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It recently became publicly available that Michael Burry (CEO of Scion Asset Management) started buying put options on numerous Chinese stocks including Alibaba Group Holding (BABA US).
We highlight four major reasons why Burry may have turned bearish on Chinese tech names (tariffs, delisting threats, increasing hostile political pressure on China, and China’s 30 year bond yield).
Although we do not know exactly know how Burry has changed his position in 2Q25, he is likely to have reduced put options on major Chinese tech stocks in April/May.

Horizon Robotics (9660 HK): Southbound Stock Connect Inclusion Today & Upcoming Index Flows

Horizon Robotics (9660 HK) will be added to Southbound Stock Connect from the start of trading today. Then there will be passive buying at the close on 20 June.
The lock up expiry in April will result in large buying from trackers of the Hang Seng TECH Index (HSTECH INDEX) and HSIII Index in September.
The stock will also be added to another large global index, though the timing on inclusion is not certain at the moment.

Tsuruha (3391 JP)/Welcia (3141 JP): Vote Musings

Leading proxies recommend that Tsuruha Holdings (3391 JP) shareholders vote against the Tsuruha/Welcia Holdings (3141 JP) merger on 26 May.
The share exchange terms favour Welcia over Tsuruha shareholders. The Tsuruha vote will be close but likely to be approved. Long Tsuruha is the trade, irrespective of the vote.
For a vote pass, you are long synergies and a likely partial offer bump. For a fail, you are long an undemanding multiple and the optionality of a new bid.

Soundwill Holdings (878 HK): Hard Lessons from Another HK Arbageddon

Soundwill Holdings (878 HK) shareholders have voted against the Foo family’s HK$8.50 per share offer. The minority participation rate was high, and the NO vote comfortably failed the value test.
Unlike the Goldlion Holdings (533 HK) deal break, the price action over the last three days pointed to a deal break. Like previous deal breaks, this one offers hard lessons.
Soundwill has the fourth-highest premium of the pre-deal break price to the undisturbed price compared to previous deal breaks. My estimated deal-break price is HK$5.63, 13.2% below the last close.

Last Week in Event SPACE: Toyota Industries, CATL, Mitsubishi Logisnext, Mayne Pharma, Melco

Winner winner chicken dinner. A Nikke article suggests a bid higher than ¥6tn for Toyota Industries (6201 JP). In addition, people thinking about ¥18,400/share are going about this incorrectly.
Contemporary Amperex Technology (CATL) (3750 HK) pops on its IPO debut. The HKEx has issued a high concentration warning
Mitsubishi Logisnext Co., Ltd. (7105 JP) is still ragingly cheap given the move to delist dual parent/sub listings and having a global footprint. Own it here and now.

Weekly Deals Digest (25 May) – Toyota Industries, Shibaura, ESR, Soundwill, Mayne Pharma, GMO

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: GMO Internet (4784 JP) secondary offering of 91.7 million shares, worth around US$1.9 billion.
Event-Driven developments: Toyota Industries (6201 JP), Shibaura Electronics (6957 JP), ESR Group (1821 HK), Soundwill Holdings (878 HK), Mayne Pharma (MYX AU), Gold Road Resources (GOR AU).

Merger Arb Mondays (26 May) – Mayne, Seven & I, Shibaura, Welcia/Tsuruha, Nissin, ESR, Dickson

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), ENN Energy (2688 HK), Seven & I Holdings (3382 JP), Smartpay Holdings (SPY NZ), ZEEKR (ZK US).
Lowest spreads: Bright Smart Securities And (1428 HK), Dada Nexus (DADA US), Amara Holdings (AMA SP), Nissin Corp (9066 JP), Avjennings Ltd (AVJ AU), SLB Development (SLB SP).

Zomato/Eternal: The BIG Passive Selling Starts

Following shareholder approval of the proposal to reduce the Foreign Ownership Limit from 100% to 49.5%, NSDL has updated the FOL. This starts the process of passive selling in Zomato.
Passives will sell US$350m at the close on Tuesday. There is a low probability of more selling later in the week. There will be bigger selling in August.
The size of the selling in August and beyond will depend on what foreign investors do in the stock till the end of June. Watch the red flag/ breach list.

Clarifying a Few Points of Confusion Surrounding the Samsung Biologics Spin-Off

Will the newly listed spinco also IPO Samsung Bioepis? That’s a textbook ECO — and could spark shareholder value dilution concerns, regulatory pushback, or even a potential KRX block.
The 8% dip looks tied to IPO fears around Bioepis. If Samsung hard-locks its no-IPO stance and FSS signs off, a near-term bounce in Biologics could be in play.
Post-Listing, watch for Samsung C&T to shift exposure—potentially boosting the surviving company’s value while capping the spinco. Sets up a compelling relative-value trade worth positioning for.

Taiwan Top 50 ETF Rebalance Preview: Elite Material (2383 TT) Walking a Fine Line

Elite Material (2383 TT)‘s stock price has soared recently and is forecast to be added to the Yuanta/P-Shares Taiwan Top 50 ETF in June, replacing Unimicron Technology (3037 TT).
Passive trackers will have 1 day of ADV to buy in Elite Material (2383 TT) and over 1 day of ADV to sell in Unimicron Technology (3037 TT).
However, Elite Material is at risk of deletion from another ETF where the impact of passive selling is a lot bigger. Tricky interplay between the two ETFs.

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May 25

Most Read: BYD, Contemporary Amperex Technology (CATL), Midea Group, Seres Group , Nationz Technologies Inc A, DigiPlus Interactive , Shanghai Runda Medical Tec-A, Samsung C&T, LX International and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

HSTECH Index Rebalance: BYD (1211 HK) To Replace China Literature (772 HK) As Trade Hits US$6bn
CATL (3750 HK): The Tail Wags the Dog
Hang Seng Index (HSI) Rebalance: Midea (300 HK) & ZTO Express (2057 HK) Added; Inching Towards a 100
China A50 ETFs Rebalance Preview: One Change Highly Likely
CSI All Share Semiconductor Index Rebalance Preview: 13 Potential Changes in June
PCOMP Index Rebalance Preview: One Set of Changes as PLUS Runs Away
CSI Medical Service Index Rebalance Preview: Five Changes as Trade Flatlines
Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (23 May to 6 June 2025)
June Rebalance Intel: Announcement Date & Key Names for KOSPI 200 & KOSDAQ 150
Eternal Vs. Swiggy: A Battle for Market Share or a Fight to Stay in the Game?

HSTECH Index Rebalance: BYD (1211 HK) To Replace China Literature (772 HK) As Trade Hits US$6bn

As expected, BYD (1211 HK) will be added to the Hang Seng TECH Index (HSTECH INDEX) in June following the launch of God’s Eye, its Advanced Driver-Assistance System (ADAS).
BYD (1211 HK)‘s inclusion results in China Literature (772 HK) being deleted from the index. China Literature stock should drop over the near-term.
Estimated one-way turnover at the rebalance is 13% resulting in a round-trip trade of HK$46.5bn (US$5.95bn). There are 16 stocks that have at least 1x ADV to trade from passives.

CATL (3750 HK): The Tail Wags the Dog

The buying in Contemporary Amperex Technology (3750 HK) over the last couple of days has dragged Contemporary Amperex Technology (CATL) (300750 CH) higher as the arbs trade the AH spread.
The Fast Entry into a global index could keep CATL (3750 HK) supported over the next few trading days, but reality will take hold pretty soon.
Short CATL (3750 HK) / long CATL (300750 CH) offers great risk/reward, while an outright CATL (3750 HK) short offers higher return albeit at a much higher level of risk.

Hang Seng Index (HSI) Rebalance: Midea (300 HK) & ZTO Express (2057 HK) Added; Inching Towards a 100

Midea Group (300 HK) and ZTO Express Cayman (2057 HK) will be added to the Hang Seng Index (HSI INDEX) in June to take us up to 85 index constituents.
Estimated one-way turnover is 2.9% and the estimated round-trip trade is HK$11.3bn (US$1.44bn) with over 1x ADV to trade in the adds and in one stock with a FAF increase.
There could be a short-term drop in the AH premium for Midea Group while this inclusion ensures ZTO Express Cayman is a member of all major indices where eligible.

China A50 ETFs Rebalance Preview: One Change Highly Likely

With the review cutoff done, there could be one change for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK) ETFs in June.
As the highest ranked non-ETF member, Seres Group (601127 CH) could replace China United Network A (600050 CH) in the ETF at the close on 20 June.
China United Network A (600050 CH) was added to the ETF in March, so this could be a very short stint in the ETF for the stock.

CSI All Share Semiconductor Index Rebalance Preview: 13 Potential Changes in June

The review period for the June rebalance of the CSI All Share Semiconductor Index ended 30 April. The changes should be announced on 30 May and implemented on 13 June.
We forecast 4 adds and 9 deletes for the index with a one-way turnover of 2.7% and a round-trip trade of CNY 1.2bn (US$167m).
Some stocks have overlaps with changes to the CES China Semiconductor Chips Index and the CNI Semiconductor Chips Index and there will be increased passive flow for those stocks.

PCOMP Index Rebalance Preview: One Set of Changes as PLUS Runs Away

With 90% of the review period for the August rebalance of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) complete, there could be one change for the index.
DigiPlus Interactive (PLUS PM) should replace Bloomberry Resorts (BLOOM PM) in the index. Bloomberry Resorts (BLOOM PM) also has some global passive selling at the close on 30 May.
DigiPlus Interactive (PLUS PM) is up 25x over the last couple of years and is up 46% since we identified the stock as a potential index inclusion.

CSI Medical Service Index Rebalance Preview: Five Changes as Trade Flatlines

The review period ended on 30 April, the changes should be announced on 30 May and will be effective after the close of trading on 13 June.
There could be 5 changes in June where passive trackers will need to trade between 0.7-2x ADV in the forecast adds and sell between 1-4x ADV in the forecast deletes.
A long adds/ short deletes trade has gone nowhere in the last 6-7 months, and the volatility of the trade has reduced even further in the last couple of months.

Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (23 May to 6 June 2025)

In this insight, we provide the top 10 stocks picks and key catalysts in the Korean stock market for the two weeks (23 May to 6 June 2025).
Our top 10 picks were up on average 2.4% in the past two weeks (from 9 to 23 May), outperforming KOSPI which was up 0.6% in the same period.
The top 10 picks in this bi-weekly include Samsung Securities, LG Uplus, Amorepacific Holdings, Samsung C&T, JYP Entertainment, Nongshim, Krafton, LS Electric, F&F, and Emart.

June Rebalance Intel: Announcement Date & Key Names for KOSPI 200 & KOSDAQ 150

Looks like the KOSPI200/KOSDAQ150 June rebal is a lock for post-close Tuesday (27th)—KRX has already signaled this to local media over the weekend.
Muted pre-positioning this time, likely from weak volumes and no market lead—sets up for punchier price action right after today’s rebalance drop.
Over ~3 weeks, KRW 40T/3.5T passive AUM tracked KOSPI200/KOSDAQ150. With shorts fully back, deletes may trade heavy—sets up well for more aggressive long-short positioning.

Eternal Vs. Swiggy: A Battle for Market Share or a Fight to Stay in the Game?

By Nimish Maheshwari

Zomato (ZOMATO IN) and Swiggy (SWIGGY IN) saw strong revenue growth, but intense competition and quick commerce costs led to declining profits or increased losses.
Zomato(Eternal) holds a strong advantage in food delivery profitability, reporting INR 428 crore adjusted EBITDA, and its IOCC status offers potential inventory benefits.
Swiggy uses quick commerce for acquisition, scaling Bolt for speed which drives over 12% of food orders and boosts retention.

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May 24

Most Read: GMO Internet, Contemporary Amperex Technology (CATL), Welcia Holdings, Soundwill Holdings, DigiPlus Interactive , HD Hyundai Marine Solution , Bharat Electronics, Dowooinsys, Xanadu Mines and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

GMO Internet (4784) – Squeeze-Able So Squeezing, Offering Likely Gets Pulled – AVOID LIKE THE PLAGUE
CATL (3750 HK): The Tail Wags the Dog
Soundwill Holdings (878 HK): 23rd May Vote On Founder’s Offer
[Japan Activism/M&A] – Thinking About Positioning Around the Tsuruha/Welcia Vote
Soundwill Holdings (878 HK): An Opportunity or Another HK Arbageddon?
PCOMP Index Rebalance Preview: One Set of Changes as PLUS Runs Away
HD Hyundai Marine Solution Block Deal Sale of 8.5% of Outstanding Shares
SENSEX Index Rebalance: Trent, Bharat Electronics to Replace Nestle, IndusInd Bank
Dowoo Insys IPO Preview
Xanadu (XAM AU): A Mongolian Face To A Mongolian Project

GMO Internet (4784) – Squeeze-Able So Squeezing, Offering Likely Gets Pulled – AVOID LIKE THE PLAGUE

GMO Internet (4784 JP) was created by the reverse takeover of a listed cad/media company by its parent company’s “internet infrastructure” business. GMO Internet Group ended up with ~98%.
In the process, the stock rose 500%. Now, as part of its promise to the TSE allowing TSE Prime membership for the extraordinarily low-float target, the parent is offering shares.
The squeeze has it at 180x Dec25e EPS, 111x EBIT, 70x book. The offering likely gets pulled and the stock isn’t shortable… so what next? Pain, and an ECLWO.

CATL (3750 HK): The Tail Wags the Dog

The buying in Contemporary Amperex Technology (3750 HK) over the last couple of days has dragged Contemporary Amperex Technology (CATL) (300750 CH) higher as the arbs trade the AH spread.
The Fast Entry into a global index could keep CATL (3750 HK) supported over the next few trading days, but reality will take hold pretty soon.
Short CATL (3750 HK) / long CATL (300750 CH) offers great risk/reward, while an outright CATL (3750 HK) short offers higher return albeit at a much higher level of risk.

Soundwill Holdings (878 HK): 23rd May Vote On Founder’s Offer

On the 7th March, small-cap property developer Soundwill (878 HK) announced an Offer from Grace Foo (ED) and her family, controlling 74.97% of shares out, by way of a Scheme.
The Offer Price of $8.50/share, including a $1.00/share dividend, was a 62.84% premium to undisturbed. But a 87.66% discount to the (then) most recent NAV. Terms were final.
The Scheme Doc is now out, with a Court Meeting on the 23rd May, and payment on or before the 11th June. The IFA (Altus Capital) says “fair & reasonable”.

[Japan Activism/M&A] – Thinking About Positioning Around the Tsuruha/Welcia Vote

The Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) AGMs to elect directors and approve the share exchange agreement to merge the two.
10% Tsuruha shareholder Orbis objects to the merger ratio AND the later tender whereby Aeon goes to 51%, saying everything is underpriced. ISS/GlassLewis recommend voting against the merger.
I haven’t seen the proxy reports but I’ve done the math. Investors/arbs should look at the possibilities/probabilities and understand what dependencies exist. Shareholders are not helpless, no matter the outcome.

Soundwill Holdings (878 HK): An Opportunity or Another HK Arbageddon?

The spread to the Foo family’s HK$8.50 offer for Soundwill Holdings (878 HK) has materially increased to 15.8% over the last two trading days. The vote is on 23 May.
Several readers have asked if the Soundwill offer will mirror the Goldlion Holdings (533 HK) deal break. The two schemes share similarities but are also different in several ways.
The share price action either reflects an imminent deal break or a result of a negative feedback loop. Tread carefully as this is a high-risk/high-reward situation.

PCOMP Index Rebalance Preview: One Set of Changes as PLUS Runs Away

With 90% of the review period for the August rebalance of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) complete, there could be one change for the index.
DigiPlus Interactive (PLUS PM) should replace Bloomberry Resorts (BLOOM PM) in the index. Bloomberry Resorts (BLOOM PM) also has some global passive selling at the close on 30 May.
DigiPlus Interactive (PLUS PM) is up 25x over the last couple of years and is up 46% since we identified the stock as a potential index inclusion.

HD Hyundai Marine Solution Block Deal Sale of 8.5% of Outstanding Shares

After the market close today, it was announced that KKR is selling 3.81 million shares (8.5% of outstanding shares) of HD Hyundai Marine Solution in a block deal sale.
The expected block deal sale price is 145,000 won to 148,000 won per share, which represent 7.96% to 9.83% discount to the closing price of 160,800 won on 22 May.
Once this block deal is completed, KKR’s remaining stake in HD Hyundai Marine Solution will be reduced to 11% (4.94 million shares).

SENSEX Index Rebalance: Trent, Bharat Electronics to Replace Nestle, IndusInd Bank

In line with forecasts, Trent and Bharat Electronics will replace Nestle India and Indusind Bank in the S&P BSE SENSEX Index after the close of trading on 20 June.
Passive funds are estimated to buy 3-4 days of ADV in the adds and sell 1-10 days of ADV in the deletes. That increase to 3.5-17 days of delivery volume.
Indusind Bank (IIB IN) stock has dropped recently due to a large quarterly loss and allegations of fraud. The stock is also a potential deletion from the NIFTY Index.

Dowoo Insys IPO Preview

Dowoo Insys is getting ready to complete its IPO in Korea. Dowoo Insys is one of the first companies in Korea to commercialize ultra thin glass (UTG) for foldable displays.
The IPO price range is 29,000 won to 32,000 won. At the high end of the IPO price range, the expected market cap of the company is 351 billion won.
The bankers used five companies including Synopex, Duksan Neolux, and Innox Advanced Materials as comparable companies. The bankers used these companies’ average EV/EBITDA multiple of 15x to value Dowoo Insys.

Xanadu (XAM AU): A Mongolian Face To A Mongolian Project

Back on the 21st May, Xanadu Mines (XAM AU), a Mongolian copper-gold mining play, inked an off-market deal with Bastion @A$0.08/share in cash.
Bastion comprises Singapore-based Baroo (comprising board members from Mongolia) and Xanadu director Ganbayer Lkhagvasuren. Bastion is also subscribing for 286.8mn shares, at A$0.06/share, or 13% fully diluted.
A follow-up Q&A session is worth listening to in full to gauge why Zijin (JV partner and 19.8% shareholder) may view Bastion taking control of XAM as a good thing.

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May 23

Most Read: GMO Internet, Contemporary Amperex Technology (CATL), Perseus Mining, Shanghai Runda Medical Tec-A, Welcia Holdings, Jiangsu Hengrui Pharmaceuticals, Soundwill Holdings, HD Hyundai Marine Solution and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

CATL (3750 HK): Reassessing Index Fast Entry; Need Overallotment Exercised by Tomorrow
GMO Internet (4784) – Squeeze-Able So Squeezing, Offering Likely Gets Pulled – AVOID LIKE THE PLAGUE
CATL (3750 HK): The Tail Wags the Dog
CATL (3750 HK)’s Concentration Warning
S&P/ASX Index Rebalance Preview (June 2025): 10 Potential Changes Across Indices
CSI Medical Service Index Rebalance Preview: Five Changes as Trade Flatlines
[Japan Activism/M&A] – Thinking About Positioning Around the Tsuruha/Welcia Vote
Jiangsu Hengrui Pharma H Share Listing (1276 HK): Trading Debut
Soundwill Holdings (878 HK): An Opportunity or Another HK Arbageddon?
HD Hyundai Marine Solution Block Deal Sale of 8.5% of Outstanding Shares

CATL (3750 HK): Reassessing Index Fast Entry; Need Overallotment Exercised by Tomorrow

CATL (3750 HK) is trading at a 6.9% premium to Contemporary Amperex Technology (CATL) (300750 CH) – if that is due to expectations of Fast Entry, that premium could drop.
CATL (3750 HK) has not announced the overallotment option as exercised and that puts Fast Entry at risk. An announcement prior to the close tomorrow could lead to Fast Entry.
The earliest inclusion could be at the close on 30 May while the other global index inclusion looks likely in December.

GMO Internet (4784) – Squeeze-Able So Squeezing, Offering Likely Gets Pulled – AVOID LIKE THE PLAGUE

GMO Internet (4784 JP) was created by the reverse takeover of a listed cad/media company by its parent company’s “internet infrastructure” business. GMO Internet Group ended up with ~98%.
In the process, the stock rose 500%. Now, as part of its promise to the TSE allowing TSE Prime membership for the extraordinarily low-float target, the parent is offering shares.
The squeeze has it at 180x Dec25e EPS, 111x EBIT, 70x book. The offering likely gets pulled and the stock isn’t shortable… so what next? Pain, and an ECLWO.

CATL (3750 HK): The Tail Wags the Dog

The buying in Contemporary Amperex Technology (3750 HK) over the last couple of days has dragged Contemporary Amperex Technology (CATL) (300750 CH) higher as the arbs trade the AH spread.
The Fast Entry into a global index could keep CATL (3750 HK) supported over the next few trading days, but reality will take hold pretty soon.
Short CATL (3750 HK) / long CATL (300750 CH) offers great risk/reward, while an outright CATL (3750 HK) short offers higher return albeit at a much higher level of risk.

CATL (3750 HK)’s Concentration Warning

Contemporary Amperex Technology (3750 HK) (CATL H), a global leader in providing battery solutions, was listed on the 20th May at $263/share. Here is the prospectus.
Via the H-share listing, CATL raised ~US$5.2bn. Shares have since gained ~26% and trade at HK$330/share, as I type.
It is worth noting the HKEx issued a high concentration warning in CATL’s H shares the day before shares were listed.

S&P/ASX Index Rebalance Preview (June 2025): 10 Potential Changes Across Indices

With the review period nearly complete, there could be one change each for the S&P/ASX20 Index, S&P/ASX50 Index and S&P/ASX200 INDEX and two changes for the S&P/ASX100 Index in June.
Passive trackers will need to buy between 1-12.5 days of ADV in the forecast adds and sell between 0.6-9.8 days of ADV in the forecast deletes.
While cumulative excess volume has increased in the forecast adds and deletes, there could be underpositioning relative to the estimated passive flow in Perseus Mining, Viva Energy and Nick Scali.

CSI Medical Service Index Rebalance Preview: Five Changes as Trade Flatlines

The review period ended on 30 April, the changes should be announced on 30 May and will be effective after the close of trading on 13 June.
There could be 5 changes in June where passive trackers will need to trade between 0.7-2x ADV in the forecast adds and sell between 1-4x ADV in the forecast deletes.
A long adds/ short deletes trade has gone nowhere in the last 6-7 months, and the volatility of the trade has reduced even further in the last couple of months.

[Japan Activism/M&A] – Thinking About Positioning Around the Tsuruha/Welcia Vote

The Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) AGMs to elect directors and approve the share exchange agreement to merge the two.
10% Tsuruha shareholder Orbis objects to the merger ratio AND the later tender whereby Aeon goes to 51%, saying everything is underpriced. ISS/GlassLewis recommend voting against the merger.
I haven’t seen the proxy reports but I’ve done the math. Investors/arbs should look at the possibilities/probabilities and understand what dependencies exist. Shareholders are not helpless, no matter the outcome.

Jiangsu Hengrui Pharma H Share Listing (1276 HK): Trading Debut

Jiangsu Hengrui Pharmaceuticals (1276 HK) priced its H Share at HK$44.05 to raise HK$9,890.1 million (US$1.3 billion) in gross proceeds. The H Share will be listed tomorrow.
The timing of the H Share listing is fortuitous, as the peers have materially re-rated since the prospectus was released on 15 May.
Hengrui had the highest oversubscription rates among recent large AH listings. The AH discount implied by the offer is attractive.

Soundwill Holdings (878 HK): An Opportunity or Another HK Arbageddon?

The spread to the Foo family’s HK$8.50 offer for Soundwill Holdings (878 HK) has materially increased to 15.8% over the last two trading days. The vote is on 23 May.
Several readers have asked if the Soundwill offer will mirror the Goldlion Holdings (533 HK) deal break. The two schemes share similarities but are also different in several ways.
The share price action either reflects an imminent deal break or a result of a negative feedback loop. Tread carefully as this is a high-risk/high-reward situation.

HD Hyundai Marine Solution Block Deal Sale of 8.5% of Outstanding Shares

After the market close today, it was announced that KKR is selling 3.81 million shares (8.5% of outstanding shares) of HD Hyundai Marine Solution in a block deal sale.
The expected block deal sale price is 145,000 won to 148,000 won per share, which represent 7.96% to 9.83% discount to the closing price of 160,800 won on 22 May.
Once this block deal is completed, KKR’s remaining stake in HD Hyundai Marine Solution will be reduced to 11% (4.94 million shares).

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May 22

Most Read: Contemporary Amperex Technology (CATL), Contemporary Amperex Technology, Sung Kwang Bend, Mayne Pharma, Seven Bank Ltd, Delta Electronics Thailand , Shibaura Electronics and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

CATL (3750 HK) H-Share IPO: Fast Entry to Global Indices Is Touch & Go
CATL (3750 HK): Reassessing Index Fast Entry; Need Overallotment Exercised by Tomorrow
KOSDAQ150 Index Rebalance Preview: Announcement Around the Corner
Mayne Disagrees With Cosette On MAC
[Japan M&A] Seven Bank (8410) – Seven & I Selldown, Itochu Buy-In, Not on My Bingo Card But Not Bad
CATL (3750 HK): The Tail Wags the Dog
Mayne Pharma (MYX AU): A Case of Buyer’s Remorse
SET50 Index Rebalance Preview: Capping DELTA & Constituent Changes
UK Inflation Flies Hawkish Pressures
[Japan M&A] Shibaura in Limbo – “Neutral” On Minebea And “Reserves Opinion” On YAGEO Bid, Waiting…

CATL (3750 HK) H-Share IPO: Fast Entry to Global Indices Is Touch & Go

Contemporary Amperex Technology (CATL) (300750 CH) could raise up to US$5.1bn in its H-share listing if the Offer Size Adjustment Option and the Overallotment Option are both exercised.
There is a huge allocation to cornerstone investors that is locked up for 6 months. That significantly reduces float and the probability of Fast Entry inclusion to global indexes.
CATL (3750 HK) will be added to Southbound Stock Connect from the open of trading on 16 June following the end of the Price Stabilisation period.

CATL (3750 HK): Reassessing Index Fast Entry; Need Overallotment Exercised by Tomorrow

CATL (3750 HK) is trading at a 6.9% premium to Contemporary Amperex Technology (CATL) (300750 CH) – if that is due to expectations of Fast Entry, that premium could drop.
CATL (3750 HK) has not announced the overallotment option as exercised and that puts Fast Entry at risk. An announcement prior to the close tomorrow could lead to Fast Entry.
The earliest inclusion could be at the close on 30 May while the other global index inclusion looks likely in December.

KOSDAQ150 Index Rebalance Preview: Announcement Around the Corner

With the review period for the June rebalance complete, we highlight 11 potential changes for the KOSDAQ 150 Index (KOSDQ150 INDEX).
The estimated impact on the potential inclusions ranges from 0.2-7.5 days of ADV while the impact on the potential deletions varies from 0.2-5.8 days of ADV.
The forecast adds have outperformed the forecast deletes over the last 6-7 months with a big move higher in the last month. Trim positions into strength.

Mayne Disagrees With Cosette On MAC

As widely speculated, Cosette asserted to Mayne Pharma (MYX AU) on the 17th May a Material Adverse Change (MAC) has occurred.
Mayne disagrees, and views the pre-requisites for a MAC, as defined in the SID, have not been established.
What now? The Scheme is not terminated. Both parties remain in consultation. If those talks are not satisfactory (say, a price reduction [my guess]), Cosette said it will walk.

[Japan M&A] Seven Bank (8410) – Seven & I Selldown, Itochu Buy-In, Not on My Bingo Card But Not Bad

Seven Bank Ltd (8410 JP) has been the ugly duckling of Japan e-banks since it got competition in the form of Rakuten Bank (5838) and SBI Sumishin (7163).
Last year, it was posited, and then confirmed, that Seven & I Holdings (3382 JP) wanted to sell down to de-consolidate. NTT Docomo wanted to buy a bank.
I thought it a good match but no deal has been done. So now we get a different deal – it’s weird for Itochu, but bodes well for Seven Bank

CATL (3750 HK): The Tail Wags the Dog

The buying in Contemporary Amperex Technology (3750 HK) over the last couple of days has dragged Contemporary Amperex Technology (CATL) (300750 CH) higher as the arbs trade the AH spread.
The Fast Entry into a global index could keep CATL (3750 HK) supported over the next few trading days, but reality will take hold pretty soon.
Short CATL (3750 HK) / long CATL (300750 CH) offers great risk/reward, while an outright CATL (3750 HK) short offers higher return albeit at a much higher level of risk.

Mayne Pharma (MYX AU): A Case of Buyer’s Remorse

Mayne Pharma (MYX AU) disclosed that Cosette asserts that a material adverse change has occurred due to its trading performance, litigation and FDA untitled letter.
Cosette has not quantified the impact, and Mayne disputes the assertion. Mayne’s trading performance is likely the largest contributor to Cosette’s MAC-related claims.
Precedent schemes suggest a lower offer is the best-case scenario. An unwilling bidder looking for angles, contractually, to exit suggests the likely outcome is a scheme termination.

SET50 Index Rebalance Preview: Capping DELTA & Constituent Changes

With 8 trading days left in the review period, we forecast 3 changes for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) in June.
Capping changes for Delta Electronics Thailand (DELTA TB) will result in big passive selling in the stock and funding inflows for the other index constituents.
The forecast adds have drifted lower over the last 6 months and outperformed the SET 50 Index while the deletes have dropped a lot and underperformed the index.

UK Inflation Flies Hawkish Pressures

By Phil Rush

Our above-consensus forecast was exceeded by UK inflation flying higher in April amid administered price rises and postponed price increases due to the late Easter in 2025.
Airfares still soared 10pp more than the norm for a late Easter, and 20pp above the April average. This stoked service and core inflation, although the median was steadier.
We expect inflation to grind up until October, whereas the consensus assumes stability until then. Persistently excessive inflation should discourage the BoE from cutting again.

[Japan M&A] Shibaura in Limbo – “Neutral” On Minebea And “Reserves Opinion” On YAGEO Bid, Waiting…

Yageo Corporation (2327 TT) approached Shibaura Electronics (6957 JP) for a takeover at ¥4300. Shibaura dismissed them and asked Minebea Mitsumi (6479 JP) to overbid. They did at ¥4500.
Then Yageo overbid Minebea at ¥5400, who then overbid Yageo at ¥5500, who then re-overbid at ¥6200. Despite not having its FEFTA Approval in place, YAGEO overbid and launched.
The Minebea CEO objected. We don’t know status. Now the Shibaura Special Committee has paused, supporting but not recommending the Minebea bid and Neutral on Yageo. We are in limbo.

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May 21

Most Read: Contemporary Amperex Technology (CATL), Contemporary Amperex Technology, Yang Ming Marine Transport, Mitsubishi Logisnext Co., Ltd., Seres Group , Melco International Development, Toyota Industries, Shin Etsu Chemical, Sung Kwang Bend and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

CATL (3750 HK) H-Share IPO: Fast Entry to Global Indices Is Touch & Go
CATL (3750 HK): Reassessing Index Fast Entry; Need Overallotment Exercised by Tomorrow
[Japan M&A/Activism] Toyota Industries (6201) Deal Could Be Announced Near-Term
TIP Taiwan Value High Dividend Index Rebalance: 10 Changes Implemented This Week; US$2.2bn Trade
[Japan M&A] Mitsubishi Logisnext (7105) – The Deal Still Looks Mighty Good
China A50 ETFs Rebalance Preview: One Change Highly Likely
Melco (200 HK) Trading “Cheap” Into Rights Issue
StubWorld: Toyota Industries/Motors, GMO Internet
[Japan Buybacks] ShinEtsu Chem (4063) – How the FCSR Works
KOSDAQ150 Index Rebalance Preview: Announcement Around the Corner

CATL (3750 HK) H-Share IPO: Fast Entry to Global Indices Is Touch & Go

Contemporary Amperex Technology (CATL) (300750 CH) could raise up to US$5.1bn in its H-share listing if the Offer Size Adjustment Option and the Overallotment Option are both exercised.
There is a huge allocation to cornerstone investors that is locked up for 6 months. That significantly reduces float and the probability of Fast Entry inclusion to global indexes.
CATL (3750 HK) will be added to Southbound Stock Connect from the open of trading on 16 June following the end of the Price Stabilisation period.

CATL (3750 HK): Reassessing Index Fast Entry; Need Overallotment Exercised by Tomorrow

CATL (3750 HK) is trading at a 6.9% premium to Contemporary Amperex Technology (CATL) (300750 CH) – if that is due to expectations of Fast Entry, that premium could drop.
CATL (3750 HK) has not announced the overallotment option as exercised and that puts Fast Entry at risk. An announcement prior to the close tomorrow could lead to Fast Entry.
The earliest inclusion could be at the close on 30 May while the other global index inclusion looks likely in December.

[Japan M&A/Activism] Toyota Industries (6201) Deal Could Be Announced Near-Term

Friday 25 April, Toyota Industries (6201 JP) released earnings for last year, guidance for this year and a Bloomberg scoop suggested Toyota Motors chairman Akio TOYODA would launch an MBO.
In some ways surprising, but activists/”noisy shareholders” and TSE guidance on dual listings caused pressure, and Toyota Motors was trying to walk the good governance walk.
I discussed the situation here on Day 1, and here a few days later. Long-only shareholders sold. Today, Kyodo had a follow-up article. Then Nikkei. Looks more solid now.

TIP Taiwan Value High Dividend Index Rebalance: 10 Changes Implemented This Week; US$2.2bn Trade

There are 10 changes for the TIP Taiwan Value High Dividend Index in May. The Yuanta Taiwan Value High Dividend ETF (00940 TT) has an AUM of US$4.4bn.
Estimated one-way turnover is 25.2% and there are 12 stocks with over 4 days of ADV to trade. The rebalance commenced yesterday and will end on Friday.
An equal weighted basket of inclusions has outperformed an equal weighted basket of deletions over the last month. That could continue near-term as the ETF continues to rebalance their portfolio.

[Japan M&A] Mitsubishi Logisnext (7105) – The Deal Still Looks Mighty Good

On 9 May Mitsubishi Logisnext Co., Ltd. (7105 JP) delayed earnings by 30 minutes. Shares popped. Then earnings were released, no deal, and shares crashed. Now they are rebounding.
But they remain volatile and subject to dips like the one this AM -5% at one point. Fears may be due to the idea that first smoke here was Dec-2024.
5 months later, no deal yet. Bids were due pre-earnings but with tariffs and writedowns, one wonders if bidders were waiting for results.

China A50 ETFs Rebalance Preview: One Change Highly Likely

With the review cutoff done, there could be one change for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK) ETFs in June.
As the highest ranked non-ETF member, Seres Group (601127 CH) could replace China United Network A (600050 CH) in the ETF at the close on 20 June.
China United Network A (600050 CH) was added to the ETF in March, so this could be a very short stint in the ETF for the stock.

Melco (200 HK) Trading “Cheap” Into Rights Issue

In my stub monitor flagged in StubWorld: Toyota Industries/Motors, GMO Internet, I see Melco International Development (200 HK) is trading “cheap” to Melco Resorts & Entertainment (MLCO US).
Last month, Melco proposed one new rights share for two existing shares at a subscription price of HK$1.0286/share, a 72.93% discount to undisturbed, and a 64.28% discount to the TERP.
Lawrence Ho will backstop ~54% of the rights, if need be. Depending on the level of support for the rights, expect Lawrence to further chip away against minorities.

StubWorld: Toyota Industries/Motors, GMO Internet

Given recent – and ongoing developments – with Toyota Industries (6201 JP) and GMO Internet (4784 JP), I’m revisiting my NAVs.
Preceding my comments on the Toyota Group and GMO, are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

[Japan Buybacks] ShinEtsu Chem (4063) – How the FCSR Works

Late April, Shin Etsu Chemical (4063 JP) announced a huge ¥500bn 200mm shares (10.2%) buyback. That was never ever going to happen. That needed a ¥2500 share price, not ¥4300+.
But it was big, and started in late May. Today, they announced how. It is a “Japan ASR”, the Nomura version, this time with an interesting twist.
In response to a couple of reader questions today, I provide a brief overview of how these things work.

KOSDAQ150 Index Rebalance Preview: Announcement Around the Corner

With the review period for the June rebalance complete, we highlight 11 potential changes for the KOSDAQ 150 Index (KOSDQ150 INDEX).
The estimated impact on the potential inclusions ranges from 0.2-7.5 days of ADV while the impact on the potential deletions varies from 0.2-5.8 days of ADV.
The forecast adds have outperformed the forecast deletes over the last 6-7 months with a big move higher in the last month. Trim positions into strength.

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May 20

Most Read: Contemporary Amperex Technology (CATL), Shibaura Electronics, BYD, Sankyo Co Ltd, Toyota Industries, NetEase , Midea Group, Mitsubishi Logisnext Co., Ltd., GMO Internet and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

CATL (3750 HK) H-Share IPO: Fast Entry to Global Indices Is Touch & Go
[Japan M&A] YAGEO Overbids Minebea’s Overbid of YAGEO’s Overbid of Minebea’s Overbid – The Endgame
HSTECH Index Rebalance: BYD (1211 HK) To Replace China Literature (772 HK) As Trade Hits US$6bn
[Japan Buybacks] ¥7.3trln of Buybacks Announced In the Last Month – Data on Each, Plus History
[Japan M&A/Activism] Toyota Industries (6201) Deal Could Be Announced Near-Term
HSCEI Index Rebalance: Why Did Pop Mart (9992 HK) Miss?
Hang Seng Index (HSI) Rebalance: Midea (300 HK) & ZTO Express (2057 HK) Added; Inching Towards a 100
Toyota Industries (6201 JP): A Potential Privatisation Sooner than Expected
[Japan M&A] Mitsubishi Logisnext (7105) – The Deal Still Looks Mighty Good
GMO Internet Placement: Extremely Overvalued at the Moment

CATL (3750 HK) H-Share IPO: Fast Entry to Global Indices Is Touch & Go

Contemporary Amperex Technology (CATL) (300750 CH) could raise up to US$5.1bn in its H-share listing if the Offer Size Adjustment Option and the Overallotment Option are both exercised.
There is a huge allocation to cornerstone investors that is locked up for 6 months. That significantly reduces float and the probability of Fast Entry inclusion to global indexes.
CATL (3750 HK) will be added to Southbound Stock Connect from the open of trading on 16 June following the end of the Price Stabilisation period.

[Japan M&A] YAGEO Overbids Minebea’s Overbid of YAGEO’s Overbid of Minebea’s Overbid – The Endgame

Yageo Corporation (2327 TT) has now strongly overbid Minebea’s weak overbid of Yageo’s strong overbid of Minebea’s weak overbid of Yageo’s initial hostile offer for Shibaura Electronics (6957 JP).
We are now 40% higher than the initial bid and the best bid is approaching the top end of Valuation Agent’s top-of-DCF-range prices. There may be a bit more. Maybe.
The question now is only whether Minebea responds. If it does, there is a little juice left, but if not, that’s it. It should get done.

HSTECH Index Rebalance: BYD (1211 HK) To Replace China Literature (772 HK) As Trade Hits US$6bn

As expected, BYD (1211 HK) will be added to the Hang Seng TECH Index (HSTECH INDEX) in June following the launch of God’s Eye, its Advanced Driver-Assistance System (ADAS).
BYD (1211 HK)‘s inclusion results in China Literature (772 HK) being deleted from the index. China Literature stock should drop over the near-term.
Estimated one-way turnover at the rebalance is 13% resulting in a round-trip trade of HK$46.5bn (US$5.95bn). There are 16 stocks that have at least 1x ADV to trade from passives.

[Japan Buybacks] ¥7.3trln of Buybacks Announced In the Last Month – Data on Each, Plus History

Buybacks are a central part of Corporate Japan’s effort to improve corporate/capital governance. Lots of cross-holders want/need to sell. Lots of companies want to reduce excess equity.
This earnings season has seen a LOT of new buybacks announced. ¥7.3trln in the last month and that doesn’t even include the biggest buybacks extant by March-end companies.
We are experimenting with new ways of displaying data/analytics for buybacks in Japan. To that end, we have a new tool. We hope users find it useful. We invite feedback.

[Japan M&A/Activism] Toyota Industries (6201) Deal Could Be Announced Near-Term

Friday 25 April, Toyota Industries (6201 JP) released earnings for last year, guidance for this year and a Bloomberg scoop suggested Toyota Motors chairman Akio TOYODA would launch an MBO.
In some ways surprising, but activists/”noisy shareholders” and TSE guidance on dual listings caused pressure, and Toyota Motors was trying to walk the good governance walk.
I discussed the situation here on Day 1, and here a few days later. Long-only shareholders sold. Today, Kyodo had a follow-up article. Then Nikkei. Looks more solid now.

HSCEI Index Rebalance: Why Did Pop Mart (9992 HK) Miss?

We had Pop Mart International (9992 HK) at the cusp of index inclusion. An increase in Postal Savings Bank of China (1658 HK)‘s FAF led to Pop Mart missing out.
Estimated one-way turnover at the rebalance is 3.18% leading to a round-trip trade of HK$3.8bn (US$489m).
There are large inflows for NetEase (9999 HK), Trip.com Group (9961 HK) and Baidu (9888 HK) due to a FAF methodology change for Secondary Listings.

Hang Seng Index (HSI) Rebalance: Midea (300 HK) & ZTO Express (2057 HK) Added; Inching Towards a 100

Midea Group (300 HK) and ZTO Express Cayman (2057 HK) will be added to the Hang Seng Index (HSI INDEX) in June to take us up to 85 index constituents.
Estimated one-way turnover is 2.9% and the estimated round-trip trade is HK$11.3bn (US$1.44bn) with over 1x ADV to trade in the adds and in one stock with a FAF increase.
There could be a short-term drop in the AH premium for Midea Group while this inclusion ensures ZTO Express Cayman is a member of all major indices where eligible.

Toyota Industries (6201 JP): A Potential Privatisation Sooner than Expected

Kyodo news agency reported that Toyota Industries (6201 JP) plans to accept a tender offer by Toyota Motor (7203 JP) and Toyota Chairman Akio Toyoda, potentially in May or June.
The Nikkei reported that Toyota plans to borrow JPY3 trillion to fund the acquisition. These articles provide more clarity on price, composition of the offeror, financing structure, and timeline.
These articles increase the probability of a tender offer around JPY18,515 (JPY6 trillion market cap). At the last close, the gross spread was 12.1%.

[Japan M&A] Mitsubishi Logisnext (7105) – The Deal Still Looks Mighty Good

On 9 May Mitsubishi Logisnext Co., Ltd. (7105 JP) delayed earnings by 30 minutes. Shares popped. Then earnings were released, no deal, and shares crashed. Now they are rebounding.
But they remain volatile and subject to dips like the one this AM -5% at one point. Fears may be due to the idea that first smoke here was Dec-2024.
5 months later, no deal yet. Bids were due pre-earnings but with tariffs and writedowns, one wonders if bidders were waiting for results.

GMO Internet Placement: Extremely Overvalued at the Moment

By Nicholas Tan

GMO Internet Group (9449 JP) is looking to sell its 33.4% stake in its subsidiary GMO Internet (4784 JP) to meet free-float requirements.
Shares are very overvalued at the moment and should be worth a mere fraction of its current trading value.
We have looked at the company’s deal dynamics in our earlier notes. In this note, we discuss the firm’s outlook as well as valuation.

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May 19

Most Read: Rainbow Robotics, Technopro Holdings, BYD, Sankyo Co Ltd, NetEase , Cosco Shipping Development, Midea Group, China Literature, Seven & I Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Samsung Group ETF Rebalancing Event to Watch for in June
[Japan M&A] TechnoPro Holdings (6028) May Be Up For Grabs
HSTECH Index Rebalance: BYD (1211 HK) To Replace China Literature (772 HK) As Trade Hits US$6bn
[Japan Buybacks] ¥7.3trln of Buybacks Announced In the Last Month – Data on Each, Plus History
HSCEI Index Rebalance: Why Did Pop Mart (9992 HK) Miss?
A/H Premium Tracker (To 16 May 2025): AH Premia Contract Small Again. BYD and CMB Go Negative.
Hang Seng Index (HSI) Rebalance: Midea (300 HK) & ZTO Express (2057 HK) Added; Inching Towards a 100
[Quiddity Index] Six Hang Seng Index Family Indices: Flows for June 6 Rebal
TechnoPro (6028 JP): A Good Privatisation Candidate
Merger Arb Mondays (19 May) – Seven & I, Nissin, Welcia/Tsuruha, Mayne, ESR, OneConnect, Frasers

Samsung Group ETF Rebalancing Event to Watch for in June

With Samsung finalizing the call option on Rainbow Robotics in February, the FTC will add it to Samsung Group in March, ensuring its inclusion in the ETF by June.
With the market cap boost from the call option, Rainbow Robotics is set to easily exceed 2% weight in the ETF by June.
The rebalancing from June 2-9 will direct 30% of daily volume into Rainbow Robotics, likely enough to move the needle on price action, especially on the first day.

[Japan M&A] TechnoPro Holdings (6028) May Be Up For Grabs

Technopro Holdings (6028 JP) is a temp/contract staffing platform which specialises in engineering staff (IT engineers far more than machinery, construction, chemicals). The company has been growing.
Overnight, an article appeared in MergerMarket – a high-dollar M&A-related news service – saying the company was going through a sale process. The company confirmed it was one possibility.
The stock went limit up. This quick writeup looks at the framework of the idea, and possibilities.

HSTECH Index Rebalance: BYD (1211 HK) To Replace China Literature (772 HK) As Trade Hits US$6bn

As expected, BYD (1211 HK) will be added to the Hang Seng TECH Index (HSTECH INDEX) in June following the launch of God’s Eye, its Advanced Driver-Assistance System (ADAS).
BYD (1211 HK)‘s inclusion results in China Literature (772 HK) being deleted from the index. China Literature stock should drop over the near-term.
Estimated one-way turnover at the rebalance is 13% resulting in a round-trip trade of HK$46.5bn (US$5.95bn). There are 16 stocks that have at least 1x ADV to trade from passives.

[Japan Buybacks] ¥7.3trln of Buybacks Announced In the Last Month – Data on Each, Plus History

Buybacks are a central part of Corporate Japan’s effort to improve corporate/capital governance. Lots of cross-holders want/need to sell. Lots of companies want to reduce excess equity.
This earnings season has seen a LOT of new buybacks announced. ¥7.3trln in the last month and that doesn’t even include the biggest buybacks extant by March-end companies.
We are experimenting with new ways of displaying data/analytics for buybacks in Japan. To that end, we have a new tool. We hope users find it useful. We invite feedback.

HSCEI Index Rebalance: Why Did Pop Mart (9992 HK) Miss?

We had Pop Mart International (9992 HK) at the cusp of index inclusion. An increase in Postal Savings Bank of China (1658 HK)‘s FAF led to Pop Mart missing out.
Estimated one-way turnover at the rebalance is 3.18% leading to a round-trip trade of HK$3.8bn (US$489m).
There are large inflows for NetEase (9999 HK), Trip.com Group (9961 HK) and Baidu (9888 HK) due to a FAF methodology change for Secondary Listings.

A/H Premium Tracker (To 16 May 2025): AH Premia Contract Small Again. BYD and CMB Go Negative.

AH spreads are slightly narrower, but performance is concentrated in fewer names and broad spread volatility is up. BYD (1211 HK) AH is negative now, maybe on HSTECH inclusion expectations.
I didn’t expect much out of Geneva last weekend. I was wrong in that there was a big announcement, but maybe not wrong because content was pretty slim.
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.

Hang Seng Index (HSI) Rebalance: Midea (300 HK) & ZTO Express (2057 HK) Added; Inching Towards a 100

Midea Group (300 HK) and ZTO Express Cayman (2057 HK) will be added to the Hang Seng Index (HSI INDEX) in June to take us up to 85 index constituents.
Estimated one-way turnover is 2.9% and the estimated round-trip trade is HK$11.3bn (US$1.44bn) with over 1x ADV to trade in the adds and in one stock with a FAF increase.
There could be a short-term drop in the AH premium for Midea Group while this inclusion ensures ZTO Express Cayman is a member of all major indices where eligible.

[Quiddity Index] Six Hang Seng Index Family Indices: Flows for June 6 Rebal

In this insight, we present the flows to buy and sell for each of the top 6 Hang Seng Index Family indices based on estimated tracking AUM.
The indices: Hang Seng Index (HSI), HS Tech Index (HSTECH), HS China Enterprise Index (HSCEI), HS HK Biotech (HSHKBIO), HS Internet & Infotech (HSIII), and HS Healthcare Index (HSHCI).
By Quiddity calculations based on the 16 May close, there is one-way flow across these six indices of HK$34,556,596,089.99 (approximately), to trade on 6 June.

TechnoPro (6028 JP): A Good Privatisation Candidate

Technopro Holdings (6028 JP) shares were up 20.7% on Friday based on a Mergermarket report that is conducting a privatisation auction with bids due in six weeks.
Technopro responded that it has been continuously exploring various strategic alternatives, including privatisation, to enhance shareholder value. TechnoPro has the characteristics to make a good privatisation target.
The precedent is Bain’s privatisation of Outsourcing Inc (2427 JP) at a forward EV/EBITDA multiple of 13.5x. A similar multiple implies a JPY4,400 offer. TechnoPro can justify a higher multiple.

Merger Arb Mondays (19 May) – Seven & I, Nissin, Welcia/Tsuruha, Mayne, ESR, OneConnect, Frasers

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: Insignia Financial (IFL AU), ENN Energy (2688 HK), Smartpay Holdings (SPY NZ), Seven & I Holdings (3382 JP), ZEEKR (ZK US), Mayne Pharma (MYX AU), Smart Share.
Lowest spreads: Bright Smart Securities And (1428 HK), Dada Nexus (DADA US), Nissin Corp (9066 JP), Sinarmas Land (SML SP), Fujitsu General (6755 JP), Torii Pharmaceutical (4551 JP).

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May 18

Most Read: BYD, Ningbo Shuanglin Auto Parts, Pop Mart International Group L, All Winner Technology, Technopro Holdings, Kuaishou Technology, Guming Holdings, NetEase and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

HSTECH Index Rebalance Preview: BYD (1211 HK) Could Replace China Literature (772 HK); Huge Trade
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for June25
CSI 500/1000 Index Rebalance Preview: Strong Near-Term Outperformance
FXI Rebalance Preview: Pop Mart (9992 HK) Pops Up Again
ChiNext/ChiNext50 Index Rebalance Preview: Whole Lotta Change
[Japan M&A] TechnoPro Holdings (6028) May Be Up For Grabs
HEW: Dovish Arguments Ageing Poorly
Hang Seng Internet & IT Index (HSIII) Rebalance: Float & Capping Changes
HSCI Index Rebalance: Bloks (325 HK), Guming (1364 HK) & MIXUE (2097 HK) Added
HSCEI Index Rebalance: Why Did Pop Mart (9992 HK) Miss?

HSTECH Index Rebalance Preview: BYD (1211 HK) Could Replace China Literature (772 HK); Huge Trade

The review period for the June rebalance of the HSTECH INDEX ended on 31 March, the changes will be announced on 16 May and implemented on 6 June.
Following the launch of the God’s Eye ADAS, BYD (1211 HK) could become eligible for index inclusion after meeting the Autonomous theme and Innovation screening.
The inclusion of BYD (1211 HK) in the index could result in China Literature (772 HK) being deleted from the index in June.

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for June25

Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 June.
With no constituent changes, one-way turnover will be 1.9% with 3 stocks being capped and FAF changes for a few stocks due to a methodology change for Secondary Listings.
We highlight 7 stocks that have a higher probability of being added to the index. Everything depends on the index committee, and we would not be surprised by zero changes.

CSI 500/1000 Index Rebalance Preview: Strong Near-Term Outperformance

With the review period complete, there could be 50 changes for the CSI Smallcap 500 Index and 100 changes for the CSI 1000 Index in June.
There are a lot of migrations expected between the two indices and the impacts for those stocks are lower with much of the flow cancelling out.
The outright adds have outperformed the outright deletes over the last few months with the profit-taking in March giving way to renewed outperformance in April.

FXI Rebalance Preview: Pop Mart (9992 HK) Pops Up Again

With two days left in the review period, Pop Mart International Group L (9992 HK) could replace China Railway Group Ltd H (390 HK) in the FXI ETF in June.
The inclusion of Pop Mart International Group L (9992 HK) in the iShares China Large-Cap (FXI) (FXI US) will add to the potential inclusion of the stock in other indices.
Short interest has been increasing in both stocks. Multiple index inclusions could result in short covering in Pop Mart while China Railway Group‘s stock price has been bouncing off its lows.

ChiNext/ChiNext50 Index Rebalance Preview: Whole Lotta Change

With the review period complete, we forecast 10 changes for the ChiNext Index (SZ399006 INDEX EQUITY) and 5 changes for the ChiNext 50 Index in June.
The largest flows will be in stocks that are adds/deletes for both indices – and there are a few of those. Plus there are some overlaps with other indices.
While the forecast adds have outperformed the forecast deletes for both indices since January, near-term performance has not been great. That could change as we near the announcement date.

[Japan M&A] TechnoPro Holdings (6028) May Be Up For Grabs

Technopro Holdings (6028 JP) is a temp/contract staffing platform which specialises in engineering staff (IT engineers far more than machinery, construction, chemicals). The company has been growing.
Overnight, an article appeared in MergerMarket – a high-dollar M&A-related news service – saying the company was going through a sale process. The company confirmed it was one possibility.
The stock went limit up. This quick writeup looks at the framework of the idea, and possibilities.

HEW: Dovish Arguments Ageing Poorly

By Phil Rush

Equity and rates market prices normalised further as data remains too resilient to prompt cuts, and US trade policy still seems to be reversing its destructive aspects.
UK GDP boomed beyond expectations again, albeit amid residual seasonality. US CPI data were soft and stable, as companies appeared to have smoothed the tariff shock.
Next week’s UK inflation data could compound the pressure by exceeding the consensus to reach 3.4% on the CPI. The flash PMIs and RBA decision are other timely highlights.

Hang Seng Internet & IT Index (HSIII) Rebalance: Float & Capping Changes

There are no constituent changes for the Hang Seng Internet & IT Index (HSIII) in June but there will be float and capping changes.
Estimated one-way turnover is 5.95% and that leads to a round-trip trade of HK$3.2bn (US$410m). There are a few stocks with over 0.5x ADV to trade from passive trackers.
The inflows to NetEase (9999 HK) and Baidu (9888 HK) and the outflows from Kuaishou Technology (1024 HK) and Bilibili (9626 HK) will add to the flows from other indices.

HSCI Index Rebalance: Bloks (325 HK), Guming (1364 HK) & MIXUE (2097 HK) Added

As expected, Bloks Group (325 HK), Guming Holdings (1364 HK) and Mixue Group (2097 HK) will be added to the Hang Seng Composite Index (HSCI) in June.
The HSCI inclusion will result in the stocks being added to Southbound Stock Connect from the open of trading on 9 June and that could result in sizeable inflows.
Use stock price spikes to trim positions in Bloks Group (325 HK) ahead of lock-up expiry in July, and in Guming Holdings (1364 HK) ahead of lock-up expiry in August.

HSCEI Index Rebalance: Why Did Pop Mart (9992 HK) Miss?

We had Pop Mart International (9992 HK) at the cusp of index inclusion. An increase in Postal Savings Bank of China (1658 HK)‘s FAF led to Pop Mart missing out.
Estimated one-way turnover at the rebalance is 3.18% leading to a round-trip trade of HK$3.8bn (US$489m).
There are large inflows for NetEase (9999 HK), Trip.com Group (9961 HK) and Baidu (9888 HK) due to a FAF methodology change for Secondary Listings.

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May 17

Most Read: BYD, Pop Mart International Group L, SK Square , Contemporary Amperex Technology, Technopro Holdings, LG Energy Solution, ESR Group , Oneconnect Financial Technology, Mayne Pharma and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

HSTECH Index Rebalance Preview: BYD (1211 HK) Could Replace China Literature (772 HK); Huge Trade
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for June25
FXI Rebalance Preview: Pop Mart (9992 HK) Pops Up Again
A Practical Guide to Stub Arb Trade in the Korean Stock Market
CATL (3750 HK): Powered by the PetroDollar. HK Offer Overview and Valuations.
[Japan M&A] TechnoPro Holdings (6028) May Be Up For Grabs
LG Chem: To Issue Exchangeable Bond Worth US$1 Billion
ESR (1821 HK): Pre-Cons Done. Scheme Doc By 22nd May
OneConnect Financial (6638 HK/OCFT US): Ping An Firms Offer @ HK$2.068/Share
Mayne Pharma’s Merger with Cosette Pharmaceuticals: Navigating FDA Concerns, Shareholder Approval, and Market Reactions

HSTECH Index Rebalance Preview: BYD (1211 HK) Could Replace China Literature (772 HK); Huge Trade

The review period for the June rebalance of the HSTECH INDEX ended on 31 March, the changes will be announced on 16 May and implemented on 6 June.
Following the launch of the God’s Eye ADAS, BYD (1211 HK) could become eligible for index inclusion after meeting the Autonomous theme and Innovation screening.
The inclusion of BYD (1211 HK) in the index could result in China Literature (772 HK) being deleted from the index in June.

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for June25

Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 June.
With no constituent changes, one-way turnover will be 1.9% with 3 stocks being capped and FAF changes for a few stocks due to a methodology change for Secondary Listings.
We highlight 7 stocks that have a higher probability of being added to the index. Everything depends on the index committee, and we would not be surprised by zero changes.

FXI Rebalance Preview: Pop Mart (9992 HK) Pops Up Again

With two days left in the review period, Pop Mart International Group L (9992 HK) could replace China Railway Group Ltd H (390 HK) in the FXI ETF in June.
The inclusion of Pop Mart International Group L (9992 HK) in the iShares China Large-Cap (FXI) (FXI US) will add to the potential inclusion of the stock in other indices.
Short interest has been increasing in both stocks. Multiple index inclusions could result in short covering in Pop Mart while China Railway Group‘s stock price has been bouncing off its lows.

A Practical Guide to Stub Arb Trade in the Korean Stock Market

Due to NAV accuracy issues, locals favor sigma plays within ±2σ bands over classic stub trades, with aggressive traders rotating longs and shorts around ±1σ.
Avoid trending divergence periods; these eight targets usually mean-revert well, but H1 this year showed unusually deep divergence—important to consider for current sigma plays.
As of today, no 20-day MA sigmas trigger trades, but holding company strength drives price ratios—a trend likely lasting post-election—suggesting ±2σ sigma plays with longs in holdcos.

CATL (3750 HK): Powered by the PetroDollar. HK Offer Overview and Valuations.

By Devi Subhakesan

Contemporary Amperex Technology (CATL) (300750 CH) has offered118 million shares in Hong Kong, priced at HKD263 per share, a modest discount to its A share price.
More than half of the USD4 Billion Hong Kong share offering has already been subscribed by cornerstone investors.
Middle Eastern sovereign wealth funds are amongst CATL’s key corner stone investors while the deal excluded US onshore investors given the mounting geopolitical tensions.

[Japan M&A] TechnoPro Holdings (6028) May Be Up For Grabs

Technopro Holdings (6028 JP) is a temp/contract staffing platform which specialises in engineering staff (IT engineers far more than machinery, construction, chemicals). The company has been growing.
Overnight, an article appeared in MergerMarket – a high-dollar M&A-related news service – saying the company was going through a sale process. The company confirmed it was one possibility.
The stock went limit up. This quick writeup looks at the framework of the idea, and possibilities.

LG Chem: To Issue Exchangeable Bond Worth US$1 Billion

On 15 May, LG Chem announced that it plans to issue foreign currency exchangeable bond worth US$1 billion using shares of its subsidiary LG Energy Solution as the underlying asset.
The purpose of this EB issue is to repay the amount of EB issued two years ago.
The exchange price premium was lowered from 130% in 2023 to 110-115% this time, and the maturity has been shortened from 7 years to 3 years.

ESR (1821 HK): Pre-Cons Done. Scheme Doc By 22nd May

Back on the 4th December 204, Starwood/Warburg Pincus Consortium announced a firm pre-conditional Offer for ESR Group (1821 HK) at HK$13/share (best & final), by way of a Scheme.
The list of pre-cons was extensive. Last night (15th May), ESR announced the satisfaction of all pre-cons.
The Scheme Doc is now required to be dispatched by the 22nd May, suggesting payment around mid-July. Assuming no dispatch delays.

OneConnect Financial (6638 HK/OCFT US): Ping An Firms Offer @ HK$2.068/Share