Most Read

Palliser Capital, which reportedly holds ~$300mn in Rio Tinto Ltd (RIO AU/LN) shares across its dual-head structure, has campaigned for near-on a year to unify the primary listing in Australia.
Palliser’s reasonings (and others) to unify make sense, such as access to stock-based mergers and eliminating franking wastage. A recent independent assessment from Grant Thornton is also supportive of unification.
Shareholders will vote on the resolution on 3rd April for UK-listed shares and 1st May for Australian-listed shares. The UK line holds the key to the vote outcome.

Korea Short Selling: What Happened on Day 1?

Short notional ticked higher on the KOSPI and KOSDAQ markets and is expected to continue increasing over the next few months.
Since the resumption of short selling, foreign holdings of Korean equities have increased from 29.26% to 29.3%.
The Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) to KOSDAQ 150 Index (KOSDQ150 INDEX) ratio has stayed stable over the last 3 trading days.

AMFI Stock Reclassification Preview (Jun 2025): Plenty of Change With More Likely

We currently forecast 10 stocks moving from MidCap to LargeCap, 10 stocks moving from LargeCap to MidCap, 9 stocks from SmallCap to MidCap, and 11 stocks from MidCap to SmallCap.
From the new listings, 2 stocks are expected to be added to Mid Cap, and multiple stocks to Small Cap.
There are multiple stocks among the AMFI changes that will be changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) and/or Nifty Midcap 150 Index in September.

Quiddity Leaderboard TDIV Jun25: US$2.1bn One-Way; 17% Turnover; Sector-Neutral Trade Ideas

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. On top of that, there will be capping flows too.

US Tariff Impact Estimates

New US tariffs ignored any notion of reciprocity, reaching shockingly substantial sizes. However, the UK was relatively fortunate in landing on the 10% minimum rate.
Repeating 2024’s imports would raise $577bn in tariff revenue, which is worth ~3% of consumption. 70% pass-through to prices would add 2% to the level over 1-2 years.
Negotiations need to conclude rapidly to avoid these front-loaded price rises. The EU’s likely retaliations would magnify its pain, but the US is the biggest stagflationary loser.

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 🍿🍿🍿 .

Mitsubishi Logisnext (7105) – Worth Buying The Dip On Likely Sale

There was a Nikkei article in December about the Mitsubishi Heavy Industries (7011 JP) selling its interests in Mitsubishi Logisnext Co., Ltd. (7105 JP).
The stock popped. Then popped some more. It was not expensive yet, but no longer dirt cheap. Now the stock is falling as Trump Tariffs threaten to throttle exports.
The reasons why this takeout price could be “high” are unchanged. Tariffs meant to drive US-manufacturing don’t reduce need for forklifts. Logisnext is not badly placed.

Yoon’s Impeachment Confirmed: Key Timeline & Regime Change Trade

The Constitutional Court approved President Yoon’s impeachment. The PM steps in as interim president, with a new election expected by May 28, 2025, before June 3.
The Democratic Party is the frontrunner, and if they win, expect a “regime change trade” with policy shifts toward green energy, welfare, public stimulus, and SME-focused initiatives.
Big-Cap builders, nuclear stocks, and major financials may struggle if the new regime focuses on public housing, anti-nuclear policies, and pro-SME, labor-friendly initiatives.

Dada Nexus (DADA US): JD.Com’s US$2/ADS Firm Offer

Back on the 27th January, Dada Nexus (DADA US), a Chinese on-demand retail and delivery platform, announced a preliminary non-binding proposal from JD.com (9618 HK).
JD.com, a 63.2% shareholder, was offering US$0.50/share (US$2.00/ADS), a 42% premium to last close. Those terms are now firm and a definitive agreement entered into.
The merger is expected to close in the third quarter. Trading at 4.7%/15%, gross/annualised spread, assuming a four month off-ramp.

Is This Chinese Biotech Going Out of Business?

By J Capital Research

This Nasdaq-listed, Hong Kong-based company hopes to apply Traditional Chinese Medicine (TCM) to significant illnesses like ADHD, but that seems unlikely. The company is a family affair, with all research provided by the CEO’s father, so one wonders how objective scientific assessment can be.
The stock surged by more than 700% in a month without patent approval, a buyout offer, or other notable news. The CEO funded a share buyback, but rather than demonstrating faith in the company, the repurchase looked suspiciously like a way to inflate the short-term share price, possibly for an equity issue or insider self- enrichment since the CEO’s compensation is tied to market capitalization.
This is a highly speculative business run by a family team from Hong Kong, thus little trusted in the U.S. and very volatile.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Analytics and News
✓ Events & Webinars

Apr 04

Most Read: SPDR S&P 500, Nick Scali Ltd, Contemporary Amperex Technology (CATL), Hanmi Semiconductor, ENN Energy, Solar Industries India, The Shanghai Commerical & Sa, HKBN Ltd, Makino Milling Machine Co and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Trump Team’s Weird Tariff Math – Not Meant to Be Negotiated
HKBN (1310 HK): MBK Ups Stake Via VLN Conversion
Northern Star’s Acquisition of De Grey Mining: The Many Index Implications & Flows
CATL A/H Listing – Thoughts on A/H Premium
Korea Short Selling: What Happened on Day 1?
ENN Energy (2688 HK): This Is An Avoid
AMFI Stock Reclassification Preview (Jun 2025): Plenty of Change With More Likely
Quiddity Leaderboard TDIV Jun25: US$2.1bn One-Way; 17% Turnover; Sector-Neutral Trade Ideas
HKBN (1310 HK): I Squared Inches Closer to a Competing Offer
Makino Milling Machine (6135 JP): Nidec Launches Its Offer

Trump Team’s Weird Tariff Math – Not Meant to Be Negotiated

For weeks, if not months, the world has been wondering what the “reciprocal tariffs” would be, and what the logic would be behind them.
There is talk of VAT, and NTBs, and huge tariff step-ups after quotas are exceeded (US exports of milk and cheese to Canada – high tariffs, but quotas not exceeded).
But a quick check of the math on the Trump Executive Order and Annex I tells you the logic is different than what everyone expected.

HKBN (1310 HK): MBK Ups Stake Via VLN Conversion

China Mobile (941 HK) has made a pre-conditional HK$5.23/share voluntary Offer for HKBN Ltd (1310 HK). However, a possible separate Offer from I Squared continues to make the news.
In an unusual move, MBK, via Twin Holding, has converted HK$970.5mn of VLNs, at a whopping HK$11.60/share conversion price, lifting MBK’s stake to 16.39% on a fully diluted basis.
Speculation is rife that MBK provides an irrevocable to I Squared for its enlarged shareholding. Maybe. I still don’t see China supporting a U.S.-based infrastructure firm over an SOE .

Northern Star’s Acquisition of De Grey Mining: The Many Index Implications & Flows

Northern Star Resources (NST AU)‘s acquisition of De Grey Mining (DEG AU) is expected to complete in the next 3 weeks.
There will be an ad hoc inclusion to the S&P/ASX 200 (AS51 INDEX) and passive buying in Northern Star Resources (NST AU) from a bunch of trackers of different indices.
The acquisition brings Northern Star Resources (NST AU) close to inclusion in the S&P/ASX 20 Index, but it’s not there yet.

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.

Korea Short Selling: What Happened on Day 1?

Short notional ticked higher on the KOSPI and KOSDAQ markets and is expected to continue increasing over the next few months.
Since the resumption of short selling, foreign holdings of Korean equities have increased from 29.26% to 29.3%.
The Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) to KOSDAQ 150 Index (KOSDQ150 INDEX) ratio has stayed stable over the last 3 trading days.

ENN Energy (2688 HK): This Is An Avoid

Back on the 26th March, ENN Energy (2688 HK) announced a cash/scrip Offer from ENN Natural Gas (600803 CH), its largest shareholder.
Investors hoping for a clean (er) exit, or one where the back-end terms were clearly defined, will be disappointed. And minorities are active in this name.
The Offer pivots on where the newly-listed H-shares trade. The IFA’s assessment on the theoretical value of these H-shares is unrealistic.

AMFI Stock Reclassification Preview (Jun 2025): Plenty of Change With More Likely

We currently forecast 10 stocks moving from MidCap to LargeCap, 10 stocks moving from LargeCap to MidCap, 9 stocks from SmallCap to MidCap, and 11 stocks from MidCap to SmallCap.
From the new listings, 2 stocks are expected to be added to Mid Cap, and multiple stocks to Small Cap.
There are multiple stocks among the AMFI changes that will be changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) and/or Nifty Midcap 150 Index in September.

Quiddity Leaderboard TDIV Jun25: US$2.1bn One-Way; 17% Turnover; Sector-Neutral Trade Ideas

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. On top of that, there will be capping flows too.

HKBN (1310 HK): I Squared Inches Closer to a Competing Offer

Today’s HKBN Ltd (1310 HK) monthly update notes that I Squared has completed due diligence and is finalising the terms of a possible preconditional offer.
The I Squared bid will likely be a modest premium to the China Mobile offer with a 50% minimum tendering condition. The key unknown is securing regulatory approvals.
China Mobile (941 HK) will first react to an I Squared offer by maintaining terms. However, regardless of whether I Squared secures regulatory approvals, it is likely to match terms.

Makino Milling Machine (6135 JP): Nidec Launches Its Offer

Nidec Corp (6594 JP) has launched its offer for Makino Milling Machine Co (6135 JP) at an unchanged JPY11,000. The offer is open from 4 April to 21 May.
The offer was launched despite securing all regulatory approvals and the Board’s postponement request. The launch could also be an attempt to thwart a competing proposal.
Despite the launch, Nidec’s offer at current terms has a low chance of success, necessitating revised terms. There remains a medium-to-high probability of a competing proposal.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Analytics and News
✓ Events & Webinars

Apr 03

Most Read: Nick Scali Ltd, BYD, Shin Kong Financial Holding, Kokusai Electric , Contemporary Amperex Technology (CATL), Hanmi Semiconductor, Chagee Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

BYD (1211 HK): God’s Eye & Potential HSTECH Index Inclusion
Northern Star’s Acquisition of De Grey Mining: The Many Index Implications & Flows
BYD (1211 HK) Tactical Outlook: Buy-The-Dip Scenarios With Passive Buying from HSI/HSCEI Trackers
Shin Kong (2888 TT)/Taishin (2887 TT) Deal Gets FSC Approval – Still A Good Swap
Nikkei 225 Sep25 Rebal: One ADD, One DELETE Still Probable Unless Kokusai Elec (6525) Offering/Split
CATL A/H Listing – Thoughts on A/H Premium
Korea Short Selling: What Happened on Day 1?
Quiddity Leaderboard T50/100 Jun25: Taishin-Shin Kong Merger Could Cause Two Changes
Tariff Transition Smoothing
Chagee Holdings (CHA US) IPO: The Bull Case

BYD (1211 HK): God’s Eye & Potential HSTECH Index Inclusion

BYD (1211 HK) raised US$5.6bn in a secondary offering a few weeks ago and the stock is trading a lot higher than the placement price.
Buying from global index trackers is done, but there will be more passive buying from Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI) trackers later this month.
With the release of the God’s Eye advanced driver-assistance system (ADAS), the stock could be added to the Hang Seng TECH Index (HSTECH INDEX) in June, bringing more passive inflows.

Northern Star’s Acquisition of De Grey Mining: The Many Index Implications & Flows

Northern Star Resources (NST AU)‘s acquisition of De Grey Mining (DEG AU) is expected to complete in the next 3 weeks.
There will be an ad hoc inclusion to the S&P/ASX 200 (AS51 INDEX) and passive buying in Northern Star Resources (NST AU) from a bunch of trackers of different indices.
The acquisition brings Northern Star Resources (NST AU) close to inclusion in the S&P/ASX 20 Index, but it’s not there yet.

BYD (1211 HK) Tactical Outlook: Buy-The-Dip Scenarios With Passive Buying from HSI/HSCEI Trackers

By Nico Rosti

A recent insight by Brian Freitas signals that BYD (1211 HK)buying from global index trackers is done (more passive buying from HSI/HSCEI trackers may come later this month).
As of Tuesday, the stock is currently in the middle of a modest pullback, 1 week down, reached a support area where the probability of a bounce is around 50%.
We are at the start of the month, it may be early to benefit from the passive buying discussed by Brian Freitas, however this pullback could support a buy-the-dips strategy.

Shin Kong (2888 TT)/Taishin (2887 TT) Deal Gets FSC Approval – Still A Good Swap

Late Monday, The Financial Supervisory Commission approved the merger where Shin Kong Financial Holding (2888 TT) is to be absorbed by Taishin Financial Holding (2887 TT). Announcement here.
Yesterday, the chairmen of both Shin Kong and Taishin decided the merger base date, which has been set a bit further out than even I expected, at 24 July 2025.
The terms tightened yesterday. There is still a worthwhile switch to be done (or arb if you have cheap borrow), and NEWCO is cheap to peers, STILL.

Nikkei 225 Sep25 Rebal: One ADD, One DELETE Still Probable Unless Kokusai Elec (6525) Offering/Split

The March 2025 Nikkei 225 review came out with a sparse set of changes. That gives us hints for the September 2025 review.
Kokusai did NOT get added, waiting for a split, an offering, or time to pass. Only one sector change was made. So we see One ADD and One DELETE.
The lack of effort to address sector imbalances within the rules suggests the rules are not as hard as people thought. Intra-review changes could be more interesting in years ahead.

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.

Korea Short Selling: What Happened on Day 1?

Short notional ticked higher on the KOSPI and KOSDAQ markets and is expected to continue increasing over the next few months.
Since the resumption of short selling, foreign holdings of Korean equities have increased from 29.26% to 29.3%.
The Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) to KOSDAQ 150 Index (KOSDQ150 INDEX) ratio has stayed stable over the last 3 trading days.

Quiddity Leaderboard T50/100 Jun25: Taishin-Shin Kong Merger Could Cause Two Changes

By Janaghan Jeyakumar, CFA

The T50 index represents the top 50 largest stocks by market capitalization in the Taiwan Stock Exchange (TWSE). The T100 index represents the next 100 largest names (51-150 ranks).
In this insight, we take a look at the potential ADDs and DELs for the June 2025 index rebal event.
Currently, we see one change for T50 and one change for T100.

Tariff Transition Smoothing

President Trump’s tariffs embed structural cost pressures, compounding supply chain changes and creating a stagflationary shock central banks cannot offset.
Potential retaliation risks raising inflation expectations, constraining the extent to which monetary policy can smooth transitional pains through temporary easing.
We still believe any dovish policy imperative is likely to be short, shallow, and reversed, with central banks forced to remain flexible and focused on shorter horizons again.

Chagee Holdings (CHA US) IPO: The Bull Case

Chagee Holdings (CHA US), a leading premium tea drinks brand, is seeking to raise US$400-500 million through a Nasdaq IPO.
According to iResearch, as of December 31, 2024, Chagee was the largest premium freshly made tea drink brand in China by the number of stores.
The bull case rests on a strong brand, leading market share, peer-leading revenue growth, top-tier profitability and cash generation.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Analytics and News
✓ Events & Webinars

Apr 02

Most Read: BYD, T&D Holdings, Jusung Engineering, Korean Air Lines, Skyworth Group Limited, Nick Scali Ltd, Kcc Corp, WuXi XDC Cayman and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

BYD (1211 HK): God’s Eye & Potential HSTECH Index Inclusion
T&D Holdings (8795) – A Really Good Look (Divs Up, Big Buyback, Good Historical Stats)
HEM: Fear of Fear Itself
FnGuide Semiconductor Top10 Index Rebalance Preview: Just One Change Likely
Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2025
Skyworth Group (751 HK)’s Latest Partial Buyback. Thoughts On Proration
Northern Star’s Acquisition of De Grey Mining: The Many Index Implications & Flows
BYD (1211 HK) Tactical Outlook: Buy-The-Dip Scenarios With Passive Buying from HSI/HSCEI Trackers
KCC Corp: Considering on Issuing an Overseas EB for Its 10% Stake in Samsung C&T
Wuxi XDC Placement – Following Biologics Playbook, past Deals Have Been Mixed

BYD (1211 HK): God’s Eye & Potential HSTECH Index Inclusion

BYD (1211 HK) raised US$5.6bn in a secondary offering a few weeks ago and the stock is trading a lot higher than the placement price.
Buying from global index trackers is done, but there will be more passive buying from Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI) trackers later this month.
With the release of the God’s Eye advanced driver-assistance system (ADAS), the stock could be added to the Hang Seng TECH Index (HSTECH INDEX) in June, bringing more passive inflows.

T&D Holdings (8795) – A Really Good Look (Divs Up, Big Buyback, Good Historical Stats)

Yesterday, post-close, T&D Holdings (8795 JP) announced ¥40 for 31-Mar-25 FY-end dividend (¥80/yr) and ¥120/share/year in the year to March 2026 on a higher planned payout ratio.
The company also announced guidance for Adjusted Profit for 2025 at ¥130bn (up), and guidance for March 2026 at ¥140bn (lower growth than this past year).
They announced the current ¥50bn buyback was 87.5% complete (they have until 13 May to complete) and a new buyback starting 19 May to spend up to ¥100bn over 10.5mos.

HEM: Fear of Fear Itself

US surveys indicate a fear of tariffs and DOGE, leading to a negative sentiment.
Despite these fears, resilient labour markets suggest that concerns may be exaggerated.
There is an expectation of reversing unnecessary easing in 2026 due to high underlying price and wage inflation.

FnGuide Semiconductor Top10 Index Rebalance Preview: Just One Change Likely

With the averaging period for the April rebalance now complete, we forecast just 1 change for the FnGuide Semiconductor Top10 Index at the upcoming rebalance.
Based on the passive assets tracking the index, there will be between 0.8-2.2x ADV to trade in the forecast changes.
The resumption of short selling makes it easier to position for these events. That could also result in the shorts moving a lot ahead of implementation.

Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2025

In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 2Q 2025.
Among the 38 holdcos/opcos, there have been several pairs that have resulted in significant price ratio divergence which could provide trading opportunities in terms of their pricing gaps closing reversal.
Given the resumption in short selling in Korea, there is going to be a lot more interest in pair trades in Korea, especially among the major Korean holdcos/opcos.

Skyworth Group (751 HK)’s Latest Partial Buyback. Thoughts On Proration

Back on the 23 December 2022, Skyworth Group (751 HK) announced (another) partial buyback, at HK$3.80/share, a 20.25% premium to undisturbed. On the 28 March, terms were bumped to $5.00/share.
At the close of the Offer, the Wong Concert Group held 50.35%, and were no longer subject to the creeper rule. The Group now holds 56.04%
Yet another Partial Offer has been announced (HK$3.11/share, a 15.19% premium)), which will lift the Group’s stake to 66.45%. Minimum pro-ration is 37.84%. It is likely to go higher.

Northern Star’s Acquisition of De Grey Mining: The Many Index Implications & Flows

Northern Star Resources (NST AU)‘s acquisition of De Grey Mining (DEG AU) is expected to complete in the next 3 weeks.
There will be an ad hoc inclusion to the S&P/ASX 200 (AS51 INDEX) and passive buying in Northern Star Resources (NST AU) from a bunch of trackers of different indices.
The acquisition brings Northern Star Resources (NST AU) close to inclusion in the S&P/ASX 20 Index, but it’s not there yet.

BYD (1211 HK) Tactical Outlook: Buy-The-Dip Scenarios With Passive Buying from HSI/HSCEI Trackers

By Nico Rosti

A recent insight by Brian Freitas signals that BYD (1211 HK)buying from global index trackers is done (more passive buying from HSI/HSCEI trackers may come later this month).
As of Tuesday, the stock is currently in the middle of a modest pullback, 1 week down, reached a support area where the probability of a bounce is around 50%.
We are at the start of the month, it may be early to benefit from the passive buying discussed by Brian Freitas, however this pullback could support a buy-the-dips strategy.

KCC Corp: Considering on Issuing an Overseas EB for Its 10% Stake in Samsung C&T

Kcc Corp (002380 KS) is considering on issuing an overseas exchangeable bond (EB) for its 10% stake in Samsung C&T (028260 KS).
KCC is the second largest shareholder of Samsung C&T with a 10% stake in the company which is worth 2 trillion won (US$1.4 billion).
Our NAV valuation of KCC Corp suggests NAV per share of 332,947 won, which is 27% higher than current price.

Wuxi XDC Placement – Following Biologics Playbook, past Deals Have Been Mixed

WuXi AppTec (2359 HK) aims to raise around US$250m via selling around 3.5% stake in WuXi XDC Cayman (2268 HK).
WuXi XDC Cayman (WXDC) is a contract research, development, and manufacturing organization (CRDMO) focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
In this note, we will talk about the placement and run the deal through our ECM framework.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Analytics and News
✓ Events & Webinars

Apr 01

Most Read: NetEase , BayCurrent Consulting , KOSDAQ 150 Index, BYD, Hang Seng TECH Index, Hanwha Corporation, Skyworth Group Limited, Fast Retailing, China Merchants Bank H and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Hang Seng Indexes: FAF Methodology Change for Secondary Listings; Over US$1bn to Buy in NetEase
Nikkei 225 Mar25 Rebal – A Big Buy With Buying Shadow, A Bigger Sell, And $2bn of Funding Flows
Korea Short Selling: Off to the Races
BYD (1211 HK): God’s Eye & Potential HSTECH Index Inclusion
ETF Flows in Q1: Inflows for Taiwan, Outflows for China
Hanwha’s Surprise Gift Disclosure: Three Major Takeaways
Skyworth (751 HK): Another Buyback
Fat Inheritance Taxes for Hanwha Group Chairman Kim’s Three Sons Post Receiving Hanwha Corp Shares
Fast Retailing (9983) | Buying Opportunity Ahead of Q2 Results
A/H Premium Tracker (To 28 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening

Hang Seng Indexes: FAF Methodology Change for Secondary Listings; Over US$1bn to Buy in NetEase

Hang Seng Indexes has announced a change in the FreeFloat-Adjusted Factor (FAF) methodology for Secondary Listings that will be implemented from the next rebalance in June.
NetEase (9999 HK), Baidu (9888 HK), Trip.com (9961 HK), NIO (9866 HK), New Oriental Education & Techn (9901 HK) and Weibo (9898 HK) benefit; GDS Holdings (9698 HK) loses out.
The FAF changes along with capping changes will result in a round-trip trade of HK$34.2bn (US$4.4bn) at the June rebalance with the largest turnover for the Hang Seng TECH Index.

Nikkei 225 Mar25 Rebal – A Big Buy With Buying Shadow, A Bigger Sell, And $2bn of Funding Flows

The Nikkei 225 March 2025 rebalance is today. The ADD is big, with more to buy later. The SELL is a really big sell in terms of float.
The Sell, Mitsubishi Logistics (9301 JP), means Max Real World Float doubles. It’s like a huge offering, with warning.
There’s a big cap trade on Fast Retailing (9983 JP) where timing is not on its side, leaving US$2bn to buy in funding. 25 names at 0.4x ADV to buy.

Korea Short Selling: Off to the Races

Short selling in Korea resumes in a couple of hours. Expect heightened volatility for a few days before things settle down.
Foreign investors have increased their holdings over the last five weeks and there could be further buying in select stocks on stock price drops.
The KOSPI 200 INDEX has outperformed the KOSDAQ 150 Index, and the forecast index deletes have underperformed the indices indicating that there will be positioning for the short-sell resumption.

BYD (1211 HK): God’s Eye & Potential HSTECH Index Inclusion

BYD (1211 HK) raised US$5.6bn in a secondary offering a few weeks ago and the stock is trading a lot higher than the placement price.
Buying from global index trackers is done, but there will be more passive buying from Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI) trackers later this month.
With the release of the God’s Eye advanced driver-assistance system (ADAS), the stock could be added to the Hang Seng TECH Index (HSTECH INDEX) in June, bringing more passive inflows.

ETF Flows in Q1: Inflows for Taiwan, Outflows for China

The largest ETF inflows in the region have been in Taiwan as investors rush into indices that have higher dividend yields.
China had large inflows last year as markets floundered. With markets trading in a range over the last 6 months, those flows have reversed in Q1 this year.
Australia has seen net inflows this year, while there have been net outflows from Hong Kong, India and Japan focused ETFs.

Hanwha’s Surprise Gift Disclosure: Three Major Takeaways

The chances of a Hanwha Corp-Hanwha Energy merger just dropped significantly. With the brothers now owning 43%, the merger’s effectively off.
The three brothers face a KRW 200B gift tax bill and need liquidity. They’ll raise cash via Hanwha Energy’s IPO, with the youngest brother set to sell a 10% stake.
Hanwha Corp will likely fund its Hanwha Aerospace rights issue through a rights offering, using KRW 1.3 trillion from Hanwha Energy, after shutting down merger rumors.

Skyworth (751 HK): Another Buyback

On 27 March, Skyworth Group Limited (751 HK) launched a conditional buyback to acquire a maximum of 350.0m shares (15.67% of outstanding) at HK$3.11, a 15.2% premium to undisturbed price.
Unlike the previous buybacks, the controlling shareholder can vote. Therefore, while the buyback offer is unattractive, the shareholder vote will pass.
Based on the irrevocables, a 100% share minority participation rate implies a minimum proration of 37.84%. The actual proration was around twice the minimum proration for the previous two.

Fat Inheritance Taxes for Hanwha Group Chairman Kim’s Three Sons Post Receiving Hanwha Corp Shares

Hanwha Group Chairman Kim Seung-youn (born in 1952) made a major move to give 11.32% of his shares in Hanwha Corporation (000880 KS) to his three sons.
It is estimated that the three sons will need to pay nearly 222 billion won in inheritance taxes associated with receiving additional stakes in Hanwha Corp.
Because the three sons need to pay for the high amounts of inheritance taxes, Hanwha Corp is likely to raise the dividend payout in the next several years.

Fast Retailing (9983) | Buying Opportunity Ahead of Q2 Results

By Mark Chadwick

Fast Retailing (9983 JP) is set to report its second-quarter results on April 10, and we see an opportunity to buy ahead of a strong earnings release
We expect Fast Retailing to post Q2 sales of ¥905bn (+15% YoY), above consensus estimates of ¥881bn. EBIT projected at ¥133bn (+21% YoY), ahead of street expectations of ¥125bn.
Domestic Uniqlo monthly sales and quarterly results from global peers suggest strong sales momentum.

A/H Premium Tracker (To 28 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening

AH Premia bounce higher. Spread curve torsion was as expected. Narrow spreads saw Hs suffer more. Wide spreads saw H outperformance.
The last few weeks I said warning signs were flashing and spreads could widen. This week they widened despite big SOUTHBOUND buying.
I expect the right thing to do is hunker down and be flat H/A risk.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Analytics and News
✓ Events & Webinars

Mar 31

Most Read: NetEase , Shinko Electric Industries, Topcon Corp, BayCurrent Consulting , Hang Seng TECH Index, Seven & I Holdings, KOSDAQ 150 Index, Jinke Smart Services and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Hang Seng Indexes: FAF Methodology Change for Secondary Listings; Over US$1bn to Buy in NetEase
Shinko Electric (6967) – Chicken and Logistics
[Japan Activism] – KKR and JIC Buy Out Topcon (7732 JP) At ¥3,300/Share
Nikkei 225 Mar25 Rebal – A Big Buy With Buying Shadow, A Bigger Sell, And $2bn of Funding Flows
Topcon (7732 JP): KKR/JICC-Sponsored Preconditional MBO, with Caveats
ETF Flows in Q1: Inflows for Taiwan, Outflows for China
Last Week in Event SPACE: Seven & I, ENN Energy, Sun Corp, Great Eastern Holdings
Weekly Deals Digest (30 Mar) – Seven & I, Topcon, ENN Energy, Jinke Smart, Sinarmas Land, Gold Road
Korea Short Selling: Off to the Races
Jinke Smart Services (9666 HK): Boyu to Launch a Privatisation Offer?

Hang Seng Indexes: FAF Methodology Change for Secondary Listings; Over US$1bn to Buy in NetEase

Hang Seng Indexes has announced a change in the FreeFloat-Adjusted Factor (FAF) methodology for Secondary Listings that will be implemented from the next rebalance in June.
NetEase (9999 HK), Baidu (9888 HK), Trip.com (9961 HK), NIO (9866 HK), New Oriental Education & Techn (9901 HK) and Weibo (9898 HK) benefit; GDS Holdings (9698 HK) loses out.
The FAF changes along with capping changes will result in a round-trip trade of HK$34.2bn (US$4.4bn) at the June rebalance with the largest turnover for the Hang Seng TECH Index.

Shinko Electric (6967) – Chicken and Logistics

The Tender Offer closed end of last week. The bidder JICC-04 got 59.281mm shares. Most of what was left over – perhaps even more than 100%, was passive-owned.
More than 100%? How does that work? It works because of how the logistics goes.
And right now, the reason why the stock is trading well through terms is a matter of Chicken and Logistics.

[Japan Activism] – KKR and JIC Buy Out Topcon (7732 JP) At ¥3,300/Share

The difference between an LBO (Leveraged Buy Out) and an MBO (Management Buy Out) is that an MBO is usually just an LBO where the buyers don’t replace the CEO.
After 4+mos of speculation/noise since a Bloomberg article said Topcon was weighing takeover bids, we have a deal. KKR and JIC will buy out Topcon in an “MBO” at ¥3,300/share.
Unusually, the lower limit is 50.1%. This is an OK exit for the “Bad Cops” but not a great one. It should be higher. Start delayed for 4 months.

Nikkei 225 Mar25 Rebal – A Big Buy With Buying Shadow, A Bigger Sell, And $2bn of Funding Flows

The Nikkei 225 March 2025 rebalance is today. The ADD is big, with more to buy later. The SELL is a really big sell in terms of float.
The Sell, Mitsubishi Logistics (9301 JP), means Max Real World Float doubles. It’s like a huge offering, with warning.
There’s a big cap trade on Fast Retailing (9983 JP) where timing is not on its side, leaving US$2bn to buy in funding. 25 names at 0.4x ADV to buy.

Topcon (7732 JP): KKR/JICC-Sponsored Preconditional MBO, with Caveats

Topcon Corp (7732 JP) recommended a KKR/JICC-sponsored preconditional MBO at JPY3,300, representing an 87.9% premium to the undisturbed price and a 5.4% premium to the last close.
The offer is preconditional on regulatory approvals and is scheduled to start at the end of July. The offer is attractive and represents an all-time high.
The offer comes with caveats: the Board recommendation is not unanimous, the lower limit is set below the two-thirds threshold, and KKR offered a higher price during the discussions.

ETF Flows in Q1: Inflows for Taiwan, Outflows for China

The largest ETF inflows in the region have been in Taiwan as investors rush into indices that have higher dividend yields.
China had large inflows last year as markets floundered. With markets trading in a range over the last 6 months, those flows have reversed in Q1 this year.
Australia has seen net inflows this year, while there have been net outflows from Hong Kong, India and Japan focused ETFs.

Last Week in Event SPACE: Seven & I, ENN Energy, Sun Corp, Great Eastern Holdings

If you don’t think Seven & I (3382 JP)‘s Standalone Plan has legs to go north of here, or ACT gets its act together, then you should sell into strength.
ENN Energy (2688 HK)‘s cash and scrip (into a unlisted H-share-equivalent entity) Offer was not what the doctor ordered.
Sun Corp (6736 JP) is cheap to its holding in Cellebrite DI (CLBT US). How cheap depends on the form and structure of its eventual exit.

Weekly Deals Digest (30 Mar) – Seven & I, Topcon, ENN Energy, Jinke Smart, Sinarmas Land, Gold Road

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: DN Solutions (298440 KS) seeks to raise US$1.1 billion in a KRX IPO.
Event-Driven developments: Seven & I Holdings (3382 JP), Topcon Corp (7732 JP), ENN Energy (2688 HK), Jinke Smart Services (9666 HK), Sinarmas Land (SML SP), Gold Road Resources (GOR AU).

Korea Short Selling: Off to the Races

Short selling in Korea resumes in a couple of hours. Expect heightened volatility for a few days before things settle down.
Foreign investors have increased their holdings over the last five weeks and there could be further buying in select stocks on stock price drops.
The KOSPI 200 INDEX has outperformed the KOSDAQ 150 Index, and the forecast index deletes have underperformed the indices indicating that there will be positioning for the short-sell resumption.

Jinke Smart Services (9666 HK): Boyu to Launch a Privatisation Offer?

Jinke Smart Services (9666 HK) is in a trading halt “pending the release of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers which constitutes inside information.”
It is likely that Boyu, the largest shareholder, is seeking to privatise Jinke. The privatisation of PRC-incorporated entities is usually done through a merger by absorption.
I use several methods to triangulate the likely offer price, which suggests a price range of HK$10.00-16.86, with an average of HK$12.47, a 45% premium to the last close.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Analytics and News
✓ Events & Webinars

Mar 30

Most Read: NetEase , Xiaomi Corp, ENN Energy, BayCurrent Consulting , Hygeia Healthcare Group, Prodia, Orion Holdings, JD.com , Ashok Leyland, Hang Seng TECH Index and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Hang Seng Indexes: FAF Methodology Change for Secondary Listings; Over US$1bn to Buy in NetEase
Xiaomi (1810 HK)’s US$5bn Placement: Unfavourable Index Dynamics but Strong Momentum
ENN Energy (2688 HK) Privatization: Details & Index Implications
Nikkei 225 Index Rebalance: Positioning With a Few Days to Implementation
Hygeia Healthcare Group (6078 HK): Slower Revenue Growth and Margin Deterioration Are Worrisome
Prodia (PRDA IJ) – Expanding and Digitally Remastered
Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (Starting 31 March 2025)
JD.com (9618 HK): Strategic Highlights and Market View from HKEX Top Trades
Ashok Leyland Restructuring: Switch UK Winds Down & Switch India’s Strategic Pivot
ETF Flows in Q1: Inflows for Taiwan, Outflows for China

Hang Seng Indexes: FAF Methodology Change for Secondary Listings; Over US$1bn to Buy in NetEase

Hang Seng Indexes has announced a change in the FreeFloat-Adjusted Factor (FAF) methodology for Secondary Listings that will be implemented from the next rebalance in June.
NetEase (9999 HK), Baidu (9888 HK), Trip.com (9961 HK), NIO (9866 HK), New Oriental Education & Techn (9901 HK) and Weibo (9898 HK) benefit; GDS Holdings (9698 HK) loses out.
The FAF changes along with capping changes will result in a round-trip trade of HK$34.2bn (US$4.4bn) at the June rebalance with the largest turnover for the Hang Seng TECH Index.

Xiaomi (1810 HK)’s US$5bn Placement: Unfavourable Index Dynamics but Strong Momentum

Xiaomi Corp (1810 HK) is looking to place 750m shares at a price range of HK$52.8-54.6/share, a 4.2-7.4% discount from last. That could raise up to HK$40.95bn (US$5.27bn).
There will be limited passive buying near-term. There will be more passive buying at the end of May. Then there will be passive selling early June.
Shorts will be hurting from the relentless move higher in the stock and there could be short covering if the stock moves lower from these levels.

ENN Energy (2688 HK) Privatization: Details & Index Implications

ENN Natural Gas has made a pre-conditional proposal to privatise ENN Energy (2688 HK). For each ENN share, shareholders will receive 2.9427 ENN Natural Gas shares and HK$24.5 in cash.
The ENN Natural Gas H-shares will be listed on the HKEX. The value received by ENN Energy shareholders depends on ENN Natural Gas stock performance and the H-share discount.
The ENN Natural Gas (600803 CH) H-shares are likely to replace ENN Energy (2688 HK) in global indices and the Hang Seng Index (HSI INDEX).

Nikkei 225 Index Rebalance: Positioning With a Few Days to Implementation

BayCurrent Consulting (6532 JP) replaces Mitsubishi Logistics (9301 JP) in the Nikkei 225 (NKY INDEX) at the close of trading on 31 March.
Since announcement, BayCurrent Consulting (6532 JP) stock is up with cumulative excess volume increasing, while Mitsubishi Logistics (9301 JP) is lower on a much bigger increase in cumulative excess volume.
Some of the forecast adds and deletes have moved as one would expect, but positioning for the September rebalance could lead to reversals over the next few weeks and months.

Hygeia Healthcare Group (6078 HK): Slower Revenue Growth and Margin Deterioration Are Worrisome

By Tina Banerjee

Hygeia Healthcare Group (6078 HK) reported revenue growth of 9% YoY to RMB4,446 million, mainly driven by a 11% YoY growth in hospital business.
Hygeia’s gross profit margin contracted 170bps YoY to 29.9%. Net profit decreased 13% on higher finance cost despite of income tax expenses being lower.
Accelerated organic growth and strengthening of margins are crucial to boost valuation.

Prodia (PRDA IJ) – Expanding and Digitally Remastered

By Angus Mackintosh

Prodia (PRDA IJ) FY2024 results reflect an impending recovery, with the company aggressively expanding its outlets by adding 73 over the year, and mostly lower cost points of collection.
The company continues to roll out new tests, with more emphasis on esoteric testing, but also looking at routine testing. It will continue opening new outlets in 2025.
Prodia also continues to expand its digital capabilities through U by Prodia for patients and Prodia for Doctors, and Prodialink. Valuations look attractive with Prodia trading on a low-single-digit EV/EBITDA,

Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (Starting 31 March 2025)

In this insight, we provide the top 10 stocks picks and key catalysts in the Korean stock market for the two weeks starting 31 March.
The top 10 picks in this bi-weekly include Orion Holdings, Hyundai Wia, KEPCO KPS, Samsung Electronics, KT, Emart, CJ Logistics, APR, Doosan Enerbility, and HD Hyundai Marine Solution.
The biggest near-term negative catalyst on the Korean stock market remains tariffs. The final legal outcome on President Yoon Seok-Yeol is expected to be made by the end of April.

JD.com (9618 HK): Strategic Highlights and Market View from HKEX Top Trades

By Gaudenz Schneider

This Insight analyses JD.com (9618 HK) option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility context are provided.
Bearish strategies dominate trading activity, outnumbering bullish ones by more than 3:1, with long volatility structures and calendar/diagonal spreads being prevalent.
Long tail events: Several strategies follow a pattern of minimal upfront cost (0.1% premium), targeting a significant payout in case of large price movements within a short timeframe.

Ashok Leyland Restructuring: Switch UK Winds Down & Switch India’s Strategic Pivot

By Nimish Maheshwari

Ashok Leyland (AL IN) plans to shut manufacturing at its UK EV subsidiary, Switch Mobility UK, and shift focus to India and UAE plants.
The UK exit curbs cash burn and earnings drag, while Switch India, driven by rising demand, nears breakeven with 1800+ e-Bus orders and 80%+ e-LCV share.
This marks a value-accretive pivot, realigning capital to India’s high-growth EV market and improving group-level profitability and return metrics.

ETF Flows in Q1: Inflows for Taiwan, Outflows for China

The largest ETF inflows in the region have been in Taiwan as investors rush into indices that have higher dividend yields.
China had large inflows last year as markets floundered. With markets trading in a range over the last 6 months, those flows have reversed in Q1 this year.
Australia has seen net inflows this year, while there have been net outflows from Hong Kong, India and Japan focused ETFs.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Analytics and News
✓ Events & Webinars

Mar 29

Most Read: Korea Stock Exchange KOSPI 200, Shinko Electric Industries, ENN Energy, BayCurrent Consulting , Baidu , NIO , Hanwha Corporation, Daihatsu Diesel Mfg, Samsung Electronics Pref Shares, Amentum Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Korea: Short Selling Is Back in March; Trade Ideas
Shinko Electric (6967) – Chicken and Logistics
ENN Energy (2688 HK) Privatization: Details & Index Implications
Nikkei 225 Index Rebalance: Positioning With a Few Days to Implementation
Changes to Hang Seng Methodology – Early Doors but $3bn a Side Across Major Indices
NIO HK Placement – Lots of Reasons to Avoid and Only One to Invest
The Hidden Play in Hanwha’s Noisy Stake Reshuffling: Hanwha Corp’s Rights Issue
Daihatsu Diesel (6023) – Is Not Directly Auto-Tariff-Related
The Hot Chatter in the Local Market: Tax-Free Dividends – Is Samsung In?
4 Spin-offs with Insider Buying

Korea: Short Selling Is Back in March; Trade Ideas

Since short selling was banned in November 2023, short interest has plunged in Korea as shorts were covered. Markets have not done much over the last 16 months though.
Foreign investor holdings have dropped from 32.05% in July to 28.57%. The top 25 stocks bought by foreign investors outperformed the top 25 stocks sold by 128% in 16 months.
There will be trade opportunities across indices, pref/ords, index migrations and deletions, potential market upgrades and overvalued stocks being sold.

Shinko Electric (6967) – Chicken and Logistics

The Tender Offer closed end of last week. The bidder JICC-04 got 59.281mm shares. Most of what was left over – perhaps even more than 100%, was passive-owned.
More than 100%? How does that work? It works because of how the logistics goes.
And right now, the reason why the stock is trading well through terms is a matter of Chicken and Logistics.

ENN Energy (2688 HK) Privatization: Details & Index Implications

ENN Natural Gas has made a pre-conditional proposal to privatise ENN Energy (2688 HK). For each ENN share, shareholders will receive 2.9427 ENN Natural Gas shares and HK$24.5 in cash.
The ENN Natural Gas H-shares will be listed on the HKEX. The value received by ENN Energy shareholders depends on ENN Natural Gas stock performance and the H-share discount.
The ENN Natural Gas (600803 CH) H-shares are likely to replace ENN Energy (2688 HK) in global indices and the Hang Seng Index (HSI INDEX).

Nikkei 225 Index Rebalance: Positioning With a Few Days to Implementation

BayCurrent Consulting (6532 JP) replaces Mitsubishi Logistics (9301 JP) in the Nikkei 225 (NKY INDEX) at the close of trading on 31 March.
Since announcement, BayCurrent Consulting (6532 JP) stock is up with cumulative excess volume increasing, while Mitsubishi Logistics (9301 JP) is lower on a much bigger increase in cumulative excess volume.
Some of the forecast adds and deletes have moved as one would expect, but positioning for the September rebalance could lead to reversals over the next few weeks and months.

Changes to Hang Seng Methodology – Early Doors but $3bn a Side Across Major Indices

Janaghan Jeyakumar, CFA put out June rebal predictions on HSCEI, HSTECH, and Hang Seng Internet & Infotech on 17-Mar-25 (and 7 mainland indices 19-21 March) and…
…the Quiddity team put out its regular predictions of all 7 major HS indices and 11 mainland indices, but on 21-March after the close, the Hang Seng team updated methodology.
They changed the way float is calculated for Secondary Listings in Hang Seng indices. It affects only a few names, but this adds US$2.7bn of buying to three names.

NIO HK Placement – Lots of Reasons to Avoid and Only One to Invest

NIO (9866 HK) is looking to raise around US$450m via a primary placement in Hong Kong.
The shares haven’t done much this year or ever since they were listed.
In this note, we will talk about the placement and run the deal through our ECM framework.

The Hidden Play in Hanwha’s Noisy Stake Reshuffling: Hanwha Corp’s Rights Issue

Hanwha Corp’s chances of raising 1T KRW without a capital call are slim, likely channeling Hanwha Energy’s 1.3T KRW into Hanwha Corp intead of Hanwha Aero.
A shareholder-allotted rights issue from Hanwha Corp looks likely, and with short-selling resumption, it sets up a clean arbitrage play with low risk before the official announcement.
Timing is key—Hanwha’s using debt for now, but likely won’t delay long. Expect Hanwha Corp’s rights issue to follow Hanwha Aero’s, probably between June and July.

Daihatsu Diesel (6023) – Is Not Directly Auto-Tariff-Related

Daihatsu Diesel Mfg (6023 JP) is down sharply today – much more than indices – as autos/tech fall on US auto tariffs. There may be some GPIF unwinds as well.
A reminder: Despite the name, Daihatsu Diesel is not an auto name, is growing, has a big order book, and minimal direct exposure to the US.
The Tender settles today. The 8% overhang from Tendered-But-Unsold Shares is an opportunity, not a burden, at 7.2x ex-cash PER.

The Hot Chatter in the Local Market: Tax-Free Dividends – Is Samsung In?

Chosun reports that some Samsung affiliates are exploring tax-free dividends at the operational level, with execs reportedly briefed on the idea.
Surprisingly, regulators and politicians haven’t objected to tax-free dividends, which ironically align with the value-up policy. The delay in Samsung’s value-up announcements may be due to this decision.
It’s unclear if Samsung Electronics and Life will drop tax-free dividends, but if regulators approve, they could introduce it suddenly in their value-up updates, especially with Lee Jae-yong’s cash crunch.

4 Spin-offs with Insider Buying

By Richard Howe

One factor that I closely follow in the spin-off universe is insider buying.
Here’s what Peter Lynch wrote about insiders and spin-offs in One Up on Wall Street: [Spin-offs] are a fertile area for amateur investors…….A month or two after the spinoff is completed, you can check to see if there is heavy insider buying among the new officers and directors.
There are four names in my universe that have interesting insider activity.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Analytics and News
✓ Events & Webinars

Mar 28

Most Read: ENN Energy, Shinko Electric Industries, Domain Holdings Australia , NIO , Cookpad Inc, Hanwha Aerospace, Hanwha Corporation, Contemporary Amperex Technology (CATL) and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

ENN Energy (2688 HK): ENN Natural Gas’ Preconditional Cash/Scrip Offer
ENN Energy (2688 HK) Privatization: Details & Index Implications
Shinko Electric (6967) – Chicken and Logistics
Domain (DHG AU): CoStar’s A$4.20/Share NBIO
NIO HK Placement – Lots of Reasons to Avoid and Only One to Invest
Tinycap Cash-Rich Cookpad (2193) With HUGE Buyback. AGAIN
FSS Surprisingly Halts Hanwha Aerospace’s Rights Offering Capital Raise Temporarily
US Tariffs: No Fooling!
The Hidden Play in Hanwha’s Noisy Stake Reshuffling: Hanwha Corp’s Rights Issue
A/H Premiums and past A/H Listings Performance Data – Mixed Results but Size Matters

ENN Energy (2688 HK): ENN Natural Gas’ Preconditional Cash/Scrip Offer

ENN Energy (2688 HK) announced a pre-conditional privatisation from ENN Natural Gas (600803 CH)/ENN-NG comprising HK$24.50 cash per share + 2.9427 ENN-NG H Shares per ENN share.
The appraised offer value is HK$80.00 (HK$82.35, including the 2024 dividend), which is a tad optimistic. My calculations suggest a realistic offer value range of HK$71.47-76.32.
The offer is final. The precondition satisfaction is low-risk. A high AGM minority participation is a risk, but the scheme vote should pass as the offer terms are reasonable.

ENN Energy (2688 HK) Privatization: Details & Index Implications

ENN Natural Gas has made a pre-conditional proposal to privatise ENN Energy (2688 HK). For each ENN share, shareholders will receive 2.9427 ENN Natural Gas shares and HK$24.5 in cash.
The ENN Natural Gas H-shares will be listed on the HKEX. The value received by ENN Energy shareholders depends on ENN Natural Gas stock performance and the H-share discount.
The ENN Natural Gas (600803 CH) H-shares are likely to replace ENN Energy (2688 HK) in global indices and the Hang Seng Index (HSI INDEX).

Shinko Electric (6967) – Chicken and Logistics

The Tender Offer closed end of last week. The bidder JICC-04 got 59.281mm shares. Most of what was left over – perhaps even more than 100%, was passive-owned.
More than 100%? How does that work? It works because of how the logistics goes.
And right now, the reason why the stock is trading well through terms is a matter of Chicken and Logistics.

Domain (DHG AU): CoStar’s A$4.20/Share NBIO

Domain Holdings Australia (DHG AU), Australia’s number two player in the online real estate market, has announced a non-binding proposal, by way of a Scheme, from CoStar Group (CSGP US).
CoStar is offering A$4.20/share, in cash. A A$0.02/share dividend declared on the 13th Feb will be added (but now ex). CoStar also acquired 16.9% of shares out, also at A$4.20/share.
Domain is 60% owned by Nine Entertainment Co Holdings (NEC AU), and has been known to be scoping out a buyer. A firm offer will require FIRB to sign off.

NIO HK Placement – Lots of Reasons to Avoid and Only One to Invest

NIO (9866 HK) is looking to raise around US$450m via a primary placement in Hong Kong.
The shares haven’t done much this year or ever since they were listed.
In this note, we will talk about the placement and run the deal through our ECM framework.

Tinycap Cash-Rich Cookpad (2193) With HUGE Buyback. AGAIN

Hugely cash-rich Cookpad Inc (2193 JP) wouldn’t hit my radar except for two things. 1) it was the target of Melco Holdings (6676 JP) chairman Maki-san a few years ago…
And 2) they did a huge buyback last year which pumped up the stock very bigly.
Maki-San appears long gone from the shares, but now they are doing another big buyback. Just as bigly. But there are new nuances this year.

FSS Surprisingly Halts Hanwha Aerospace’s Rights Offering Capital Raise Temporarily

After the market close on 27 March, the Financial Supervisory Service (FSS) surprisingly announced a temporary halt to the 3.6 trillion won rights offering capital raise of Hanwha Aerospace.
The FSS has requested a correction report to the massive paid-in capital increase securities report submitted by Hanwha Aerospace on 20 March.
While there could be a short term pop to Hanwha Aerospace’s stock tomorrow, we continue remain negative on Hanwha Aerospace over next 1 year mainly due to its stretched valuations

US Tariffs: No Fooling!

By Alastair Newton

The announcement of individual reciprocal tariff rates for US trading patterns on 2 April is a significant event for investors.
This announcement is part of a drive to re-industrialise America.
Despite its significance, this could merely represent the initial stages of a prolonged trade war.

The Hidden Play in Hanwha’s Noisy Stake Reshuffling: Hanwha Corp’s Rights Issue

Hanwha Corp’s chances of raising 1T KRW without a capital call are slim, likely channeling Hanwha Energy’s 1.3T KRW into Hanwha Corp intead of Hanwha Aero.
A shareholder-allotted rights issue from Hanwha Corp looks likely, and with short-selling resumption, it sets up a clean arbitrage play with low risk before the official announcement.
Timing is key—Hanwha’s using debt for now, but likely won’t delay long. Expect Hanwha Corp’s rights issue to follow Hanwha Aero’s, probably between June and July.

A/H Premiums and past A/H Listings Performance Data – Mixed Results but Size Matters

Given the slew of A/H offerings in the Hong Kong IPO pipeline, in this note, we talk about the overall A/H premiums currently.
We also had a quick look at the past A/H listing performance, including subscription rates and A/H premiums at the time of listing.
Overall, most of the A/H listings haven’t done much in the near term, with a few exceptions.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Analytics and News
✓ Events & Webinars

Mar 27

Most Read: Rio Tinto Ltd, BayCurrent Consulting , Mixue Group, ENN Energy, Shinko Electric Industries, Shopify , Baidu and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Rio Tinto (RIO AU/RIO LN): Unification Index Flows
The Japan March-End Rebal and Dividend Trade
ENN Energy (2688 HK): Third Party Offer?
Nikkei 225 Index Rebalance: Positioning With a Few Days to Implementation
HSCI Index Rebalance Preview: Three Hot Inclusions to Stock Connect in June
ENN Energy (2688 HK): ENN Natural Gas’ Preconditional Cash/Scrip Offer
Shinko Electric (6967) – Chicken and Logistics
Shopify (SHOP US): Adds to Cart Nasdaq100, S&P500, R1000 and Krisp After US Listing & Filing Changes
Changes to Hang Seng Methodology – Early Doors but $3bn a Side Across Major Indices
UK: Low CPI As Seasonal Sales Extend

Rio Tinto (RIO AU/RIO LN): Unification Index Flows

At the upcoming AGM, Rio Tinto Ltd and Rio Tinto PLC shareholders will vote on the company commencing a review on the benefits vs costs of Unification.
Palliser Capital has been pushing for Unification while the Rio Tinto Board has recommended that shareholders vote against Resolution 21/24 citing tax costs among other reasons.
If the Unification completes, S&P/ASX trackers will need to buy Rio Tinto Ltd (RIO AU) while UKX Index (UKX INDEX) trackers will sell Rio Tinto PLC (RIO LN). Net positive.

The Japan March-End Rebal and Dividend Trade

Every year it’s the same trade. But sometimes it is not. This year it is Thursday and Friday. Or not.
The month-end and quarter-end bring big flows, or not, depending on how things have gone.
Over the past 10 years or so, the two-day return on the March trade is pretty good. This year? Well read on!

ENN Energy (2688 HK): Third Party Offer?

ENN Energy (2688 HK), a major clean energy distributor based in China, is currently suspended pursuant to the Takeovers Code
The largest shareholder is ENN Group (34.28% of shares out), an entity controlled by founder Wang Yusuo and his wife, Zhao Baoju.
ENN Energy is a US$8.5bn market cap company. It’s possible ENN Group make an Offer. But more likely, I’d expect an Offer from a (larger) third party.

Nikkei 225 Index Rebalance: Positioning With a Few Days to Implementation

BayCurrent Consulting (6532 JP) replaces Mitsubishi Logistics (9301 JP) in the Nikkei 225 (NKY INDEX) at the close of trading on 31 March.
Since announcement, BayCurrent Consulting (6532 JP) stock is up with cumulative excess volume increasing, while Mitsubishi Logistics (9301 JP) is lower on a much bigger increase in cumulative excess volume.
Some of the forecast adds and deletes have moved as one would expect, but positioning for the September rebalance could lead to reversals over the next few weeks and months.

HSCI Index Rebalance Preview: Three Hot Inclusions to Stock Connect in June

There have been 14 new listings on the Main Board of the HKEX in Q1. One listing is a transfer from the GEM Board and one is a De-SPAC.
Of the 14 stocks, we see Mixue Group (2097 HK), Guming Holdings (1364 HK) and Bloks Group (1850960D CH) as potential HSCI inclusions in June.
There are no lock-up expiries in the stocks ahead of inclusion in Southbound Stock Connect and the low float could take the stocks higher ahead of the index inclusion announcement.

ENN Energy (2688 HK): ENN Natural Gas’ Preconditional Cash/Scrip Offer

ENN Energy (2688 HK) announced a pre-conditional privatisation from ENN Natural Gas (600803 CH)/ENN-NG comprising HK$24.50 cash per share + 2.9427 ENN-NG H Shares per ENN share.
The appraised offer value is HK$80.00 (HK$82.35, including the 2024 dividend), which is a tad optimistic. My calculations suggest a realistic offer value range of HK$71.47-76.32.
The offer is final. The precondition satisfaction is low-risk. A high AGM minority participation is a risk, but the scheme vote should pass as the offer terms are reasonable.

Shinko Electric (6967) – Chicken and Logistics

The Tender Offer closed end of last week. The bidder JICC-04 got 59.281mm shares. Most of what was left over – perhaps even more than 100%, was passive-owned.
More than 100%? How does that work? It works because of how the logistics goes.
And right now, the reason why the stock is trading well through terms is a matter of Chicken and Logistics.

Shopify (SHOP US): Adds to Cart Nasdaq100, S&P500, R1000 and Krisp After US Listing & Filing Changes

By Dimitris Ioannidis

Shopify (SHOP US) is eligible for Nasdaq100 following its listing transfer from NYSE to Nasdaq on 31 March. Inclusion is anticipated in December 2025 or earlier as a replacement.
Shopify (SHOP US) is expected to be added to R1000 and Krisp Mega in June 2025 due to a new domestic 10-K filing which results in a US nationality assignment.
The company can be considered for TMI and S&P500 only if it re-domiciles to US. New filings and US headquarters point towards that direction, but no plans have been announced.

Changes to Hang Seng Methodology – Early Doors but $3bn a Side Across Major Indices

Janaghan Jeyakumar, CFA put out June rebal predictions on HSCEI, HSTECH, and Hang Seng Internet & Infotech on 17-Mar-25 (and 7 mainland indices 19-21 March) and…
…the Quiddity team put out its regular predictions of all 7 major HS indices and 11 mainland indices, but on 21-March after the close, the Hang Seng team updated methodology.
They changed the way float is calculated for Secondary Listings in Hang Seng indices. It affects only a few names, but this adds US$2.7bn of buying to three names.

UK: Low CPI As Seasonal Sales Extend