Most Read

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.

GMO Internet (4784) Offering – This Is a GINORMOUS Re-IPO – AVOID LIKE THE PLAGUE

Last year, GMO injected its internet business into GMO Internet (4784 JP) and took shares as consideration. Somehow, GMO Internet got a TOPIX inclusion earlier this year.
The company has 1.24% float of 3.4mm shares. GMO Internet Group – the parent – will now offload 91.7mm shares in an equity offering to meet TSE Continued Listing Requirements.
That is about ¥279bn at current price against float of ¥10bn. Full market cap is ¥850bn. That’s 170x Dec25e Net Income. I expect the price will fall. You were warned.

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.

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.

Mayne Pharma (MYX AU): Firm Support From Cosette Would Be Welcome About Now

They say bad things come in threes. First, Mayne Pharma (MYX AU)announced TherapeuticsMD (TXMD US)‘s legal lawsuit. Then shares buckled in the wake of Trump’s executive order on pharma.
The final straw was the FDA accusing Mayne of giving misleading impression of the risks of its oral birth control pill. Shares are now a whopping 29% adrift of terms.
Mayne reckons the lawsuit and the FDA letter are not materially price sensitive; and it intends to move forward with the Scheme. A similar intention from Cosette would be welcome.

[Japan M&A/Activism] Infroneer To Buy Out Activist Target Sumi Mits Construction (1821) Cheapish

Noted activist Yoshiaki MURAKAMI and associates owned ~12.5% in March 2024, perhaps a tad more. Now they own ~29%.
Integrated Construction Co INFRONEER Holdings (5076 JP) – congenitally allergic to paying full price for acquisitions – is buying Sumitomo Mitsui Construction (1821 JP) well below FAs’ DCF range midpoints.
But MURAKAMI-san has tossed his cards in, agreeing to tender. This looks like it gets done, but there are interesting angles.

Jiangsu Hengrui Pharma A/H Listing – Low-End Is Probably Close to Fair Value

Jiangsu Hengrui Medicine (600276 CH), a China-based pharmaceutical company, aims to raise around US$1.3bn in its H-share listing.
JHP Has been ranked as one of the global Top 50 pharmaceutical companies by Pharm Exec for six consecutive years since 2019.
We have looked at the company’s past performance and other deal dynamics in our previous note. In this note, we talk about the IPO pricing.

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.

ESR Group (1821 HK): Precondition Satisfied

The precondition for the consortium scheme offer for ESR Group (1821 HK) has been satisfied. The scheme document will be despatched by 22 May.
The consortium has disclosed an additional irrevocable. Total irrevocables and letters of support represent 35.01% of outstanding shares (58.24% of disinterested shares).
This is a done deal, helped by the material derating of peers. At the last close and for an early August payment, the gross/annualised spread is 4.3%/21.3%

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May 15

Most Read: BYD, Mayne Pharma, Hainan Meilan International Airport, GMO Internet, Pop Mart International Group L, Dawning Information Industry C, Nippon Road, Ningbo Shuanglin Auto Parts, Frasers Hospitality Trust 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
Mayne Pharma (MYX AU): MAC Musings
Hainan Meilan Intl Airport (357 HK): Hainan SASAC’s Left/Right Pocket MGO
GMO Internet (4784) Offering – This Is a GINORMOUS Re-IPO – AVOID LIKE THE PLAGUE
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for June25
SSE50 Index Rebalance Preview: 4 Potential Changes in June
[Japan M&A] – Three+ Years Later, Shimizu Comes In To Buy Out Minorities in Nippon Road (1884)
CSI 500/1000 Index Rebalance Preview: Strong Near-Term Outperformance
GMO Internet Placement: Secondary Sell-Down (Quasi IPO) To Meet Prime Listing Requirements
Frasers Hospitality Trust (FHT SP): Frasers Property & TCC Reload Scheme

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.

Mayne Pharma (MYX AU): MAC Musings

Back on the 21st Feb 2025, Mayne Pharma (MYX AU), a leader in dermatology and women’s health, entered into a Scheme with US-based pharmaceutical outfit, Cosette Pharmaceuticals, at A$7.40/share.
The transaction is progressing – the HSR Act condition was satisfied last week. A Scheme Booklet should be issued shortly, with an expected vote mid-June and late-June/early-July implementation.
Shares declined 3.1% yesterday over concerns a MAC could be triggered on the back of the Trump’s executive order on pharma. The impact is likely mixed, but leans neutral.

Hainan Meilan Intl Airport (357 HK): Hainan SASAC’s Left/Right Pocket MGO

Hainan Meilan International Airport (357 HK) has announced a potential change of control, via the domestic shares.
Haikou Meilan’s major shareholder, Hainan Airport Industrial, has entered into a SPA with Hainan Island (600515 CH) to sell its 50.19% stake, the completion of which triggers an unconditional MGO.
The H-share Offer price will be HK$10.62/share. That’s not compelling; but it’s not meant to be as Hainan Airport Industrial and Hainan Island Construction are ultimately controlled by Hainan SASAC.

GMO Internet (4784) Offering – This Is a GINORMOUS Re-IPO – AVOID LIKE THE PLAGUE

Last year, GMO injected its internet business into GMO Internet (4784 JP) and took shares as consideration. Somehow, GMO Internet got a TOPIX inclusion earlier this year.
The company has 1.24% float of 3.4mm shares. GMO Internet Group – the parent – will now offload 91.7mm shares in an equity offering to meet TSE Continued Listing Requirements.
That is about ¥279bn at current price against float of ¥10bn. Full market cap is ¥850bn. That’s 170x Dec25e Net Income. I expect the price will fall. You were warned.

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.

SSE50 Index Rebalance Preview: 4 Potential Changes in June

With the review period complete, there are 2 non-constituents in direct inclusion zone and 4 current constituents in direct deletion zone.
4 changes result in a one-way turnover of 5.7%, leading to a round-trip trade of CNY 21.8bn (US$3bn). Index arb balances will increase the impact on the stocks.
After drifting in a range, the forecast adds have outperformed the forecast deletes over the last month. There could be further outperformance as we near the announcement date.

[Japan M&A] – Three+ Years Later, Shimizu Comes In To Buy Out Minorities in Nippon Road (1884)

In February 2022, Shimizu Corp (1803 JP) bought an additional 25% to get to 50.1% of Nippon Road (1884 JP). It wasn’t a great price.
It was, however, a good trade to buy the dip after, as recommended. I expected Shimizu to come back in one to three years. It took three.
Like last time, the price is light. The multiple is low. There are no synergies in the price analysis, in specific violation of the METI Fair M&A/CorpTakeover Guidelines. Bah humbug.

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.

GMO Internet Placement: Secondary Sell-Down (Quasi IPO) To Meet Prime Listing Requirements

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.
As the current free-float is tiny, the deal is more like a quasi-IPO rather than a placement, in our view.
In this note, we will talk about the deal dynamics as well as updates on the company’s financial performance.

Frasers Hospitality Trust (FHT SP): Frasers Property & TCC Reload Scheme

Frasers Hospitality Trust (FHT SP) (FHT) has announced a Scheme Implementation Deed was signed for the S-REIT’s privatisation by its current sponsor, Frasers Property Limited.
The Scheme Consideration is S$0.71/unit in cash against the latest adjusted NAV estimate of S$0.63904/unit (vs last NAV of S$0.64160/unit).
Back in September 2022, ~3% of units (~4.7% of minorities) voted against Frasers/TCC’s S$0.70/unit Offer. But only 18.8% of minorities actually voted. That deal just failed.

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May 14

Most Read: Posco Future M, BYD, Contemporary Amperex Technology (CATL), Canvest Environmental Protection Group, Bestechnic Shanghai , Mayne Pharma, Mitsui Matsushima, Sankyo Co Ltd, GENDA and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

POSCO Future M: A Rights Offering Capital Raise of 1.1 Trillion Won
HSTECH Index Rebalance Preview: BYD (1211 HK) Could Replace China Literature (772 HK); Huge Trade
CATL (3750 HK) H-Share IPO: Fast Entry to Global Indices Is Touch & Go
Canvest (1381 HK): Buy Here, And On Weakness
STAR50/STAR100 Index Rebalance Preview: Strong Outperformance for STAR50 Changes
Mayne Pharma (MYX AU): MAC Musings
[Japan Activism] Murakami Owns ~42% and Company Announces 31.3% Buyback
[Japan Buyback] Sankyo (6417) – Starts Buying Bigly. Again. Re-Levered It Has A Super-High ROE
CATL A/H Listing – More like ADR Secondary Listing than an A/H Listing – Performance & Subscription
GENDA Placement – Good Track Record & Sort off Well Flagged but Relatively Large

POSCO Future M: A Rights Offering Capital Raise of 1.1 Trillion Won

By Douglas Kim

Posco Future M (003670 KS) announced today that it plans to complete a rights offering capital raise of 1.1 trillion won.
The capital raise will involve 11.483 million new shares, representing 14.8% of current outstanding shares. The expected rights offering price is 95,800 won, which is 15.8% lower than current price.
We have a Negative view on POSCO Future M and this capital raise, which is likely to have a negative impact on its shares due to the dilution risk.

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.

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.

Canvest (1381 HK): Buy Here, And On Weakness

Ahead of the 12th May shareholder to vote on Grandblue’s Offer, recent price action in Canvest (1381 HK) has been odd, with considerable selling volume.
By all accounts, a chunk of that selling was brought about by an event desk in Singapore shutting down. Elsewhere, via numerous inquiries, I see nothing deal specific.
In recent positive developments, AEP (3.62% of shares out) is supportive; there are no material updates in s329 announcements; and I see nothing of note when inspecting the shareholder register.

STAR50/STAR100 Index Rebalance Preview: Strong Outperformance for STAR50 Changes

With the review period complete, we forecast 1 change for the SSE STAR50 (STAR50 INDEX) and 4 changes for the STAR100 Index in June.
We estimate turnover of 2.26% for the SSE STAR50 (STAR50 INDEX) and 5.05% for the STAR100 Index. The estimated round-trip trade is CNY 8.1bn (US$1.11bn).
There are multiple stocks that are forecast adds or deletes for other indices and the passive flows will be a lot larger than just for the STAR50/STAR100 indices.

Mayne Pharma (MYX AU): MAC Musings

Back on the 21st Feb 2025, Mayne Pharma (MYX AU), a leader in dermatology and women’s health, entered into a Scheme with US-based pharmaceutical outfit, Cosette Pharmaceuticals, at A$7.40/share.
The transaction is progressing – the HSR Act condition was satisfied last week. A Scheme Booklet should be issued shortly, with an expected vote mid-June and late-June/early-July implementation.
Shares declined 3.1% yesterday over concerns a MAC could be triggered on the back of the Trump’s executive order on pharma. The impact is likely mixed, but leans neutral.

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

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

[Japan Buyback] Sankyo (6417) – Starts Buying Bigly. Again. Re-Levered It Has A Super-High ROE

On 12 May 2025, Sankyo Co Ltd (6417 JP) announced earnings (Revenue -3.7%yoy, OP +1.5%, Net Profit +0.4%) with guidance for March 2026 showing Revs, OP, and NP all falling.
OP and NP would fall 14.4% and 18.5% respectively. The dividend is expected to fall ¥10 to ¥90/share which would be a 41.6% payout ratio.
The company also announced a BIG BUYBACK – Up to ¥60bn buying up to 30.0mm shares (13.66%), starting today and going through 31 March 2026.

CATL A/H Listing – More like ADR Secondary Listing than an A/H Listing – Performance & Subscription

Contemporary Amperex Technology (CATL) (300750 CH) , one of the world’s largest battery solutions providers, aims to raise around US$4bn in its H-share listing.
CATL is the global leader in new energy vehicle battery solutions, in China and globally, as per SNE Research. Its A-shares have been listed since 2018.
In this note, we talk about the IPO pricing and how it compares to some of the past listings.

GENDA Placement – Good Track Record & Sort off Well Flagged but Relatively Large

GENDA (9166 JP), along with a selling shareholder, is looking to raise around US$190m to partly fund its M&A.
Genda develops and operates amusement facilities in Japan, primarily operating under its Genda GiGO Entertainment subsidiary.
In this note, we will talk about the placement and run the deal through our ECM framework.

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May 13

Most Read: BYD, Contemporary Amperex Technology (CATL), Pop Mart International Group L, Cipla Ltd, Renesas Electronics, Nissin Corp 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
CATL (3750 HK) H-Share IPO: Fast Entry to Global Indices Is Touch & Go
HSCEI Index Rebalance Preview: Pop Mart (9992 HK) Could Replace Sunny Optical (2382 HK)
CATL A/H Listing – High Quality, Large Size Make It Unavoidable but Needs a Discount
India: Potential Free Float Changes & Passive Flows in 3 Weeks
Renesas Electronics (6723 JP): Denso Exits as Stock Price Falters
CATL H Share Listing (3750 HK): Valuation Insights
Renesas Electronics Block – Well Flagged, Clean up but Momentum Isn’t Great
CATL: Key Highlights in 1Q 2025 and PHIP Updates on Hong Kong Listing
[Japan M&A] Bain Deal for Nissin (9066) Is Still Light Vs Comparable Deals

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.

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.

HSCEI Index Rebalance Preview: Pop Mart (9992 HK) Could Replace Sunny Optical (2382 HK)

The review period for the June rebalance of the HSCEI ended on 31 March, the results will be announced on 16 May and will be implemented on 6 June.
Pop Mart International Group L (9992 HK) could be added to the index while Sunny Optical Technology Group (2382 HK) could be deleted from the index.
There are other stocks with big flows due to a change in the FreeFloat-Adjusted Factor (FAF) methodology for Secondary Listings that will be implemented from the rebalance in June.

CATL A/H Listing – High Quality, Large Size Make It Unavoidable but Needs a Discount

Contemporary Amperex Technology (CATL) (300750 CH) , one of the world’s largest battery solutions providers, aims to raise around US$4bn in its H-share listing.
CATL is the global leader in new energy vehicle battery solutions, in China and globally, as per SNE Research. Its A-shares have been listed since 2018.
We have looked at the company’s past performance in our earlier notes. In this note, we talk about the IPO pricing.

India: Potential Free Float Changes & Passive Flows in 3 Weeks

Companies in India have disclosed their shareholding pattern as of end-March in April. There are companies with significant float changes from end-December and/or end-September.
The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
Depending on the date that the shareholding was published, there could be 6 stocks with passive inflows from global trackers while 4 could see passive outflows in May.

Renesas Electronics (6723 JP): Denso Exits as Stock Price Falters

Denso Corp (6902 JP) is looking to raise up to JPY137bn (US$940m) by selling 73.9m shares of Renesas Electronics (6723 JP) to international investors.
The indicative price range is JPY 1,812-1,848/share, a discount of 1-2.95% to Monday’s close. The placement is 4.1% of shares outstanding and is 4.7 days of ADV.
We do not expect any passive buying at the time of settlement of the placement shares. The earliest passive buying will take place in August and September.

CATL H Share Listing (3750 HK): Valuation Insights

Contemporary Amperex Technology (CATL) (300750 CH) has launched its H Share listing at a maximum price of HK$263. Pricing will be on 19 May, and the listing on 20 May.
I discussed the H Share listing in CATL H Share Listing: The Investment Case, CATL H Share Listing: AH Discount Views, CATL H Share Listing: PHIP Reinforces the Investment Case.
Our valuation analysis suggests that the low AH discount can be justified. We would participate in the listing.

Renesas Electronics Block – Well Flagged, Clean up but Momentum Isn’t Great

Denso Corp (6902 JP) is looking to raise US$940m via selling its remaining stake in Renesas Electronics (6723 JP).
DENSO last sold some of its stake nearly a year ago and hence, this deal is well flagged.
In this note, we will talk about the placement and run the deal through our ECM framework.

CATL: Key Highlights in 1Q 2025 and PHIP Updates on Hong Kong Listing

By Douglas Kim

CATL reported a 6.2% YoY increase in revenue in 1Q 2025. EV battery sales rose 14.0% YoY driven by healthy demand offset by lower ESS battery sales.
CATL provided discussions about ongoing tariff disputes. It mentioned that the overall impact and outcome remain uncertain. The U.S. market accounts for about 7% of CATL’s total EV battery business.
We maintain a Positive View of CATL. Our base case valuation of CATL is implied market cap of 1.3 trillion CNY which is 32% higher than current market cap.

[Japan M&A] Bain Deal for Nissin (9066) Is Still Light Vs Comparable Deals

The deal price is higher than the Bloomberg article insinuated. The closing date is earlier than the Bloomberg article suggested. But that doesn’t mean it’s enough.
The Large ToSTNeT-3 buyback last year changed the shareholder structure significantly, but many holders who sold are unknown. I would expect they were cross-holders.
For that, this deal is NOT a done deal. There may be games played on this deal.

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May 12

Most Read: Nissin Corp, Imagica Robot Holdings, Goldlion Holdings, BYD, Pop Mart International Group L, Hanwha Aerospace, Cipla Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

[Japan M&A] Bloomberg Reports Bain MBO on Nissin (9066) May Come Monday – The Implied Price Is Light
[Japan M&A] Son of Chairman/55%Owner Taking Imagica (6879) Private at 10x FCF, 4+x EBITDA. CHEAP.
Goldlion Holdings (533 HK): An Unexpected HK Arbageddon
HSTECH Index Rebalance Preview: BYD (1211 HK) Could Replace China Literature (772 HK); Huge Trade
HSCEI Index Rebalance Preview: Pop Mart (9992 HK) Could Replace Sunny Optical (2382 HK)
Nissin Corp (9066 JP): A Rumoured Bain-Sponsored MBO?
Imagica (6879 JP): MBO Tender Offer at JPY795
How NXT (ATS) Affects Event Pricing from a Microstructure Perspective
India: Potential Free Float Changes & Passive Flows in 3 Weeks
Ohayo Japan | Great Progress Made???

[Japan M&A] Bloomberg Reports Bain MBO on Nissin (9066) May Come Monday – The Implied Price Is Light

Last year, Nissin Corp (9066 JP) started race-walking the good governance walk. The day they released earnings they announced crossholding sales and an overnight 23.61% ToSTNeT-3 Buyback (executed successfully).
They also expected 19% Net Income Growth (to go with accretion), and in November, nearly doubled their dividend on new payout policy (minimum 4% DOE).
Now, Bloomberg reports they are considering going private via a Bain MBO at ¥100bn+ (or a 30% premium).

[Japan M&A] Son of Chairman/55%Owner Taking Imagica (6879) Private at 10x FCF, 4+x EBITDA. CHEAP.

This deal should not come as a surprise. Bloomberg has an article out saying tycoons are taking companies private to avoid shareholder activism. It’s not just that.
The stated reasons (competitive environment requiring faster decision-making and significant restructuring) are all kinda hot garbage. This is being done at adjusted EV/EBITDA of 4x and 10x FCF.
And there are no synergies counted, and half of the Adjusted EV is net receivables+inventory equal to about 2mos of revenues. This is being done too cheaply. But…. TIJ baby…

Goldlion Holdings (533 HK): An Unexpected HK Arbageddon

Goldlion Holdings (533 HK) shareholders have voted against Mr Tsang’s HK$1.5232 per share offer. The minority participation rate was high, and the NO vote comfortably cleared the threshold.
The Goldlion deal break was unexpected, and the HKEx merger arb rulebook will be rewritten. This deal break offers several lessons.
Goldlion had the highest premium of the pre-deal break price to the undisturbed price compared to previous deal breaks. My estimated deal-break price is HK$0.953, 36.0% below last close.

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.

HSCEI Index Rebalance Preview: Pop Mart (9992 HK) Could Replace Sunny Optical (2382 HK)

The review period for the June rebalance of the HSCEI ended on 31 March, the results will be announced on 16 May and will be implemented on 6 June.
Pop Mart International Group L (9992 HK) could be added to the index while Sunny Optical Technology Group (2382 HK) could be deleted from the index.
There are other stocks with big flows due to a change in the FreeFloat-Adjusted Factor (FAF) methodology for Secondary Listings that will be implemented from the rebalance in June.

Nissin Corp (9066 JP): A Rumoured Bain-Sponsored MBO?

Nissin Corp (9066 JP) shares were up 10.3% based on a Bloomberg report that it would be privatised through a Bain-sponsored MBO.
The deal is expected to exceed JPY100 billion. Assuming this refers to a market cap, the implied offer price is around JPY6,500 (21.5% premium to last close).
While the rumoured offer represents an all-time high share price, it is light compared to precedent and peer multiples. A long-dated offer makes it susceptible to a counterbid.

Imagica (6879 JP): MBO Tender Offer at JPY795

Imagica Robot Holdings (6879 JP) has recommended a MBO tender offer from Shunjiro Nagase (President) at JPY795 per share, a 43.0% premium to the undisturbed price.
The offer is reasonable compared to historical trading ranges and is above the midpoint of the IFA DCF valuation range.
Irrevocables (55.40% ownership ratio) pave the way for deal completion. The tender runs from 12 May to 20 June (30 business days).

How NXT (ATS) Affects Event Pricing from a Microstructure Perspective

Next day’s base price uses the 3:30pm close—NXT’s after-hours moves don’t count. That small gap can impact rights offerings, as seen in Samsung SDI’s pricing delta on April 8.
NXT after-hours volumes count toward VWAP. So in uptrends, they can impact pricing—possibly with Samsung SDI’s final reference price on May 16.
No shorting allowed after 3:30pm on NXT, leading to inefficiencies—while not yet fit for latency arb, it’s ripe for tactical day–night spread plays and re-entry timing.

India: Potential Free Float Changes & Passive Flows in 3 Weeks

Companies in India have disclosed their shareholding pattern as of end-March in April. There are companies with significant float changes from end-December and/or end-September.
The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
Depending on the date that the shareholding was published, there could be 6 stocks with passive inflows from global trackers while 4 could see passive outflows in May.

Ohayo Japan | Great Progress Made???

By Mark Chadwick

Stocks were generally flat and rangebound as investors awaited key U.S.-China trade talks in Switzerland
Fuji Oil has cancelled its planned production of recycled aviation fuel (SAF) due to soaring construction costs for production facilities and rising prices of waste cooking oil
Nissan Motor has scrapped plans for its first electric vehicle battery plant in Japan due to poor financial performance, deeming the significant investment unfeasible

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May 11

Most Read: Contemporary Amperex Technology (CATL), Laopu Gold, S&P/ASX 200, East Buy Holding , Indusind Bank, Tsuruha Holdings, Shionogi & Co, Shanghai Electric Group Company and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

CATL (300750 CH): Index Inclusion as Potential Listing Nears
Laopu Gold (6181 HK): US$300m Primary Placement & Index Inclusion Green Light
ASX200 (AS51 INDEX) Outlook: Rallying Out of a Bear Market Amid Passive Flows And Sector Strength
East Buy Holdings (1797 HK): Potential KWEB Deletion in June
SENSEX Index Rebalance Preview: Trent, Bharat Electronics Could Replace IndusInd Bank, Nestle
[Japan Activism] ISS Comes Out Supporting Orbis Against Tsuruha/Welcia Merger Ratio
CATL H Share Listing: PHIP Reinforces the Investment Case
HEW: Doves Disappointed By Patience
Shionogi & Co (4507 JP): Torii Acquisition to Broaden Portfolio; High R&D to Dent Profitability
A/H Premium Tracker (To 9 May 2025): AH Premia Fall Small; Spread Torsion Provides Continued Alpha

CATL (300750 CH): Index Inclusion as Potential Listing Nears

Reports continue to indicate a US$5bn raise for CATL H-shares with a discount of up to 10% to CATL (300750 CH) and with cornerstone investors taking up half the deal.
The company is currently gauging investor demand. The IPO could open next week and the H-shares could list later this month.
Index Fast Entry largely depends on the cornerstone investor allocation. Float higher than 50%/60% is required for Fast Entry to global indices.

Laopu Gold (6181 HK): US$300m Primary Placement & Index Inclusion Green Light

Full circulation implementation at the beginning of April derailed Laopu Gold (6181 HK)‘s chances of global index inclusion in May.
The company has now launched a US$300m primary placement that will significantly improve chances of inclusion in the same global index in August.
Laopu Gold (6181 HK) will also be added to another global index in September, so there are a few index inclusions likely for the stock this year.

ASX200 (AS51 INDEX) Outlook: Rallying Out of a Bear Market Amid Passive Flows And Sector Strength

By Nico Rosti

Over the past three weeks, the S&P/ASX 200 (AS51 INDEX) has staged one of the strongest rebounds since the early April Trump-tariff shock, rallying approximately +15% from its 16-month low.
Several factors are driving the rally: recent passive flow activity, as highlighted by Brian Freitas but also broad-based sector strength, with notable gains in energy, healthcare, and consumer staples.
Despite a positive outlook, our models indicate the index is currently OVERBOUGHT. This insight breaks down the key details.

East Buy Holdings (1797 HK): Potential KWEB Deletion in June

East Buy Holding (1797 HK) was deleted from the Hang Seng TECH Index in March and could be deleted from the KraneShares CSI China Internet ETF (KWEB US) in June.
There are other ETFs that track the same index (and similar indices), and those trackers will be selling East Buy Holding (1797 HK) too.
There has been some short covering in the stock recently, but short interest is pretty high as a percentage of float. Watch out for short covering that offsets passive selling.

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

With the review period complete, there could be two changes for the S&P BSE SENSEX Index (SENSEX INDEX) at the June rebalance.
Trent Ltd (TRENT IN) and Bharat Electronics (BHE IN) are high probability inclusions while Indusind Bank (IIB IN) and Nestle India (NEST IN) are high probability deletions.
Indusind Bank (IIB IN) is also a potential NIFTY Index (NIFTY INDEX) deletion in September and there will be continued pressure on the stock.

[Japan Activism] ISS Comes Out Supporting Orbis Against Tsuruha/Welcia Merger Ratio

Large Tsuruha Holdings (3391 JP) investor Orbis Investments last month said they were against the Tsuruha/Welcia merger ratio. They wanted a cash takeover above Aeon’s Oasis buy price from 2024.
Influential shareholder proxy advisor ISS has apparently come out recommending shareholders vote against. That’s a start, but the hard work needs to be Orbis talking to domestic passive managers.
Getting 90% of foreign active managers as of end-February would make it a very close-run thing, but Orbis really needs some more to show up against the ratio.

CATL H Share Listing: PHIP Reinforces the Investment Case

Contemporary Amperex Technology (CATL) (300750 CH), the world’s largest supplier of EV and ESS batteries, has filed its PHIP for an H-Share listing to raise US$5 billion.
I previously discussed the H Share listing in CATL H Share Listing: The Investment Case and CATL H Share Listing: AH Discount Views.
In this note, I examine the latest results and developments outlined in the PHIP. Overall, the PHIP reinforces my positive view.

HEW: Doves Disappointed By Patience

By Phil Rush

The BoE and Fed decisions disappointed dovish hopes for action by sensibly waiting to see some signs that easing is appropriate. Caution reduces the risk of a policy mistake.
Inflation in the US, plus unemployment and GDP in the UK, are the scheduled economic highlights for us next week. The UK data may prove more resilient than feared again.
An absence of bad news can allow the good vibes to keep flowing from recent resilient data and trade policy progress, but investors seeking to sleep easy may wish to hedge.

Shionogi & Co (4507 JP): Torii Acquisition to Broaden Portfolio; High R&D to Dent Profitability

By Tina Banerjee

Shionogi & Co (4507 JP) is acquiring Torii Pharmaceutical, as well as the pharmaceutical business of Japan Tobacco and U.S. group company Akros Pharma (sub-subsidiary of Japan Tobacco) for ~¥160B.
With minimum overlap in focus areas, Shionogi believes that the transaction will create a leading company that delivers innovative pharmaceuticals. However, R&D expenses of the combined company will remain elevated.
Considering the promising pipeline, we are hopeful on the long-term growth prospect of the combined company. Shionogi is scheduled to announce FY25 result on May 12.

A/H Premium Tracker (To 9 May 2025): AH Premia Fall Small; Spread Torsion Provides Continued Alpha

AH spreads are basically flat on the shortened week. AH premia rose in Pharma and Tech, fell in Industrials, Finance, and Banks.
All eyes will be on what happens in Geneva. I personally don’t expect much.
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.

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May 10

Most Read: Contemporary Amperex Technology (CATL), Laopu Gold, NTT Data Corp, East Buy Holding , Goldlion Holdings, Indusind Bank, Tsuruha Holdings, Geely Auto, Green Tea Group and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

CATL (300750 CH): Index Inclusion as Potential Listing Nears
Laopu Gold (6181 HK): US$300m Primary Placement & Index Inclusion Green Light
[Japan M&A] NTT (9432) Overpays To Buy Out NTT Data (9613) Minorities
East Buy Holdings (1797 HK): Potential KWEB Deletion in June
Goldlion Holdings (533 HK): 9th May Vote On Tsang Family’s Offer
SENSEX Index Rebalance Preview: Trent, Bharat Electronics Could Replace IndusInd Bank, Nestle
[Japan Activism] ISS Comes Out Supporting Orbis Against Tsuruha/Welcia Merger Ratio
StubWorld: Geely Is (Mostly) Trading “Rich”; And May Still Bump Zeekr Terms
Green Tea Group IPO – Peer Comp & Thoughts on Valuation
HEW: Doves Disappointed By Patience

CATL (300750 CH): Index Inclusion as Potential Listing Nears

Reports continue to indicate a US$5bn raise for CATL H-shares with a discount of up to 10% to CATL (300750 CH) and with cornerstone investors taking up half the deal.
The company is currently gauging investor demand. The IPO could open next week and the H-shares could list later this month.
Index Fast Entry largely depends on the cornerstone investor allocation. Float higher than 50%/60% is required for Fast Entry to global indices.

Laopu Gold (6181 HK): US$300m Primary Placement & Index Inclusion Green Light

Full circulation implementation at the beginning of April derailed Laopu Gold (6181 HK)‘s chances of global index inclusion in May.
The company has now launched a US$300m primary placement that will significantly improve chances of inclusion in the same global index in August.
Laopu Gold (6181 HK) will also be added to another global index in September, so there are a few index inclusions likely for the stock this year.

[Japan M&A] NTT (9432) Overpays To Buy Out NTT Data (9613) Minorities

Pre-Open, we got a Nikkei article which suggested four different prices possible. We got something in the middle. I think NTT is probably overpaying here.
There is a fair bit of transparency in the documents and valuation. That is encouraging. There are no synergies counted in the fair calculations. That is discouraging.
This will not trade like a “normal” Japan risk arb situation. There will be nuances.

East Buy Holdings (1797 HK): Potential KWEB Deletion in June

East Buy Holding (1797 HK) was deleted from the Hang Seng TECH Index in March and could be deleted from the KraneShares CSI China Internet ETF (KWEB US) in June.
There are other ETFs that track the same index (and similar indices), and those trackers will be selling East Buy Holding (1797 HK) too.
There has been some short covering in the stock recently, but short interest is pretty high as a percentage of float. Watch out for short covering that offsets passive selling.

Goldlion Holdings (533 HK): 9th May Vote On Tsang Family’s Offer

On the 17th December 2024, Goldlion Holdings (533 HK), an apparel manufacturer/distributor, announced an Offer, by way of a Scheme, from the Tsang family (2.95% stakeholder), for shares not held.
The Tangs are offerings $1.5232/share (declared final), a 24.85% premium to last price, but a 71% premium to undisturbed. Despite the very low price-to-book multiple, this transaction looks done.
The Scheme Doc is now out, with a Court Meeting on the 9th May, with payment on or before the 10th July. The IFA (Altus Capital) says “fair & reasonable“.

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

With the review period complete, there could be two changes for the S&P BSE SENSEX Index (SENSEX INDEX) at the June rebalance.
Trent Ltd (TRENT IN) and Bharat Electronics (BHE IN) are high probability inclusions while Indusind Bank (IIB IN) and Nestle India (NEST IN) are high probability deletions.
Indusind Bank (IIB IN) is also a potential NIFTY Index (NIFTY INDEX) deletion in September and there will be continued pressure on the stock.

[Japan Activism] ISS Comes Out Supporting Orbis Against Tsuruha/Welcia Merger Ratio

Large Tsuruha Holdings (3391 JP) investor Orbis Investments last month said they were against the Tsuruha/Welcia merger ratio. They wanted a cash takeover above Aeon’s Oasis buy price from 2024.
Influential shareholder proxy advisor ISS has apparently come out recommending shareholders vote against. That’s a start, but the hard work needs to be Orbis talking to domestic passive managers.
Getting 90% of foreign active managers as of end-February would make it a very close-run thing, but Orbis really needs some more to show up against the ratio.

StubWorld: Geely Is (Mostly) Trading “Rich”; And May Still Bump Zeekr Terms

Geely Auto (175 HK)‘s discount to NAV is less than half its 12-month average. And Geely is generally trading tighter to listed PRC auto peers.
Preceding my comments on Geely – and NTT Data Corp (9613 JP) – 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%.

Green Tea Group IPO – Peer Comp & Thoughts on Valuation

By Troy Wong

Green Tea Group (GTG) is looking to raise US$157m (HKD 1.2bn) in its upcoming Hong Kong IPO.
GTG is the fourth largest Casual Chinese Cuisine player in Mainland China, it has been gaining market share historically and is likely to continue.
GTG plans to accelerate its expansion of the restaurant network, focusing on expansion into tier two cities and below, with small restaurants rather than large ones.

HEW: Doves Disappointed By Patience

By Phil Rush

The BoE and Fed decisions disappointed dovish hopes for action by sensibly waiting to see some signs that easing is appropriate. Caution reduces the risk of a policy mistake.
Inflation in the US, plus unemployment and GDP in the UK, are the scheduled economic highlights for us next week. The UK data may prove more resilient than feared again.
An absence of bad news can allow the good vibes to keep flowing from recent resilient data and trade policy progress, but investors seeking to sleep easy may wish to hedge.

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May 09

Most Read: Makino Milling Machine Co, NTT Data Corp, Laopu Gold, Contemporary Amperex Technology (CATL), Mitsubishi Shokuhin, Shibaura Electronics, East Buy Holding and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Nidec Launches on Makino Milling (6135) – Others Presumably Wait In the Wings
NTT (9432) To Overpay To Take Over NTT Data (9613) Subsidiary?
Laopu Gold (6181 HK): US$300m Primary Placement & Index Inclusion Green Light
CATL (300750 CH): Index Inclusion as Potential Listing Nears
[Japan M&A] NTT (9432) Overpays To Buy Out NTT Data (9613) Minorities
[Japan M&A] MitCorp (8058) Buys Out Subsidiary Mitsubishi Shokuhin (7451) – Bad Process, Bad Price
[Japan M&A] YAGEO Overbids Minebea’s Overbid of YAGEO’s Overbid of Minebea’s Overbid – The Endgame
Laopu Gold (6181 HK): Heritage Luxury, Guochao Appeal. Key Facts, Financials & Valuation
NTT DATA (9613 JP): NTT (9432 JP) Tender Offer at JPY4,000
East Buy Holdings (1797 HK): Potential KWEB Deletion in June

Nidec Launches on Makino Milling (6135) – Others Presumably Wait In the Wings

Nidec Corp (6594 JP) bid ¥11,000 for Makino Milling Machine Co (6135 JP) in December, saying it expected to launch on 4-April. It launched its ¥11,000 bid on 4-April.
A Nikkei article in March suggested Makino had found multiple competing bidders, some who had put in “legally binding bids.” No news on those yet, but we have a month.
Earnings are 9-May. Strategy on timing for Makino differs according to its desired outcome. It has to opine on Nidec’s bid by about 18 April. Be long. Carry 🍿🍿🍿 .

NTT (9432) To Overpay To Take Over NTT Data (9613) Subsidiary?

This morning, the Nikkei says NTT (Nippon Telegraph & Telephone) (9432 JP) has decided, 5 years after taking Docomo private, to buy out minorities in NTT Data Corp (9613 JP).
NTT owns 58%. The article suggests a “30-40% premium” (¥3,900-4,200) “is likely”, with the parent spending ¥2-3trln (¥3,380-5,060) on the deal. The numbers are a bit all over the place.
It will go limit up today to ¥3,492. A deal should be announced today after the close when NTT Data reports earnings. There’s a cool index event too.

Laopu Gold (6181 HK): US$300m Primary Placement & Index Inclusion Green Light

Full circulation implementation at the beginning of April derailed Laopu Gold (6181 HK)‘s chances of global index inclusion in May.
The company has now launched a US$300m primary placement that will significantly improve chances of inclusion in the same global index in August.
Laopu Gold (6181 HK) will also be added to another global index in September, so there are a few index inclusions likely for the stock this year.

CATL (300750 CH): Index Inclusion as Potential Listing Nears

Reports continue to indicate a US$5bn raise for CATL H-shares with a discount of up to 10% to CATL (300750 CH) and with cornerstone investors taking up half the deal.
The company is currently gauging investor demand. The IPO could open next week and the H-shares could list later this month.
Index Fast Entry largely depends on the cornerstone investor allocation. Float higher than 50%/60% is required for Fast Entry to global indices.

[Japan M&A] NTT (9432) Overpays To Buy Out NTT Data (9613) Minorities

Pre-Open, we got a Nikkei article which suggested four different prices possible. We got something in the middle. I think NTT is probably overpaying here.
There is a fair bit of transparency in the documents and valuation. That is encouraging. There are no synergies counted in the fair calculations. That is discouraging.
This will not trade like a “normal” Japan risk arb situation. There will be nuances.

[Japan M&A] MitCorp (8058) Buys Out Subsidiary Mitsubishi Shokuhin (7451) – Bad Process, Bad Price

Mitsubishi Shokuhin (7451 JP) was supposed to announce earnings at 2pm JST. They didn’t. Someone (or people) decided that meant there might be a takeover. There was.
The stock popped nearly 15% to ¥6,200, paused, was flat for an hour, then popped again, closing at ¥6,150/share. Post-close, we get a deal at ¥6,340/share.
A disappointing process. At ¥6,240, the Special Committee said it was “far from a standard that takes into account the interests of TargetCo’s minority shareholders.” At ¥6,340, they dealt. Aaaargh.

[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.

Laopu Gold (6181 HK): Heritage Luxury, Guochao Appeal. Key Facts, Financials & Valuation

By Devi Subhakesan

Laopu Gold (6181 HK) targets to raise approximately USD350 mn from a primary placement of 4.31 million new shares at HKD630 per share.
Laopu Gold has delivered both superior margins and rapid growth by marrying cultural resonance, premium pricing, artisanal excellence, and outstanding store economics.
Laopu’s growth track record coincides with period of rising gold prices. Investors should weigh its impressive margins and brand strength against the risk of a less supportive gold price environment.

NTT DATA (9613 JP): NTT (9432 JP) Tender Offer at JPY4,000

NTT Data Corp (9613 JP) has recommended a tender offer from NTT (Nippon Telegraph & Telephone) (9432 JP) at JPY4,000 per share, a 33.7% premium to the last close.
The Nikkei earlier reported on the offer. The offer represents an all-time high and is attractive compared to historical trading ranges, peer multiples and precedent transactions.
The offer could be considered light as it is below the midpoint of the target IFA’s DCF valuation range. However, the shareholder structure suggests a done deal.

East Buy Holdings (1797 HK): Potential KWEB Deletion in June

East Buy Holding (1797 HK) was deleted from the Hang Seng TECH Index in March and could be deleted from the KraneShares CSI China Internet ETF (KWEB US) in June.
There are other ETFs that track the same index (and similar indices), and those trackers will be selling East Buy Holding (1797 HK) too.
There has been some short covering in the stock recently, but short interest is pretty high as a percentage of float. Watch out for short covering that offsets passive selling.

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May 08

Most Read: NetEase , Han Kuk Carbon, Kuang-Chi Technologies , BayCurrent Consulting , Torii Pharmaceutical, Pan American Silver, Laopu Gold, ZEEKR, NTT Data Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Hang Seng Indexes: ADR Depositary Holding Changes; Round-Trip Trade Is US$5.1bn; NetEase Outperforms
Errors in Local Street’s Projections for the KOSPI 200 Rebalancing
KOSPI200 Index Rebalance Preview: 7 Changes a Side for June
CSI300 Index Rebalance Preview: 8 Changes a Side in June; US$4.5bn Trade
Nikkei 225 Sep25 Rebal: One ADD, One DELETE Still Probable, Kokusai a Question but $3bn+ a Side
[JAPAN M&A] Shionogi (4507) Bids for Torii Pharma (4551) – Split Price Deal on Weak Transparency
[Quiddity Index] MV Jr-Gold Miners Jun25 Leaderboard: Flow Expectations
Laopu Gold (6181 HK): US$300m Primary Placement & Index Inclusion Green Light
ZEEKR (ZK US): Geely Auto’s Light Non-Binding Offer at US$25.66 Per ADS
NTT (9432) To Overpay To Take Over NTT Data (9613) Subsidiary?

Hang Seng Indexes: ADR Depositary Holding Changes; Round-Trip Trade Is US$5.1bn; NetEase Outperforms

Most Secondary-listed companies have announced the number of shares that underlie ADRs and are held by the ADR depositaries as of end-March (or around that time).
There are some significant increases in the number of shares held by the ADR depositaries. That changes the free float for the stocks and consequently the estimated flows.
NetEase (9999 HK), Trip.com Group (9961 HK), Baidu (9888 HK) and Weibo (9898 HK) will have passives buying, while NIO (9866 HK) switches to a sell.

Errors in Local Street’s Projections for the KOSPI 200 Rebalancing

One local desk misread the KOSPI 200 rules, thinking one screen was enough — but it’s a strict two-step filter, and that led to three wrong delete calls.
KRX will drop the rebalance list post-close on May 21 or 22, and despite well-telegraphed outcomes, strong next-day price action has followed in past cycles.
Consider a pre-announcement long/short basket trade, as this is the first rebalance post-short-selling resumption. NXT’s rising market share also creates opportunities in overnight-daytime price spreads.

KOSPI200 Index Rebalance Preview: 7 Changes a Side for June

With the review period complete, there could be 7 changes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) in June.
The impact on the potential inclusions ranges from 1.6-22 days of ADV while the impact on the potential deletions varies from 3.6-16.5 days of ADV.
Han Kuk Carbon (017960 KS) appeared as a forecast add in the week starting 22 March and the stock is up 38% since then.

CSI300 Index Rebalance Preview: 8 Changes a Side in June; US$4.5bn Trade

There could be 8 changes at the June rebalance with the Industrials and Information Technology sectors gaining 3 index spots each and the Materials sector losing 4 spots.
Estimated one-way turnover is 1.44% at the rebalance leading to a round-trip trade of CNY 32.55bn (US$4.5bn). There are 13 stocks with over 2x ADV to trade.
The forecast adds have outperformed the forecast deletes over the last 6 weeks even though there have been large ETF creations. There could be more outperformance coming up.

Nikkei 225 Sep25 Rebal: One ADD, One DELETE Still Probable, Kokusai a Question but $3bn+ a Side

The March 2025 Nikkei 225 review came out with a sparse set of changes. That gives us hints for the September 2025 review.
For the moment, that leads me to believe we get ONE ADD and ONE DELETE though up to three of each is possible.
Even with only one name replacement, there are some big side trades and US$3.2bn a side to trade for now.

[JAPAN M&A] Shionogi (4507) Bids for Torii Pharma (4551) – Split Price Deal on Weak Transparency

Today after the close, Shionogi & Co (4507 JP) and Torii Pharmaceutical (4551 JP) announced an agreed deal whereby Shionogi would launch a Tender Offer to take over Torii.
Torii Pharmaceutical shares rallied sharply after earnings so the actual TOB Price of ¥6,350/share is not a particularly high premium vs undisturbed. Valuation transparency is limited. Synergies are not included.
But the price is an ATH, the company is heavily de-levered (so a 23% premium to undisturbed is decent) and the minimum threshold is not high.

[Quiddity Index] MV Jr-Gold Miners Jun25 Leaderboard: Flow Expectations

The MV Jr-Gold Miners index represents the performance of small-cap gold and silver mining companies listed around the world.
This index is reviewed semiannually in March and September. We expect there will be no index changes for the June 2025 index rebal event but there will be capping flows.
We expect one-way flows of US$122mm for the June 2025 rebal which translates to a turnover of 2%.

Laopu Gold (6181 HK): US$300m Primary Placement & Index Inclusion Green Light

Full circulation implementation at the beginning of April derailed Laopu Gold (6181 HK)‘s chances of global index inclusion in May.
The company has now launched a US$300m primary placement that will significantly improve chances of inclusion in the same global index in August.
Laopu Gold (6181 HK) will also be added to another global index in September, so there are a few index inclusions likely for the stock this year.

ZEEKR (ZK US): Geely Auto’s Light Non-Binding Offer at US$25.66 Per ADS

Geely Auto (175 HK), the controlling shareholder, disclosed a cash or scrip non-binding proposal for ZEEKR (ZK US) at US$25.66 per ADS or 12.3 newly issued Geely shares.
While the offer is 22.2% above the IPO price, it is unattractive compared to historical trading ranges, peer multiples and average sell-side price targets.
The shareholder vote is a formality as Geely and concert parties exceed the two-thirds voting threshold. The key risk is the timing of a binding proposal.

NTT (9432) To Overpay To Take Over NTT Data (9613) Subsidiary?

This morning, the Nikkei says NTT (Nippon Telegraph & Telephone) (9432 JP) has decided, 5 years after taking Docomo private, to buy out minorities in NTT Data Corp (9613 JP).
NTT owns 58%. The article suggests a “30-40% premium” (¥3,900-4,200) “is likely”, with the parent spending ¥2-3trln (¥3,380-5,060) on the deal. The numbers are a bit all over the place.
It will go limit up today to ¥3,492. A deal should be announced today after the close when NTT Data reports earnings. There’s a cool index event too.

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May 07

Most Read: Contemporary Amperex Technology (CATL), Toyota Industries, NetEase , Hanwha Ocean , Nan Ya Plastics, Sonoscape Medical Corp, Guangzhou Automobile Group, Han Kuk Carbon and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

CATL A/H Listing – Thoughts on A/H Premium
Toyota Industries (6201) – Thinking About How To Value a ¥6trln Bid
Hang Seng Indexes: ADR Depositary Holding Changes; Round-Trip Trade Is US$5.1bn; NetEase Outperforms
CATL H Share Listing: AH Discount Views
Rare Arb Opportunity from ATS Breakout in Korea: Day-Night Spread
Quiddity Leaderboard TDIV Jun25: US$2.5bn One-Way; Several High-Impact Flow Names
Quiddity Leaderboard ChiNext & ChiNext 50 Jun25: Last-Minute Methodology Changes; Final Expectations
A/H Premium Tracker (To 2 May 2025): AH Premia Fall Small; Spread Torsion Provides Continued Alpha
Errors in Local Street’s Projections for the KOSPI 200 Rebalancing
HEM: Dovish Prices Deranged

CATL A/H Listing – Thoughts on A/H Premium

Contemporary Amperex Technology (CATL) (300750 CH), one of the world’s largest battery solutions providers, aims to raise at least US$5bn in its H-share listing.
CATL is the global leader in new energy vehicle battery solutions, in China and globally, as per SNE Research. Its A-shares have been listed since 2018.
We have looked at the company’s past performance in our earlier notes. In this note, we talk about its recent updates and provide our thoughts on valuations.

Toyota Industries (6201) – Thinking About How To Value a ¥6trln Bid

Toyota Industries is a relatively complicated business. It owns lots of shares of Toyota and other companies. It has a financing business, and runs ¥500+bn of EBITDA.
As of 31 March 2025, the “Enterprise Value” of the Operating and Financing Business together was about ¥2.2trln. The “Asset Ownership Business” was at ¥2.8trln (1yr ago it was ¥4trln).
If you think buying the Operating Business at 6x EBITDA is appropriate, that means the Asset Ownership Business block buy gets done at 31-March-2025 prices. Worth thinking about.

Hang Seng Indexes: ADR Depositary Holding Changes; Round-Trip Trade Is US$5.1bn; NetEase Outperforms

Most Secondary-listed companies have announced the number of shares that underlie ADRs and are held by the ADR depositaries as of end-March (or around that time).
There are some significant increases in the number of shares held by the ADR depositaries. That changes the free float for the stocks and consequently the estimated flows.
NetEase (9999 HK), Trip.com Group (9961 HK), Baidu (9888 HK) and Weibo (9898 HK) will have passives buying, while NIO (9866 HK) switches to a sell.

CATL H Share Listing: AH Discount Views

Contemporary Amperex Technology (CATL) (300750 CH), the world’s largest supplier of EV and ESS batteries, is set to launch an H Share listing to raise US$5 billion.
In CATL H Share Listing: The Investment Case, a leading market position, forecasted return to growth, peer-leading profitability, cash generation, peer-leading FCF margin and an attractive valuation are highlighted.
In this note, I examine the likely discount CATL will offer its H Shares compared to the A Shares.

Rare Arb Opportunity from ATS Breakout in Korea: Day-Night Spread

Local traders are targeting the spread between day and NXT’s after-hours, a classic arb play similar to what Japanese instos used when ATS first launched, now emerging in Korea.
The gap persists because institutional flow on NXT is still minimal, with recent data showing instos accounting for just 1-2% of total turnover.
NXT’s night session is seeing heavy retail flow, providing instos with the liquidity to trade. This creates a rare opportunity to capitalize on early inefficiencies before others catch on.

Quiddity Leaderboard TDIV Jun25: US$2.5bn One-Way; Several High-Impact Flow Names

By Janaghan Jeyakumar, CFA

The TDIV index tracks the top 50 names in the Taiwan Stock Exchange with the highest dividend yields. It is a yield-weighted index with unique capping rules.
In this insight, we take look at Quiddity’s expectations for index changes and capping flows for the TDIV Index for the June 2025 index rebal event.
We expect five changes for the TDIV index and there could be index flows of US$2.5bn one-way due to capping.

Quiddity Leaderboard ChiNext & ChiNext 50 Jun25: Last-Minute Methodology Changes; Final Expectations

By Janaghan Jeyakumar, CFA

The ChiNext index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
In this insight, we have presented our final expectations for the upcoming index rebal event. We expect 9 ADDs/DELs for the ChiNext index and 5 ADDs/DELs for the ChiNext 50.

A/H Premium Tracker (To 2 May 2025): AH Premia Fall Small; Spread Torsion Provides Continued Alpha

A quiet week as most indices – HK and mainland – saw performance hover around zero for the three days both were open at the start of the week.
For a couple of months I’ve thought warning signs were flashing and spreads could widen. Widening has paused. I am not comfortable it will remain paused or Hs will outperform.
The Quiddity Portfolio is pretty hunkered down and nearly flat H/A risk. But benefits from spread torsion (wider spreads coming in, small premia widening). Alpha good again this week.

Errors in Local Street’s Projections for the KOSPI 200 Rebalancing