Most Read

There are 5 constituent changes for the CSI Hong Kong Connect Internet Index in June. Plus there are capping changes for some stocks.
A lot of the adds have moved significantly in the last couple of days, so the impact over the next couple of days will be smaller.
There could be opportunities to trade the reversion strategy. Getting borrow may not be easy on some names.

Toyota Industries (6201 JP): Thoughts on Intrinsic Value

Several investors have sharply criticised Toyota Industries (6201 JP)’s preconditional tender offer from Toyota Fudosan. Oasis is pushing for a higher offer.
The offer has several issues that are detrimental to minorities’ interests. The key grievance is that it is below TICO’s intrinsic value.
Due to TICO’s varied business units, SoTP valuation is the most appropriate methodology. My analysis suggests a base case intrinsic value of around JPY19,000.

MINISO (9896 HK)’s (Possible) TOP TOY Spin-Off Is Priced In

Three months ago, local media reported that Chinese lifestyle retailer MINISO Group Holding (9896 HK) was considering spinning off its collectible toy unit TOP TOY on the Hong Kong exchange.
Reportedly, MINISO could raise ~US$300mn from an IPO. MINISO has now confirmed that a spin-off is being contemplated; although a proposal is only at a preliminary stage.
TOP TOY has been a growth engine. But its contribution to the group is still ~6%. Applying a holding company discount, post spin-off, MINISO’s upside appears limited.

[Japan M&A] Hino & Mitsubishi-Fuso Truck to Join; Bagholding Ugly for Minorities, and a Re-IPO

On the 10th of June, Toyota Motor (7203 JP) subsidiary Hino Motors Ltd (7205 JP) and Mitsubishi-Fuso Truck & Bus Company announced their long-awaited integration plans. We have a deal.
An agreement was signed in 2023, but Hino got in big trouble for falsifying testing data on gasoline engine emissions/efficiency. Hino took a hit in 2023, then 2025. Talks advanced.
The deal announced suggests Toyota has thrown itself and Hino minorities under the proverbial Fuso bus. It’s VERY odd. But… it deserves a look because 2026 will see a re-IPO.

More Accurate Context Behind Tencent’s Nexon Moves Reported by Bloomberg

By Sanghyun Park

Government aims to sell 30.6% NXC stake by 2027 for ₩4T tax revenue, offering NXC a buyback or selling with management control to attract bidders.
The family won’t buy back the 30.6% stake but may allow partial management rights, with Tencent eyeing that stake—not a full $15B Nexon buyout as Bloomberg suggested.
Tencent’s targeting that stake chunk only, no control shift, so no mandatory tender offer triggered—at least for now.

Zijin Mining (2899 HK): Fully Valued Ahead Of (Expected) Gold Unit Spin-Off

Back on the 30th April 2025, Zijin Mining (2899 HK) said it planned to spin off its overseas gold mine assets on the Hong Kong exchange.
The newly created unit, Zijin Gold International, owns/operates mines in South America, Central Asia, Africa and Oceania, including the Buritica project in Colombia, the nation’s largest gold mine.
A Circular is now out concerning the spin-off, which is not subject to shareholder approval. Pegged to peers, Zijin appears fully valued.

UK: Retreating To Trend Again

By Phil Rush

Residual seasonality shocked the consensus again, this time on the downside, as the spurious surge is replaced with stagnation for the rest of the year in our view.
The 0.3% m-o-m decline dragged GDP back toward its trend, wiping out the highly supportive statistical carryover effect for Q2, which we now forecast at 0.1% q-o-q.
BoE forecasts are on track, allowing the MPC’s bias to slow easing to materialise with a pause. We expect cuts to keep being rolled later, with no more delivered in this cycle.

Quiddity Leaderboard Hang Seng Biotech Sep25: Three Changes Likely + One Intra-Review Change

By Janaghan Jeyakumar, CFA

The Hang Seng Biotech index (HSHKBIO) represents the 50 largest biotech companies listed in Hong Kong (HKEX).
In this insight, we take a look at the potential index changes and the resultant capping flows for the HSHKBIO index rebal event in September 2025.
Based on the latest data, we see three ADDs and three DELs.

Zhejiang Sanhua Intelligent Controls (2050 HK): Big Raise Supported by Cornerstones

Zhejiang Sanhua Intellignt Controls Co. (002050 CH)‘s global offering opens today and the raise could reach up to US$1.4bn if the offer-size adjustment option and the overallotment option are exercised.
There is a large allocation to cornerstone investors. The discount of around 22.7% to the A-shares is attractive given the recent trend for Midea (300 HK) and CATL (3750 HK).
The H-shares should be added to Southbound Stock Connect in July, to the HSCI in September, and to a global index in December.

Everest Medicine Placement: Another Sell-Down by CBC, Some Caution Warranted

By Nicholas Tan

Everest Medicines (1952 HK) aims to raise around US$150m in a secondary sell-down of shares conducted by CBC Group.
This comes on the heels of a similar secondary sell down in Jan 2025, whereby CBC sold ~US$100m worth of stock, priced at a 10% discount.
In this note, we comment on the deal dynamics and run the deal through our ECM framework.

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Jun 12

Most Read: Foshan Haitian Flavouring & Food, TRYT , Horizon Robotics, Toyota Industries, Virgin Australia Holdings, Kioxia Holdings , SK Inc, KE Holdings , MINISO Group Holding and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Foshan Haitian Flavouring & Food (3288 HK): Offering Details & Index Inclusion
[Japan M&A] Carlyle Deal for TRYT (9164) – Great Exit for Speculators as HR Co Targets Are Desirable
Horizon Robotics Placement – Momentum Is Strong but Raising Seems Opportunistic
Toyota Industries (6201 JP): Thoughts on Intrinsic Value
Virgin Australia (VGN AU): Touch & Go for Index Inclusion
Kioxia IPO Lockup Expiry – US$6.7bn Release, with Shareholders Eager to Sell
Preferred Shares of Five Major Korean Holdcos – Likely to Close the Gap Further With Common Shares
CSI Hong Kong Connect Internet Index Rebalance: 10 Changes & Big Impact
MINISO (9896 HK)’s (Possible) TOP TOY Spin-Off Is Priced In
Foshan Haitian Flavouring A/H Listing – Strong Cornerstone, Weak Momentum

Foshan Haitian Flavouring & Food (3288 HK): Offering Details & Index Inclusion

Foshan Haitian Flavouring & Food (603288 CH)‘s global offering opens today and the raise could reach up to US$1.5bn if the offer-size adjustment option and the overallotment option are exercised.
There is a large allocation to cornerstone investors. The discount of around 22% to the A-shares is attractive given the recent trend for Midea (300 HK) and CATL (3750 HK).
The H-shares could be added to a global index and the FXI ETF in December. Inclusion in the HSCI should be in September and Southbound Stock Connect in July.

[Japan M&A] Carlyle Deal for TRYT (9164) – Great Exit for Speculators as HR Co Targets Are Desirable

In early February, articles suggesting the PE owner of TRYT (9164 JP) wanted to cash out. Performance post-IPO had been bad. Catching up to the IPO price would be tough.
But a second round of bidding came about, so the stock went limit up. Then it settled in the ¥480 range for three weeks. Then started to climb.
Now the company and its PE firm owner have announced a sale to a new PE Firm at ¥880/share. This is below IPO Price but it will get done.

Horizon Robotics Placement – Momentum Is Strong but Raising Seems Opportunistic

Horizon Robotics (9660 HK) raised around US$800m in its Hong Kong IPO in October 2024. It’s back again to raise another US$600m via a placement.
Horizon Robotics (HR) is a provider of advanced driver assistance systems (ADAS) and autonomous driving (AD) solutions for passenger vehicles, empowered by its proprietary software and hardware technologies.
In this note we talk about the deal dynamics and run the deal through our ECM framework.

Toyota Industries (6201 JP): Thoughts on Intrinsic Value

Several investors have sharply criticised Toyota Industries (6201 JP)’s preconditional tender offer from Toyota Fudosan. Oasis is pushing for a higher offer.
The offer has several issues that are detrimental to minorities’ interests. The key grievance is that it is below TICO’s intrinsic value.
Due to TICO’s varied business units, SoTP valuation is the most appropriate methodology. My analysis suggests a base case intrinsic value of around JPY19,000.

Virgin Australia (VGN AU): Touch & Go for Index Inclusion

Virgin Australia Holdings (VGN AU) is looking to raise A$685m in a secondary offering, valuing the company at A$2.27bn. The stock is expected to start trading on 24 June.
Bain Capital and management are escrowed on their shares till early 2026. There is no escrow for Qatar Airways, but they have indicated that their shareholding is strategic.
Virgin Australia Holdings (VGN AU) could be added to the S&P/ASX 300 Index in September and there could be global index inclusions in November and December.

Kioxia IPO Lockup Expiry – US$6.7bn Release, with Shareholders Eager to Sell

Kioxia Holdings (285A JP) raised around US$800m (including over-allocation) in its Japan IPO, after pricing its IPO in the middle of its range. Its IPO linked lockup will expire soon.
Kioxia is a manufacturer and a global leader in flash memory and solid state drives for smartphones, PCs, enterprise servers and data centers.
In this note, we will talk about the lock-up dynamics and updates since our last note.

Preferred Shares of Five Major Korean Holdcos – Likely to Close the Gap Further With Common Shares

In this insight, we discuss the preferred shares of five major holding companies and how the share price gap relative to their common counterparts could decrease.
There is a relatively easy way to improve shareholder value of these holding companies which is to cancel the entire preferred shares that trade at discount to their common counterparts.
The common shares of these five companies have experienced an average share price appreciation of 33.2% YTD versus 28.7% appreciation for their preferred shares counterparts.

CSI Hong Kong Connect Internet Index Rebalance: 10 Changes & Big Impact

There are 5 constituent changes for the CSI Hong Kong Connect Internet Index in June. Plus there are capping changes for some stocks.
A lot of the adds have moved significantly in the last couple of days, so the impact over the next couple of days will be smaller.
There could be opportunities to trade the reversion strategy. Getting borrow may not be easy on some names.

MINISO (9896 HK)’s (Possible) TOP TOY Spin-Off Is Priced In

Three months ago, local media reported that Chinese lifestyle retailer MINISO Group Holding (9896 HK) was considering spinning off its collectible toy unit TOP TOY on the Hong Kong exchange.
Reportedly, MINISO could raise ~US$300mn from an IPO. MINISO has now confirmed that a spin-off is being contemplated; although a proposal is only at a preliminary stage.
TOP TOY has been a growth engine. But its contribution to the group is still ~6%. Applying a holding company discount, post spin-off, MINISO’s upside appears limited.

Foshan Haitian Flavouring A/H Listing – Strong Cornerstone, Weak Momentum

Foshan Haitian Flavouring & Food (603288 CH) (FHCC), China’s leading condiments company, aims to raise around US$1.2bn in its H-share listing.
FHCC is China’s leading condiments company within its main product categories of soy sauce, oyster sauce, flavored sauce, specialty condiment products and other products.
We have looked at the past performance and likely A/H premium in our previous note. In this note, we talk about the IPO pricing.

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Jun 11

Most Read: Sony Corp, TRYT , XtalPi Holdings, Austal Ltd, Hyundai Mobis, Virgin Australia Holdings, Foshan Haitian Flavouring & Food and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Index Treatment of Sony (6758 JP)’s Spinoff of the Financial Services Business
Nikkei 225 Proposal for Dealing With Sony’s (6758) Sony Finl Spinoff – A Non-Event but TOPIX Isn’t
[Japan M&A] Carlyle Deal for TRYT (9164) – Great Exit for Speculators as HR Co Targets Are Desirable
UK: Some Workshy Start Looking
Xtalpi US$860m IPO Lockup Expiry – Last of the Lockup Release with Nearly All Shares in CCASS Now
Austal (ASB AU): A Hanwha Bid Is Back In Play
The Straight-Up Timelines on Three Big Econ Policy Bills Rattling Korea’s Local Market Right Now
No, Hong Kong Won’t Abandon The Peg
Virgin Australia (VGN AU): Touch & Go for Index Inclusion
Foshan Haitian Flavouring & Food (3288 HK): Offering Details & Index Inclusion

Index Treatment of Sony (6758 JP)’s Spinoff of the Financial Services Business

For each share of Sony Corp (6758 JP), shareholders will receive 1 share of Sony Financial Group. Ex-date for the dividend in-kind is 29 September.
The Nikkei has started a market consultation on treatment of the spinoff in the Nikkei225 and that means the dividend in-kind will not be included in the Dividend Point Index.
There will be some selling in SFGI from passive trackers and the company will buy back some stock following listing. Details of the buyback have not been announced yet.

Nikkei 225 Proposal for Dealing With Sony’s (6758) Sony Finl Spinoff – A Non-Event but TOPIX Isn’t

A couple of years ago, Sony Corp (6758 JP) announced they would spin off Sony Financial Holdings (8729 JP) (called Sony Financial Group Inc). That spinoff is due in Sep-2025.
The extra capital required for a tech/industrial to hold the financial business is significant, but some of the other reasons Sony has offered are just management-speak hogwash.
The problem? It creates a new event in the Nikkei 225 paradigm for which there was no rule. Now the Nikkei has proposed a rule. It isn’t perfect.

[Japan M&A] Carlyle Deal for TRYT (9164) – Great Exit for Speculators as HR Co Targets Are Desirable

In early February, articles suggesting the PE owner of TRYT (9164 JP) wanted to cash out. Performance post-IPO had been bad. Catching up to the IPO price would be tough.
But a second round of bidding came about, so the stock went limit up. Then it settled in the ¥480 range for three weeks. Then started to climb.
Now the company and its PE firm owner have announced a sale to a new PE Firm at ¥880/share. This is below IPO Price but it will get done.

UK: Some Workshy Start Looking

By Phil Rush

A broadly softer labour market report could easily be used to overstate the fundamental significance. Unemployment’s rise was expected and only 0.2pp on the year.
Employment is growing and redundancies are low, but when the inactive look for work, long-term unemployment rises. Yet the workshy will struggle to compete for jobs.
Wage growth slowed despite a 0.5% m-o-m impulse. Costs are rising excessively fast, so the BoE still doesn’t have space to keep easing, and we expect no more rate cuts.

Xtalpi US$860m IPO Lockup Expiry – Last of the Lockup Release with Nearly All Shares in CCASS Now

XtalPi Holdings (2228 HK) was listed in Hong Kong on 13th Jun 2024 after raising US$126m. Its one-year lockup will expire soon.
QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
In this note, we will talk about the lock-up dynamics and updates since our last note.

Austal (ASB AU): A Hanwha Bid Is Back In Play

The Hanwha Group has received approval from the US’ CFIUS to acquire up to a 100% stake in Aussie-based shipbuilding and defense firm Austal Ltd (ASB AU).
Hanwha currently holds 9.9% and a further 9.9% via a cash settled total return swap. Apparently Hanwha had initially filed with CFIUS to approve a 19.9% stake acquisition.
Hanwha has also applied to FIRB to lift its position to 19.9%. It’s unlikely the local regulator would block Hanwha subsequent to CFIUS’ nod. Note: Austal “disputes” CFIUS’ approval.

The Straight-Up Timelines on Three Big Econ Policy Bills Rattling Korea’s Local Market Right Now

By Sanghyun Park

The Commercial Act passed committee but the floor vote set for the 12th was postponed unexpectedly today; inheritance tax and Samsung Life bills remain stuck at proposal stage.
Presidential Office is pushing the Commercial Act reform hard; vote likely after new floor leader’s election. Passage is almost guaranteed, with enactment expected by early to late August.
Inheritance tax bills face heavy backlog, delaying progress; the Samsung Life Law, proposed by another party, is pushed further back as the new government prioritizes easier wins.

No, Hong Kong Won’t Abandon The Peg

A Bloomberg op-ed piece on the 5th June concludes it is time to move on from “from an archaic currency regime“. That conclusion appears presumptuous. And uninformed.
A key tenent of this piece is that HK’s benchmark interest rates are (or were) significantly – and stubbornly – lower than US rates. Yet this “anomaly” is easily explained.
The article fails to discuss the impact from CATL (3750 HK)‘s IPO on the peg; and even what would replace the peg (IF it were replaced).

Virgin Australia (VGN AU): Touch & Go for Index Inclusion

Virgin Australia Holdings (VGN AU) is looking to raise A$685m in a secondary offering, valuing the company at A$2.27bn. The stock is expected to start trading on 24 June.
Bain Capital and management are escrowed on their shares till early 2026. There is no escrow for Qatar Airways, but they have indicated that their shareholding is strategic.
Virgin Australia Holdings (VGN AU) could be added to the S&P/ASX 300 Index in September and there could be global index inclusions in November and December.

Foshan Haitian Flavouring & Food (3288 HK): Offering Details & Index Inclusion

Foshan Haitian Flavouring & Food (603288 CH)‘s global offering opens today and the raise could reach up to US$1.5bn if the offer-size adjustment option and the overallotment option are exercised.
There is a large allocation to cornerstone investors. The discount of around 22% to the A-shares is attractive given the recent trend for Midea (300 HK) and CATL (3750 HK).
The H-shares could be added to a global index and the FXI ETF in December. Inclusion in the HSCI should be in September and Southbound Stock Connect in July.

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Jun 10

Most Read: Great Wall Motor, Yang Ming Marine Transport, Blackstone , Mazagon Dock Shipbuilders , Austal Ltd, SK Inc, With Us Corp, Azoom, Sony Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

RMB Dual Counter Trading Is Coming – This Changes AH Relationships
Yuanta/P-Shares Taiwan Div+ ETF Rebalance: Huge Turnover & Flow Overlap
Select Sector Indices and S&P Equal Weight Rebalance Preview: US$17bn Round-Trip Trade
A/H Premium Tracker (To 6 June 2025): Narrow Premia Hs Worst Performers, BYD Relents
NIFTY200 Momentum30 Index Rebalance: HUGE Turnover and Trade as Financials Shine
S&P/ASX Index Rebalance (June 2025): Changes, Flows, Shorts & Positioning
NAV Valuations of Top Five Largest “Pure” Holdcos in Korea
With Us (9696 JP): NSSK’s JPY3,237 Tender Offer
[Japan ECM/Index] Azoom (3496) Offering to Enable Move to TOPIX
Index Treatment of Sony (6758 JP)’s Spinoff of the Financial Services Business

RMB Dual Counter Trading Is Coming – This Changes AH Relationships

A week after the State Council issued “Several Opinions” (关于加强监管防范风险推动资本市场高质量发展的若干意见》), the CSRC announced Friday five capital market cooperation measures with HK Connect. The goals are to increase cross-border investor flows.
They include: a broader range of ETFs in Connect, including REITs in both directions, include RMB counters in Southbound, improve mutual recognition of funds, increasing China IPOs in Hong Kong.
RMB Dual Counters Southbound-eligible will take time. They have some homework, but it is on the “To Do” list “as soon as possible and smoothly.” Watch impact on H/A Pairs.

Yuanta/P-Shares Taiwan Div+ ETF Rebalance: Huge Turnover & Flow Overlap

There are 5 adds and 5 deletes for the Yuanta/P-Shares Taiwan Dividend Plus ETF in June with implementation starting on 20 June and ending on 26 June.
Estimated one-way turnover is 17.7% resulting in a round-trip trade of TWD 158bn (US$5.3bn). There are 10 stocks with over 5 days of ADV to trade.
There are a few stocks that have same-way or opposing flows from other index trackers over the next couple of weeks and those stocks could outperform/underperform their peers.

Select Sector Indices and S&P Equal Weight Rebalance Preview: US$17bn Round-Trip Trade

There are no constituent changes for the S&P 500 INDEX (SPX INDEX) in June but there are capping changes for the Select Sector indices and the Equal Weight Index.
The round-trip trade is US$17.4bn with a big chunk from the Equal Weight Index, Communication Services Select Sector SPDR Fund (XLC US) and Energy Select Sector SPDR Fund (XLE US).
The largest flows are expected in Exxon Mobil, Alphabet, Chevron Corp, Visa, Blackstone, Live Nation Entertainment, Meta, Broadcom, TKO Group Holdings, Dell Technologies and Omnicom Group.

A/H Premium Tracker (To 6 June 2025): Narrow Premia Hs Worst Performers, BYD Relents

AH spreads are slightly narrower. BANKS, INSURERS, BROKERS, INDUSTRIALS, PHARMA and UTILITIES see significant H-share outperformance vs their A pairs. TECH, CONSUMER, ENERGY mixed to worse.
Ongoing skew on H-vs-A performance this week. Those trading AH Premium <20% saw H outperform sharply but those with H Premia contracted. Quiddity Portfolio alpha trending strongly.
The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.

NIFTY200 Momentum30 Index Rebalance: HUGE Turnover and Trade as Financials Shine

There are 20 changes a side for the Nifty200 Momentum30 Index that will be implemented at the close on 27 June. We had correctly forecast 39 of the 40 changes.
Estimated one-way turnover is 68.4% resulting in a round-trip trade of INR 160bn (US$1.9bn). There are 22 stocks with over 1x ADV to trade.
The Financials sector has 9 net inclusions to the index while the Information Technology and Consumer Discretionary sectors have 2 net deletions each.

S&P/ASX Index Rebalance (June 2025): Changes, Flows, Shorts & Positioning

There is 1 change for the S&P/ASX20 Index, 1 change for the S&P/ASX50 Index, 2 changes for the S&P/ASX100 Index and 2 changes for the S&P/ASX 200 (AS51 INDEX).
There is between A$30m-A$135m to trade in the index changes and that is between 0.7-16 days of ADV in the stocks. Short interest has jumped in a few stocks.
We expect positioning to be lower than the passive trading in Nick Scali, Viva Energy Group, Perseus Mining, Austal Ltd and Healius.

NAV Valuations of Top Five Largest “Pure” Holdcos in Korea

Holding companies have been the best performing asset class in the Korean stock market in the past month.
In this insight, we provide updated NAV valuations of the top five, largest “pure” holdcos in Korea including SK Square, SK Inc, LG Corp, Hanjin KAL, and HD Hyundai.
The NAVs of these five holdcos are about 18% higher than their current prices on average.

With Us (9696 JP): NSSK’s JPY3,237 Tender Offer

With Us Corp (9696 JP) has recommended a tender offer from Nippon Sangyo Suishin Kiko (NSSK) at JPY3,237, an 18.0% premium to the last close price.
The offer represents an all-time high and concludes SwissAsia’s activist campaign to spill the Board at the AGM on 26 June.
SwissAsia and the founding family have provided irrevocables (39.81% ownership ratio), paving the way for deal completion.

[Japan ECM/Index] Azoom (3496) Offering to Enable Move to TOPIX

On Friday 6 June, Azoom (3496 JP) announced it would conduct an offering (small issuance of new shares, some Treasury shares, larger selldown by the main shareholder).
That comes in conjunction with a transfer to TSE Prime from TSE Growth, which itself leads to a TOPIX Inclusion trade next month.
The company has decided to tack on a special dividend for this year, on top of growth and more liquidity. None of this is especially bad.

Index Treatment of Sony (6758 JP)’s Spinoff of the Financial Services Business

For each share of Sony Corp (6758 JP), shareholders will receive 1 share of Sony Financial Group. Ex-date for the dividend in-kind is 29 September.
The Nikkei has started a market consultation on treatment of the spinoff in the Nikkei225 and that means the dividend in-kind will not be included in the Dividend Point Index.
There will be some selling in SFGI from passive trackers and the company will buy back some stock following listing. Details of the buyback have not been announced yet.

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Jun 09

Most Read: Aurora World, Mayne Pharma, Unimicron Technology, Fuji Corp, Yang Ming Marine Transport, Daiso Korea, Taishin Financial Holding, Mazagon Dock Shipbuilders and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Curator’s Cut: The Next Labubu, Crypto Equities and Tracking APAC Buybacks
Merger Arb Mondays (09 June) – Mayne, Tam Jai, OneConnect, Toyota Industries, Makino, Fuji Corp
Taiwan Top 50 ETF Rebalance: Elite Materials Added (But Bigger Sell Flows Elsewhere)
[Japan M&A] Private Co Takeout of Fuji Corp (7605 JP) – A Done Deal
Yuanta/P-Shares Taiwan Div+ ETF Rebalance: Huge Turnover & Flow Overlap
A Visit to Daiso in Seoul – A Retail Giant Crushing the Competition
Quiddity TDIV/50/100 Jun25 Results: 100% Hit Rate; Positioned for High-Impact Sector-Neutral Trades
Ohayo Japan | Stocks up on Jobs Data
Fuji Corp (7605 JP): Usami Koyu’s JPY2,830 Tender Offer Is Light but Done
NIFTY200 Momentum30 Index Rebalance: HUGE Turnover and Trade as Financials Shine

Curator’s Cut: The Next Labubu, Crypto Equities and Tracking APAC Buybacks

By Pranav Rao

Welcome to Curator’s Cut, a fortnightly roundup of standout themes from the 1,200+ insights published over the past two weeks on Smartkarma
In this cut, we look at an Asian toy manufacturer not named Pop Mart or Dream Int’l, the mashup between crypto and equity markets and the takeaways from tracking buybacks
Want to dig deeper? Comment or message on the themes you think should be highlighted next

Merger Arb Mondays (09 June) – Mayne, Tam Jai, OneConnect, Toyota Industries, Makino, Fuji Corp

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), Fuji Corp (7605 JP), ENN Energy (2688 HK), Smartpay Holdings (SPY NZ), Seven & I Holdings (3382 JP).
Lowest spreads: Bright Smart Securities And (1428 HK), Toyota Industries (6201 JP), Dada Nexus (DADA US), Avjennings Ltd (AVJ AU), Nissin Corp (9066 JP), Torii Pharmaceutical (4551 JP).

Taiwan Top 50 ETF Rebalance: Elite Materials Added (But Bigger Sell Flows Elsewhere)

Elite Material (2383 TT) will be added to the Yuanta/P-Shares Taiwan Top 50 ETF in June and will replace Unimicron Technology (3037 TT).
ETF AUM has now crossed US$20bn and passive trackers will need to buy 1x ADV in Elite Material (2383 TT) and sell 1.2x ADV in Unimicron Technology (3037 TT).
Importantly, Elite Material (2383 TT)‘s stock price rally results in a lower dividend yield and the stock will be deleted from another ETF where the passive selling is much larger.

[Japan M&A] Private Co Takeout of Fuji Corp (7605 JP) – A Done Deal

The long-term major owner now chairman is getting out. The company was shopped. And bought. And this is the deal. ¥2,830 which is about 5.7x this year’s EBITDA.
It could have been done a bit better, but irrevocables are 48.5% out of the 50.01% minimum and other directors get this past the minimum hurdle.
Transparency is lacking but it is an all-time high and you can’t do much about it.

Yuanta/P-Shares Taiwan Div+ ETF Rebalance: Huge Turnover & Flow Overlap

There are 5 adds and 5 deletes for the Yuanta/P-Shares Taiwan Dividend Plus ETF in June with implementation starting on 20 June and ending on 26 June.
Estimated one-way turnover is 17.7% resulting in a round-trip trade of TWD 158bn (US$5.3bn). There are 10 stocks with over 5 days of ADV to trade.
There are a few stocks that have same-way or opposing flows from other index trackers over the next couple of weeks and those stocks could outperform/underperform their peers.

A Visit to Daiso in Seoul – A Retail Giant Crushing the Competition

I recently visited Daiso near Seoul Station. Daiso is one of the few off-line stores that has been crushing the competition in Korea in the past several years.
Amid continued weak economy in Korea in the past several years, Daiso has thrived through its detailed execution of focus on low priced products with highest value to consumers.
Able C&C (078520 KS) is a prime example a company capitalizing on the strong demand for cosmetic products at Daiso.

Quiddity TDIV/50/100 Jun25 Results: 100% Hit Rate; Positioned for High-Impact Sector-Neutral Trades

By Janaghan Jeyakumar, CFA

The index changes for the T50/100 index family and the TDIV index were confirmed after market close on Friday 6th June 2025.
There will be one ADD/DEL for T50, two ADDs/DELs for T100, and five ADDs/DELs for TDIV.
All of these are exactly in line with our final expectations.

Ohayo Japan | Stocks up on Jobs Data

By Mark Chadwick

US stocks rallied Friday after stronger-than-expected nonfarm payrolls data eased slowdown fears
Fifty Japanese companies received activist proposals at June shareholder meetings, the highest number on record,
Takeda Pharmaceutical faces opposition from Institutional Shareholder Services (ISS) against reappointing CEO

Fuji Corp (7605 JP): Usami Koyu’s JPY2,830 Tender Offer Is Light but Done

Fuji Corp (7605 JP) has recommended a tender offer from Usami Koyu at JPY2,830, a 32.2% premium to the last close price.
Unusually for a Board recommended offer, the lower limit will not achieve a 66.67% ownership ratio. Based on past EGM voting ratios, it is set at a 50.01% ownership ratio.
While the offer represents an all-time high, it is below the midpoint of the IFA DCF valuation range. However, due to irrevocables, this is a done deal.

NIFTY200 Momentum30 Index Rebalance: HUGE Turnover and Trade as Financials Shine

There are 20 changes a side for the Nifty200 Momentum30 Index that will be implemented at the close on 27 June. We had correctly forecast 39 of the 40 changes.
Estimated one-way turnover is 68.4% resulting in a round-trip trade of INR 160bn (US$1.9bn). There are 22 stocks with over 1x ADV to trade.
The Financials sector has 9 net inclusions to the index while the Information Technology and Consumer Discretionary sectors have 2 net deletions each.

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Jun 08

Most Read: BYD, Solar Industries India, Henderson Land Development, Pop Mart International Group L, Bluefocus Communication Group Co, Ltd., Keppel DC REIT, SGX Rubber Future TSR20, Unimicron Technology and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$8.1bn of Flows Post Capping (June 2025)
NIFTY200 Momentum30 Index Rebalance Preview: 69% One-Way Turnover & US$1.9bn Trade
Henderson Land (12 HK): Large Passive Flow Coming Up as Shorts Cover
FXI Rebalance: Pop Mart, SF Holding In; China Merchant Sec, China Railway Out
ChiNext/ChiNext 50 Index Rebalance: US$1.3bn Round-Trip Trade
STTF Index Rebalance: Keppel DC REIT Replaces Jardine Cycle & Carriage
ASX Short Interest Weekly (May 30th): Sigma Pharmaceuticals, Evolution Mining, Westpac, Goodman
Higher Rubber Values Come In Handy For Vietnam, Though Volume Down
Japan Weekly | Geopolitics Rule as Semis Shine and Autos Stumble
Taiwan Top 50 ETF Rebalance: Elite Materials Added (But Bigger Sell Flows Elsewhere)

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$8.1bn of Flows Post Capping (June 2025)

The June rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today’s closing prices to cap the index constituent weights at 8%/12%. This leads to large flows.
The net round-trip trade across all stocks across the four indices is estimated at HK$63.55bn (US$8.1bn). There are 12 stocks with over 2x ADV to trade from passive trackers.
The trade size is much bigger than usual due to the inclusion of BYD in the HSTECH Index and due to a change in the FAF methodology for Secondary Listings.

NIFTY200 Momentum30 Index Rebalance Preview: 69% One-Way Turnover & US$1.9bn Trade

There could be 20 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 27 June.
If all changes are on expected lines, one-way turnover is estimated at 68.7% and that will result in a round-trip trade of INR 159bn (US$1.87bn).
Financials are expected to gain 9 index spots and Materials are expected to gain 3 spots. Consumer Discretionary could lose 5 spots and Information Technology could lose 4 spots.

Henderson Land (12 HK): Large Passive Flow Coming Up as Shorts Cover

Henderson Land Development (12 HK) will be added to a global sector index at the close on 20 June.
Estimated passive buying in Henderson Land Development (12 HK) is 42m shares (US$131.5m; 7.5x ADV).
The stock is up over the last 2 months as shorts have covered. Performance is in line with peers and positioning does not appear to be excessive.

FXI Rebalance: Pop Mart, SF Holding In; China Merchant Sec, China Railway Out

Pop Mart (9992 HK) and S.F. Holding (6936 HK) will replace China Railway Group (390 HK) and China Merchants Securities (6099 HK) in the iShares China Large-Cap (FXI) (FXI US).
Passive trackers will need to buy between 0.4-0.6x ADV in the adds and sell between 0.5-1.3x ADV in the deletes. There are some small capping flows too.
There are a lot of shorts in Pop Mart (9992 HK), China Railway Group Ltd H (390 HK) and China China Merchants Securities Co Ltd (H) (6099 HK).

ChiNext/ChiNext 50 Index Rebalance: US$1.3bn Round-Trip Trade

There are 8 changes for the ChiNext Index (SZ399006 INDEX EQUITY) and 5 changes for the ChiNext 50 Index at the June rebalance.
We correctly forecast 7/8 and 8/8 for the Chinext Index adds/deletes and were 4/5 and 5/5 for the Chinext50 Index adds/deletes.
Based on the estimated passive tracking AUM, the round-trip trade across both indices is estimated to be CNY 9.55bn (US$1.33bn).

STTF Index Rebalance: Keppel DC REIT Replaces Jardine Cycle & Carriage

Keppel DC REIT (KDCREIT SP) will replace Jardine Cycle & Carriage (JCNC SP) in the SPDR Straits Times Index ETF (STTF SP) at the close on 20 June.
The SPDR Straits Times Index ETF (STTF SP) will need to trade between 3-5 days of ADV in the add and delete.
The ETF trading could help Keppel DC REIT (KDCREIT SP) break out of its short-term downtrend and could add further pressure on Jardine Cycle & Carriage (JCNC SP).

ASX Short Interest Weekly (May 30th): Sigma Pharmaceuticals, Evolution Mining, Westpac, Goodman

By Ke Yan, CFA, FRM

We analyzed the changes in short interest of ASX Stocks as of May 30th (reported today). The aggregated short interest was USD27.2bn.
We tabulate league tables for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
We highlight short interest changes in Sigma Pharmaceuticals, Evolution Mining, Westpac, Goodman, Wisetech Global, Rio Tinto, Treasury Wine Estates, Gpt, National Australia Bank.

Higher Rubber Values Come In Handy For Vietnam, Though Volume Down

By Vinod Nedumudy

During January-April 2025, exports at 452,866 tons, down 11% YoY
January-April 2025 exports value at US$872.78 mn, up 20.4% YoY
Vietnam Rubber Group reports net profit of US$45.4 mn in Q1 2025

Japan Weekly | Geopolitics Rule as Semis Shine and Autos Stumble

By Mark Chadwick

Japanese equities dipped as geopolitical tensions weighed on autos, though semiconductor stocks surged after Nvidia regained its crown as top global firm.
Japan’s Q1 capex jumped 6.4% amid pre-tariff investment, but weak household spending and falling real wages signaled persistent domestic demand fragility.
Toyota Industries fell 10% after unveiling a privatization plan priced below market expectations, raising investor governance concerns despite likely deal approval.

Taiwan Top 50 ETF Rebalance: Elite Materials Added (But Bigger Sell Flows Elsewhere)

Elite Material (2383 TT) will be added to the Yuanta/P-Shares Taiwan Top 50 ETF in June and will replace Unimicron Technology (3037 TT).
ETF AUM has now crossed US$20bn and passive trackers will need to buy 1x ADV in Elite Material (2383 TT) and sell 1.2x ADV in Unimicron Technology (3037 TT).
Importantly, Elite Material (2383 TT)‘s stock price rally results in a lower dividend yield and the stock will be deleted from another ETF where the passive selling is much larger.

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Jun 07

Most Read: BYD, Solar Industries India, Henderson Land Development, Pop Mart International Group L, Keppel DC REIT, Bank of Jiangsu , Tam Jai International, FnGuide Inc, Great Eastern Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$8.1bn of Flows Post Capping (June 2025)
NIFTY200 Momentum30 Index Rebalance Preview: 69% One-Way Turnover & US$1.9bn Trade
Henderson Land (12 HK): Large Passive Flow Coming Up as Shorts Cover
FXI Rebalance: Pop Mart, SF Holding In; China Merchant Sec, China Railway Out
STTF Index Rebalance: Keppel DC REIT Replaces Jardine Cycle & Carriage
China A50 ETF Rebalance: One Set of Changes
Tam Jai (2217 HK): Toridoll (3397 JP)’s Excellent Offer. Still.
HEW: Poorly Positioned Doves
FnGuide Sector ETF Boom: Sniffing Out Uncrowded Flow Trades
Great Eastern (GE SP): OCBC Bumps Terms – $30.15/Share Exit Offer

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$8.1bn of Flows Post Capping (June 2025)

The June rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today’s closing prices to cap the index constituent weights at 8%/12%. This leads to large flows.
The net round-trip trade across all stocks across the four indices is estimated at HK$63.55bn (US$8.1bn). There are 12 stocks with over 2x ADV to trade from passive trackers.
The trade size is much bigger than usual due to the inclusion of BYD in the HSTECH Index and due to a change in the FAF methodology for Secondary Listings.

NIFTY200 Momentum30 Index Rebalance Preview: 69% One-Way Turnover & US$1.9bn Trade

There could be 20 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 27 June.
If all changes are on expected lines, one-way turnover is estimated at 68.7% and that will result in a round-trip trade of INR 159bn (US$1.87bn).
Financials are expected to gain 9 index spots and Materials are expected to gain 3 spots. Consumer Discretionary could lose 5 spots and Information Technology could lose 4 spots.

Henderson Land (12 HK): Large Passive Flow Coming Up as Shorts Cover

Henderson Land Development (12 HK) will be added to a global sector index at the close on 20 June.
Estimated passive buying in Henderson Land Development (12 HK) is 42m shares (US$131.5m; 7.5x ADV).
The stock is up over the last 2 months as shorts have covered. Performance is in line with peers and positioning does not appear to be excessive.

FXI Rebalance: Pop Mart, SF Holding In; China Merchant Sec, China Railway Out

Pop Mart (9992 HK) and S.F. Holding (6936 HK) will replace China Railway Group (390 HK) and China Merchants Securities (6099 HK) in the iShares China Large-Cap (FXI) (FXI US).
Passive trackers will need to buy between 0.4-0.6x ADV in the adds and sell between 0.5-1.3x ADV in the deletes. There are some small capping flows too.
There are a lot of shorts in Pop Mart (9992 HK), China Railway Group Ltd H (390 HK) and China China Merchants Securities Co Ltd (H) (6099 HK).

STTF Index Rebalance: Keppel DC REIT Replaces Jardine Cycle & Carriage

Keppel DC REIT (KDCREIT SP) will replace Jardine Cycle & Carriage (JCNC SP) in the SPDR Straits Times Index ETF (STTF SP) at the close on 20 June.
The SPDR Straits Times Index ETF (STTF SP) will need to trade between 3-5 days of ADV in the add and delete.
The ETF trading could help Keppel DC REIT (KDCREIT SP) break out of its short-term downtrend and could add further pressure on Jardine Cycle & Carriage (JCNC SP).

China A50 ETF Rebalance: One Set of Changes

The iShares A50 China (2823 HK) and CSOP China A50 (HKD) (2822 HK) ETFs will rebalance their holdings at the close on 20 June.
Bank of Jiangsu (600919 CH) will replace Great Wall Motor (601633 CH) in the ETFs and passives will need to trade between 0.4-0.6x ADV in the stocks.
This change is a surprise to us and there could be a short-term move in the stocks.

Tam Jai (2217 HK): Toridoll (3397 JP)’s Excellent Offer. Still.

On the 17th Feb, a specialty restaurant-operator Tam Jai (2217 HK) announced an Offer, by way of a Scheme, from TORIDOLL (3397 JP) at HK$1.58/share, a 75.56% premium to undisturbed.
This should get up; but really, given the recent Soundwill Holdings (878 HK) and Goldlion Holdings (533 HK) failures, small, illiquid arbs are not the preferred haven for arb investors.
The Scheme Doc is now out, with a Court Meeting on the 30th June, and payment on or before the 26 August. The IFA (Lego Corporate) says “fair & reasonable“.

HEW: Poorly Positioned Doves

By Phil Rush

The ECB was even more hesitant to signal cuts than we expected, with the level after the unsurprising cut now deemed well-positioned. Cuts will require downside news.
Disinflationary surprises across the Euro area in the May flash releases are already embedded in that assessment. Doves are poorly positioned for this reaction function.
US inflation data may be the most crucial global release next week, although the signal may not be clear. Statistical issues affect the UK labour market and GDP data.

FnGuide Sector ETF Boom: Sniffing Out Uncrowded Flow Trades

By Sanghyun Park

Korea’s ETF market just hit KRW 200T AUM — doubling in under 2 years. ETFs now make up ~10% of KOSPI’s cap and over half its daily trading volume.
FnGuide dominates Korea’s sector theme ETF space, capturing ~KRW 9T of the KRW 14T market — far ahead of KRX — with momentum accelerating in early 2025.
FnGuide’s rebalancing process is drawing more trader interest lately, with rising inquiries suggesting faster market learning — prompting earlier pre-positioning in sector ETF flow trades.

Great Eastern (GE SP): OCBC Bumps Terms – $30.15/Share Exit Offer

The prior Offer for Great Eastern Holdings (GE SP) closed on the 12th July 2024, with OCBC holding 93.62%. Shares have been suspended ever since. Compulsory acquisition was not afforded.
To break the deadlock, I mused in This Needs To Be Sorted: Great Eastern (GE SP)’s Protracted Suspension, that OCBC needed to come out with a improved Offer of ~S$30/share.
That has now unfolded. Minorities have the option of a S$30.15/share Exit Offer; or voting for the resumption of trading, which will be possible via the issuance of bonus shares.

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Jun 06

Most Read: Toyota Industries, Mediatek Inc, Mitsui Matsushima, BYD, Henderson Land Development, Pop Mart International Group L, Virgin Australia Holdings, Makino Milling Machine Co, Tam Jai International, Wistron Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

[Japan M&A] Toyota Inds (6201) Proposed Takeover – It Looks Bad, and It’s Worse Than It Looks
TIP Customized Taiwan Select High Dividend Index Rebalance: 22 Changes as Expected
[Japan Activism] Murakami Owns ~42% and Company Announces 31.3% Buyback
HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$8.1bn of Flows Post Capping (June 2025)
Henderson Land (12 HK): Large Passive Flow Coming Up as Shorts Cover
FXI Rebalance: Pop Mart, SF Holding In; China Merchant Sec, China Railway Out
Virgin Australia IPO – Not Terribly Exciting, After Significant Items Adjustment
MBK Partners Plans to Launch a Tender Offer for Makino Milling Machine
Tam Jai (2217 HK): Anxiety Creeps in Ahead of the Scheme Document
Wistron GDR Offering – Well Flagged US$922m Offering, Discount Slightly Wider than Recent Deals

[Japan M&A] Toyota Inds (6201) Proposed Takeover – It Looks Bad, and It’s Worse Than It Looks

2wks ago I said “a deal could be announced near-term.” 2wks later we have a deal. But it is a bad deal for TICO minorities. Low price. Minimal transparency. Awful.
But if you dig through deal structure and economics, it is worse than it looks. It takes digging to understand how bad, and they could tell you, but they won’t.
The deal will take time. Things will be in limbo til then. And Toyota Group governance and capital allocation is conditional on this deal getting done, which is also bad.

TIP Customized Taiwan Select High Dividend Index Rebalance: 22 Changes as Expected

There are 16 adds and 6 deletes for the TIP Customized Taiwan Select High Dividend Index in June. The TIP Taiwan Select High Dividend ETF has an AUM of US$12.4bn.
The ETF has started trading the stocks and are expected to continue trading for the next 7 trading days. In reality, the process could drag on for some stocks.
The index committee appears to have a little discretion in choosing the inclusions with one expected add not being added and one lower ranked stock being added to the index.

[Japan Activism] Murakami Owns ~42% and Company Announces 31.3% Buyback

With earnings today (which beat guidance), Mitsui Matsushima (1518 JP) announced upbeat guidance for next year, a very large dividend hike from ¥130/share to ¥230/share, and a Very Large Buyback.
The buyback is ¥20bn (vs ¥47bn market cap) or 3.5mm shares (31.3%). It starts 2 June. Astute Murakami trackers may recognise the potential pattern here.
If the company buys back all 3.5mm shares at just below book, EPS of ¥756 = 12.9% ROE and PER of 7.8x. Even up 30% from here that isn’t super-rich.

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$8.1bn of Flows Post Capping (June 2025)

The June rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today’s closing prices to cap the index constituent weights at 8%/12%. This leads to large flows.
The net round-trip trade across all stocks across the four indices is estimated at HK$63.55bn (US$8.1bn). There are 12 stocks with over 2x ADV to trade from passive trackers.
The trade size is much bigger than usual due to the inclusion of BYD in the HSTECH Index and due to a change in the FAF methodology for Secondary Listings.

Henderson Land (12 HK): Large Passive Flow Coming Up as Shorts Cover

Henderson Land Development (12 HK) will be added to a global sector index at the close on 20 June.
Estimated passive buying in Henderson Land Development (12 HK) is 42m shares (US$131.5m; 7.5x ADV).
The stock is up over the last 2 months as shorts have covered. Performance is in line with peers and positioning does not appear to be excessive.

FXI Rebalance: Pop Mart, SF Holding In; China Merchant Sec, China Railway Out

Pop Mart (9992 HK) and S.F. Holding (6936 HK) will replace China Railway Group (390 HK) and China Merchants Securities (6099 HK) in the iShares China Large-Cap (FXI) (FXI US).
Passive trackers will need to buy between 0.4-0.6x ADV in the adds and sell between 0.5-1.3x ADV in the deletes. There are some small capping flows too.
There are a lot of shorts in Pop Mart (9992 HK), China Railway Group Ltd H (390 HK) and China China Merchants Securities Co Ltd (H) (6099 HK).

Virgin Australia IPO – Not Terribly Exciting, After Significant Items Adjustment

Bain Capital is looking to raise around US$440m via selling some of its stake in Virgin Australia Holdings (VAH AU).
Virgin Australia is the second largest airline group operating in the Australian aviation market, with an average 32% domestic RPT capacity market share in CY24.
In this note, we look at the company’s past performance and provide our thoughts on valuations.

MBK Partners Plans to Launch a Tender Offer for Makino Milling Machine

MBK Partners plans to launch a tender offer for Makino Milling Machine (6135 JP) at 11,751 yen per share by early December to take over the controlling ownership.
The key long-term investment case for Makino is that it is one of the best companies in the world for making advanced machine tools that are increasingly becoming more sophisticated.
One could make the argument that this may not the final offer and some investors may require slightly higher prices in order to make the deal final.

Tam Jai (2217 HK): Anxiety Creeps in Ahead of the Scheme Document

The spread to TORIDOLL Holdings Corporation (3397 JP)’s HK$1.58 offer for Tam Jai International (2217 HK) has risen to 9.7% ahead of the scheme document’s release.
Several readers have asked whether the Tam Jai offer will mirror the Goldlion and Soundwill deal break. The schemes share similarities but are also different in several ways.
The scheme’s vote risk has undoubtedly increased partly due to the recent 2025 results and deal breaks. This situation warrants a safety-first approach.

Wistron GDR Offering – Well Flagged US$922m Offering, Discount Slightly Wider than Recent Deals

By Akshat Shah

Wistron Corp (3231 TT) is looking to raise up to US$922m in its global depository receipts (GDRs) offering.
Similar to previous GDR listings, the firm has undergone a long drawn out process prior to launching the deal, having to jump through a number of board/shareholder/regulatory approval loops.
In this note, we run the deal through our ECM framework and comment on deal dynamics.

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✓ Company Analytics and News
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Jun 05

Most Read: Toyota Industries, Mediatek Inc, BYD, Solar Industries India, Pop Mart International Group L, Mayne Pharma, Henderson Land Development and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

[Japan M&A] Toyota Inds (6201) Proposed Takeover – It Looks Bad, and It’s Worse Than It Looks
Toyota Industries (6201 JP): After a High, Comes the Low of a Takeunder
TIP Customized Taiwan Select High Dividend Index Rebalance: 22 Changes as Expected
HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$8.1bn of Flows Post Capping (June 2025)
NIFTY200 Momentum30 Index Rebalance Preview: 69% One-Way Turnover & US$1.9bn Trade
FXI Rebalance: Pop Mart, SF Holding In; China Merchant Sec, China Railway Out
Mayne Pharma (MYX AU): Twists and Turns as Cosette Chases a Get-Out-Of-Jail-Free Card
Henderson Land (12 HK): Large Passive Flow Coming Up as Shorts Cover
US vs EU: Mutually Assured Destruction?
Lee Jae-Myung Becomes the New South Korean President – Four Investment Themes That Could Outperform

[Japan M&A] Toyota Inds (6201) Proposed Takeover – It Looks Bad, and It’s Worse Than It Looks

2wks ago I said “a deal could be announced near-term.” 2wks later we have a deal. But it is a bad deal for TICO minorities. Low price. Minimal transparency. Awful.
But if you dig through deal structure and economics, it is worse than it looks. It takes digging to understand how bad, and they could tell you, but they won’t.
The deal will take time. Things will be in limbo til then. And Toyota Group governance and capital allocation is conditional on this deal getting done, which is also bad.

Toyota Industries (6201 JP): After a High, Comes the Low of a Takeunder

Toyota Industries (6201 JP) disclosed a preconditional tender offer from Toyota Fudosan at JPY16,300, a 23.3% premium to the undisturbed price but a 11.4% discount to last close.
While representing a pre-rumour all-time high, the offer is below the midpoint of the special committee IFA DCF valuation range. The Board has a neutral recommendation.
The offer undermines minorities as it lacks split pricing for the Toyota Motor (7203 JP) and its affiliates’ shareholding and likely undervalues the significant real estate holdings.

TIP Customized Taiwan Select High Dividend Index Rebalance: 22 Changes as Expected

There are 16 adds and 6 deletes for the TIP Customized Taiwan Select High Dividend Index in June. The TIP Taiwan Select High Dividend ETF has an AUM of US$12.4bn.
The ETF has started trading the stocks and are expected to continue trading for the next 7 trading days. In reality, the process could drag on for some stocks.
The index committee appears to have a little discretion in choosing the inclusions with one expected add not being added and one lower ranked stock being added to the index.

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$8.1bn of Flows Post Capping (June 2025)

The June rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today’s closing prices to cap the index constituent weights at 8%/12%. This leads to large flows.
The net round-trip trade across all stocks across the four indices is estimated at HK$63.55bn (US$8.1bn). There are 12 stocks with over 2x ADV to trade from passive trackers.
The trade size is much bigger than usual due to the inclusion of BYD in the HSTECH Index and due to a change in the FAF methodology for Secondary Listings.

NIFTY200 Momentum30 Index Rebalance Preview: 69% One-Way Turnover & US$1.9bn Trade

There could be 20 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 27 June.
If all changes are on expected lines, one-way turnover is estimated at 68.7% and that will result in a round-trip trade of INR 159bn (US$1.87bn).
Financials are expected to gain 9 index spots and Materials are expected to gain 3 spots. Consumer Discretionary could lose 5 spots and Information Technology could lose 4 spots.

FXI Rebalance: Pop Mart, SF Holding In; China Merchant Sec, China Railway Out

Pop Mart (9992 HK) and S.F. Holding (6936 HK) will replace China Railway Group (390 HK) and China Merchants Securities (6099 HK) in the iShares China Large-Cap (FXI) (FXI US).
Passive trackers will need to buy between 0.4-0.6x ADV in the adds and sell between 0.5-1.3x ADV in the deletes. There are some small capping flows too.
There are a lot of shorts in Pop Mart (9992 HK), China Railway Group Ltd H (390 HK) and China China Merchants Securities Co Ltd (H) (6099 HK).

Mayne Pharma (MYX AU): Twists and Turns as Cosette Chases a Get-Out-Of-Jail-Free Card

Mayne Pharma (MYX AU) disclosed that Cosette served a scheme termination notice. Mayne maintains that a material adverse clause was not breached and considers the termination notice invalid.
The Cosette MAC breach claims likely hinge on establishing that forecasts provided during due diligence are materially lower than the unaudited management accounts. Precedents do not favour Mayne.
While the last close price (A$4.48) is below the undisturbed price (HK$5.41), there remains downside. My estimated deal break valuation range is A$3.26-A$4.00.

Henderson Land (12 HK): Large Passive Flow Coming Up as Shorts Cover

Henderson Land Development (12 HK) will be added to a global sector index at the close on 20 June.
Estimated passive buying in Henderson Land Development (12 HK) is 42m shares (US$131.5m; 7.5x ADV).
The stock is up over the last 2 months as shorts have covered. Performance is in line with peers and positioning does not appear to be excessive.

US vs EU: Mutually Assured Destruction?

By Alastair Newton

Section 899 is generally understood to be about leverage and deterrence.
It is unlikely to be fully implemented due to the potential harm it could cause to the US.
There are concerns about what could happen if the EU challenges this approach or if it is partially intended as a method to raise revenue.

Lee Jae-Myung Becomes the New South Korean President – Four Investment Themes That Could Outperform

Now that Lee Jae-Myung has become new South Korean President, the uncertainty revolving who will lead South Korea in the next five years is now over.
In this insight, we discuss four investment themes (related to Lee Jae-Myung becoming the new South Korean President) that could outperform the market for the remainder of 2025.
The four investment themes include Korean Holdcos/Quasi Holdcos, Korean Cultural Contents, Securities, and SK Group Companies.

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✓ Company Analytics and News
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Jun 04

Most Read: Yang Ming Marine Transport, Pasona Group, Toyota Industries, BYD, Nexchip Semiconductor , Bluefocus Communication Group Co, Ltd., New World Development, Makino Milling Machine Co and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Toyota Industries (6201) – SURPRISE! It’s a TOYODA Takeover Proposal (Good Governance May Not Win)
TIP Customized Taiwan Select High Div Index Rebal Preview: Methodology Change Leads to US$9bn Trade
[Japan Activism] Pasona Group (2168 JP) – Three New Things Of Mixed Importance
Toyota Industries (6201 JP): After a High, Comes the Low of a Takeunder
[Japan M&A] Toyota Inds (6201) Proposed Takeover – It Looks Bad, and It’s Worse Than It Looks
HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$8.1bn of Flows Post Capping (June 2025)
CNI Semiconductor Chips Index Rebalance: One Change with Big Impact
ChiNext/ChiNext 50 Index Rebalance: US$1.3bn Round-Trip Trade
NWD (17 HK): Markets Pricing In A Bust
Makino Milling Machine (6135 JP): MBK’s Preconditional Offer Is Not the Likely Endgame

Toyota Industries (6201) – SURPRISE! It’s a TOYODA Takeover Proposal (Good Governance May Not Win)

On Friday after the close, media reports surfaced that Toyota Motor (7203 JP) Group chairman and founding family member had put forth a take-private proposal to Toyota Industries (6201 JP).
The number quoted was ¥6trln market cap (most) or EV (FT), financed by personal funds, 3 megabanks, and reportedly some group companies.
¥6trln market cap would be +50%. ¥6trln EV +16%. Simultaneously shocking but somehow not surprising. Opportunistic, and surprisingly elegant as a family/group/cultural solution. More below.

TIP Customized Taiwan Select High Div Index Rebal Preview: Methodology Change Leads to US$9bn Trade

The TIP Taiwan Select High Dividend ETF (00919 TW) tracks the TIP Customized Taiwan Select High Dividend Index and has an AUM of TWD 363bn (US$12.1bn).
Following a change in methodology, there could be 16 adds and 6 deletes in June with an estimated one-way turnover of 39% and a round-trip trade of US$9bn.
We expect the adds to outperform the deletes over the next few days, following which reversion could set in.

[Japan Activism] Pasona Group (2168 JP) – Three New Things Of Mixed Importance

Pasona Group (2168 JP) is a “value stock.” It has loads of cash (but less than you think) and significant ongoing governance issues, but they are doing a TINY buyback.
Several weeks ago we got an announcement which was odd. Not completely odd, just odd. Now in the past week we have market activity/announcements which make one wonder.
This piece attempts to interpret some of the recent data/info points. One is odd. Another is odd but meaningful (but different than people think). A third is just technical.

Toyota Industries (6201 JP): After a High, Comes the Low of a Takeunder

Toyota Industries (6201 JP) disclosed a preconditional tender offer from Toyota Fudosan at JPY16,300, a 23.3% premium to the undisturbed price but a 11.4% discount to last close.
While representing a pre-rumour all-time high, the offer is below the midpoint of the special committee IFA DCF valuation range. The Board has a neutral recommendation.
The offer undermines minorities as it lacks split pricing for the Toyota Motor (7203 JP) and its affiliates’ shareholding and likely undervalues the significant real estate holdings.

[Japan M&A] Toyota Inds (6201) Proposed Takeover – It Looks Bad, and It’s Worse Than It Looks

2wks ago I said “a deal could be announced near-term.” 2wks later we have a deal. But it is a bad deal for TICO minorities. Low price. Minimal transparency. Awful.
But if you dig through deal structure and economics, it is worse than it looks. It takes digging to understand how bad, and they could tell you, but they won’t.
The deal will take time. Things will be in limbo til then. And Toyota Group governance and capital allocation is conditional on this deal getting done, which is also bad.

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$8.1bn of Flows Post Capping (June 2025)

The June rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today’s closing prices to cap the index constituent weights at 8%/12%. This leads to large flows.
The net round-trip trade across all stocks across the four indices is estimated at HK$63.55bn (US$8.1bn). There are 12 stocks with over 2x ADV to trade from passive trackers.
The trade size is much bigger than usual due to the inclusion of BYD in the HSTECH Index and due to a change in the FAF methodology for Secondary Listings.

CNI Semiconductor Chips Index Rebalance: One Change with Big Impact

There is 1 change for the CNI Semiconductor Chips Index that will be implemented at the close on 13 June.
Passive trackers are estimated to buy 2.7x ADV in Nexchip Semiconductor (688249 CH) and sell 1.5x ADV in Amlogic Shanghai (688099 CH).
The delete has outperformed the inclusion this year. With 8 days left to implementation of the changes and decent impact, there could be a short-term reversal.

ChiNext/ChiNext 50 Index Rebalance: US$1.3bn Round-Trip Trade

There are 8 changes for the ChiNext Index (SZ399006 INDEX EQUITY) and 5 changes for the ChiNext 50 Index at the June rebalance.
We correctly forecast 7/8 and 8/8 for the Chinext Index adds/deletes and were 4/5 and 5/5 for the Chinext50 Index adds/deletes.
Based on the estimated passive tracking AUM, the round-trip trade across both indices is estimated to be CNY 9.55bn (US$1.33bn).

NWD (17 HK): Markets Pricing In A Bust

0.052x P/B! That’s New World Development (17 HK)‘s current trailing P/B ratio; roughly a quarter of the next comparable real estate peer.
What’s new? The latest decline followed an announcement on the 30th May that it would defer payments on its perpetual bonds.
NWD’s 6.15% and 4.8% perpetuals fell to 23 cents and 15.5 cents on the dollar on 2nd June, suggesting the market is pricing in the possibility of a bust.

Makino Milling Machine (6135 JP): MBK’s Preconditional Offer Is Not the Likely Endgame