
  • DAILY NUGGETS. Nintendo – Game Over. Is our view.  The Switch is getting old and we are past the peak..

Antony Blinken, Balloon, China, Adani, Russia, Taiwan, Fed, US Dollar – We Didn’t Start the Fire

By Xinyao (Criss) Wang

  • Since the US and China could not agree beforehand, it would be useless for Antony Blinken to come. Or only discuss the balloon?
  • Many people are worried about the escalation of Sino-US confrontation. The key to the occurrence of the Taiwan Strait War is who will become the new president of the US.
  • The three crises of the US dollar in the past 50 years have been redeemed by war, including “various forms of war”.Perhaps, we should get ready for a new era. 

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Feb 08
0

Daily Brief ECM: Hesai Group IPO: Valuation Insights and more

By | Daily Briefs, ECM

In today’s briefing:

  • Hesai Group IPO: Valuation Insights
  • Mankind Pharma Pre-IPO – Peer Comparison – One of the Largest, with Better Growth and Margins
  • New Ruipeng Pet IPO: Covid-19 Is Not the Sole Reason for Mediocre Performance

Hesai Group IPO: Valuation Insights

By Arun George

Mankind Pharma Pre-IPO – Peer Comparison – One of the Largest, with Better Growth and Margins

By Sumeet Singh

  • Mankind Pharma is looking to raise about US$1bn in its upcoming India IPO.
  • MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
  • In this note, we will undertake a peer comparison with some of the India listed and domestically focussed pharmaceutical firms.

New Ruipeng Pet IPO: Covid-19 Is Not the Sole Reason for Mediocre Performance

By Shifara Samsudeen, ACMA, CGMA

  • New Ruipeng is the largest pet care platform in China and second largest globally in terms of no.of hospitals and revenue from pet care services in both 2020 and 2021.
  • The company has filed for an IPO in the US and plans to raise at least US$100m through the IPO.
  • Though the company’s operations were negatively affected by Covid-19, our analysis shows that intense competition has led to the company losing its market share in the pet care services.

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Feb 08
0

Daily Brief Event-Driven: Toshiba (6502) – Funding Definitely Probably Now Secured – Next Steps and Risks and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Toshiba (6502) – Funding Definitely Probably Now Secured – Next Steps and Risks
  • DTAC/TRUE Merger: Index Flows & Potential SET50 Replacement
  • Carlyle 86% Premium ¥4460 TOB on Iwasaki Elec – Probably Light, and Interesting Shareholder Register
  • Nissan’s Renault Led Selldown Very Early Look – US$4.3bn Prolonged Overhang or Lack Thereof
  • Toshiba – Good News?
  • Toyo Construction (1890 JP): YFO and the Board Trading Half-Truths
  • SM Entertainment: A Rights Offering & CB Issue to Kakao Corp
  • EQD | HSI Index: Buying the Dip Using Options

Toshiba (6502) – Funding Definitely Probably Now Secured – Next Steps and Risks

By Travis Lundy

  • On 31 January, the expected “deadline” for a bank loan agreement with the JIP Consortium bidding for Toshiba, we got news that commitment confirmation would be extended to 3 February.
  • Every other time we got a deadline extension, we got an article. On 3-6 Feb, we got no article, suggesting we were close. Today, a Bloomberg article says terms agreed.
  • That gets us over the biggest hump. Now we have to look at possible next steps and timing.

DTAC/TRUE Merger: Index Flows & Potential SET50 Replacement

By Brian Freitas

Carlyle 86% Premium ¥4460 TOB on Iwasaki Elec – Probably Light, and Interesting Shareholder Register

By Travis Lundy

  • Carlyle has agreed to do an MBO on Iwasaki Electric (6924 JP) where the existing CEO who is 65yrs old will take a 0.5% stake.
  • As a purveyor of specialist industrial lighting, including transition to LED lighting for public space use, the company’s place in the ecosystem is not undesirable. But it isn’t hugely profitable.
  • This smallcap takeout at an 86% premium is probably still too light. And the Shareholder Structure is interesting.

Nissan’s Renault Led Selldown Very Early Look – US$4.3bn Prolonged Overhang or Lack Thereof

By Sumeet Singh

  • With Nissan (7201 JP) and Renault coming to a new arrangement regarding their working relationship, Renault will be left with a US$4.3bn Nissan stake that it will look to sell eventually.
  • The selldown will probably take a long while to materialize.
  • In this note, we talk about the announcement and take a very early look at the possible selldown.

Toshiba – Good News?

By Mio Kato

  • So JIP appears to have finally secured funding for its tortured Toshiba bid. 
  • The market is reacting positively and we think this is reasonable but the real question is whether Toshiba management will be amenable to the new terms of JIP’s deal. 
  • In our view, there are certain quirks regarding recent news flow which point to a potential answer to that question.

Toyo Construction (1890 JP): YFO and the Board Trading Half-Truths

By Arun George

  • YFO’s latest press release outlines the key objectives of a revamped Toyo Construction (1890 JP) Board, should its recommended directors get elected at the June AGM.
  • YFO’s strategy is to revamp the Board, which should pave the way for its tender offer. YFO’s standstill agreement expires on 24 May and the tender offer starts in late-September.
  • The Board could allege that YFO has breached its NDA agreement and re-introduce a poison pill. The Board could look to garner enough support to block YFO’s nominations. 

SM Entertainment: A Rights Offering & CB Issue to Kakao Corp

By Douglas Kim

  • On 7 February, it was announced that SM Entertainment will conduct a third party rights offering and CB issue to Kakao Corp.
  • Post these deals, Kakao Corp will own a 9.05% stake in SM Entertainment.
  • The rights offering and the CB issue have all the hallmarks of an intermediate deal prior to an eventual takeover of SM Entertainment by the Kakao Group.

EQD | HSI Index: Buying the Dip Using Options

By Simon Harris

  • HSI Index has paused for breath this month underperforming most other global indices
  • The outlook for the region remains strong as reopening strength gains momentum and the Government continue to announce new supportive measures
  • We favour a buy the dip strategy and suggest using derivatives to play it

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Feb 08
0

Daily Brief Equity Bottom-Up: Nintendo (7974) | Game Over for Switch and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • Nintendo (7974) | Game Over for Switch
  • Hong Kong Property: Retail Reopening Front-Runners
  • Softbank Group (Neutral) – Q3 22 Results Reaction: Defensive Stance Intact as VF Losses Continue
  • Pinduoduo: Untaming TEMU Through $100 Coupons
  • Consun Pharmaceutical (1681.HK) – Still Has Investment Value Even Without High-Priced Acquisition
  • Z Holdings (4689.JP) Upgrade to BUY: Leaner Business Lines with PayPay Drives Growth
  • Burberry: Too Far Too Soon
  • Taiwan Tech Weekly: Balloon Incident Could Worsen China Restrictions & Key Earnings Readthroughs
  • Long Apple Vs. Short Quanta & Pegatron Update: Apple Outperformed 12%, Consider Unwind
  • US Neobanks; Warning Signals from SoFi and Varo 4Q Results

Nintendo (7974) | Game Over for Switch

By Mark Chadwick

  • Nintendo reported operating profit of 190b yen (-8% YoY), falling far short of Street expectations
  • The Nintendo Switch is now a six-year old console and demand is exhausted. A normalization of chip/supply chain issues benefits the newer PS5
  • Our thesis is that the hardware cycle has peaked and that the share price will head lower in tandem with the dwindling top line

Hong Kong Property: Retail Reopening Front-Runners

By David Blennerhassett

  • China’s swift and sudden abolishment of its Covid rules triggered across-the-board outperformance for Hong Kong stocks. The HSI is up ~13% since early December 2022. 
  • A strong rebound of inbound tourism and the resumption of normalised travel between Hong Kong and the mainland should underpin the city’s recovery.
  • The retail sector, notably the high street shop segment, should lead this post-Covid recovery in terms of both rents and prices. 

Softbank Group (Neutral) – Q3 22 Results Reaction: Defensive Stance Intact as VF Losses Continue

By Kirk Boodry

  • Management pushed a conservative / defensive line for Q3 as markets remain uncertain and investment losses continue
  • Revenue growth at ARM was better than expected as licensing revenues rebounded strongly. Guidance for the timing of an IPO (sometime in 2023) remains unchanged
  • This was a slightly disappointing quarter but hopes were not high heading into the print with the discount hovering around 35%

Pinduoduo: Untaming TEMU Through $100 Coupons

By Oshadhi Kumarasiri

  • The market seems to be expecting quite a bit from Pinduoduo (PDD US) in upcoming earnings with consensus expecting the company to make around RMB 11.4bn OP in 4Q22.
  • With CCP’s anti-monopoly drive on hold, Pinduoduo may need to persuade customers and merchants a bit more than usual via sales and marketing to further improve its market position.
  • TEMU was anyway going to be a significant burden on profitability. With aggressive discounting and coupons, we think that burden has gotten significantly heavier.

Consun Pharmaceutical (1681.HK) – Still Has Investment Value Even Without High-Priced Acquisition

By Xinyao (Criss) Wang

  • The potential high-priced acquisition proposed by Wepon failed. In fact, Wepon is in a vicious circle. So, terminating the acquisition is not a bad thing for Consun Pharmaceutical (1681 HK).
  • Consun kept positive momentum and its performance was strong in 22H1. Such growth is expected to continue after China reopens as non-COVID related medical demand returns to normal.
  • Considering its solid business performance and large cash balance, Consun is obviously undervalued. In our view, even without Wepon’s deal as the catalyst, Consun still has investment value.

Z Holdings (4689.JP) Upgrade to BUY: Leaner Business Lines with PayPay Drives Growth

By Shawn Yang

  • ZHD F3Q22 (C4Q22) net revenue slightly missed our est. and cons. by (2%) and (1%). Adjusted EBITDA margin was in line with our est. excluding impact from PayPay consolidation. 
  • PayPay will continue to be the growth driver for ZHD with increase in unit spending supported by premium credit card offering and deepening integration with group’s other services.
  • We upgrade ZHD to BUY and raise our TP to JPY 435 to reflect beat in profitability and upsides in PayPay

Burberry: Too Far Too Soon

By Alexis Dwek

  • Expectations of the new CEO Jonathan Akeroyd and the new creative director Daniel Lee uplifting the business and accelerating sales are priced in
  • Resumption of Chinese outbound travel will surely happen, but it will take time
  • No valuation upside at these levels. We are bearish on the stock

Taiwan Tech Weekly: Balloon Incident Could Worsen China Restrictions & Key Earnings Readthroughs

By Vincent Fernando, CFA

  • China Balloon Incident — Negative news for China semiconductor restrictions; Up to 45nm may now be hobbled by Japan & Netherlands joining.
  • Hon Hai — January sales results strong, could help market look forward to Hon Hai’s future growth.
  • Mediatek Results & Upcoming Results — Signs of slight smartphone stablization, also we highlight key Auto & Industrial Semiconductor related results ahead.

Long Apple Vs. Short Quanta & Pegatron Update: Apple Outperformed 12%, Consider Unwind

By Vincent Fernando, CFA

  • Since our Long Apple vs. Short Quanta & Pegatron piece, Apple has outperformed by 11.7% in USD-adjusted terms.
  • Apple has reported results recently, thus the next major events could be Quanta and Pegatron results.
  • Given Apple has outperformed by a significant amount, we believe the best of Apple’s relative outperformance is done for the near-term. One can thus look for levels to unwind.

US Neobanks; Warning Signals from SoFi and Varo 4Q Results

By Victor Galliano

  • Varo bank published 4Q22 results that revealed lower quarterly cash burn through cost control, but revenue per client declined and the very high customer acquisition cost
  • SoFi’s cost reduction success in 4Q22 seems, in contrast to Varo, to have limited revenue loss, thereby bringing SoFi closer to breakeven; it trades at a premium to peers
  • These early 4Q22 results signals may provide some read across which we believe could be negative for Dave in particular, as well being a reality check for Inter’s US ambitions

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Feb 08
0

Daily Brief Macro: Balloons Aside and more

By | Daily Briefs, Macro

In today’s briefing:

  • Balloons Aside, US-China Tensions Will Be Contained
  • With FY24 Budget, India Shows Signs of Shift in Growth Strategy

Balloons Aside, US-China Tensions Will Be Contained

By Manu Bhaskaran

  • The bizarre incident of a Chinese surveillance balloon into US airspace is a temporary setback in US-China relations, but long-run factors limit the downsides. 
  • Domestic politics are a moderating force against careless misjudgments by President Xi, even as US political dynamics point to more hawkish posturing from Washington.
  • China will not revert to “wolf-warrior” diplomacy after the strategic setbacks it has suffered, and efforts to modulate its foreign policy approach will be largely unaffected.

With FY24 Budget, India Shows Signs of Shift in Growth Strategy

By Manu Bhaskaran

  • The Modi administration’s latest budget will have a mildly contractionary stance for the economy. This is broadly appropriate to balance consolidation and growth concerns. 
  • The boost in public capital spending is welcome given the growing demands on India’s infrastructure, while consolidation is largely helped by a reduction in expected subsidy spending.
  • The budget also shows signs of subtle shifts in the government’s economic and political strategy as it aims to boost both India’s growth and Modi’s electoral prospects.

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Feb 07
0

Daily Brief ECM: JEIO IPO: Book Building Results Analysis and more

By | Daily Briefs, ECM

In today’s briefing:

  • JEIO IPO: Book Building Results Analysis
  • New Ruipeng Pet Group IPO: Struggling Pet Hospital Operator. Hard To Justify Premium Valuation
  • Greatpower Nickel and Cobalt Materials Pre-IPO – Should Turnaround once COVID Is Over

JEIO IPO: Book Building Results Analysis

By Douglas Kim

  • Jeio (418550 KS) announced its IPO price of 13,000 won, which was at the high end of the recently revised down IPO price range of 10,000 won to 13,000 won.
  • There were 1,174 institutional investors that participated in this IPO survey. The demand ratio was 352.6 to 1.
  • Our base case valuation of JEIO is target price of 12,575 won per share, which is 3.3% lower than the IPO price 13,000 won.

New Ruipeng Pet Group IPO: Struggling Pet Hospital Operator. Hard To Justify Premium Valuation

By Andrei Zakharov

  • New Ruipeng Pet Group, a China-based pet clinic operator and provider of pet care services, filed for a U.S. IPO. The company plans to list ADSs under the ticker “RPET.”
  • The company’s most recent private round was a $500M venture round led by Boehringer Ingelheim and Tencent at a ~$4.4B valuation in September 2020. 
  • We believe investors should think twice before investing in the New Ruipeng IPO as the pet hospital operator struggled to grow revenues, operating losses mounted, and labor costs increased.

Greatpower Nickel and Cobalt Materials Pre-IPO – Should Turnaround once COVID Is Over

By Ethan Aw

  • Greatpower Nickel & Cobalt Materials (1919613D CH) is looking to raise about US$300m in its upcoming Hong Kong IPO.
  • Greatpower Nickel and Cobalt Materials (GNCM) is a supplier of new energy battery materials in China, with a dual focus on nickel and cobalt for the production of cathode materials. 
  • The firm has made itself one of the top Chinese players in terms of cobalt refining by sales volume and nickel by trading volume. However, its profitability was significantly impacted. 

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Feb 07
0

Daily Brief Credit: Morning Views Asia: Country Garden Holdings Co and more

By | Credit, Daily Briefs

In today’s briefing:

  • Morning Views Asia: Country Garden Holdings Co, Greentown China

Morning Views Asia: Country Garden Holdings Co, Greentown China

By Charles Macgregor

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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Feb 07
0

Daily Brief Technical Analysis: USDJPY – Is USDJPY Confirming a Return to the Long-Term Uptrend? and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • USDJPY – Is USDJPY Confirming a Return to the Long-Term Uptrend?
  • EM Outperformance to Continue (Vs. EAFE) — Add on a Pullback; DXY Needs to Hold Below $106
  • Zhejiang HangKe Technology-A (688006 CH) – Confirming a Tradeable Bullish Multi-Month Opportunity

USDJPY – Is USDJPY Confirming a Return to the Long-Term Uptrend?

By David Coloretti, CMT

  • At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
  • Last week delivered a host of bullish MT USD reversal patterns across USD/G10 and USD/Asia pairs.
  • USDJPY has responded impulsively to critical LT support around 127.50. February has the potential to confirm a return to the multi-year uptrend with aggressive targets around 175/180.

EM Outperformance to Continue (Vs. EAFE) — Add on a Pullback; DXY Needs to Hold Below $106

By Joe Jasper

  • The MSCI EM vs.EAFE ratio (local currency) shows EM has outperformed relative to EAFE since the DXY peaked in November 2022, and also shows signs of reversing the 2-year downtrend.
  • As long as the DXY remains below $103.50-$106, we expect outperformance from EM to continue.
  • China/Hong Kong, Greece, South Africa, and Mexico stand out as attractive countries. Our top actionable Sectors include Communications, Consumer Discretionary, and Technology. We highlight 76 attractive EM stocks.

Zhejiang HangKe Technology-A (688006 CH) – Confirming a Tradeable Bullish Multi-Month Opportunity

By David Coloretti, CMT

  • At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
  • January completed a bullish 3 month reversal pattern in 688006 CH and thus confirmed a likely MT bottom.
  • 688006 CH has had an incredible pivotal relationship with its 50 week MA since 2020. A weekly close above the 50 week MA will confirm a high probability MT uptrend.

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Feb 07
0

Daily Brief Thematic (Sector/Industry): Good Morning Japan | Spy Balloons?? SPX Holds; Google Responds with BARD; BOJ AMAMIYA Story Refuted! and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Good Morning Japan | Spy Balloons?? SPX Holds; Google Responds with BARD; BOJ AMAMIYA Story Refuted!
  • Weekly Stock Bullfinder – Week of 2/6
  • Global Semiconductor Sales Increase 3.2% YoY In 2022

Good Morning Japan | Spy Balloons?? SPX Holds; Google Responds with BARD; BOJ AMAMIYA Story Refuted!

By Mark Chadwick

  • OVERSEAS.  SPX Pulls Back for 2nd day as Spy Balloons dominate – mkts just stretched;  Google responds to ChatGPT with BARD; Dell cuts headcount as PC struggle continues
  • JAPAN. NKY Fut flat vs Cash; USDJPY 132.63; Govt denies BOJ-Amamiya claim(really !); Son to skip Softban earnings call; Masa Takafumi wins Grammy with Sakura!
  • DAILY NUGGET. MHI  formalizes exit from Spacejet. No surprise as it has been on ice for 2 years.   Opportunity to put a positive spin on the $7bn failure.

Weekly Stock Bullfinder – Week of 2/6

By Weekly Stock Bull Finder

  • According to BeSpoke investment firm research, the top 10% of the most heavily shorted stocks are up an average of 36.3% so far this year.
  • This includes troubled retailer Bed Bath & Beyond (BBBY) whose shares surged by more than 18% Thursday, a day after they missed a Feb. 1 interest payment and warned that it might file for bankruptcy within weeks.
  • Other stocks like online car dealer Carvana and any company which has anything remotely associated with artificial intelligence (AI) have seen similar spikes.

Global Semiconductor Sales Increase 3.2% YoY In 2022

By Semicon Alpha

  • According to the Semiconductor Industry Association (SIA), global semiconductor industry sales totaled $573.5 billion in 2022, the highest-ever annual total and an increase of 3.2% compared to the 2021 total of $555.9 billion.
  • Monthly semiconductor sales peaked in May of 2022, reaching an all time high of %51.
  • This marked the culmination of almost two years of sequential monthly semiconductor sales growth, driven in large part by the pandemic-driven return to growth in both PC and smartphone unit sales.

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Feb 07
0

Daily Brief Event-Driven: Newmont Proposes Taking Newcrest Back Into The Fold and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Newmont Proposes Taking Newcrest Back Into The Fold
  • Korea: Upcoming Changes to Dividend Rules & Implications
  • Korea NPS Reportedly Finalized Additional 50 KOSPI Stocks in Its BM for Direct Management
  • Quiddity Leaderboard-S&P/​​​​​​​​​​ASX Mar 23: Time to Be Bullish ASX 200 & 300 Potential ADDs
  • Renault & Nissan Deal Done: Still a Trading Nothing🍔 So Far, OK Framework but Need Shaq Fingerguns
  • Newcrest Mining (NCM AU): Newmont’s Light All-Scrip Offer
  • Boustead Projects (BOCJ SP): Unconditional Offer at S$0.90 from Boustead Singapore
  • Iwasaki Electric (6924 JP): JPY4,460 MBO Tender Offer from Carlyle
  • Delta Electronics (DELTA TB / 2308 TT): Waiting for a Reversal

Newmont Proposes Taking Newcrest Back Into The Fold

By David Blennerhassett

  • Newmont Mining (NEM US), the world’s largest gold miner, has pitched a non-binding, all-scrip proposal for Newcrest Mining (NCM AU), Australia’s largest listed gold company.  
  • The proposal offers 0.38 Newmont shares for every Newcrest share, or an indicative Offer price of A$27.16/share, a 21% premium to last close. An earlier proposal from Newmont was rejected.
  • The proposal is subject to a raft of conditions, including granting of exclusivity to Newmont, due diligence, Newmont shareholder approval, and regulatory approvals, including FIRB.

Korea: Upcoming Changes to Dividend Rules & Implications

By Brian Freitas

  • On 31 January, Korea’s Financial Services Commission (FSC) and the Ministry of Justice announced plans to improve rules regarding dividends to bring them in line with international standards.
  • Companies will be able to decide the dividend amount prior to the record dates for quarterly dividends, while the ex-date of the final dividend will be post the AGM.
  • This was one of the issues highlighted by MSCI for Korea’s upgrade from EM to DM. There are also implications for the KOSPI200 futures basis and futures rolls.

Korea NPS Reportedly Finalized Additional 50 KOSPI Stocks in Its BM for Direct Management

By Sanghyun Park

  • NPS said it would add 50 KOSPI stocks to KOSPI 200 for direct management. However, the key was when this would be implemented and which ones would be included.
  • SBS, one of Korea’s major networks, exclusively reported that NPS finalized the constituent stocks of the NPS-KR250 and started rebalancing trading on the 50 additional KOSPI stocks from January.
  • Hence, tracing and identifying who these additional 50 KOSPI stocks are is becoming the hottest topic in Korea’s local market at this point.

Quiddity Leaderboard-S&P/​​​​​​​​​​ASX Mar 23: Time to Be Bullish ASX 200 & 300 Potential ADDs

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential index changes for S&P ASX 20, 50, 100, 200, 300 in the run up to the March 2023 Rebalance.
  • There could be one change for ASX 20 and one change for ASX 100 while ASX 200 could see four ADDs/DELs.
  • For ASX 300, there could be 15 ADDs and 12 DELs in the March 2023 Rebalance including some high impact names based on days-to-trade.

Renault & Nissan Deal Done: Still a Trading Nothing🍔 So Far, OK Framework but Need Shaq Fingerguns

By Travis Lundy

  • As “disclosed” recently, we have a deal. Nissan Motor (7201 JP) will invest “up to 15%” in Ampere. Mitsubishi Motors (7211 JP) may join. They have many potential joint projects.
  • The key is the Governance Framework, which replaces RAMA. Renault SA (RNO FP) puts 28.4% of Nissan in an open-ended Trust. Renault and Nissan have 15% reciprocal voting rights.
  • The webcast is more optimistic than I am. Luca de Meo made special mention of the joint projects. This sounds good. It sounds like what has always been promised.

Newcrest Mining (NCM AU): Newmont’s Light All-Scrip Offer

By Arun George

  • Newcrest Mining (NCM AU) confirmed a non-binding indicative privatisation proposal from Newmont Mining (NEM US) at 0.380 Newmont shares per Newcrest share. 
  • The offer values Newcrest at a discount to Tier 1 gold producer EV/Resource multiples. Also, the offer carries the volatility risk around Newmont shares and FX rates.
  • The offer underscores Newcrest’s value and helps the Board seek better terms. There is a possibility of a counterbid from other Tier 1 producers such as Barrick Gold (GOLD US).

Boustead Projects (BOCJ SP): Unconditional Offer at S$0.90 from Boustead Singapore

By Arun George

  • Boustead Projects (BOCJ SP)/BPL has disclosed a voluntary unconditional offer from Boustead Singapore Limited (BOCS SP) at S$0.90 per share, a 7.8% premium to the undisturbed price (3 February).
  • The offer price is unattractive in comparison to peer multiples, historical trading ranges and precedent transactions. However, the offer price is not final.
  • As Boustead Singapore aims to privatise BPL there is a possibility of a bump. The offer document will be despatched and the offer opens by 27 February.

Iwasaki Electric (6924 JP): JPY4,460 MBO Tender Offer from Carlyle

By Arun George

  • Iwasaki Electric (6924 JP) has recommended an MBO tender offer, sponsored by Carlyle Group Inc (CG US), of JPY4,460 per share, an 86.1% premium to the undisturbed price (6 February).
  • The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.
  • The tender offer is attractive and represents a ten-year share price high. This suggests a done deal. The tender offer period is from 7 February to 22 March.

Delta Electronics (DELTA TB / 2308 TT): Waiting for a Reversal

By Brian Freitas

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