Consumer

• Star Entertainment Group (SGR AU) (SGR) plans to raise around US$480m (A$750m) via an entitlement offer cum institutional placement.
• SGR undertook a similar sized raising earlier this year in Feb 2023, at a price which was double the current deal price.
• In this note, we will talk about the deal dynamics.

• On 9 August, PE outfit TPG and InvoCare (IVC AU), Australia’s leading funeral services provider, entered into a Scheme Implementation Agreement at A$12.70/share, inclusive of a A$0.60/share fully franked dividend.
• TPG’s had previously tabled A$12.65/share on the 7 March, which  InvoCare summarily rejected.
• The Scheme Booklet is now out. InvoCare shareholders vote on the transaction on the 31 October, with implementation on the 24 November. The IE says terms are “fair and reasonable“.

• Tuhu Car (2007986D HK) raised around US$151m in its Hong Kong IPO.
• Tuhu is an integrated online and offline platform for automotive services in China.
• We have covered various aspects of the deal in our previous notes. In this note, we will talk about the demand and trading dynamics.

• Leapmotor (9863 HK) (LM) raised around US$800m in its Hong Kong IPO. The stock was listed in Sep 2022, its lockup on pre-IPO investors will expire on 29th Sep 2023.
• LM is a smart EV company based in China, founded in 2015.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• August outbound travel activity surged against easy 2022 comps, but offered no surprises
• The pace of outbound capacity rebuild slowed in August — what do airlines see ahead?
• Is there really “pent-up” tourism demand among Chinese consumers? We don’t think so

• Tsuruha is the latest retailer to come under attack from an activist investment fund. 
• As with Seven & I, the company fended off demands to shake up its board, crucially with the support of Aeon, its largest stakeholder.
• The move will likely lead to some careful reconsideration of how Tsuruha and Aeon could work together and may even lead to a Welcia/Tsuruha merger.

Games Workshop Group (GAW) enjoyed another record year of revenue and profit growth in FY23 despite the more challenging macroeconomic backdrop and economy-wide cost pressures. Underlying volume growth is testimony to the appeal of the IP to its hobbyists. GAW entered FY24 with strong revenue momentum, implying that the June 2023 release of Leviathan, the 10th edition of its most significant property, Warhammer 40K, has boosted growth in Q124. Easing cost pressures should be supportive of underlying margin progress, albeit the recent strength of sterling provides a headwind to growth if it persists through the year.

• Airbnb delivered a solid result and managed an all-around beat in the recent quarterwith over 115 million Nights and Experiences Booked, resulting in revenue of $2.5 billion, marking an 18% year-over-year growth.
• Net income for the quarter stood at $650 million, reflecting a net income margin of 26%, the highest second-quarter margin ever achieved.
• Additionally, free cash flow reached $900 million, a 13% increase from the previous year, with a trailing 12-month free cash flow of $3.9 billion and a margin of 43%.

• Monster Beverage Corporation generated below par revenues in the last quarter and its earnings were on par with market expectations.
• The rise in gross profit as a percentage of net sales was primarily due to price actions, lower freighting expenses, and higher aluminum can costs.
• Besides that, the company introduced The Beast Unleashed in the quarter.

• The Kroger Co. delivered a mixed result in the recent quarter, with revenues below market expectations but surpassing the analyst consensus regarding earnings.
• The total effect on operating profit during the second quarter was somewhat positive, and they expect this to continue for the remainder of the year.
• Besides these results, their healthcare subsidiary, Kroger Health, entered into a collaborative partnership with Performance Kitchen to provide medically customized meals (MTMs).

• Thai Beverage (THBEV SP) has trended lower over the last couple of years and the stock is trading very close to its lows.
• There has been a contraction in multiples and Thai Beverage (THBEV SP) trades cheaper than a lot of its Asia listed peers.
• A potential index inclusion could bring in significant passive inflows and result in a rerating of the stock.

• 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 – 111 Inc (YI US), Eoflow (294090 KS), Symbio Holdings (SYM AU), Mason Group Holdings (273 HK), JSR Corp (4185 JP), DDH1 (DDH AU), ENM Holdings (128 HK). 
• Lowest spreads – Toyo Construction (1890 JP), Healius (HLS AU), Yaizu Suisankagaku Industry (2812 JP), Allkem Ltd (AKE AU), Pact Group Holdings (PGH AU), Pacific Current (PAC AU). 

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), Water Oasis (1161 HK), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and The Keepers Holdings (KEEPR PM).
• We add UMP Healthcare (722 HK) to our list of small/mid-cap names we track. The company has just recently declared its full-year results. 

• This is the brand spanking new Quiddity Mainland Connect NORTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor.
• The data on liquid names is presented for 5 days and four weeks and anything seen can be ranked in tables or selected and charted (names, sectors, outperformance, etc).
• We like the nifty interactive tables and charts and welcome feedback. This week saw small net buying for the first week in seven.

• Golden Agri Resources (GGR SP) has traded lower over the last year and trades cheaper than some of its peers.
• Revenue, income and net profit margins have been moving higher over the last few years and EPS/DPS have increased sharply over the last two years.
• Potential passive buying could result in Golden Agri Resources (GGR SP) outperforming peers in the near term.

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• In the IPO space, Kokusai Electric (6525 JP) filed for it Japan listing, while Midea Group Co Ltd A (000333 CH) continued to work towards its H-share listing.
• In the placement space, there were no major deals this week apart from Blue Star and Sheela Foam Ltd (SFL IN). 

• Hyatt Hotels Corporation’s results were a major disappointment as the company failed to meet Wall Street’s revenue and earnings expectations.
• The ongoing transformation of Hyatt is gaining momentum, with second-quarter results reinforcing their confidence in executing the strategy outlined during the Investor Day in May.
• Hyatt has set ambitious targets, aiming to achieve $750 million in free cash flow and an 80% asset-light earnings mix by 2025.

• The coming week has the rebalance implementation for the NIFTY family of indices on Thursday and the Nikkei 225 (NKY INDEX) on Friday.
• The review period for the December rebalance of the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index and the HSCI Index ends on Friday.
• Inflows to mainland China ETFs resumed following a pause as markets continue to trade weak.

• Soybean ranks as the most traded crop globally. It comprises 10% of the total value of global agriculture trade.
• The Americas comprise >80% of total global production. China mops up ~60% of global imports and is primarily used to feed massive livestock.
• Soybean is more prone to shocks from geopolitical disruptions. Weather also impacts Beans. El Niño favours Soybean yields.

• Costa Group Holdings (CGC AU) has entered a scheme implementation deed with Paine Schwartz Partners (PSP) led consortium at A$3.20 per share. 
• The key conditions are regulatory and shareholder approval. China SAMR regulatory approval poses a risk, primarily related to timing. Costa anticipates completion in 1Q24.
• The headcount test related to the retail vote remains a risk. The risk/reward is unfavourable as the deal break downside (10%+) outweighs the offer’s upside (3.6% at last close).  

• My comparables derived valuation of Pendragon PLC (PDG LN) is 32p/share, above the value of Lithia’s “package” and spot-on Hedin’s unsolicited & preliminary revised offer (well above its initial lowball offer).
• The market seems skeptical about the future prospects of Pinewood. Putting it on a 13.3x multiple, the value of the business would still be c. 11p/share, hardly a game-changer.
• The revised Hedin’s offer is 17% above Lithia’s, with no execution risk (Hedin backing off again seems less likely), and probably enough to win Board’s recommendation. Gross spread, 5.6%. Long.

• Vinfast (VFS US) reported 2Q2023 results yesterday. Revenues saw significant increase driven by strong YoY growth in EV sales volume which reached 9,535 units during the quarter.
• More than 50% of EV volume during 1H2023 were to a related company while US volume was less than 200 units raising serious concerns over demand for Vinfast’s EVs.
• It seems unlikely for Vinfast to meet its 50K EV target for 2023 and our revised forecast suggests there is further downside despite shares dropping more than 50% vs IPO.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Cencosud’s ESG as “Adequate”, in line with its “Adequate” Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.

Our H1/23 Assessment and Outlook report is a review of the performance of companies under our coverage in the stated period. Following a brief discussion of macro trends as well as monetary policy and input cost developments, we assess how these companies performed compared to our analysts’ expectations, and examine credit stats trends. We provide overviews of sector developments, as well as summaries of all the companies’ earnings. This includes classifying all the names into either picks or pans, to provide an overview of which companies we are comfortable of investing in a portfolio context. We highlight that both our picks and pans can be names for which we have “Hold” recommendations.

• Nippon Active Value Fund PLC (NAVF LN)’s jointly-held shareholding in Intage Holdings (4326 JP) has declined from 11.28% to 9.52% of outstanding shares (disclosed on 20 September).
• NAVF wants to take as much money off the table as possible as NTT (Nippon Telegraph & Telephone) (9432 JP)’s partial offer price represents an all-time high.
• Our revised minimum proration is 53.31%. NAVF’s action suggests that the minimum acceptance condition, which requires a 20% minority acceptance rate, should be satisfied.

• Midea Group Co Ltd A (000333 CH), one of the world’s largest home appliance producers, aims to raise up to  US$5bn in its H-share listing.
• Midea Group is one of the world’s largest home appliance manufacturing companies with a presence in over 200 countries. Its A-shares have been listed since 2013.
• In this note, we look at its past performance and other deal dynamics that might impact the listing.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Melco Resorts’ ESG as “Adequate”, in line with its Social and Governance scores. The Environmental pillar is “Strong”. Controversies are “Immaterial” and Disclosure is “Strong”.

• On the 18 September, Costa Group Holdings (CGC AU) announced A$3.20/share best and final Offer from Paine Schwartz Partners (PSP) down from the A$3.50/share NBIO in July.
• Costa’s shares wobbled – would they, won’t they be supportive? A break price beyond the undisturbed price loomed. Vanguard kicked out a chunk of shares below A$3.
• This morning Costa and PSP entered into a Scheme Implementation Deed. The transaction is expected to close in 1Q24. Key conditions are Costa’s shareholder vote and FIRB/SAMR/EU approval. 

• Constellation Brands, Inc. managed to exceed analyst expectations in terms of revenue as well as earnings.
• The company’s beer business generated significant growth for the quarter while steadily moving forward with all 4 of its strategic projects.
• Their larger premium and luxury brands in the higher-end wine area of their portfolio experienced weaker segment demand in April.

• Restaurant Brands International Inc. delivered an all-around beat in the previous quarter, marked by impressive growth, with year-over-year consolidated system-wide sales increasing significantly.
• Strong comparable sales and net restaurant growth drove this substantial growth.
• Popeyes US achieved substantial growth in similar sales, driven by menu extensions, operational enhancements, and digital sales growth.

• Metro Pacific Investments Co (MPI PM) has announced that the public float of the stock will drop to 2.78% following the Tender Offer.
• Metro Pacific Investments Co (MPI PM) shares are expected to be suspended from 26 September. That could see Bloomberry Resorts (BLOOM PM) added to the PCOMP INDEX on 25 September.
• There will be large passive inflows to Bloomberry Resorts (BLOOM PM) as well as flows from active managers that track the PCOMP INDEX.

• Through all the upheavals in discretionary product distribution in the last decade, Itochu Corp (8001 JP)’s Itochu Textile subsidiary has managed to maintain huge power in the channel.
• While the trading firm has traditionally focused on premium fashion brands, in the last few years it has invested heavily in the sports market, including its growing investment in Descente.
• The move is part of wider plans to take lead share in sports, footwear and department store brands.

• Midea Group Co Ltd A (000333 CH) announced on September 18 the approval for H-share listing for a total of not more than 10% of its outstanding shares (before overallotment).
• Reasons for the listing include the possible share incentive program for overseas employees and more exposure to foreign investors. 
• The H-share listing could be a safe bet given the current valuation profile, especially if the discount to A-share is larger than 10%. 

• From 200 properties, the Cambodian government now only allows 87 shrinking capacity but increasing footfall for existing properties like Nagaworld in Phnom Penh.
• Nagaworld enjoys a moat in metro Phnom Penh–this supply reduction expands its base.
• H1 performance strong, reduced national capacity will contribute to revenue gains from a wider geography for the largest single integrated luxury resort in Cambodia.

• Global Digital Niaga (BliBli) continues to stand out from peers given a differentiated omnichannel model plus a greater portion of 1P but 3P sales are growing driven by Tiket.com.
• TPV growth surpassed revenue growth in 1H2023 driven by Tiket.com but take rates and gross margins improved, as the company cut back on promotional spending and improved cost efficiencies. 
• BliBli booked organic growth with more users and a significant pick-up in the average order value, partially driven by Tiket.com. 

• While Yamazaki Baking (2212 JP)‘s recent surge has been impressive, consensus expectations are high for the upcoming quarter, despite yet another price hike in July 2023.
• From a valuation perspective, we expect limited upside potential even if Yamazaki Baking surpasses consensus expectations.
• Therefore, we believe that the risk-reward profile for maintaining a long position in Yamazaki Baking is currently not particularly attractive.

• The percentage of female managers is low, around 10%, so it will take time for internal executive directors to be nominated, and meanwhile companies will be dependent on outside directors.
• Finally, TSE has clearly stated specific numerical targets, so the path to achieving the targets is clear. Now the focus will shift to the content of female board  directors.
• Hiring talented people should be the biggest management challenge, but the appointment of foreign talent has been too slow compared to the globalization of the business.

• Indonesia-based Koltiva works with producers in 52 countries and boasts over 1 million producers and 6,800 businesses

• Indonesia-based sustainable farming and supply chain traceability startup Koltiva has raised an undisclosed “seven-figure” USD in a Series A financing round led by AC Ventures.

• Silverstrand Capital, Planet Rise, Development Finance Asia, Blue 7, The Meloy Fund, and an unnamed impact investor in Southeast Asia also joined.

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.

• First Pacific Co

• Maize plays a pivotal role in Indonesian agriculture, including as a prime source of animal feed. In 2022, the country’s maize production was estimated to reach 44 million tons.

• Agritech startup Kora is one of those few startups operating in this space.

• Kora aims to improve the quality and quantity of post-harvest maize.

• Midea Group Co Ltd A (000333 CH) could raise between HK$35-54bn (US$4.5-6.9bn) in its H-share listing depending on the H-shares discount and exercise of the overallotment option.
• The H-shares could get Fast Entry to some global indices depending on the number of shares that are allotted to cornerstone and/or strategic investors.
• The H-shares will be added to Southbound Stock Connect following the end of the price stabilisation period. Inclusion in the Hang Seng Composite Index will come later.

• Bob van Dijk, CEO of both Naspers (NPN SJ) and Prosus NV (PRX NA), has stepped down, effective 18 September. 
• Van Dijk was instrumental in the 2019 listing of Prosus and the creation (and subsequent unwinding) of the highly-criticised Prosus/Naspers cross-holding structure. 
• His departure should have minimal impact. Everything else basically stays the same. Continue to be long Prosus vs. NAV – that is, Prosus vs. Tencent (700 HK).

• The move from 80 index constituents to 100 could take most of next year (and possibly even the year after that) to manage turnover and add profitable companies.
• Foreign companies will be eligible for inclusion in the index from the December rebalance. That makes Samsonite (1910 HK) a high probability inclusion candidate.
• We highlight 8 potential inclusions to the index with passive trading impact varying from 1.6-4.3 days of ADV. There are large shorts on some of the stocks.

• Tata Motors DVR (TTMT/A IN) now trades at a 32.9% discount to Tata Motors Ltd (TTMT IN) and there is another 4.4% in the trade following the scheme of arrangement.
• Tata Motors DVR (TTMT/A IN) could be added to global indices in November and that will bring significant inflows to the stock.
• The pre-positioning and passive buying could lead to the DVR discount narrowing further and provide trading opportunities for the next few weeks.

• Global wheat trade is imbalanced with few exporters and many importers. This means a few nations’ trade policies affect supply during shortages as they restrict exports to prioritize domestic needs.
• El Niño generally causes wheat production to decline among key exporters as well as most importers. This increases the likelihood of shortages in the wheat export market.
• Currently diminished global wheat inventories increase the likelihood of supply shocks and price surges in global wheat markets.

We view H&H International as “Medium Risk” on the LARA scale. The company has a sound business profile, with stable branded products in the Baby Nutrition & Care (BNC) and Adult Nutrition & Care (ANC) markets. The acquisition of Zesty Paws in 2021 allowed H&H to expand into the Pet Nutrition & Care (PNC) market. The company’s strong distribution channels support cross-border and e-commerce sales strategies. That said, the positive factors are balanced by risks associated with penetration into new markets and products, along with the fragmented and competitive Chinese market.

We view positively H&H’s solid business fundamentals and strong market positions. We highlight the company’s sound liquidity profile and stable CFO. Negatively, the Zesty Paws acquisition affected H&H’s financial profile, weakening the leverage metrics. That said, PNC is part of the company’s sustainable growth plan. We expect H&H to work on deleveraging in the near term, in order to maintain a healthy credit profile.

Bondholders of the 2026 USD notes suffer from small degree of structural subordination, as the company’s PRC subsidiaries do not guarantee the notes, but certain PRC subsidiaries are likely to be guarantors for the term loan.

Our Credit Bias on H&H is “Stable”, given the company’s solid business fundamentals, strong market positions and moderate financial profile. ANC and PNC are expected to deliver better numbers going forward, while BNC should remain challenging. As a result, ANC and PNC will likely be H&H’s key growth segments, offsetting high competition in the BNC business. The company aims to expand into other business segments and markets outside China, in order to compensate for muted growth in the country.

Controversies are “Immaterial” and the ESG Impact on Credit is “Neutral”.

• Paramount Global managed to exceed analyst expectations in terms of revenue and earnings, demonstrating sustained focus on corporate spending containment and good momentum in its D2C sector.
• Affiliate and subscription revenue increased by a healthy 12% in Q2 and again showed how the combination of traditional and streaming led to net growth for the business.
• Paramount’s 47% increase in D2C subscription revenue was mostly attributable to Paramount+, where the company saw subscriber growth, increased ARPU, and lower churn rates.

• Lear Corporation managed to exceed analyst expectations in terms of revenue and earnings.
• With a 61% increase from the previous year, core operating earnings were the greatest in over two years.
• Adjusted earnings per share rose by 86% while operating cash flow for the quarter grew dramatically to $311 million.

• Sysco Corporation delivered mixed results in its recent quarter, with revenues falling short of analysts’ expectations but above-par earnings.
• Their U.S. food service business’s Q4 case volume increased significantly, enhancing their market share and solidifying their top spot in food service distribution.
• This partnership aims to devise customized strategies that will assist Sysco Corporation in mitigating its environmental impact by reducing its carbon emissions.

• Domino’s Pizza Inc. delivered a mixed result in the recent quarter, with revenues below market expectations, but it surpassed the analyst consensus regarding earnings.
• Despite challenges in the US delivery business, Domino’s achieved positive same-store sales growth in the US and international markets for the third consecutive quarter, driving improvements in operating income.
• However, Domino’s management remains optimistic about its ability to return to a more robust growth trajectory in 2024, supported by powerful new openings and more robust international same-store sales.

• The Poly Culture Group Corp H (3636 HK) H Shareholders’ class meeting is scheduled for 3 November. The IFA considers the HK$8.88 per H share offer fair and reasonable.
• The key condition is approval by at least 75% independent H Shareholders (<10% of all independent H Shareholders rejection). No independent H Shareholder holds a blocking stake.
• The offer’s 77.6% premium to the undisturbed price and shareholder structure helps the vote. At the current price and for the 23 November payment, the gross/annualised spread is 3.3%/19.2%.

• Back on the 23 June, SOE-backed Poly Group tabled an HK$8.88 bid per Poly Culture Group (3636 HK) H Share and RMB8.17386240 per Domestic Share. Terms were declared final.
• This Merger by Absorption Offer incorporates a Scheme-like vote. There is no tendering condition. The premium to last close is 77.6%; and a 112.5% premium to the five-day closing average.
• The Composite Doc is out. Independent H-shareholders get to vote on the transaction on the 3rd of November. Payment is expected on or before the 23 November. I’d get involved. 

• Costa Group Holdings (CGC AU)  has disclosed a revised non-binding indicative proposal from Paine Schwartz Partners at A$3.20 per share, 9.6% lower than the previous offer on a like-for-like basis. 
• The weak CY23 outlook impacted the debt that could be taken on to meet the IRR hurdles of the previous offer. The revised offer is the best and final offer.
• The Board faces a dilemma as the offer is light, but some shareholders will want the Board to accept as trading volatility making Costa more suited to the private market.

• Chinese automotive maintenance services platform Tuhu Car has announced the terms for its HKEx IPO. Tuhu plans to raise net proceeds of HK$1.0-1.1bn (US$132-161m) through the issuance of 40.62m shares.
• Tuhu Car (2007986D HK) ‘s franchised business model seems to have worked well, while its focus on high margin products/services have helped improve profitability.
• In this insight, we discuss our forecasts and valuation for the company, and our analysis suggests that Tuhu Car’s IPO is priced reasonably.

• Seven & I Holdings (3382 JP)‘s share price has remained below ¥6,600 since the end of its bull run in March 2023.
• Short-Term optimism hinges on a substantial earnings beat, but the US business challenges make it unlikely.
• Seven & I faces valuation risks, trading near peak multiples with diminishing growth prospects.

• If a company with P/B less than 1 conducts share buyback, its P/B will decrease; if a company with P/B greater than 1 conducts share buyback, its P/B will increase.
• A company with P/B below 1x can be a great value stock if it can demonstrate to investors that it will generate ample cash flow, in addition to repurchasing shares.
• Even if a company’s P/B is well above 1x, it is required to explain to investors whether there are any gaps in its cash flow growth scenario.

• Booking Holdings Inc. managed to exceed analyst expectations in terms of revenue as well as earnings.
• The 268 million hotel nights booked in the second quarter increased by 9% year over year, and the $39.7 billion in gross bookings, the largest quarterly total ever, surged by 15% year over year.
• The positive demand environment caused hotel nights and revenue bookings to surpass the company’s previous projections.

• Sai Silk Kalamandir (SSKL IN) is looking to raise about US$145m in its India IPO.
• Sai Silk Kalamandir (SSK) is one of the largest retailers of ethnic apparel in South India, particularly in sarees, according to Technopak.
• In this note, we look at the company’s past performance and provide our thoughts on valuations.

• ATH for the NIFTY Index (NIFTY INDEX),  Going ahead, we expect the momentum in the market to continue. 
• Healthcare and Information Technology remain interesting pockets to watch when it comes to iShares MSCI India ETF (INDA US). 
• Other names discussed include Bajaj Auto Ltd (BJAUT IN), Hindustan Unilever (HUVR IN), Bandhan Bank Ltd (BANDHAN IN) and Vedant Fashions (MANYAVAR IN).  

• Philip Morris International managed to surpass the revenue and the earnings expectations of Wall Street.
• This fantastic result supported high teens’ currency-neutral adjusted diluted EPS growth and double-digit organic top-line growth.
• Given these strong results, their team remains confident in a solid full-year result with exceptional revenue growth.

• Four years after Itochu got to 40.0% of votes in Descente (8114) in a hostile Tender Offer, Descente partner ANTA, which supported Itochu at the time started selling its stake.
• A few months later, Itochu started buying shares of Descente in the market. As of 7 Sep, Itochu had bought Descente shares 81 days straight (9.7% of ADV).
• This begs the question: Is Itochu ensuring they maintain voting control as ANTA sells? Or are they buying to lift their stake prior to another bid?

• There could be two changes for the SET50 INDEX with JMT Network Services (JMT TB) and I-TAIL (ITC TB) replacing Srisawad Power (SAWAD TB) and Ngern Tid Lor (TIDLOR TB). 
• With no further inclusions on the Market Surveillance Measure list, Delta Electronics Thai (DELTA TB) should be safe at the December rebalance.
• There are a couple of stocks that are close to passing/failing the liquidity tests and that could result in further changes to the index.

• Back on the 4 July, Paine Schwartz Partners (PSP) made an A$3.50/share NBIO for Costa Group (CGC AU) by way of a Scheme.  PSP held 14.84% at the time.
• The due diligence period came and went, or so it appeared, but Costa said it remained ongoing.  Rumours circulated that PSP had gone cold. 1H23 results were also delayed. 
• Costa has now announced this morning that PSP has returned with a $3.20/share Offer – best and final – reduced for any permitted dividend of up to A$0.04, if declared. 

• It was a busy Friday with a bunch of indices rebalancing at the close and big volumes trading on a lot of stocks.
• Brilliance China Automotive (1114 HK) had a good week with the stock rallying on Thursday and Friday on huge volumes amid expectations of upcoming passive buying.
• A quiet week for ETFs with mainland China ETFs seeing some outflows after the huge inflows over the last couple of months.

• This is the brand spanking new Quiddity Mainland Connect NORTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor.
• The data on liquid names is presented for 5 days and four weeks and anything seen can be ranked in tables or selected and charted (names, sectors, outperformance, etc).
• We like the nifty interactive tables and charts and welcome feedback. This week saw RMB 15bn+ of net selling. That’s six weeks in a row of respectably large outflows.

• STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
• In this insight, we take a look at our expectations for potential ADDs and DELs for the STAR 50 index during the December 2023 Rebalance event.
• I currently expect one ADD and one DEL for the STAR 50 index in December 2023.