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Most Read

Apr 23
0

Most Read: Chubu Electric Power Co, Hitachi Transport System, Toshiba Corp, Yangzijiang Shipbuilding and more

By | Daily Briefs, Most Read

In today’s briefing:

  • S&P Global Clean Energy Index: Changes for Asia & Impact
  • Hitachi Transport (9086) Takeover Deal Imminent
  • Toshiba (6502) – Now We Have “That One Piece Of News”
  • Straits Times Index (STI) Rebalance Preview: Impact of Yangzijiang Shipbuilding Spin-Off
  • Toshiba – Market Reaction to Proposal Solicitation News Is a Great Short Opportunity

S&P Global Clean Energy Index: Changes for Asia & Impact

By Brian Freitas

Hitachi Transport (9086) Takeover Deal Imminent

By Travis Lundy

  • The Nikkei Leak Article of the Hitachi Transport takeover price is out. That suggests board meetings and deal announcement are imminent
  • The price suggested in the article comes out to be just under ¥8,000. 
  • Past deals between KKR and Hitachi for Hitachi subs (and the language of the article on deal structure) suggest the minority Tender Offer Price could be different.

Toshiba (6502) – Now We Have “That One Piece Of News”

By Travis Lundy

  • Toshiba announced that it will start a sale process by offering info, and running a two-round “strategic alternative” process. Info and non-binding proposals followed by due dili and binding proposals.
  • For me, this seems like “That One Piece Of News” which is required to make the range jump, and to get people into Now-We-Are-Going-To-Get-A-Deal. 
  • We may not, of course, and it will be a long, complicated road. But this is a step change. Starting a beauty contest is a big deal.

Straits Times Index (STI) Rebalance Preview: Impact of Yangzijiang Shipbuilding Spin-Off

By Brian Freitas

Toshiba – Market Reaction to Proposal Solicitation News Is a Great Short Opportunity

By Mio Kato

  • Toshiba announced yesterday that they would be soliciting proposals on strategic alternatives specifically mentioning privatisation. 
  • The stock is up 3.5% on the news and had been up as much as 6.5% in a very weak market despite the news being well foreshadowed. 
  • At the current price we believe there could be limited scope for a significant premium and much downside if tech turns over.

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Apr 22
0

Most Read: Toshiba Corp, LG Energy Solution, Keppel Corp, Zhihu Technology, Softbank Group and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Toshiba – Some Thoughts on the Bain Article
  • LG Energy IPO Lock-Up – Some Might Be Tempted to Book Profits
  • Keppel : Thinking About Keppel/SMM MergeCo and NEW KEPPEL Pro-Forma Opportunities
  • Zhihu HK Secondary Listing Trading – Delivered the Correction but Still Set for the Worst Debut Yet
  • Softbank Group – Strong Dollar Impact Boosts Buyback Math Although Debt May Rise Too

Toshiba – Some Thoughts on the Bain Article

By Mio Kato

  • Yesterday the Nikkei published an article featuring Bain MD Yuji Sugimoto who also featured heavily during their bid for Kioxia. 
  • Sugimoto commented that in the event of a buyout there would be no break-up of Toshiba. 
  • While plausibly a PR move directed at employees that stance raises the question of exactly how they would unlock value.

LG Energy IPO Lock-Up – Some Might Be Tempted to Book Profits

By Sumeet Singh

  • LG Energy Solution (LGES) raised US$10.8bn in its South Korea IPO in Jan 22. Its three-month lockup is set to expire soon.
  • LGES is the EV battery unit of LG Chem. The company is a major supplier to customers including Tesla and General Motors.
  • In this note, we will talk about the lock-up dynamics and updates since our last note.

Keppel : Thinking About Keppel/SMM MergeCo and NEW KEPPEL Pro-Forma Opportunities

By Travis Lundy

  • 20 months ago, Temasek walked away from a deal to buy control of Keppel Corp (KEP SP) as the O&M business saw large writedowns and covid stoppage losses.
  • The story? A possible Keppel O&M and Sembcorp Marine (SMM SP) merger. SMM was recapped and spun out of Sembcorp Industries (SCI SP) then recapped again. 
  • Now it’s crunch time. Keppel & SMM hope to update investors on a merger plan by end of April. This insight looks at what to look out for.

Zhihu HK Secondary Listing Trading – Delivered the Correction but Still Set for the Worst Debut Yet

By Sumeet Singh

  • Zhihu Technology (ZH US) raised around US$106m via a dual primary listing in Hong Kong. 
  • Unlike all the prior dual primary/secondary listings which have been done via offering either only primary or a mix of primary+secondary shares, Zhihu’s offering will consist of only secondary shares.
  • In this note, we’ll talk about the demand and trading dynamics.

Softbank Group – Strong Dollar Impact Boosts Buyback Math Although Debt May Rise Too

By Kirk Boodry

  • The strong dollar has boosted Softbank’s predominantly dollar-linked asset value by 9% in yen terms (although reported net debt will also increase)
  • Also relevant is a decrease in the dollar cost of its ¥1,000bn share repurchase which was $8.8bn when announced but costs less than $8bn at the current exchange rate.
  • This has kept the share price up YTD and QTD despite weakness in the investment portfolio but tech weakness probably has more legs than dollar appreciation

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Apr 21
0

Most Read: Chubu Electric Power Co, Ramsay Health Care, Toshiba Corp, Kakao Pay and more

By | Daily Briefs, Most Read

In today’s briefing:

  • S&P Global Clean Energy Index: Changes for Asia & Impact
  • Ramsay Health Care (RHC AU): Indicative Proposal from KKR & Index Implications
  • KKR Bids $88/Share For Ramsay Health
  • Toshiba – Some Thoughts on the Bain Article
  • Kakao Pay Passive Play Opportunity on June 9

S&P Global Clean Energy Index: Changes for Asia & Impact

By Brian Freitas

Ramsay Health Care (RHC AU): Indicative Proposal from KKR & Index Implications

By Brian Freitas

  • A KKR led consortium has made a conditional, non-binding, indicative proposal to acquire 100% of the shares in Ramsay Health Care (RHC AU) at A$88/share in cash.
  • The offer values Ramsay Health Care (RHC AU) at A$20.14bn and is a premium of 36.7% to the last close. The premium is over 30% even using longer term VWAPs.
  • There will be changes to the S&P/ASX family of indices to maintain the number of index members. We will know more once an indicative timeline is published.

KKR Bids $88/Share For Ramsay Health

By David Blennerhassett

  • Hospital operator Ramsay Health Care (RHC AU) has announced an unsolicited, non-binding Offer from KKR, by way of a Scheme, at A$88.00/share, in cash, a 36.7% premium to last close.
  • Presumably, Paul Ramsay’s Ramsay Foundation, Ramsay’s largest shareholder, is supportive, otherwise there is no deal.
  • Due diligence has been granted. If successful, this would be one of the largest LBOs by a private equity outfit in Australia. 

Toshiba – Some Thoughts on the Bain Article

By Mio Kato

  • Yesterday the Nikkei published an article featuring Bain MD Yuji Sugimoto who also featured heavily during their bid for Kioxia. 
  • Sugimoto commented that in the event of a buyout there would be no break-up of Toshiba. 
  • While plausibly a PR move directed at employees that stance raises the question of exactly how they would unlock value.

Kakao Pay Passive Play Opportunity on June 9

By Sanghyun Park

  • A passive play opportunity for Kakao Pay (377300 KS) is approaching.
  • Its float rate will likely be raised in the KOSPI 200 June rebalancing. Then, in the KOSPI 200 IT Sector Index, it will again experience the most significant passive inflow.
  • The recent share price volatility has increased considerably. So, instead of a preemptive position buildup, a shorter-window passive play seems more appropriate just before the rebalancing trading day.

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Apr 20
0

Most Read: Sumber Alfaria Trijaya Tbk Pt, DiDi Global, Chubu Electric Power Co, SK Telecom, Japan Post Holdings and more

By | Daily Briefs, Most Read

In today’s briefing:

  • MSCI May 2022 Index Rebalance Preview: Changes as We Start the Review Period
  • DIDI Decides To Delist – Now It Gets Messy
  • S&P Global Clean Energy Index: Changes for Asia & Impact
  • Korea FOL (Foreign Ownership Limit) Stock List: MSCI Flow Trading on KT & SKT
  • Japan Post Holdings – Good Play On the BOJ’s Conundrum

MSCI May 2022 Index Rebalance Preview: Changes as We Start the Review Period

By Brian Freitas

DIDI Decides To Delist – Now It Gets Messy

By Travis Lundy

  • The company was told a year ago that it had data problems. It was then told in June it had serious data problems and was given 15 days to fix.
  • It did not. It listed itself, against the wishes of the regulators. Then it got in serious hot water. And it has only been getting hotter. 
  • A hoped-for HK Listing By Introduction was nixed 5 weeks ago. Now the Company is simply going to delist to try to solve its problems behind closed doors before relisting.

S&P Global Clean Energy Index: Changes for Asia & Impact

By Brian Freitas

Korea FOL (Foreign Ownership Limit) Stock List: MSCI Flow Trading on KT & SKT

By Sanghyun Park

  • SKT has a good chance of being deleted with the current level of foreign room. If it gets deleted, it will likely experience a passive outflow of 3.02x ADTV.  
  • KT Corp will also face the Price Cutoff Date, which should re-test KT’s foreign room status. The chances that it will eventually fail the inclusion also seem pretty high.
  • We need to engage in short-term trading aimed at the possibility that they will face a price correction around the MSCI May SAIR result announcement.

Japan Post Holdings – Good Play On the BOJ’s Conundrum

By Mio Kato

  • The BOJ looks increasingly trapped between a rapidly depreciating yen and a stated desire to hold rates low. 
  • We believe that the BOJ will eventually have to compromise on its 0.25% ceiling for the ten year JGB once inflation data gives them cover to do so. 
  • However, we believe Japan Post Holdings could potentially benefit from both macro forces and consider it one of the best risk-reward positions in Japan and perhaps globally.

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Apr 19
0

Most Read: Yangzijiang Shipbuilding, DiDi Global, 21Vianet Group, Renesas Electronics and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Index Rebalance & ETF Flow Recap: MSCI, TOPIX, KT/SKT, GoTo, Yangzijiang, Emperador, SK Shieldus
  • DIDI Decides To Delist – Now It Gets Messy
  • Merger Arb Mondays (18 Apr) – Yashili, VNET, Sezzle, Link Admin, Razer, Excelpoint, Guodian
  • Renesas (6723 JP) – On Top of Peer-Beating Growth, and Valuation… Watch for Buybacks
  • DiDi to Vote on US Delisting on 23 May

Index Rebalance & ETF Flow Recap: MSCI, TOPIX, KT/SKT, GoTo, Yangzijiang, Emperador, SK Shieldus

By Brian Freitas

  • The review period for the MSCI May SAIR starts on Monday, 18 April and will run for 10 trading days, though MSCI usually selects one of the first five days.
  • GoTo (GOTO IJ) listed during the last week and could be a Fast Entry to the IDX indices. The Yangzijiang Shipbuilding (YZJSGD SP) spinoff has index implications.
  • Relatively large inflows into China focused ETFs during the week, while there were outflows from Korea focused ETFs.

DIDI Decides To Delist – Now It Gets Messy

By Travis Lundy

  • The company was told a year ago that it had data problems. It was then told in June it had serious data problems and was given 15 days to fix.
  • It did not. It listed itself, against the wishes of the regulators. Then it got in serious hot water. And it has only been getting hotter. 
  • A hoped-for HK Listing By Introduction was nixed 5 weeks ago. Now the Company is simply going to delist to try to solve its problems behind closed doors before relisting.

Merger Arb Mondays (18 Apr) – Yashili, VNET, Sezzle, Link Admin, Razer, Excelpoint, Guodian

By Arun George

Renesas (6723 JP) – On Top of Peer-Beating Growth, and Valuation… Watch for Buybacks

By Travis Lundy

  • A bit over a year ago Renesas Electronics (6723 JP) announced its transaction to buy Dialog Semiconductor (DLG GR) for €4.8bn (roughly ¥624bn) and the transaction closed end-August 2021.
  • In September, Renesas announced a “Progress Update” covering various business segments, expectations for supply in the sector, and eventual “shareholder return” policy.
  • This past week the Nikkei carried an article talking about a possible stock buyback later this year. I explore.

DiDi to Vote on US Delisting on 23 May

By Arun George

  • DiDi Global (DIDI US) will hold an EGM on 23 May to vote to delist the ADS from the NYSE. The shares will not be listed on another exchange before delisting. 
  • Due to the regulatory restrictions, DiDi is losing market share and pricing power to competitors in China. The 4Q21 results were poor. 
  • Directors and key pre-IPO investors together account for 48.2% of outstanding shares, suggesting that the ordinary resolution will pass. 

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Apr 18
0

Most Read: JD.com Inc., Yangzijiang Shipbuilding, Toyo Construction and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Last Week in Event SPACE: JD.com, Suzuki, Twitter, Toyo Construction, Uniti Group, Singapore Press
  • Index Rebalance & ETF Flow Recap: MSCI, TOPIX, KT/SKT, GoTo, Yangzijiang, Emperador, SK Shieldus
  • Asia-Pac Weekly Risk Arb Wrap: Excelpoint, Tri Stage, Toyo, Uniti, Western Areas, Suchuang Gas
  • End of Nearly All Social Distancing Measures in Korea & How My Views of Mask Wearing Has Changed
  • A-H Premium Weekly: Real Estate, Industrials, Utilities Led the Decline

Last Week in Event SPACE: JD.com, Suzuki, Twitter, Toyo Construction, Uniti Group, Singapore Press

By David Blennerhassett

  • JD.com (9618 HK)‘s CCASS movements are a thing, and there are things going on in the background, but the things in the foreground are not as menacing as they appear. 
  • Suzuki Co Ltd (6785 JP)‘s NAV discount and implied stub plumb new lows. Again.
  • Musk has made a non-binding proposal for Twitter Inc (TWTR US) at US$54.20/share. Get it? Get it? Nudge nudge wink wink. That’s all part of the fun for him.

Index Rebalance & ETF Flow Recap: MSCI, TOPIX, KT/SKT, GoTo, Yangzijiang, Emperador, SK Shieldus

By Brian Freitas

  • The review period for the MSCI May SAIR starts on Monday, 18 April and will run for 10 trading days, though MSCI usually selects one of the first five days.
  • GoTo (GOTO IJ) listed during the last week and could be a Fast Entry to the IDX indices. The Yangzijiang Shipbuilding (YZJSGD SP) spinoff has index implications.
  • Relatively large inflows into China focused ETFs during the week, while there were outflows from Korea focused ETFs.

Asia-Pac Weekly Risk Arb Wrap: Excelpoint, Tri Stage, Toyo, Uniti, Western Areas, Suchuang Gas

By David Blennerhassett

End of Nearly All Social Distancing Measures in Korea & How My Views of Mask Wearing Has Changed

By Douglas Kim

  • Starting Monday, 18 April, South Korea will lift almost all social distancing measures after nearly two years.
  • Under the new measures, the previous restrictions including midnight business hour curfew for restaurants, cafes, and other businesses will be completely lifted. 
  • The pandemic to endemic reopening plays in Korea (19 stocks) are up on average 7% YTD, significantly outperforming KOSPI which is down 9.5% in the same period.

A-H Premium Weekly: Real Estate, Industrials, Utilities Led the Decline

By Ke Yan, CFA, FRM

  • We analyse the changes of A/H premium on 138 stocks over the last week.
  • Real Estate, Industrials, Utilities Led the week on week A-H premium decline of 2.7ppt. 
  • We highlight stocks including Shanghai Junshi, CIMC Vehicles, and CRCC Corp.

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Apr 17
0

Most Read: Singapore Press Holdings, Taiwan Semiconductor Sp Adr, Yangzijiang Shipbuilding, GoTo and more

By | Daily Briefs, Most Read

In today’s briefing:

  • SPH Shareholders – SPH REIT Options Decay in Value
  • TSMC – Great 1Q But Scope For Further Good News Looks Limited
  • Singapore: Succession Uncertainty Lifted, What Is Next?
  • Index Rebalance & ETF Flow Recap: MSCI, TOPIX, KT/SKT, GoTo, Yangzijiang, Emperador, SK Shieldus
  • ECM Weekly (17th Apr 2022)- Sk Shieldus, One Store, LIC, GoTo, Zhihu, Park24, PHC Holding, Visional

SPH Shareholders – SPH REIT Options Decay in Value

By Travis Lundy

  • Shares in Singapore Press Holdings (SPH SP) stopped trading a week ago. The election period to choose cash or cash and SPH REIT shares started yesterday.
  • The OBVIOUS choice is to take the cash. But you have ten days to see SPH REIT gain 2% to change your mind. 
  • I note Keppel wanted SPH back when SPHREIT was worth a fair bit less, but at that time they didn’t want SPHREIT when an MGO would have been cheaper.

TSMC – Great 1Q But Scope For Further Good News Looks Limited

By Mio Kato

  • TSMC’s 1Q results were extremely strong with revenue 4.15% above consensus and OP 9.04% above consensus. 
  • With the strong pricing power and favourable forex factored in consensus OP estimates for the year have moved up to TWD954bn in line with our start of year estimate. 
  • However, that now leaves limited further upside in our view and we expect earnings to decline next year rather than rise.

Singapore: Succession Uncertainty Lifted, What Is Next?

By Manu Bhaskaran

  • Lawrence Wong is slated to be the next PM. One cannot help but get a sense that the succession process was not as smooth as it might have been.
  • In the upcoming cabinet reshuffle, Wong is likely to be elevated to the deputy premiership with one of the contenders – Chan Chun Sing – as second deputy PM. 
  • Continuity in substantive policies is likely, the hallmark of Singapore politics – that the election of a new PM does not lead to any abrupt change in major policies.  

Index Rebalance & ETF Flow Recap: MSCI, TOPIX, KT/SKT, GoTo, Yangzijiang, Emperador, SK Shieldus

By Brian Freitas

  • The review period for the MSCI May SAIR starts on Monday, 18 April and will run for 10 trading days, though MSCI usually selects one of the first five days.
  • GoTo (GOTO IJ) listed during the last week and could be a Fast Entry to the IDX indices. The Yangzijiang Shipbuilding (YZJSGD SP) spinoff has index implications.
  • Relatively large inflows into China focused ETFs during the week, while there were outflows from Korea focused ETFs.

ECM Weekly (17th Apr 2022)- Sk Shieldus, One Store, LIC, GoTo, Zhihu, Park24, PHC Holding, Visional

By Sumeet Singh

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • On the IPOs front, Zhihu and the SK twins were the main active deals, with LIC being in the pipeline for a potential launch in the coming week.
  • Placement flows remained slow over the holiday shortened week. With Japan continuing to favour accelerated book build.

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Apr 16
0

Most Read: NIO Inc, Toyo Construction, Twitter Inc, SK Shieldus, Fast Retailing and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Hang Seng TECH Index Rebalance Preview: Big Impact as NIO (9866) Could Replace ASM Pacific (522)
  • ToyoKen (1890) Mystery Bidder Is Yamauchi No. 10 Family Office – And That Changes Things
  • Elon Musk Bids for All of Twitter 🤯
  • SK Shieldus IPO: Index Inclusion Timeline
  • Fast Retailing (9983) – Summer Is the Time for Shorts

Hang Seng TECH Index Rebalance Preview: Big Impact as NIO (9866) Could Replace ASM Pacific (522)

By Brian Freitas

ToyoKen (1890) Mystery Bidder Is Yamauchi No. 10 Family Office – And That Changes Things

By Travis Lundy

  • A Nikkei article this morning says the mystery bidder behind WK1/2/3 Limited is Nintendo founding family’s Yamauchi No.10 Family Office. This changes things more than just knowing their identity does.
  • To start, their website is the most fun investment management company website I have come across. It’s great.  https://y-n10.com/. It’s also well worth reading. It’s also worth noting their history.
  • Understanding the parameters here is key to understanding possible next steps.

Elon Musk Bids for All of Twitter 🤯

By Travis Lundy

  • Elon Musk has apparently sent a letter to Bret Taylor, Chairman of the Board of Twitter, saying he would make a bid for 100% of Twitter at US$54.20/share. 
  • Get it? Get it? Nudge nudge wink wink. That’s all part of the fun for him. 
  • The question is whether this bid, which creates problems of whether one should take it seriously vs literally, or vice versa, engenders more discussion about how the platform makes money.

SK Shieldus IPO: Index Inclusion Timeline

By Brian Freitas

  • SK Shieldus (ABFHIZ KS) is looking to raise up to US$860m selling a mix of primary and secondary shares. The stock is expected to in the second half of May.
  • The company will be valued at US$2.87bn at the top end of the IPO range and will not get Fast Entry to any of the major indices.
  • Entry to the KOSPI2 INDEX is unlikely, MSCI inclusion could take place at the November SAIR, while FTSE inclusion could take place at the December QIR.

Fast Retailing (9983) – Summer Is the Time for Shorts

By Mark Chadwick

  • Interim results were surprisingly strong considering the headwinds from China and rising costs
  • 2H guidance looks optimistic. China remains a key risk and we still see risks to the gross margin
  • The “R” word. Rising inflation, Rising Interest rates = Recession. Probably not good for consumers and certainly not good for high stock multiples

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Apr 15
0

Most Read: Toyo Construction, Twitter Inc, SK Shieldus, Excelpoint Technology and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Toyo Construction (1890) – Mystery Holders Now 17% (Or More)
  • ToyoKen (1890) Mystery Bidder Is Yamauchi No. 10 Family Office – And That Changes Things
  • Elon Musk Bids for All of Twitter 🤯
  • SK Shieldus IPO: Index Inclusion Timeline
  • WT Micro’s Offer For Excelpoint Tech

Toyo Construction (1890) – Mystery Holders Now 17% (Or More)

By Travis Lundy

  • WK 1-3 Limited are now (as of a week ago) 17.34% of Toyo Construction’s share register. They bought 40+% of volume in the relevant period, as I suggested they might.
  • On a realtime basis, they could be 20+%, but because no single entity is there they would not become top shareholder as a triumvirate.
  • I offer consolidated thoughts and like the idea of buying the dip.

ToyoKen (1890) Mystery Bidder Is Yamauchi No. 10 Family Office – And That Changes Things

By Travis Lundy

  • A Nikkei article this morning says the mystery bidder behind WK1/2/3 Limited is Nintendo founding family’s Yamauchi No.10 Family Office. This changes things more than just knowing their identity does.
  • To start, their website is the most fun investment management company website I have come across. It’s great.  https://y-n10.com/. It’s also well worth reading. It’s also worth noting their history.
  • Understanding the parameters here is key to understanding possible next steps.

Elon Musk Bids for All of Twitter 🤯

By Travis Lundy

  • Elon Musk has apparently sent a letter to Bret Taylor, Chairman of the Board of Twitter, saying he would make a bid for 100% of Twitter at US$54.20/share. 
  • Get it? Get it? Nudge nudge wink wink. That’s all part of the fun for him. 
  • The question is whether this bid, which creates problems of whether one should take it seriously vs literally, or vice versa, engenders more discussion about how the platform makes money.

SK Shieldus IPO: Index Inclusion Timeline

By Brian Freitas

  • SK Shieldus (ABFHIZ KS) is looking to raise up to US$860m selling a mix of primary and secondary shares. The stock is expected to in the second half of May.
  • The company will be valued at US$2.87bn at the top end of the IPO range and will not get Fast Entry to any of the major indices.
  • Entry to the KOSPI2 INDEX is unlikely, MSCI inclusion could take place at the November SAIR, while FTSE inclusion could take place at the December QIR.

WT Micro’s Offer For Excelpoint Tech

By David Blennerhassett

  • WT Microelectronics (3036 TT) has entered into an agreement to acquire electronic component distributor  Excelpoint Technology (EXLP SP) by way of a Scheme at a cash consideration of S$1.93/share.
  • This is an Offer premium 7.8% to last close but a 21.4% premium prior to the announcement Excelpoint was in discussions with a third party involving the company’s shares.
  • Albert Phuay (founder and CEO) will reinvest part of his cash consideration under the Scheme in 20% equity of the Acquiring Entity, with the balance 80% stake owned by WT. 

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Apr 14
0

Most Read: JD.com Inc., SK Telecom, Toyo Construction, Suzuki Motor and more

By | Daily Briefs, Most Read

In today’s briefing:

  • JD.com (9618 HK): CCASS Share Increase Driver & Potential Prosus Selldown
  • KT Corp & SK Telecom: Potential Changes Driven by Foreign Buying
  • JD.com’s Musical Shares – Less Than You Think
  • Toyo Construction (1890) – Mystery Holders Now 17% (Or More)
  • Suzuki’s NAV Discount And Implied Stub Plumb New Lows. Again

JD.com (9618 HK): CCASS Share Increase Driver & Potential Prosus Selldown

By Brian Freitas

  • There has been an increase of 700m shares held in HK CCASS for JD.com Inc. (9618 HK) on 11 April.
  • The largest part of 421.5m shares is likely the conversion of Class B to Class A shares following Richard Liu stepping down as CEO of the company.
  • The rest is unknown at this point but could be Prosus (PRX NA) moving their shares to HK to sell-down and use the cash to buy back their own stock.

KT Corp & SK Telecom: Potential Changes Driven by Foreign Buying

By Brian Freitas

  • Foreign investors have continued to buy Korea telecom companies. The buying has pushed the foreign room lower. This will have implications for the stocks in MSCI and FTSE indices.
  • KT Corp (030200 KS)‘s foreign room has dropped below 15% and this could lead to the stock not being added to the MSCI Korea Index at the May SAIR. 
  • SK Telecom (017670 KS)‘s foreign room has dropped significantly and further buying over the next week could see the stock deleted from the MSCI Korea Index at the May SAIR. 

JD.com’s Musical Shares – Less Than You Think

By Travis Lundy

  • Today, CCASS data showed that 700,000,047 Class A Shares of JD.com Inc. (9618 HK) popped into existence in CCASS (from outside of CCASS the day before). Poof!
  • They showed up in Deutsche Bank’s CCASS Participant account. Just like the 600,000,000 Class A Shares which popped in on 15 December 2021. 
  • There’s a thing here, and there are things going on in the background, but the things in the foreground are not as menacing as they appear. I explore and explain.

Toyo Construction (1890) – Mystery Holders Now 17% (Or More)

By Travis Lundy

  • WK 1-3 Limited are now (as of a week ago) 17.34% of Toyo Construction’s share register. They bought 40+% of volume in the relevant period, as I suggested they might.
  • On a realtime basis, they could be 20+%, but because no single entity is there they would not become top shareholder as a triumvirate.
  • I offer consolidated thoughts and like the idea of buying the dip.

Suzuki’s NAV Discount And Implied Stub Plumb New Lows. Again

By David Blennerhassett

  • Suzuki Motor (7269 JP)‘s implied stub and simple ratio (Suzuki/ Maruti Suzuki India (MSIL IN)) are currently at all-time lows.
  • This bifurcation has become endemic in the relative value space, especially in Japan. 
  • Maruti is trading rich amid its ongoing support for hybrid vehicles. That scenario won’t play out well. 

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