Smartkarma Daily Briefs

On Friday, Tsuruha Holdings (3391 JP), Welcia Holdings (3141 JP), and Aeon Co Ltd (8267 JP) announced the Tsuruha/Welcia merger and Partial Tender to get Aeon to 50+% of NEWCO.
The scrip ratio short-changes Tsuruha shareholders. The subsequent partial offer to raise Aeon’s stake above 50% is low too. 9.7% shareholder Orbis is already out with a complaint.
But… all is not lost. There are some interesting angles here to complain.

What if China ADRs Are Delisted from US Exchanges?

We see 281 Chinese companies listed on U.S Stock Exchanges with a total market cap of US$869bn. 32 of these companies are listed on the HKEX (388 HK).
If the rumours of Chinese stocks being delisted from U.S. Exchanges gathers steam, we could see a wave of secondary listings in Hong Kong.
PDD Holdings, Full Truck Alliance, Vipshop Holdings, TAL Education and ZEEKR are the largest China ADRs with no HK listing and could come under pressure.

“Tiny Win for Guess The Ratio” Aeon (8267) Pays a SMALL Premium for Aeon Mall (8905)

In an announcement after the close Friday 11 April, Aeon Co Ltd (8267 JP) and AEON Mall (8905 JP) announced their merger ratio, and timing.
The ratio is 0.65 to 1.0, meaning Aeon Mall shareholders don’t get a lot of credit for their real estate. The timing is short-dated. The AGM is end-May. Merger July1.
This may be a tad light, but it is a done deal. Active shareholder base is almost all retail and crossholders+dom passive gets Aeon to 70%.

Suzuki Motor (7269 JP) Placement: Likely to Price Today; 7-8% Underperformance Vs Peers/TOPIX

Tokio Marine & Nichido Fire Insurance and Sompo Japan Insurance are looking to raise US$1.2bn by offloading their entire stakes in Suzuki Motor by way of a secondary offering.
Suzuki Motor (7269 JP) stock is flat since the announcement of the placement but has underperformed its peers and the TSE Tokyo Price Index TOPIX (TPX INDEX).
With the placement being less than 5% of the number of shares outstanding, there is unlikely to be any immediate passive inflow which could pressure the stock.

Aeon Mall (8905 JP): Aeon (8267 JP)’s Share Exchange Ratio Is Set

AEON Mall (8905 JP) announced a share exchange offer by Aeon Co Ltd (8267 JP) at 0.65 Aeon shares per Aeon Mall share, a 30.9% premium to the undisturbed price.
The share exchange ratio is reasonable compared to historical price ratios and IFA valuation ranges. The implied offer multiple is attractive compared to peer multiples.
Aeon’s 58.16% shareholding ensures that Aeon Mall’s vote on 22 May is low-risk. The share exchange’s effective date is 1 July.

HK Connect SOUTHBOUND Flows (To 11 Apr 2025); Record Net Buying

Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. The first two weeks in April were HK$145bn.
The first two weeks in April were HK$145bn as what appeared to be national team, or equally patriotic buyers, showed up droves to buy financials, energy, telecoms, and big techs.
Included is a summary of important China Stocks-relevant news as I saw it this week, but frankly, the only thing that matters is the back and forth by the Donald.

A/H Premium Tracker (To 11 Apr 2025): Sharp AH Premia Widening

AH Premia bounce higher. Spread curve torsion is mild given how much AH is widening again. Two weeks in a row we see a big net move.
For a month I thought warning signs were flashing and spreads could widen. They are still widening despite really big net SOUTHBOUND buying.
I expected the right thing to do was hunker down and be flat H/A risk. Hs underperformed As by 3.7% over two weeks so it’s tough to be flat enough.

Merger Arb Mondays (14 Apr) – ESR, Fengxiang, Vesync, Goldlion, Shibaura, Tsuruha/Welcia, Aeon Mall

By Special Situation Investments

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: ENN Energy (2688 HK), Insignia Financial (IFL AU), Oneconnect Financial Technology (6638 HK), Shandong Fengxiang (9977 HK), Seven & I Holdings (3382 JP), Smart Share Global (EM US).
Lowest spreads: Shibaura Electronics (6957 JP), Sinarmas Land (SML SP), Millennium & Copthorne Hotels Nz (MCK NZ), Makino Milling Machine Co (6135 JP), Spartan Resources (SPR AU).

Fengxiang (9977 HK): PAG’s Pre-Con Offer

By David Blennerhassett

When Shandong Fengxiang (9977 HK) was suspended last month due to the Takeovers Code, I expected PAG to launch an Offer by way of a Merger by Absorption at ~HK$2.00.
And that is exactly what unfolded. The price, which is a 33.33% premium to last close is final. 42.35% of independent H-shareholders are supportive. A scrip alternative is afforded.
PAG was permitted to take control of Fengxiang, via the domestic shares, late 2022. There will be no regulatory roadblock as PAG now seeks to privatise Fengxiang.

Strategic Acquisitions, Merger Developments, and Takeover Bids: Key Updates

Lensar (LNSR) is being acquired by Alcon for $14/share plus a CVR up to $2.75/share, with closing expected in H2 2024.
OCI N.V. announced a $1bn extraordinary cash distribution, with shareholders choosing payment currency, ex-dividend date April 15.
Kronos Bio (KRON) terminated a lease for $1.5m, with potential net cash outcome between ~$1 and $1.30/share.

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Apr 14

Daily Brief Equity Bottom-Up: TSMC Q125 Earnings Preview and more

By Smartkarma Daily Briefs | Daily Briefs, Equity Bottom-Up

In today’s briefing:

TSMC Q125 Earnings Preview
Taiwan Tech Weekly: TSMC 1Q25 Results & The 2nm Frontline; Mediatek Vs. TSMC Valuation; PC 1Q25 Data
China Healthcare (Apr.13) – Trump’s Tariffs on Pharmaceuticals, NSCEB’s Report, RemeGen’s Pain Point
Nippon Parking Development (2353 JP): Irreplaceable Assets with +12% Historical EPS CAGR at 13x P/E
Adastria: ¥500 Billion Through New Brands – Signs UK’s Karrimor
Kinatico Ltd – SaaS revenue now 50% of total revenue

TSMC Q125 Earnings Preview

By William Keating

TSMC reported March 2025 revenues of NT$285.96 billion, up 10% MoM and up 46.5% YoY.
Revenue for January through March 2025 totaled NT$839.25 billion, an increase of 41.6% YoY.
At the forecasted exchange rate of NT$32.8 to the US$, this translates into Q125 revenues of $25.58 billion, marginally above the guided midpoint of $25.4 billion

Taiwan Tech Weekly: TSMC 1Q25 Results & The 2nm Frontline; Mediatek Vs. TSMC Valuation; PC 1Q25 Data

By Vincent Fernando, CFA

TSMC’s Next Leap: 1Q25 Earnings Ahead and the 2nm Frontline
Is the Valuation Divergence Justified? Mediatek Vs TSMC Valuation Compared
PC 1Q25: 5% YoY Growth but Shipments Inflated Ahead of US Tariffs. Dream of a Refresh Cycle Continue

China Healthcare (Apr.13) – Trump’s Tariffs on Pharmaceuticals, NSCEB’s Report, RemeGen’s Pain Point

By Xinyao (Criss) Wang

Trump’s administration will soon impose tariffs on pharmaceuticals. Chinese API companies will be hit the most. Pharmaceutical companies that mainly focus on domestic market could be better investment options.
NSCEB released “Changing the Future of Biotechnology”, among which WuXi AppTec was named again. Chinese CXO’s performance this year could be lower than expected due to geopolitical conflicts.
RemeGen’s 2024 results improved, but concerns remain due to its “disorganized” pipeline layout and uncompetitive products. The reasonable market value of Remegen is about RMB10 billion to RMB15 billion.

Nippon Parking Development (2353 JP): Irreplaceable Assets with +12% Historical EPS CAGR at 13x P/E

By Michael Fritzell

Nippon Parking Development (2353 JP — US$477 million) — also known as “NPD” — is a Japanese lessor of parking spaces and an operator of ski resorts and theme parks.
It’s the brainchild of lifelong entrepreneur Kazuhisa Tatsumi, who literally built the company in his garage in the early 1990s.
In Japan, developers are generally required to build 1/3 parking space per 100 square meters of floor area for any large building. This is known as “legally mandated parking space”.

Adastria: ¥500 Billion Through New Brands – Signs UK’s Karrimor

By Michael Causton

Adastria (soon to be And ST) is Japan’s biggest multi-chain clothing retailer and fourth largest overall.
As well as investing in core brands like Global Work, the former wholesaler is now expanding through new segments – including Forever 21 despite its US bankruptcy
In a sign of further diversification, it will now move into the very buoyant outdoor market having just acquired the Asian rights to UK outdoor brand, Karrimor.

Kinatico Ltd – SaaS revenue now 50% of total revenue

By Research as a Service (RaaS)

Kinatico Ltd (ASX:KYP) is a ‘Know Your People’ regtech company providing workforce compliance monitoring and management technology and services.
The company has announced that total revenue in Q3 increased 15% to $8.1m, with higher-margin SaaS (Software as a Service) revenue making up 50% of the total.
SaaS revenue grew 60% in the quarter on the previous corresponding period (pcp) to $4m and is tracking at $16m on an annualised basis.

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Apr 14

Daily Brief Macro: A Game Theory Analysis of the Trade War and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

A Game Theory Analysis of the Trade War
Estimating Downside Risk
Copper Tracker 14th April 2025: Green Shoots Emerging After the Trump Tariff Fiasco
Iron Ore Tracker (14-Apr-2025): Iron Within The Band, Set To Bounce On China Stimulus Talks

A Game Theory Analysis of the Trade War

By Cam Hui

No country in the world will be spared damage in a trade war.
Both the U.S. and China have outlined positions that are little more than posturing.
However, a game theory analysis of the relative positions indicates that the U.S. holds a weaker hand than China.

Estimating Downside Risk

By Cam Hui

The S&P 500 is deeply oversold by historical standards, but it remains an open question of whether stock prices will decline further after a short-term bounce.
Our estimate of S&P 500 downside is 3900–4500 without a recession, with strong technical support at 4800. Downside risk with a recession is 3300-3800.
Current readings indicate elevated recession risk based on consensus policy expectations, which can change at any time.

Copper Tracker 14th April 2025: Green Shoots Emerging After the Trump Tariff Fiasco

The introduction of Trump Tariffs has adversely impacted the commodities market’s promising start to the year, except for gold, which has exceeded 3,200 USD/oz.
Following a peak of 10,000 USD/ton on March 25, copper prices fell 14% to 8,600 USD/ton before rebounding in the past two trading sessions to 9,150 USD/ton.
The dollar’s depreciation, Trump’s flexibility on tariffs, and anticipated acceleration in Chinese stimulus have created a more favorable market environment for copper.

Iron Ore Tracker (14-Apr-2025): Iron Within The Band, Set To Bounce On China Stimulus Talks

Iron ore prices dropped by 5.5% last week, as the tariff war spooked the market and global recession fears gripped the market.
With the temporary relaxation of the tariffs and a meeting of key Chinese leaders to front-load the stimulus, the market seems slightly less pessimistic about iron ore prices.
With iron ore prices falling below USD 100 per ton, the higher end of the cost curve, we anticipate a slight rebound toward the USD 105-110 per ton range.

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Apr 14

Daily Brief Australia: Iron Ore, Kinatico and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Iron Ore Tracker (14-Apr-2025): Iron Within The Band, Set To Bounce On China Stimulus Talks
Kinatico Ltd – SaaS revenue now 50% of total revenue

Iron Ore Tracker (14-Apr-2025): Iron Within The Band, Set To Bounce On China Stimulus Talks

By Research as a Service (RaaS)

Iron ore prices dropped by 5.5% last week, as the tariff war spooked the market and global recession fears gripped the market.
With the temporary relaxation of the tariffs and a meeting of key Chinese leaders to front-load the stimulus, the market seems slightly less pessimistic about iron ore prices.
With iron ore prices falling below USD 100 per ton, the higher end of the cost curve, we anticipate a slight rebound toward the USD 105-110 per ton range.

Kinatico Ltd – SaaS revenue now 50% of total revenue

Kinatico Ltd (ASX:KYP) is a ‘Know Your People’ regtech company providing workforce compliance monitoring and management technology and services.
The company has announced that total revenue in Q3 increased 15% to $8.1m, with higher-margin SaaS (Software as a Service) revenue making up 50% of the total.
SaaS revenue grew 60% in the quarter on the previous corresponding period (pcp) to $4m and is tracking at $16m on an annualised basis.

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Apr 14

Daily Brief South Korea: Posco Future M, Korea Stock Exchange KOSPI 200 and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Timing the Announcement of POSCO Future M’s Rights Issue
Kospi Index Options Weekly (Apr 07 – 11): Skew Shifts Steepens and Positioning Signals

Timing the Announcement of POSCO Future M’s Rights Issue

By Sanghyun Park

All three local CRAs are pushing hard — an equity raise isn’t optional, it’s the only shot at keeping the AA- rating intact. Street says it’s not if, it’s when.
Late April to mid-May looks like the key window. And start keeping tabs on the flow real tight.
Leak channels are still active. FSC’s pointed at IB sales and law firm staff. If we see outsized sell prints—especially from local hedge funds, that’s our cue to act.

Kospi Index Options Weekly (Apr 07 – 11): Skew Shifts Steepens and Positioning Signals

By John Ley

Price action was volatile this week, marked by two large moves and a notable pickup in vol of vol.
We examine the material steepening of skew observed over the course of the week.
USD/KRW broke its recent range, reinforcing signs that USD assets may be losing their traditional flight to quality appeal.

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Apr 14

Daily Brief United States: Chagee Holdings, Copper, LENSAR and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Pre-IPO Chagee Holdings – IPO Pricing Is Attractive, But Share Price May Underperform
Copper Tracker 14th April 2025: Green Shoots Emerging After the Trump Tariff Fiasco
Strategic Acquisitions, Merger Developments, and Takeover Bids: Key Updates

Pre-IPO Chagee Holdings – IPO Pricing Is Attractive, But Share Price May Underperform

By Xinyao (Criss) Wang

Chagee is seeking up to US$411 million by offering nearly 14.7 million ADS priced between US$26 and US$28 each, with market value to reach about US$4.8-US$5.1 billion.
Chagee is facing performance headwinds. Whether the current high growth of Chagee is sustainable in the future is uncertain. This makes us tend to be conservative in Chagee’s valuation expectations
Based on our forecast, P/E is about 11.5-12.3x if based on 2025 net profit. Such valuation is attractive, but “valuation discount” may occur due to market turmoil and geopolitical conflicts.

Copper Tracker 14th April 2025: Green Shoots Emerging After the Trump Tariff Fiasco

By Special Situation Investments

The introduction of Trump Tariffs has adversely impacted the commodities market’s promising start to the year, except for gold, which has exceeded 3,200 USD/oz.
Following a peak of 10,000 USD/ton on March 25, copper prices fell 14% to 8,600 USD/ton before rebounding in the past two trading sessions to 9,150 USD/ton.
The dollar’s depreciation, Trump’s flexibility on tariffs, and anticipated acceleration in Chinese stimulus have created a more favorable market environment for copper.

Strategic Acquisitions, Merger Developments, and Takeover Bids: Key Updates

Lensar (LNSR) is being acquired by Alcon for $14/share plus a CVR up to $2.75/share, with closing expected in H2 2024.
OCI N.V. announced a $1bn extraordinary cash distribution, with shareholders choosing payment currency, ex-dividend date April 15.
Kronos Bio (KRON) terminated a lease for $1.5m, with potential net cash outcome between ~$1 and $1.30/share.

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Apr 14

Daily Brief India: NIFTY Index and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

NSE NIFTY50/ Vol Update / Risk Premia Catches up with Global Counterparts in Spite of Truncated Week

NSE NIFTY50/ Vol Update / Risk Premia Catches up with Global Counterparts in Spite of Truncated Week

By Sankalp Singh

Risk premia in Nifty50 Options catches up with Global Markets as IVs spike from sub-12% to 24% – levels last seen during 2024 National Elections.
Vol-Regime switches from “Low & Up” state to “High & Up”. Term-structure swings into Backwardation. Front-end risk premiums elevated in spite of truncated upcoming week.
Tactical Implications: (1) Use IV-spike to flatten +ve Vega exposure. (2) Avoid -ve Gamma, Vol harvesting structures. (3) Front-end/ Back-end Calendars recommended as extreme curve inversion expected to normalize.

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Apr 14

Daily Brief China: PDD Holdings, Midea Group, Tencent, China Oilfield Services H, ESR Group , Chagee Holdings, Remegen , Shandong Fengxiang, Jiangsu Zenergy Battery Technologies, Contemporary Amperex Technology (CATL) and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

What if China ADRs Are Delisted from US Exchanges?
Midea (300 HK): IPO Lock-Up Expiry Triggers 10% Float Increase in Global Indices for May and June
HK Connect SOUTHBOUND Flows (To 11 Apr 2025); Record Net Buying
A/H Premium Tracker (To 11 Apr 2025): Sharp AH Premia Widening
Merger Arb Mondays (14 Apr) – ESR, Fengxiang, Vesync, Goldlion, Shibaura, Tsuruha/Welcia, Aeon Mall
Chagee IPO: Luckin X Starbucks of Tea. Pricing, Valuation, Key Facts & Financials
China Healthcare (Apr.13) – Trump’s Tariffs on Pharmaceuticals, NSCEB’s Report, RemeGen’s Pain Point
Fengxiang (9977 HK): PAG’s Pre-Con Offer
Jiangsu Zenergy Battery Technologies IPO Trading – Muted Overall Demand, No Stabilisation
ECM Weekly (14 Apr 2025) – Suzuki, EBOS, Hengrui Pharma, Zenergy, Chagee, LG India, Huge Dental

What if China ADRs Are Delisted from US Exchanges?

We see 281 Chinese companies listed on U.S Stock Exchanges with a total market cap of US$869bn. 32 of these companies are listed on the HKEX (388 HK).
If the rumours of Chinese stocks being delisted from U.S. Exchanges gathers steam, we could see a wave of secondary listings in Hong Kong.
PDD Holdings, Full Truck Alliance, Vipshop Holdings, TAL Education and ZEEKR are the largest China ADRs with no HK listing and could come under pressure.

Midea (300 HK): IPO Lock-Up Expiry Triggers 10% Float Increase in Global Indices for May and June

By Dimitris Ioannidis

Midea Group (300 HK) went public on HKEX on 17 September 2024 and achieved fast-entry in both global indices due to high free float and a market cap of ~$4.5bn.
The 6-month lockup on cornerstone investors expired on 17 March 2025.
The free float is forecasted to increase from ~65% to ~75% for both global indices in May and June 2025 following the lockup expiry.

HK Connect SOUTHBOUND Flows (To 11 Apr 2025); Record Net Buying

Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. The first two weeks in April were HK$145bn.
The first two weeks in April were HK$145bn as what appeared to be national team, or equally patriotic buyers, showed up droves to buy financials, energy, telecoms, and big techs.
Included is a summary of important China Stocks-relevant news as I saw it this week, but frankly, the only thing that matters is the back and forth by the Donald.

A/H Premium Tracker (To 11 Apr 2025): Sharp AH Premia Widening

AH Premia bounce higher. Spread curve torsion is mild given how much AH is widening again. Two weeks in a row we see a big net move.
For a month I thought warning signs were flashing and spreads could widen. They are still widening despite really big net SOUTHBOUND buying.
I expected the right thing to do was hunker down and be flat H/A risk. Hs underperformed As by 3.7% over two weeks so it’s tough to be flat enough.

Merger Arb Mondays (14 Apr) – ESR, Fengxiang, Vesync, Goldlion, Shibaura, Tsuruha/Welcia, Aeon Mall

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: ENN Energy (2688 HK), Insignia Financial (IFL AU), Oneconnect Financial Technology (6638 HK), Shandong Fengxiang (9977 HK), Seven & I Holdings (3382 JP), Smart Share Global (EM US).
Lowest spreads: Shibaura Electronics (6957 JP), Sinarmas Land (SML SP), Millennium & Copthorne Hotels Nz (MCK NZ), Makino Milling Machine Co (6135 JP), Spartan Resources (SPR AU).

Chagee IPO: Luckin X Starbucks of Tea. Pricing, Valuation, Key Facts & Financials

By Devi Subhakesan

Chagee Holdings (CHA US) is offering 14.68 million shares for USD26 to USD28 each to raise upto USD411 million in its initial public offering in the US.
Chagee’s premium branded teahouses blend traditional tea culture with modern, tech-driven service, distinctly setting itself apart from bubble tea kiosks.
Chagee’s IPO is priced at a discount to forward valuations of recently listed (in HK) China-based freshly brewed drinks players and leading Cafe companies.

China Healthcare (Apr.13) – Trump’s Tariffs on Pharmaceuticals, NSCEB’s Report, RemeGen’s Pain Point

By Xinyao (Criss) Wang

Trump’s administration will soon impose tariffs on pharmaceuticals. Chinese API companies will be hit the most. Pharmaceutical companies that mainly focus on domestic market could be better investment options.
NSCEB released “Changing the Future of Biotechnology”, among which WuXi AppTec was named again. Chinese CXO’s performance this year could be lower than expected due to geopolitical conflicts.
RemeGen’s 2024 results improved, but concerns remain due to its “disorganized” pipeline layout and uncompetitive products. The reasonable market value of Remegen is about RMB10 billion to RMB15 billion.

Fengxiang (9977 HK): PAG’s Pre-Con Offer

By David Blennerhassett

When Shandong Fengxiang (9977 HK) was suspended last month due to the Takeovers Code, I expected PAG to launch an Offer by way of a Merger by Absorption at ~HK$2.00.
And that is exactly what unfolded. The price, which is a 33.33% premium to last close is final. 42.35% of independent H-shareholders are supportive. A scrip alternative is afforded.
PAG was permitted to take control of Fengxiang, via the domestic shares, late 2022. There will be no regulatory roadblock as PAG now seeks to privatise Fengxiang.

Jiangsu Zenergy Battery Technologies IPO Trading – Muted Overall Demand, No Stabilisation

By Akshat Shah

Jiangsu Zenergy Battery Technologies (JSZENERGY CH) raised US$130m in its Hong Kong IPO.
Zenergy is an EV and energy storage system battery manufacturer providing integrated battery solutions, encompassing battery cells, modules, packs and battery management systems dedicated to large-scale applications of electrochemical products.
We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

ECM Weekly (14 Apr 2025) – Suzuki, EBOS, Hengrui Pharma, Zenergy, Chagee, LG India, Huge Dental

By Sumeet Singh

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, we looked at the possible A/H premium for Jiangsu Hengrui Medicine (600276 CH), along with two live deals in Hong Kong .
On the placements front, only Suzuki Motor (7269 JP)‘s shareholders were brave enough to launch a placement in the turbulent markets.

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Apr 14

Daily Brief Japan: Tsuruha Holdings, AEON Mall, Suzuki Motor, Nippon Parking Development, Adastria Co Ltd, Nikkei 225 and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Tsuruha (3391), Welcia (3141), and Aeon (8267) Do a Deal, Short-Changing Tsuruha Minorities
“Tiny Win for Guess The Ratio” Aeon (8267) Pays a SMALL Premium for Aeon Mall (8905)
Suzuki Motor (7269 JP) Placement: Likely to Price Today; 7-8% Underperformance Vs Peers/TOPIX
Aeon Mall (8905 JP): Aeon (8267 JP)’s Share Exchange Ratio Is Set
Weekly Deals Digest (13 Apr) – Suzuki, Canvest, Fengxiang, HKBN, Goldlion, Tsuruha/Welcia, Shibaura
Nippon Parking Development (2353 JP): Irreplaceable Assets with +12% Historical EPS CAGR at 13x P/E
Adastria: ¥500 Billion Through New Brands – Signs UK’s Karrimor
Nikkei Index Options Weekly (Apr 07 – 11): Vol Spikes, Skew Steepens, Macro Shifts Unfold

Tsuruha (3391), Welcia (3141), and Aeon (8267) Do a Deal, Short-Changing Tsuruha Minorities

On Friday, Tsuruha Holdings (3391 JP), Welcia Holdings (3141 JP), and Aeon Co Ltd (8267 JP) announced the Tsuruha/Welcia merger and Partial Tender to get Aeon to 50+% of NEWCO.
The scrip ratio short-changes Tsuruha shareholders. The subsequent partial offer to raise Aeon’s stake above 50% is low too. 9.7% shareholder Orbis is already out with a complaint.
But… all is not lost. There are some interesting angles here to complain.

“Tiny Win for Guess The Ratio” Aeon (8267) Pays a SMALL Premium for Aeon Mall (8905)

In an announcement after the close Friday 11 April, Aeon Co Ltd (8267 JP) and AEON Mall (8905 JP) announced their merger ratio, and timing.
The ratio is 0.65 to 1.0, meaning Aeon Mall shareholders don’t get a lot of credit for their real estate. The timing is short-dated. The AGM is end-May. Merger July1.
This may be a tad light, but it is a done deal. Active shareholder base is almost all retail and crossholders+dom passive gets Aeon to 70%.

Suzuki Motor (7269 JP) Placement: Likely to Price Today; 7-8% Underperformance Vs Peers/TOPIX

Tokio Marine & Nichido Fire Insurance and Sompo Japan Insurance are looking to raise US$1.2bn by offloading their entire stakes in Suzuki Motor by way of a secondary offering.
Suzuki Motor (7269 JP) stock is flat since the announcement of the placement but has underperformed its peers and the TSE Tokyo Price Index TOPIX (TPX INDEX).
With the placement being less than 5% of the number of shares outstanding, there is unlikely to be any immediate passive inflow which could pressure the stock.

Aeon Mall (8905 JP): Aeon (8267 JP)’s Share Exchange Ratio Is Set

AEON Mall (8905 JP) announced a share exchange offer by Aeon Co Ltd (8267 JP) at 0.65 Aeon shares per Aeon Mall share, a 30.9% premium to the undisturbed price.
The share exchange ratio is reasonable compared to historical price ratios and IFA valuation ranges. The implied offer multiple is attractive compared to peer multiples.
Aeon’s 58.16% shareholding ensures that Aeon Mall’s vote on 22 May is low-risk. The share exchange’s effective date is 1 July.

Weekly Deals Digest (13 Apr) – Suzuki, Canvest, Fengxiang, HKBN, Goldlion, Tsuruha/Welcia, Shibaura