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Most Read

Most Read: Thai Beverage, MR D.I.Y. Group, Ichigo Inc, SinoPac Holdings, Softbank Group and more

By | Daily Briefs, Most Read

In today’s briefing:

  • ThaiBev BeerCo Pre-IPO – Back for Another Round
  • MSCI May 2022 Index Rebalance: In-Line With a Few Surprises
  • FTSE EPRA Nareit Developed Asia Preview: Two Adds Near the Inclusion Threshold
  • FTSE TWSE Taiwan 50 Index Rebalance Preview: Sinopac Holdings Could Replace Momo.com
  • Softbank – Not Pretty

ThaiBev BeerCo Pre-IPO – Back for Another Round

By Sumeet Singh

  • On 5th May 2022, Thai Beverage announced that BeerCo will resume its Proposed Spin-off Listing. This time the company is aiming to raise less than US$1bn, as per media reports.
  • We have looked at various aspects of the deal earlier, as the company had tried to spin-off BeerCo in 2021 as well before finally calling it off in April 2021.
  • In this note, we talk about the recent updates for BeerCo.

MSCI May 2022 Index Rebalance: In-Line With a Few Surprises

By Brian Freitas


FTSE EPRA Nareit Developed Asia Preview: Two Adds Near the Inclusion Threshold

By Brian Freitas

  • The next FTSE EPRA Nareit Index review will use data from 23 May. The changes will be announced on 1 June and implemented at the close on 17 June.
  • Potential inclusions at the review include Frasers Hospitality Trust (FHT SP) and Ichigo Inc (2337 JP), though both are very close to the basis point threshold for inclusion.
  • Digital Core REIT (DCREIT SP) has still not published an audited annual report in English and is unlikely to be included in the index at the June rebalance.

FTSE TWSE Taiwan 50 Index Rebalance Preview: Sinopac Holdings Could Replace Momo.com

By Brian Freitas

  • The next FTSE TWSE Taiwan 50 Index review will use data from 23 May. The changes will be announced on 3 June and implemented at the close on 17 June.
  • Momo.Com Inc (8454 TT) is a potential deletion from the index, while SinoPac Holdings (2890 TT) should be included as the highest ranked non-index constituent.
  • SinoPac Holdings (2890 TT) has over 3.5 days of ADV to buy from passive funds and trades cheaper than its peers. The stock could outperform over the next few weeks.

Softbank – Not Pretty

By Mio Kato

  • Softbank results were about as ugly as expected and the only major new information in our view was that they took a small (too small) write-down on their private holdings. 
  • Masayoshi Son did Masayoshi Son things regaling investor with tales of “To the moon bro!” but offered little of substance to suggest a turnaround was near. 
  • Ultimately we keep coming back to the question of where margin calls might be struck.

Before it’s here, it’s on Smartkarma

Most Read: LG Energy Solution, Link Administration Holdings, Thai Beverage, Woodside Petroleum and more

By | Daily Briefs, Most Read

In today’s briefing:

  • FTSE All-World/​​​​All-Cap Index Rebalance Preview: Potential IPO Inclusions in June
  • Now Link Admin Takes A Bath – Time To Buy
  • ThaiBev BeerCo Pre-IPO – Back for Another Round
  • Woodside/BHP And the Timing Of The Trade Flows Vs Peers
  • Link’s Shares Collapse as Worries of Buyer’s Remorse Sets In

FTSE All-World/​​​​All-Cap Index Rebalance Preview: Potential IPO Inclusions in June

By Brian Freitas


Now Link Admin Takes A Bath – Time To Buy

By David Blennerhassett

  • Link Administration Holdings (LNK AU) cratered this morning ahead of a pause in trading. 
  • Link said it is unaware of the reason for the decline; however, the unfortunate timing of the ACCC delay and the MAC disconnect between Offeror and Target are not helping. 
  • Break price fair value has emerged. Separately, Link is coming up “cheap” versus its holding in PEXA Group (PXA AU).

ThaiBev BeerCo Pre-IPO – Back for Another Round

By Sumeet Singh

  • On 5th May 2022, Thai Beverage announced that BeerCo will resume its Proposed Spin-off Listing. This time the company is aiming to raise less than US$1bn, as per media reports.
  • We have looked at various aspects of the deal earlier, as the company had tried to spin-off BeerCo in 2021 as well before finally calling it off in April 2021.
  • In this note, we talk about the recent updates for BeerCo.

Woodside/BHP And the Timing Of The Trade Flows Vs Peers

By Travis Lundy

  • BHP Group Ltd (BHP AU) and Woodside Petroleum (WPL AU) announced a merger of BHP Petroleum with Woodside late last year, to be implemented in Q2 2022
  • The vote is in a week, and BHP is expected to trade ex- WPL share spinoff on 24 May 2022, with delivery a week later. 
  • The trade so far has worked well, and there has been a slight additive flow pattern in the last several days. It is worth thinking closely about timing.

Link’s Shares Collapse as Worries of Buyer’s Remorse Sets In

By Arun George

  • Link Administration Holdings (LNK AU) claims to be not aware of any reason for today’s -15% share collapse. The market seems nervy that DND will exhibit buyer’s remorse. 
  • The scheme consideration is now 2.6x DND’s market cap. The ACCC delayed review and the contract renewal MAC clause could be DND’s get-out-of-jail-free card for a lower price/walk-away. 
  • Our “deal-break” SoTP valuation suggests a valuation of A$4.24 per share, which is broadly in line with the last close price. The next catalyst is DND’s results tomorrow.

Before it’s here, it’s on Smartkarma

Most Read: SK Telecom Co Ltd (Adr), ioneer Ltd, Nintendo Co Ltd, Sony Corp, Link Administration Holdings and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Trading Opportunity Coming on SK Telecom ADR Premium
  • MVIS Global Rare Earth/​​Strategic Metals Index Rebalance Preview: Potential Adds & Capping Flows
  • Nintendo (7974) – Earnings Forecasts⬇︎ Stock Split, Buyback, and HOW TO SELL WELL
  • Another BIG SONY (6758) Buyback, But…
  • Link Admin (LNK AU): 13 July Scheme Meeting As Dye & Durham Takes A Bath

Trading Opportunity Coming on SK Telecom ADR Premium

By Sanghyun Park

  • ADRs are traded at a significant premium when the foreign room for underlying shares is exhausted. This is the pattern that KT showed in 2018.
  • SKT’s foreign room is currently 1.85%. That is, the burnout rate is 98.15%. Only about 2M shares need to be burned to hit bottom. This is 0.91% of SO.
  • The shortage of SKT ADRs is likely to intensify, which in turn suggests that the ADR premium may rise further.

MVIS Global Rare Earth/​​Strategic Metals Index Rebalance Preview: Potential Adds & Capping Flows

By Brian Freitas

  • Core Lithium Ltd (CXO AU) could be added to the MVIS Global Rare Earth/Strategic Metals Index in June. Lake Resources Nl (LKE AU) is the next highest ranked non-index constituent.
  • Irrespective of whether there are inclusions, there will be passive selling on ioneer Ltd (INR AU) and Australian Strategic Materials (ASM AU) due to capping changes to the index constituents.
  • Inclusions to the index jump post announcement. The review cutoff date is 31 May, so weakness in the potential inclusions could be used to pre-position (if they outperform index constituents).

Nintendo (7974) – Earnings Forecasts⬇︎ Stock Split, Buyback, and HOW TO SELL WELL

By Travis Lundy

  • Nintendo has announced in-line-ish results for March 2022, and quite disappointing forecasts for March 2023. Mio Kato called it on 30 March as a sell. Excellent timing. 
  • Nintendo has a buyback tomorrow and if you don’t like the guidance, you should DEFINITELY read on below.
  • But Nintendo also announced something truly extraordinary – a stock split. Everyone pooh-poohs the impact of a stock split but… in this case it is probably not nothing.

Another BIG SONY (6758) Buyback, But…

By Travis Lundy

  • A release showed up on TDNET last week that Sony Corp (6758 JP) had completed its ¥200bn 25mm share (2.02%) buyback program announced 28 April 2021. 
  • The details showed they had actually bought back 8.2mm shares spending only ¥97bn, despite the shares trading below T-1 Announcement Date Price for four months straight. 
  • Today, with earnings, SONY announced a NEW buyback. ¥200bn, 25mm shares, 2.02%. Same as last year. 

Link Admin (LNK AU): 13 July Scheme Meeting As Dye & Durham Takes A Bath

By David Blennerhassett

  • The Supreme Court of New South Wales today approved the convening of a Scheme Meeting for Link Administration Holdings (LNK AU) on the 13 July.  
  • The Explanatory Booklet has been registered with ASIC. The Independent Expert (Deloitte) has concluded that the A$5.50/share Scheme Consideration is fair and reasonable. 
  • Separately, the Offeror, Canada’s Dye & Durham, has seen its shares decline 57% since the release of its 2Q22 results.

Before it’s here, it’s on Smartkarma

Most Read: NTT (Nippon Telegraph & Telephone), Jindal Steel & Power, Mindtree Ltd, SK Telecom Co Ltd (Adr), Bank Of Iwate and more

By | Daily Briefs, Most Read

In today’s briefing:

  • NTT and NTT Data Reshuffle the Deckchairs and Everyone “Wins”
  • India: Preview of Stock Reclassification for Active Funds
  • Mindtree & L&T Infotech’s US$18bn Merger: Details and Index Implications
  • Trading Opportunity Coming on SK Telecom ADR Premium
  • JAPAN ACTIVISM: Silchester Goes After Bk of Iwate – Cheaper Than Chips

NTT and NTT Data Reshuffle the Deckchairs and Everyone “Wins”

By Travis Lundy

  • NTT (Nippon Telegraph & Telephone) (9432 JP) and NTT Data Corp (9613 JP) this morning announced a 1pm joint presser. Imaginations ran wild and NTT went up 12+%.
  • The reality is more subdued (as it should have been for a during-market-hours-presser) and it involves a restructuring of a small NTT subsidiary which happens to own NTT Data shares.
  • But it is still positive. It is something of a win-win for both parties.

India: Preview of Stock Reclassification for Active Funds

By Brian Freitas

  • Two-Thirds of the way through the review period, we see 7 stocks migrating from MidCap to LargeCap, 8 stocks from LargeCap to MidCap, and 1 new listing added to LargeCap.
  • Post listing, Life Insurance Corp of India (LIC) (1248Z IN) should be added to the LargeCap segment while Delhivery (1058656D IN) should be added to the MidCap segment.
  • On average, stocks expected to migrate from Mid Cap to Large Cap have outperformed. Stocks expected to migrate from the Large Cap to Mid Cap segment have performed the worst.

Mindtree & L&T Infotech’s US$18bn Merger: Details and Index Implications

By Brian Freitas


Trading Opportunity Coming on SK Telecom ADR Premium

By Sanghyun Park

  • ADRs are traded at a significant premium when the foreign room for underlying shares is exhausted. This is the pattern that KT showed in 2018.
  • SKT’s foreign room is currently 1.85%. That is, the burnout rate is 98.15%. Only about 2M shares need to be burned to hit bottom. This is 0.91% of SO.
  • The shortage of SKT ADRs is likely to intensify, which in turn suggests that the ADR premium may rise further.

JAPAN ACTIVISM: Silchester Goes After Bk of Iwate – Cheaper Than Chips

By Travis Lundy

  • Silchester has written letters to four Japanese regional banks where they hold large stakes asking for higher dividends and payout ratios. It has proposed a special div AGM agenda item.
  • Bank Of Iwate (8345 JP) is nearly 40% held by cross-holders and government-affiliated entities, and Real World Float is less than 50%. Winning at the AGM is tough.
  • The collection of banks is mixed. But this one is cheap. Cheap as chips. Or cheaper.

Before it’s here, it’s on Smartkarma

Most Read: Yamada Denki, Mindtree Ltd, SenseTime Group, CJ CGV Co Ltd, Jindal Steel & Power and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Yamada Denki – GINORMOUS Buyback To Dramatically Boost EPS and ROE
  • Mindtree & L&T Infotech’s US$18bn Merger: Details and Index Implications
  • Index Rebalance & ETF Flow Recap: KOSPI200, KQ150, CSI300, STAR50, SET50, China A50, HSCI, SenseTime
  • KOSPI 200 Rebalancing: Trade Short Covering Event for Deletions
  • India: Preview of Stock Reclassification for Active Funds

Yamada Denki – GINORMOUS Buyback To Dramatically Boost EPS and ROE

By Travis Lundy

  • Yamada Denki (9831 JP) reported earnings (Revs -7.6% (slight beat), OP -28.6% (slight miss), NP -2.4% (slight miss)), and slightly upbeat forecasts to Mar-2023 (Revs +4.6%, OP +12.5%, NP +2.9%) 
  • They also announced an unchanged dividend at ¥18/share, and a VERY BIG BUYBACK. This is one of the largest, most aggressive, on-market buyback programs I have ever seen.
  • Previous buybacks have been duds. Yamada Denki is not playing around this time. This time it will be a buy.

Mindtree & L&T Infotech’s US$18bn Merger: Details and Index Implications

By Brian Freitas


Index Rebalance & ETF Flow Recap: KOSPI200, KQ150, CSI300, STAR50, SET50, China A50, HSCI, SenseTime

By Brian Freitas


KOSPI 200 Rebalancing: Trade Short Covering Event for Deletions

By Sanghyun Park

  • Short-Selling is not possible after being deleted from the KOSPI 200. So, active short-covering for deletions is witnessed before and after the rebalancing implementation.
  • CJ CGV (079160 KS) stands out the most at this point. Its short interest is 4.10% of SO, and the short interest has increased the most over the past month.
  • The short-covering/price movement started to be observed from the end of the prior month. So, I’d consider building positions from the third week of this month.

India: Preview of Stock Reclassification for Active Funds

By Brian Freitas

  • Two-Thirds of the way through the review period, we see 7 stocks migrating from MidCap to LargeCap, 8 stocks from LargeCap to MidCap, and 1 new listing added to LargeCap.
  • Post listing, Life Insurance Corp of India (LIC) (1248Z IN) should be added to the LargeCap segment while Delhivery (1058656D IN) should be added to the MidCap segment.
  • On average, stocks expected to migrate from Mid Cap to Large Cap have outperformed. Stocks expected to migrate from the Large Cap to Mid Cap segment have performed the worst.

Before it’s here, it’s on Smartkarma

Most Read: Yamada Denki, China MeiDong Auto, Delhivery, Yashili International Holdings, SenseTime Group and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Yamada Denki – GINORMOUS Buyback To Dramatically Boost EPS and ROE
  • China Meidong: Back the Porsche at 20 HKD
  • Delhivery IPO: Offering Details & Index Inclusion Timeline
  • Yashili (1230 HK)’s Pre-Conditional Offer From Mengniu
  • Index Rebalance & ETF Flow Recap: KOSPI200, KQ150, CSI300, STAR50, SET50, China A50, HSCI, SenseTime

Yamada Denki – GINORMOUS Buyback To Dramatically Boost EPS and ROE

By Travis Lundy

  • Yamada Denki (9831 JP) reported earnings (Revs -7.6% (slight beat), OP -28.6% (slight miss), NP -2.4% (slight miss)), and slightly upbeat forecasts to Mar-2023 (Revs +4.6%, OP +12.5%, NP +2.9%) 
  • They also announced an unchanged dividend at ¥18/share, and a VERY BIG BUYBACK. This is one of the largest, most aggressive, on-market buyback programs I have ever seen.
  • Previous buybacks have been duds. Yamada Denki is not playing around this time. This time it will be a buy.

China Meidong: Back the Porsche at 20 HKD

By Sameer Taneja

  • China Meidong Auto (1268 HK) trades at a 12x/9x PE FY22/23E with a 6.5% dividend yield at a 20 HKD/share price (assuming an 80% payout ratio).
  • In buying China Meidong Auto (1268 HK), you get an industry leader in the dealership space with supreme execution (35% ROE/47% CAGR profit growth/best capital allocator).
  • The integration of the Starchase Porsche Dealerships provides an upside potential, as the management, with their superior track record, can significantly improve the target’s operations.

Delhivery IPO: Offering Details & Index Inclusion Timeline

By Brian Freitas

  • Delhivery (1058656D IN) is looking at raising INR 52,350m (US$685m) in its IPO by selling up to 113.3m shares at a range of INR 462-487/share.
  • At the mid point of the IPO range, Delhivery (1058656D IN) will be valued at INR 344.8bn (US$4.5bn) while the free float market cap will be much lower.
  • Delhivery (1058656D IN) could get entry to the FTSE All-World Index at the December QIR, while inclusion in the MSCI India Index could take place at the May 2023 SAIR.

Yashili (1230 HK)’s Pre-Conditional Offer From Mengniu

By David Blennerhassett


Index Rebalance & ETF Flow Recap: KOSPI200, KQ150, CSI300, STAR50, SET50, China A50, HSCI, SenseTime

By Brian Freitas


Before it’s here, it’s on Smartkarma

Most Read: Woodside Petroleum, Gree Electric Appliances, Delhivery, Health And Happiness (H&H), Yamada Denki and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Woodside / BHP Petroleum Merger – Thinking About Flows (Still a Flowback Sell)
  • FTSE China A50 Index Rebalance Preview: PetroChina, Gree Out Due to Ground Rule Change
  • Delhivery IPO: Offering Details & Index Inclusion Timeline
  • Health And Happiness (H&H) (1112.HK) – High Bankruptcy Risk Together with Gloomy Prospects
  • Yamada Denki – GINORMOUS Buyback To Dramatically Boost EPS and ROE

Woodside / BHP Petroleum Merger – Thinking About Flows (Still a Flowback Sell)

By Travis Lundy


FTSE China A50 Index Rebalance Preview: PetroChina, Gree Out Due to Ground Rule Change

By Brian Freitas


Delhivery IPO: Offering Details & Index Inclusion Timeline

By Brian Freitas

  • Delhivery (1058656D IN) is looking at raising INR 52,350m (US$685m) in its IPO by selling up to 113.3m shares at a range of INR 462-487/share.
  • At the mid point of the IPO range, Delhivery (1058656D IN) will be valued at INR 344.8bn (US$4.5bn) while the free float market cap will be much lower.
  • Delhivery (1058656D IN) could get entry to the FTSE All-World Index at the December QIR, while inclusion in the MSCI India Index could take place at the May 2023 SAIR.

Health And Happiness (H&H) (1112.HK) – High Bankruptcy Risk Together with Gloomy Prospects

By Xinyao (Criss) Wang

  • H&H is faced with multiple challenges. Internally, the performance is under pressure, with stagnating revenue, decreasing profits, cash flow shortage and bankruptcy risk.It’s difficult for H&H to turn things around.
  • Externally, factors such as the declining birth rate, lower demand, fierce competition in the infant formulas market, rising costs due to inflation, and economic slowdown worsen the Company’s prospects.
  • Based on our 2022 forecast (14% or lower adjusted EBITDA margin,1%-2% or flat revenue growth), we do not think H&H is a good investment. We are conservative about its outlook.

Yamada Denki – GINORMOUS Buyback To Dramatically Boost EPS and ROE

By Travis Lundy

  • Yamada Denki (9831 JP) reported earnings (Revs -7.6% (slight beat), OP -28.6% (slight miss), NP -2.4% (slight miss)), and slightly upbeat forecasts to Mar-2023 (Revs +4.6%, OP +12.5%, NP +2.9%) 
  • They also announced an unchanged dividend at ¥18/share, and a VERY BIG BUYBACK. This is one of the largest, most aggressive, on-market buyback programs I have ever seen.
  • Previous buybacks have been duds. Yamada Denki is not playing around this time. This time it will be a buy.

Before it’s here, it’s on Smartkarma

Most Read: Woodside Petroleum, JMT Network Services, PAG, Gree Electric Appliances, Alliance Aviation Services and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Woodside / BHP Petroleum Merger – Thinking About Flows (Still a Flowback Sell)
  • SET50 Index Rebalance Preview: +JMT, JMART, BJC / -RATCH, STGT, IRPC
  • PAG Pre-IPO – The Negatives – Planned Reorg Doesn’t Sound Great
  • FTSE China A50 Index Rebalance Preview: PetroChina, Gree Out Due to Ground Rule Change
  • Qantas Enters Scheme With Alliance Aviation

Woodside / BHP Petroleum Merger – Thinking About Flows (Still a Flowback Sell)

By Travis Lundy


SET50 Index Rebalance Preview: +JMT, JMART, BJC / -RATCH, STGT, IRPC

By Brian Freitas


PAG Pre-IPO – The Negatives – Planned Reorg Doesn’t Sound Great

By Sumeet Singh

  • PAG aims to raise around US$2bn via its Hong Kong IPO.
  • PAG is an alternative investment firm focused on Asia-Pacific (APAC), it had approximately US$50bn in assets under management (AUM), as of Dec 21.
  • In this note, we will talk about the not so positive aspects of the deal.

FTSE China A50 Index Rebalance Preview: PetroChina, Gree Out Due to Ground Rule Change

By Brian Freitas


Qantas Enters Scheme With Alliance Aviation

By David Blennerhassett

  • Qantas Airways (QAN AU) has entered into a Scheme to buy smaller airline Alliance Aviation Services (AQZ AU).
  • Alliance shareholders will receive $4.75 in Qantas shares or a 35% premium to last close. The consideration implies an equity value of A$764.5mn and an enterprise value of A$919.2mn.
  • The Scheme is subject to shareholder and ACCC approval. The ACCC recently cleared Qantas’19.9% stake in Alliance after a three-year investigation.

Before it’s here, it’s on Smartkarma

Most Read: SG Micro Corp, Jinko Solar, SK Telecom, Pag, JMT Network Services and more

By | Daily Briefs, Most Read

In today’s briefing:

  • CSI300 Index Rebalance Preview: 30 Potential Changes as Sector Rotation Continues
  • STAR50 Index Rebalance Preview: 3 Changes or 5? It Depends…
  • Overlooked Aspect About MSCI’s SKT Foreign Room Calculation
  • PAG Pre-IPO – The Positives – Past Record Has Been Decent
  • SET50 Index Rebalance Preview: +JMT, JMART, BJC / -RATCH, STGT, IRPC

CSI300 Index Rebalance Preview: 30 Potential Changes as Sector Rotation Continues

By Brian Freitas

  • We expect the maximum permitted 30 changes at a single review to take place at the June rebalance. Most changes are high probability.
  • We estimate a one-way turnover of 4.25% at the rebalance leading to a one-way trade of CNY 10.677bn.
  • Industrials, Information Technology and Materials sectors are expected to have the most net inclusions, while Health Care and Financials are expected to have the most net deletions.

STAR50 Index Rebalance Preview: 3 Changes or 5? It Depends…

By Brian Freitas


Overlooked Aspect About MSCI’s SKT Foreign Room Calculation

By Sanghyun Park

  • The MSCI does not have a rule on how to treat DRs in the foreign room calculation. It only considers the proportion of shares AVAILABLE to foreign investors.
  • Unlike KT in 2019, SKT ADRs are not traded at a premium. It means that the MSCI may treat a portion of SKT ADRs as Still AVAILABLE Shares.
  • For this reason, it cannot be concluded that SKT will be deleted simply because it is below 3.75%.

PAG Pre-IPO – The Positives – Past Record Has Been Decent

By Sumeet Singh

  • PAG aims to raise around US$2bn via its Hong Kong IPO.
  • PAG is an alternative investment firm focused on Asia-Pacific (APAC), it had approximately US$50bn in assets under management (AUM), as of Dec 21.
  • In this note, we will talk about the positive aspects of the deal.

SET50 Index Rebalance Preview: +JMT, JMART, BJC / -RATCH, STGT, IRPC

By Brian Freitas


Before it’s here, it’s on Smartkarma

Most Read: China Huarong Asset Management, SenseTime Group, Hitachi Transport System, Chugoku Bank and more

By | Daily Briefs, Most Read

In today’s briefing:

  • HSCI Index Rebalance and Stock Connect: Potential Changes in June and September
  • SenseTime (20 HK): Lock-Up Expiry Will Bring BIG Passive Flow
  • Hitachi Transport (9086 JP):  Trading Too Wide
  • JAPAN ACTIVISM: Silchester Goes After Chugoku Bank
  • Asia Short Interest: Large Moves in April

HSCI Index Rebalance and Stock Connect: Potential Changes in June and September

By Brian Freitas

  • We see seven new listings as potential inclusions to the HSCI in June. One is already a part of Connect while five will be added to Southbound Stock Connect.
  • We see 19 potential changes to the HSCI in September. Seven of the deletions are on market cap, four on liquidity, and eight due to prolonged trading suspension.
  • Some of the potential deletions have large Southbound holdings and some of these could be trimmed over the next couple of months.

SenseTime (20 HK): Lock-Up Expiry Will Bring BIG Passive Flow

By Brian Freitas

  • SenseTime Group (20 HK) currently has a float of 1.4%. That will increase to 46% at the end of June as pre-IPO and cornerstone investor lock-ups end.
  • The Hang Seng Tech Index FAF increase and potential inclusion in the Hang Seng China Enterprises Index will require passive trackers to buy 700m shares early September.
  • Economic stimulus in China, outlook for China tech, lock-up expiry, inclusion in Southbound Connect and flows from passive trackers will drive the stock for few months and provide trading opportunities.

Hitachi Transport (9086 JP):  Trading Too Wide

By Travis Lundy


JAPAN ACTIVISM: Silchester Goes After Chugoku Bank

By Travis Lundy

  • In early February 2022, Silchester International Investors (according to its website) sent letters to four low-ROE-earning Japanese regional banks proposing a new dividend policy.
  • The management and boards of each bank rejected the policy proposal though two of the four had upped their proposed dividend or changed policy prior, and two upped it afterwards.
  • While Bank of Kyoto is the biggest equity portfolio, Chugoku Bank (8382 JP) is a relatively large, provincial, regional bank, with middling equity portfolio. Different shape. Different situation.

Asia Short Interest: Large Moves in April

By Brian Freitas

  • We look at short interest across Hong Kong, Japan, Korea and Taiwan in April to identify stocks/sectors that have seen the largest changes in each market.
  • Korea and Taiwan are showing a clear divergence with short notional increasing as the market moves lower, indicative of new shorts being initiated.
  • China Merchants Bank H (3968 HK) has seen the largest short covering as the stock has tumbled in the last couple of weeks.

Before it’s here, it’s on Smartkarma