Smartkarma Daily Briefs

• In April, a Bloomberg story said Renault SA (RNO FP) might sell shares in Nissan Motor (7201 JP) to support its investment in EVs. They might sell to Nissan, others.
• Renault shares popped hard, this two months after CEO Luca de Meo had said Renault might split, investing in and listing its EV business separately.  But since then? Crickets.
• Over the weekend, we have news talks are coming to a head. My feeling? The results won’t be pretty – a messy agreement which inspires nobody, but probably still works.

• Bilibili Inc (BILI US) listed in the US in April 2018. It eventually listed in Hong Kong under the ticker Bilibili (9626 HK) in March 2021 as a Secondary Listing. 
• Bilibili (9626 HK)  announced 16 March 2022 it intended to pursue a HK Primary Listing.  Application was announced on 2 May 2022, Circular a month later. Results announced 29 September.
• As of 3 October, it is a Dual Primary Listing, making it eventually eligible for Southbound Trading. But there as confusion as to when. Hint:  It’s March 2023.

• Nearing the end of the review period for the December rebalance of the CSI500 Index, we forecast 50 changes (the maximum permitted) at the close on 9 December.
• There is a big sector skew in the potential changes. We estimate a one-way turnover of 13.67% at the December rebalance leading to a one-way trade of CNY 7.53bn.
• The potential adds have outperformed over the last 6 months but have given up some of the gains recently as market turned volatile. Expect outperformance as the review period ends.

Our latest Webinar looks at news updates on Shinsei, Toa Oil, and Toyo Construction. To help us explore the implications for investors, we welcome Insight Provider Travis Lundy of Quiddity Advisors. 

The webinar will be hosted on Wednesday, 12 October 2022, 17:00 SGT/HKT.

Travis Lundy has 20+ years of experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies, with most of that time spent managing money.

• Pushpay Holdings (PPH NZ) confirmed that it had received a “revised” indicative non-binding proposal from a shareholder consortium, believed to be Sixth Street/BGH, which has a 20.3% stake.
• The proposal is “to acquire the Company at a premium to Friday’s closing share price.” Due to the sell-off, Sixth Street/BGH will likely offer a lower premium than initially intended.
• Our best guess is that Sixth Street/BGH’s offer is around A$1.30 per share. While not a knockout offer, it is a good starting point in the current grim market conditions.

• 90% of the way through the review period of the Kospi 200 Index December rebalance, we see two potential changes to the index. There is another potential inclusion failing liquidity.
• This rebalance is expected to have the lowest turnover as compared to any of the Kospi 200 Index rebalances over the last few years. Partly lower markets, partly no IPOs.
• That said, passive trackers are estimated to need to trade over 10 days of ADV on one of the potential adds and both potential deletes.

• Nearing the end of the review period, we expect there will be 18 changes to the SSE180 Index in December. The first-order impact on the stocks is not large.
• Stocks that are not currently in Buy/Sell Stock Connect will be added to the list. That makes them eligible for inclusion in the MSCI and FTSE indices in February/March.
• We see 6 of the potential/close adds being added to the MSCI China Index in February and 8 of the potential/close adds being added to the FTSE All-World/All-Cap in March.

• Davidson Kempner and others may seek an improved offer of up to 3,500p/share, 29.7x EV/Fwd EBIT, in line with Ideagen’s acquisition multiples. Gross spread is +2.38%.
• Assuming AVEVA can reach 2018a 34.7% EBITDA margins and increase revenues, the offer price would seem cheap. An increase to 3,300p seems feasible, £4,073 million, similar to the Bridge Facility.
• Current net debt/EBITDA is 1.3x and EBIT/interest is 33.6x, so it could comfortably take on that additional debt. At 3,300p, proforma net debt/EBITDA would be 1.9x, before adding any synergies.

• PureTech Health (PRTC LN) has confirmed its possible merger with Nektar Therapeutics (NKTR US). Uncertainty regarding the actual offer has caused volatility to PureTech shares.
• Nektar will be required, by not later than November 3, 2022, to announce a firm intention to make an offer for the company.
• Nektar faced a big setback in its lead pipeline assets and is going through tight financial condition. We are not expecting a lucrative takeover offer for PureTech.

• K Car completed its IPO in South Korea in Oct 21. It raised around US$300m after having downsized the offering and cut the asking price to below the IPO range. 
• K Car is a used car marketplace and dealership operating in South Korea.
• In this note, we will talk about the recent updates and the upcoming lockup expiry.