Smartkarma Daily Briefs

The Reserve Bank of India (RBI) is set to announce a monetary policy decision on Friday, 6 June 2025.
Market Expectations: The consensus anticipates a 25-basis-point rate cut, lowering the rate from currently 6.00% to 5.75%. Historically, one in four RBI rate decisions is a surprise to the market.
This Insight investigates past market behavior during comparable RBI policy announcements, unearthing a surprising statistic about how the Nifty 50 might react to June’s decision, regardless of the outcome.

Aegis Vopak IPO: Anemic Demand

By Nicholas Tan

Aegis Vopak Terminals Ltd (1902844D IN) raised about US$328m in its upcoming India IPO.
It is the largest Indian third-party owner and operator (in terms of storage capacity) of tank storage terminals for liquified petroleum gas (LPG) and liquid products.
In our previous notes, we talked about the company’s historical performance, undertook a peer comparison and shared our thoughts on valuation. In this note, we talk about the trading dynamics.

Schloss Bangalore IPO Trading – Decent Anchor; Muted Overall Demand

By Akshat Shah

Schloss Bangalore Ltd (SCHBL IN) raised about US$400m in its India IPO.
It is a luxury hospitality company which owns, operates, manages and develops luxury hotels and resorts under ‘The Leela’ brand, through direct ownership and hotel management agreements with third-party owners.
We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

Pair Trade Signal: LIC Housing Finance (LICHF IN) Long Vs. Canara Bank (CBK IN) Short

The Canara Bank (CBK IN) vs. LIC Housing Finance (LICHF IN) Price-Ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
The relative value opportunity can be implemented through stocks, derivatives, or as relative over-/underweights in a long only context.
This Insight provides a target return and discusses trade setup and risk management strategies.

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Jun 02

Daily Brief Financials: Leopalace21 Corp, Shanghai Rural Commercial Bank, NIFTY Index, NET Lease Office Properties, Woori Financial Group , Schloss Bangalore Ltd, Canara Bank, Renatus Tactical Acquisition Corp I and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

[Japan Buyback] Leopalace (8848 JP) – A Giant Buyback To Get Fortress Partially Out
CSI300/CSI500/CSI1000 Index Rebalance: Changes Lead to US$12bn Trade
Nifty 50 and the RBI Rate Decision: History Has a Pattern
[Alert] Buy Net Lease Office Properties (NLOP)
Korean Banks; Presidential Election Drives Positive View on Hana (086790 KS) And Woori (316140 KS)
Schloss Bangalore IPO Trading – Decent Anchor; Muted Overall Demand
Pair Trade Signal: LIC Housing Finance (LICHF IN) Long Vs. Canara Bank (CBK IN) Short
Renatus Tactical Acquisition Corp I: SPAC with Crypto Focus and Trump-Linked Management

[Japan Buyback] Leopalace (8848 JP) – A Giant Buyback To Get Fortress Partially Out

Leopalace21 Corp (8848 JP) had a giant oopsie in 2018-2021 where they lost ¥180bn over three years because of defective construction requiring repairs.
Murakami and others got involved. Leopalace got financing from FIG (shares/SARs/loan), Murakami bailed. Eventually Hikari Tsushin got in. Leopalace got FIG out of their loan, doing a refi through Mizuho.
Cash was up, cashflow is strong. Business is changed/revived. Now Leopalace is buying back SARs it sold to FIG. FIG will still own 26%. The future is potentially interesting. Still.

CSI300/CSI500/CSI1000 Index Rebalance: Changes Lead to US$12bn Trade

There are 7 changes for the CSI 300 Index, 50 changes for the CSI 500 Index and 100 changes for the CSI1000 Index that will be implemented on 13 June.
There are 240 unique names that are adds or deletes and the round-trip trade across all 3 indices is close to US$12bn.
The adds have outperformed the deletes for the CSI 300 Index and the CSI 1000 Index but underperformed for the CSI 500 Index.

Nifty 50 and the RBI Rate Decision: History Has a Pattern

The Reserve Bank of India (RBI) is set to announce a monetary policy decision on Friday, 6 June 2025.
Market Expectations: The consensus anticipates a 25-basis-point rate cut, lowering the rate from currently 6.00% to 5.75%. Historically, one in four RBI rate decisions is a surprise to the market.
This Insight investigates past market behavior during comparable RBI policy announcements, unearthing a surprising statistic about how the Nifty 50 might react to June’s decision, regardless of the outcome.

[Alert] Buy Net Lease Office Properties (NLOP)

By Richard Howe

I thought I had missed NLOP. But a conversation at the Berkshire Hathaway annual meeting convinced me to take another look.
I told a friend that I “was pissed that I missed NLOP.” He said, “You haven’t missed it. All recourse debt has been paid off and the company is about to start paying dividends.”
So I made a decision to revisit NLOP with a fresh perspective.

Korean Banks; Presidential Election Drives Positive View on Hana (086790 KS) And Woori (316140 KS)

By Victor Galliano

The “Value Up” initiative which kicked off in February 2024 has been intended to bring about corporate governance and market reforms which minority and especially foreign investors have long sought
So far, these voluntary reforms have brought positive albeit limited benefits to South Korean equities; presidential elections, with potential legislative change, should act as a positive valuation driver
We reiterate our positive views on Woori and Hana Financial which are the top banks based on our scorecard; these attributes are due to attractive valuations and balance sheet credentials

Schloss Bangalore IPO Trading – Decent Anchor; Muted Overall Demand

By Akshat Shah

Schloss Bangalore Ltd (SCHBL IN) raised about US$400m in its India IPO.
It is a luxury hospitality company which owns, operates, manages and develops luxury hotels and resorts under ‘The Leela’ brand, through direct ownership and hotel management agreements with third-party owners.
We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

Pair Trade Signal: LIC Housing Finance (LICHF IN) Long Vs. Canara Bank (CBK IN) Short

By Special Situation Investments

The Canara Bank (CBK IN) vs. LIC Housing Finance (LICHF IN) Price-Ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
The relative value opportunity can be implemented through stocks, derivatives, or as relative over-/underweights in a long only context.
This Insight provides a target return and discusses trade setup and risk management strategies.

Renatus Tactical Acquisition Corp I: SPAC with Crypto Focus and Trump-Linked Management

Renatus Tactical Acquisition Corp I (RTAC) is a SPAC targeting crypto/blockchain with a $240m IPO, led by Trump Media executives.
RTAC units include one share and half a warrant, with a trust value of $10.025/share, trading above trust value.
RTAC’s sponsor sold 1.5m shares and 0.7m warrants post-IPO at $2.45/unit, below IPO price.

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Jun 02

Daily Brief Industrials: Zhongyuan Environment A, Aegis Vopak Terminals Ltd, Deere & Co, Elbit Systems and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Quiddity CSI 1000 Jun25 Results: 200 Changes; US$2Bn+ One-Way
Aegis Vopak IPO: Anemic Demand
Deere & Company Doubles Down on Autonomy—Will See & Spray Transform Modern Agriculture?
Elbit Systems: Iron Beam Laser System Advancements

Quiddity CSI 1000 Jun25 Results: 200 Changes; US$2Bn+ One-Way

By Janaghan Jeyakumar, CFA

The June 2025 index review results for China’s CSI 1000 index were announced after market close on Friday 30th May 2025.
There will be 100 ADDs/DELs for CSI 1000 in the June 2025 rebalance.
The CSI 1000 index rebal event could trigger US$2.2bn in one-way flow.

Aegis Vopak IPO: Anemic Demand

By Nicholas Tan

Aegis Vopak Terminals Ltd (1902844D IN) raised about US$328m in its upcoming India IPO.
It is the largest Indian third-party owner and operator (in terms of storage capacity) of tank storage terminals for liquified petroleum gas (LPG) and liquid products.
In our previous notes, we talked about the company’s historical performance, undertook a peer comparison and shared our thoughts on valuation. In this note, we talk about the trading dynamics.

Deere & Company Doubles Down on Autonomy—Will See & Spray Transform Modern Agriculture?

Deere & Company’s latest earnings report highlights both accomplishments and challenges in a complex market environment marked by global uncertainties and macroeconomic pressures.
The company’s second quarter performance exceeded expectations, with a commendable 18.8% margin for equipment operations amidst significant headwinds, including heightened tariff impacts and global trade volatility.
Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Elbit Systems: Iron Beam Laser System Advancements

Elbit Systems’ financial results for the first quarter of 2025 displayed strong growth and stable operational performance, continuing a trend from the past few quarters.
The company reported revenues of $1.896 billion, marking a significant increase from $1.554 billion for the same quarter in 2024.
This growth reflects a substantial demand across key markets, with Europe, North America, Asia Pacific, and Israel contributing 24%, 21%, 18%, and 32% of revenues, respectively.

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Jun 02

Daily Brief United States: Tjx Companies, NET Lease Office Properties, NVIDIA Corp, Target Corp, Home Depot Inc, Workday Inc Class A, Toll Brothers, Autodesk Inc, Lowe’s Companies Inc, Intuit Inc and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

The TJX Companies: Leveraging Vendor Relationships For A Competitive Edge!
[Alert] Buy Net Lease Office Properties (NLOP)
Nvidia’s $3.4 Trillion AI Empire Is Just Getting Started—You Won’t Believe What’s Next!
Target Corporation: Will Its Investments in Digital Fulfillment and Supply Chain Pay Off?
How The Home Depot Plans to Capture a $50 Billion Opportunity Amid Economic Uncertainty!
Workday Inc.: Will Its WorkdayGO Initiatives Help to Quickly Modernize & Streamline The Enterprise Functions?
Toll Brothers: Will Its Spec Home Strategy & Market Adaptation Be A Breakthrough Move?
Autodesk Inc.: Transition to New Transaction Model to Maintain A Strong Foothold Amidst Macroeconomic Challenges!
Lowe’s Companies: Localization Strategy & Space Productivity Improvement to Drive Sales Growth & Market Share In The Targeted Segments!
Intuit Inc.: Its Expansion into QuickBooks Advanced and Intuit Enterprise Suite & Other Major Drivers!

The TJX Companies: Leveraging Vendor Relationships For A Competitive Edge!

The TJX Companies, Inc. reported its first-quarter results for fiscal year 2026, demonstrating resilient performance across its various divisions amidst a challenging macroeconomic environment.
The company achieved a 3% increase in comparable store sales, driven by higher customer transactions, with each division—both in the U.S. and internationally—contributing positively.
Notable growth was observed in the HomeGoods division, which outperformed its competitors, delivering a 4% increase in comp sales and a 70 basis point improvement in segment profit margin compared to the previous year.

[Alert] Buy Net Lease Office Properties (NLOP)

By Richard Howe

I thought I had missed NLOP. But a conversation at the Berkshire Hathaway annual meeting convinced me to take another look.
I told a friend that I “was pissed that I missed NLOP.” He said, “You haven’t missed it. All recourse debt has been paid off and the company is about to start paying dividends.”
So I made a decision to revisit NLOP with a fresh perspective.

Nvidia’s $3.4 Trillion AI Empire Is Just Getting Started—You Won’t Believe What’s Next!

Nvidia’s first-quarter results for fiscal 2026 showcased an extraordinary ability to maintain momentum in the face of geopolitical disruption, marking a defining moment in its trajectory as a dominant AI chipmaker.
The company reported a 69% year-over-year revenue surge to $44.1 billion, outperforming expectations despite the mid-April U.S. government ban on H20 GPU sales to China.
The data center segment remained the primary growth engine, rising 73% to $39.1 billion, driven by rising AI infrastructure demand and the adoption of its cutting-edge Blackwell architecture.

Target Corporation: Will Its Investments in Digital Fulfillment and Supply Chain Pay Off?

Target Corporation faced a set of challenging conditions in the first quarter of 2025, significantly impacting its overall performance.
The detailed analysis of the quarterly results reveals a balanced mix of positive aspects, setbacks, and strategic adjustments, offering investors insights into the company’s current standing and future priorities.
First-quarter sales for Target declined by 2.8%, primarily driven by a decrease in comparable sales of 3.8%.

How The Home Depot Plans to Capture a $50 Billion Opportunity Amid Economic Uncertainty!

The Home Depot, during its first quarter of fiscal 2025, reported sales of $39.9 billion, which represented a 9.4% increase compared to the same period last year.
However, the company’s comparable store sales declined slightly by 0.3%.
The U.S. comps showed a modest increase of 0.2%.

Workday Inc.: Will Its WorkdayGO Initiatives Help to Quickly Modernize & Streamline The Enterprise Functions?

Workday Inc. reported a robust first quarter of fiscal year 2026, demonstrating solid growth in key financial metrics and notable advancements in its strategic initiatives.
The company reported a 13% increase in subscription revenue, reaching $2.059 billion, and achieved a non-GAAP operating margin of 30.2%.
This performance was driven by strong customer adoption across various industries, solid contributions from their partner ecosystem, and a continued focus on AI innovation.

Toll Brothers: Will Its Spec Home Strategy & Market Adaptation Be A Breakthrough Move?

During its second quarter earnings for fiscal 2025, Toll Brothers, Inc. outlined its financial and operational performance amidst a challenging economic environment, providing insights into its strategies and market outlook.
Toll Brothers reported robust financial performance for the second quarter, achieving record second quarter home sales revenue of $2.71 billion, which surpassed the midpoint of their guidance by $236 million.
They delivered 2,899 homes at an average selling price of approximately $934,000.

Autodesk Inc.: Transition to New Transaction Model to Maintain A Strong Foothold Amidst Macroeconomic Challenges!

Autodesk delivered solid results in the first quarter of fiscal 2026, surpassing the upper limits of its guidance range for both revenue and non-GAAP earnings per share.
The company reported a revenue growth of 15% as reported and 16% in constant currency, with a significant contribution of $78 million from the new transaction model.
Billings also saw a substantial increase of 29% as reported and 30% in constant currency, reflecting a strategic shift towards annual billings for most multi-year contracts.

Lowe’s Companies: Localization Strategy & Space Productivity Improvement to Drive Sales Growth & Market Share In The Targeted Segments!

Lowe’s Companies, Inc. delivered a mixed performance during the first quarter of fiscal 2025, reporting total sales of $20.9 billion and a 1.7% decline in comparable sales, aligning with their expectations.
The results reflect challenges in the DIY segment, particularly in discretionary spending on larger ticket items, compounded by a slow start to the spring season largely due to adverse weather conditions.
On the positive side, the company showed strength in Pro sales, reporting mid-single-digit growth, and saw a 6% rise in online sales due to improvements in both traffic and conversion rates.

Intuit Inc.: Its Expansion into QuickBooks Advanced and Intuit Enterprise Suite & Other Major Drivers!

The third-quarter results for Intuit’s fiscal year 2025 illustrate a strong performance across multiple segments, driven primarily by its robust AI capabilities and strategic innovations.
Intuit reported a 15% increase in revenue, with significant contributions from both its Consumer Group and Global Business Solutions Group.
This quarter, the company raised its financial targets, attributing its success to its AI-driven platform which enhances customer interaction and streamlines processes for consumers, businesses, and accountants.

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Jun 02

Daily Brief China: Montage Technology , HealthyWay, Shanghai Rural Commercial Bank, Bestechnic Shanghai , Zhongyuan Environment A, Contemporary Amperex Technology (CATL), Zijin Mining Group , Sichuan Biokin Pharmaceutical, Water Oasis, Softcare and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

SSE50/SSE180 Index Rebalance: Some Surprises Among the Adds; Deletes as Expected
KWEB Index Rebalance: HealthyWay In; East Buy Out
CSI300/CSI500/CSI1000 Index Rebalance: Changes Lead to US$12bn Trade
STAR50/STAR100 Index Rebalance: 10 Changes and US$1.4bn Trade
Quiddity CSI 1000 Jun25 Results: 200 Changes; US$2Bn+ One-Way
ECM Weekly (2 June 2025) -Indigo, ITC, EBOS, Isuzu, Foshan Haitian, Lens Tech, Seres, Schloss, Aegis
Zijin Mining (601899 CH / 2899 HK): Evaluating the Impact of Kakula Suspension
China Healthcare Weekly (Jun.1)-Akeso/Summit’s Disappointing Ph3 Readout,Valuation Outlook of Biokin
Water Oasis H1 FY25 Results: An Improvement In Profitability And Cash 90% of Market Capitalization
Pre-IPO Softcare – Strong Performance Growth Momentum Would Continue

SSE50/SSE180 Index Rebalance: Some Surprises Among the Adds; Deletes as Expected

There are 4 changes for the SSE50 Index (SSE50 INDEX) and 18 changes for the SSE180 Index that will be implemented at the close on 13 June.
The SSE50 Index (SSE50 INDEX) deletes were in line with forecasts, and the index committee has used some discretion while picking the index inclusions.
The SSE50 Index adds have outperformed the deletes over the last few months and there could be a further move higher in the ‘surprise’ adds to the index.

KWEB Index Rebalance: HealthyWay In; East Buy Out

The June rebalance of the KraneShares CSI China Internet ETF (KWEB US) will take place at the close of trading on 13 June.
HealthyWay (2587 HK) will be added to the ETF while East Buy Holding (1797 HK) will be deleted. The passive trading will offer an opportunity to exit positions.
There is a huge lock-up expiry in HealthyWay (2587 HK) on 30 June and the stock could drop ahead of that. Then it could drop some more after lock-up expiry.

CSI300/CSI500/CSI1000 Index Rebalance: Changes Lead to US$12bn Trade

There are 7 changes for the CSI 300 Index, 50 changes for the CSI 500 Index and 100 changes for the CSI1000 Index that will be implemented on 13 June.
There are 240 unique names that are adds or deletes and the round-trip trade across all 3 indices is close to US$12bn.
The adds have outperformed the deletes for the CSI 300 Index and the CSI 1000 Index but underperformed for the CSI 500 Index.

STAR50/STAR100 Index Rebalance: 10 Changes and US$1.4bn Trade

There is 1 constituent change for the STAR50 INDEX and 4 changes for the STAR100 Index at the next rebalance that will be implemented at the close on 13 June.
We estimate turnover of 2.35% for the SSE STAR50 (STAR50 INDEX) and 4.9% for the STAR100 Index. The estimated round-trip trade is CNY 9.8bn (US$1.35bn).
There are multiple stocks that are adds or deletes for other indices and the passive flows will be a lot larger than just for the STAR50/STAR100 indices.

Quiddity CSI 1000 Jun25 Results: 200 Changes; US$2Bn+ One-Way

By Janaghan Jeyakumar, CFA

The June 2025 index review results for China’s CSI 1000 index were announced after market close on Friday 30th May 2025.
There will be 100 ADDs/DELs for CSI 1000 in the June 2025 rebalance.
The CSI 1000 index rebal event could trigger US$2.2bn in one-way flow.

ECM Weekly (2 June 2025) -Indigo, ITC, EBOS, Isuzu, Foshan Haitian, Lens Tech, Seres, Schloss, Aegis

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, Foshan Haitian Flavouring & Food (603288 CH) might launch its A/H listing this week.
On the placements front, there were a number of large deals across the region, with notable ones in ITC Ltd (ITC IN) and InterGlobe Aviation Ltd (INDIGO IN).

Zijin Mining (601899 CH / 2899 HK): Evaluating the Impact of Kakula Suspension

By Rahul Jain

A 4–6 month Kakula disruption could reduce Zijin’s 2025 copper output by 4–8%, cutting EBITDA by ~7–11%.
Ramp-Ups at Julong and Čukaru Peki can offset ~60–70% of the lost volume and partially protect margins.
Lithium is expected to grow from 8% to 20% of EBITDA by 2028, driven by 300kt LCE capacity from low-cost brine assets.

China Healthcare Weekly (Jun.1)-Akeso/Summit’s Disappointing Ph3 Readout,Valuation Outlook of Biokin

By Xinyao (Criss) Wang

CR Sanjiu plans to transfer 49.8967% equity of Sanjiu (Anguo) and pay more attention to the quality of external M&As. China Resources+Tasly+KPC will be the core drivers of future performance.
Akeso’s first global phase 3 readout for ivonescimab was disappointing, which cast shadow on the final FDA approval. We shared our views on the outlook and valuation ahead.
The failure of HER3-DXd cast shadow over the outlook of HER3. We think Biokin is overvalued. Its valuation should be lower than Akeso and Kelun Bio.

Water Oasis H1 FY25 Results: An Improvement In Profitability And Cash 90% of Market Capitalization

By Sameer Taneja

Water Oasis (1161 HK) H1 FY25 results were encouraging and a step in the positive direction as revenue/PAT improved by -2.5%/116% YoY
The company declared a semi-annual dividend of 3.5 cents (6.7% annualized yield) for a 43% payout ratio. Net cash of 633 million HKD represents 90% of the market capitalization.
Trading at 6.0x FY25 PE with earnings stabilization, this is a great name to explore, although we would like to see an improvement in capital allocation.

Pre-IPO Softcare – Strong Performance Growth Momentum Would Continue

By Xinyao (Criss) Wang

Softcare has established its core competitiveness of “low price + localization”, and has achieved success in Africa. Softcare hopes to replicate its business model in Africa to other markets.
Emerging Markets have seen sustained growth in market penetration of baby/feminine hygiene products. We’re optimistic about Softcare’s future performance growth due to “demographic dividend + consumption upgrade” in Emerging Markets.
Softcare has strong fundamentals and promising outlook. We think valuation of Softcare should be higher than Hengan International Group (1044 HK) due to higher profit margin and future growth potential.

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Jun 02

Daily Brief Japan: Leopalace21 Corp, Isuzu Motors, Seven & I Holdings, NTT Data Corp, TSE Tokyo Price Index TOPIX, ZOZO Inc and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

[Japan Buyback] Leopalace (8848 JP) – A Giant Buyback To Get Fortress Partially Out
[Japan Buybacks] – Buybacks Announced 26-30 May 2025 And Company Buyback History
Merger Arb Mondays (02 June) – Seven & I, SBI Sumishin, Shibaura, Mayne, ENN Energy, HKBN, Zeekr
(Mostly) Asia M&A, May 2025 Wrap: NTT Data, ZEEKR, MAC Copper, Torii, Mitsu. Shokuhin, SBI Sumishin
Governance Issues Were Not Highlighted and the Win-Win by REIT Sponsors and Investors Continues
Zozo Purchase of Lyst Is Timely

[Japan Buyback] Leopalace (8848 JP) – A Giant Buyback To Get Fortress Partially Out

Leopalace21 Corp (8848 JP) had a giant oopsie in 2018-2021 where they lost ¥180bn over three years because of defective construction requiring repairs.
Murakami and others got involved. Leopalace got financing from FIG (shares/SARs/loan), Murakami bailed. Eventually Hikari Tsushin got in. Leopalace got FIG out of their loan, doing a refi through Mizuho.
Cash was up, cashflow is strong. Business is changed/revived. Now Leopalace is buying back SARs it sold to FIG. FIG will still own 26%. The future is potentially interesting. Still.

[Japan Buybacks] – Buybacks Announced 26-30 May 2025 And Company Buyback History

Buybacks in Japan are becoming a much greater driver of shareholder return than in previous years. The total amount of buybacks announced just during the March-end earnings season cleared ¥7trln.
Quiddity has developed a buyback tool which tracks Japanese buybacks and the buyback history for any given company. Isuzu Motors (7202 JP) announced a big post-Offering buyback this week.
Want to see how Isuzu has executed buybacks the past decade? Daily data? % volume? You can check here for any of the 21 companies which announced buybacks this week.

Merger Arb Mondays (02 June) – Seven & I, SBI Sumishin, Shibaura, Mayne, ENN Energy, HKBN, Zeekr

By Arun George

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: Mayne Pharma (MYX AU), Insignia Financial (IFL AU), ENN Energy (2688 HK), Seven & I Holdings (3382 JP), Smartpay Holdings (SPY NZ), Smart Share Global (EM US).
Lowest spreads: Bright Smart Securities And (1428 HK), Dada Nexus (DADA US), Spartan Resources (SPR AU), Nissin Corp (9066 JP), Torii Pharmaceutical (4551 JP), Nippon Road (1884 JP).

(Mostly) Asia M&A, May 2025 Wrap: NTT Data, ZEEKR, MAC Copper, Torii, Mitsu. Shokuhin, SBI Sumishin

By David Blennerhassett

For May 2025, 13 new transactions (firm and non-binding) were discussed on Smartkarma (by the Quiddity team) with an overall announced deal size of ~US$27bn.
The average premium for the new transactions announced (or first discussed) in May was ~28%, with a year-to-date average of 49%.
The average premiums for transactions in 2024 (129 transactions), (2023 (117), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) were 43%, 39%, 41%, 33%, 31%, and 31%.

Governance Issues Were Not Highlighted and the Win-Win by REIT Sponsors and Investors Continues

By Aki Matsumoto

While offering non-serious TOB prices, knowing that the likelihood of TOBs by the activist fund is low, the aim to extract concessions from the REIT and sponsor companies was successful.
The governance problem is the composition of the company, which continues to manage off-balance sheet real estate through its subsidiary REIT asset management company.
So far, however, governance issues have not received much attention, only confirming the sponsor companies’ willingness to continue REIT control and investors’ benefit from higher REIT stock prices by TOBs.

Zozo Purchase of Lyst Is Timely

By Michael Causton

Zozo’s purchase of UK mall Lyst will create significant synergies, allowing Zozo to build a strong base in Europe and the US.
The move will allow brands from Japan to sell overseas easily, while also potentially making it simple for European and US brands to sell into Japan.
The deal comes just in time given slowing e-commerce sales in Japan.

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Jun 02

Most Read: Suzhou Maxwell Technologies , Leopalace21 Corp, Montage Technology , Winner Medical, Isuzu Motors, Northeast Securities, HealthyWay, Washington H. Soul Pattinson and Co. Ltd, Seven & I Holdings, Shenzhen Overseas Chinese (A) and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

STAR&CHINEXT 50 Index Rebalance: One Change in June Adds to Other (Larger) Index Flows
[Japan Buyback] Leopalace (8848 JP) – A Giant Buyback To Get Fortress Partially Out
SSE50/SSE180 Index Rebalance: Some Surprises Among the Adds; Deletes as Expected
CSI Medical Service Index Rebalance: Six Changes with Decent Impact
[Japan Buybacks] – Buybacks Announced 26-30 May 2025 And Company Buyback History
CSI All Share IB & Brokerage Index Rebalance: Northeast Replaces Harbin Hatou
KWEB Index Rebalance: HealthyWay In; East Buy Out
Soul Patts & Brickworks: Index Impact of A$14bn Merger
Merger Arb Mondays (02 June) – Seven & I, SBI Sumishin, Shibaura, Mayne, ENN Energy, HKBN, Zeekr
CSI All Share Real Estate Sector Index Rebalance: Sector Reclassification Drives Changes

STAR&CHINEXT 50 Index Rebalance: One Change in June Adds to Other (Larger) Index Flows

There is one constituent change for the STAR&CHINEXT 50 Index in June with AVIC Chengdu Aircraft Co (302132 CH) replacing Suzhou Maxwell Technologies (300751 CH).
Passive trackers will need to buy 0.15x ADV in AVIC Chengdu Aircraft Co (302132 CH) and sell 0.4x ADV in Suzhou Maxwell Technologies (300751 CH).
AVIC Chengdu Aircraft Co (302132 CH) is a CSI 500 Index to CSI 300 Index migration in June, so there will be more buying in the stock.

[Japan Buyback] Leopalace (8848 JP) – A Giant Buyback To Get Fortress Partially Out

Leopalace21 Corp (8848 JP) had a giant oopsie in 2018-2021 where they lost ¥180bn over three years because of defective construction requiring repairs.
Murakami and others got involved. Leopalace got financing from FIG (shares/SARs/loan), Murakami bailed. Eventually Hikari Tsushin got in. Leopalace got FIG out of their loan, doing a refi through Mizuho.
Cash was up, cashflow is strong. Business is changed/revived. Now Leopalace is buying back SARs it sold to FIG. FIG will still own 26%. The future is potentially interesting. Still.

SSE50/SSE180 Index Rebalance: Some Surprises Among the Adds; Deletes as Expected

There are 4 changes for the SSE50 Index (SSE50 INDEX) and 18 changes for the SSE180 Index that will be implemented at the close on 13 June.
The SSE50 Index (SSE50 INDEX) deletes were in line with forecasts, and the index committee has used some discretion while picking the index inclusions.
The SSE50 Index adds have outperformed the deletes over the last few months and there could be a further move higher in the ‘surprise’ adds to the index.

CSI Medical Service Index Rebalance: Six Changes with Decent Impact

CSI announced the changes for the June rebalance after market close on 30 May and the changes will be effective after the close of trading on 13 June.
There are 6 changes for the index and we estimate passive buying of 0.7-2.4x ADV in the adds and passive selling of between 1-4.7x ADV in the deletes.
There will be capping inflows for Shenzhen Mindray Bio-Medical Electronics (300760 CH) and capping outflows for WuXi AppTec (603259 CH).

[Japan Buybacks] – Buybacks Announced 26-30 May 2025 And Company Buyback History

Buybacks in Japan are becoming a much greater driver of shareholder return than in previous years. The total amount of buybacks announced just during the March-end earnings season cleared ¥7trln.
Quiddity has developed a buyback tool which tracks Japanese buybacks and the buyback history for any given company. Isuzu Motors (7202 JP) announced a big post-Offering buyback this week.
Want to see how Isuzu has executed buybacks the past decade? Daily data? % volume? You can check here for any of the 21 companies which announced buybacks this week.

CSI All Share IB & Brokerage Index Rebalance: Northeast Replaces Harbin Hatou

The changes to the CSI All Share Investment Banking & Brokerage Index were announced after market close on 30 May and will be implemented at the close on 13 June.
Northeast Securities (000686 CH) will be added to the index while Harbin Hatou Investment Co, Ltd. (600864 CH) will be deleted.
There is over 2.5x ADV to trade in both stocks and much smaller impact of funding/capping flows on the other index constituents.

KWEB Index Rebalance: HealthyWay In; East Buy Out

The June rebalance of the KraneShares CSI China Internet ETF (KWEB US) will take place at the close of trading on 13 June.
HealthyWay (2587 HK) will be added to the ETF while East Buy Holding (1797 HK) will be deleted. The passive trading will offer an opportunity to exit positions.
There is a huge lock-up expiry in HealthyWay (2587 HK) on 30 June and the stock could drop ahead of that. Then it could drop some more after lock-up expiry.

Soul Patts & Brickworks: Index Impact of A$14bn Merger

Washington H. Soul Pattinson (SOL AU) and Brickworks Ltd (BKW AU) have executed a binding Combination Deed to implement an A$14bn merger that simplifies the company structure by eliminating crossholdings.
The merger ratio is a good one for Brickworks Ltd (BKW AU) shareholders and the benefits to both sets of shareholders should see the merger approved.
There will be large passive buying in Washington H. Soul Pattinson (SOL AU) from global and local index trackers and that could lead to short covering.

Merger Arb Mondays (02 June) – Seven & I, SBI Sumishin, Shibaura, Mayne, ENN Energy, HKBN, Zeekr

By Arun George

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: Mayne Pharma (MYX AU), Insignia Financial (IFL AU), ENN Energy (2688 HK), Seven & I Holdings (3382 JP), Smartpay Holdings (SPY NZ), Smart Share Global (EM US).
Lowest spreads: Bright Smart Securities And (1428 HK), Dada Nexus (DADA US), Spartan Resources (SPR AU), Nissin Corp (9066 JP), Torii Pharmaceutical (4551 JP), Nippon Road (1884 JP).

CSI All Share Real Estate Sector Index Rebalance: Sector Reclassification Drives Changes