In today’s briefing:
- Kokusai Electric (6525 JP): Lock-Up Expiry, Index Deletion, Index Inclusion – It’s All Happening
- CATL (300750 CH): Index Inclusion Post H-Share Listing
- Hyundai Motor (HYUNDAI IN): Anchor Lock-Up Expiry Increases Float; Index Inclusions Near
- Solactive Global Uranium & Nuclear Components Index Rebalance Preview: Potential Changes Next Week
- Delta Electronics (DELTA TB / 2308 TT): Off the Peak; SET50 Deletion Risk Increases
- Taiwan: Potential Global Index Changes; Last Review Day Today
- Tsuruha (3391) – Welcia (3141) Future Merger Ratio – Pounding the Table
- IDX30/LQ45/IDX80 Index Rebalance: Big Impact in Some Stocks with 4 Days to Implementation
- Nasdaq100 Dec2025 Forecast (Part 1): MDB & BIIB in Trouble; UAL & ALNY First Replacements
- Dongbang Medical IPO Book Building Results Analysis
Kokusai Electric (6525 JP): Lock-Up Expiry, Index Deletion, Index Inclusion – It’s All Happening
- The lock-up on KKR HKE ends next week, Kokusai Electric (6525 JP) should be deleted from a global index end-February and could be added to the NKY INDEX in March.
- There has been a buildup of shorts in Kokusai Electric (6525 JP) as the stock has underperformed the Philadelphia Stock Exchange Semiconductor Index (SOX INDEX) by a lot.
- The global index deletion in February could provide an entry point into a long position ahead of the announcement of the Nikkei 225 (NKY INDEX) changes in March.
CATL (300750 CH): Index Inclusion Post H-Share Listing
- Contemporary Amperex Technology (CATL) (300750 CH) has announced plans for an H-share listing with media reports indicating a raise of at least US$5bn. Shareholders have approved the issuance.
- CATL (300750 CH) was designated as a Chinese Military Company earlier this year by the U.S. Department of Defense but is still not on the NS-CMIC list.
- The CATL (300750 CH) H-shares should get Fast Entry to the global indices and iShares China Large-Cap (FXI US) ETF. Inclusion in the HSCEI and HSI will take longer.
Hyundai Motor (HYUNDAI IN): Anchor Lock-Up Expiry Increases Float; Index Inclusions Near
- The lock-up on the second half of the anchor investor allocation for Hyundai Motor India (HYUNDAI IN) ends after market close today and the shares will be available for sale tomorrow.
- The lock-up expiry further increases free float for the stock and there will be multiple index inclusions over the next few months.
- The largest index inclusion will be in February, followed by smaller inclusions in March and June. In total, passives will mop up around 16% of the float.
Solactive Global Uranium & Nuclear Components Index Rebalance Preview: Potential Changes Next Week
- Based on prices and turnover from 22 January, there could be one deletion from the index in January. Plus there will be capping and float changes.
- There are four stocks that meet the inclusion criteria, but all are non-pure play companies, and the index is already at the limit of 15 non-pure play companies.
- Estimated one-way turnover is 6.8% resulting in a round-trip trade of US$506m. There are many stocks with multiple days of ADV to trade.
Delta Electronics (DELTA TB / 2308 TT): Off the Peak; SET50 Deletion Risk Increases
- Delta Electronics Thailand (DELTA TB) is trading at a huge valuation premium to Delta Electronics (2308 TT), though that has narrowed over the last couple of months.
- Delta Electronics Thailand has already been on the Market Surveillance list for 2 months and inclusion for another 2 months will mean SET 50 Index deletion in June.
- A placement by Delta Electronics (2308 TT) is not out of the question and that further increases the downside risk for Delta Electronics Thailand (DELTA TB).
Taiwan: Potential Global Index Changes; Last Review Day Today
- There could be 2 adds and 2 deletes for Taiwan in a global index in February. Today is the last trading day ahead of the CNY holidays.
- Passive trackers will need to trade between US$76m to US$370m of the stocks and impact will vary between 3.2x-7x ADV to trade.
- Shorts are small in the potential adds and there has been short covering recently, while there has been a big increase in shorts for one of the potential deletes.
Tsuruha (3391) – Welcia (3141) Future Merger Ratio – Pounding the Table
- In late December, a Jiji article said Tsuruha & Welcia would look to integrate by end-2025, now that they no longer need SEC approval. Odd language, but we’ll take it.
- That means we look to what might happen between here and there. The companies will hire Legal and Financial Advisors, wait until both report FY, then start negotiating.
- What has been the long-term trend and the trend of the last two years is different. It’s worthwhile looking at valuations and expectations to decide how to trade. It’s good.
IDX30/LQ45/IDX80 Index Rebalance: Big Impact in Some Stocks with 4 Days to Implementation
- There are 2 constituent changes for the IDX30 Index, and 3 changes each for the LQ45 Index and IDX80 Index to be implemented at the close on 31 January.
- The largest passive flows are expected in Bank Central Asia, Indosat, Japfa Comfeed Indonesia, Indocement Tunggal Prakarsa, Dayamitra Telekomunikasi, MAP Aktif Adiperkasa, Bank Mandiri Persero, Ciputra Development and XL Axiata.
- With only 4 days to implementation, there could be relatively big moves on stocks that have large flow/impact from passive fund trading.
Nasdaq100 Dec2025 Forecast (Part 1): MDB & BIIB in Trouble; UAL & ALNY First Replacements
- MongoDB (MDB US) and Biogen Inc (BIIB US) are the main candidates for deletion based on their current and previous-review ranking.
- Ansys Inc (ANSS US) is expected to be deleted from the index by June 2025 following its $35bn acquisition by Synopsys Inc (SNPS US).
- United Airlines Holdings (UAL US) and Alnylam Pharmaceuticals (ALNY US) are currently the main candidates for addition, thus the first in line to replace Ansys Inc (ANSS US).
Dongbang Medical IPO Book Building Results Analysis
- Dongbang Medical reported excellent IPO book building results. The IPO price has been finalized at 10,500 won. The demand ratio from the institutional investors was 910 to 1.
- Our base case valuation of Dongbang Medical is target price of 13,609 won per share which is 30% higher than the IPO price of 10,500 won.
- Dongbang Medical specializes in the manufacturing and distribution of acupuncture needles, various cosmetic devices, and other medical devices.
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