Category

Daily Briefs

Aug 20
0

Daily Brief Financials: Japan Post Bank and more

By | Daily Briefs, Financials

In today’s briefing:

  • Last Week in Event SPACE: Aussie Tax-Loss Selling, Japan Post Bank/Holdings, AviChina, Hang Lung

Last Week in Event SPACE: Aussie Tax-Loss Selling, Japan Post Bank/Holdings, AviChina, Hang Lung

By David Blennerhassett

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Aug 20
0

Daily Brief Health Care: China Resources Sanju Mdcl & Phrm, Celltrion Inc, Mayne Pharma and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • China Healthcare Weekly (Aug.18) – TCM Formula Granules VBP, Global Financing Rebound, CR Sanjiu
  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: Celltrion, Sanei Architecture, T&K Toka, MPI, Chindata
  • Mayne Pharma (MYX AU): Sale of Retail Generic Portfolio Shifts Focus on US Women’s Health and Derma

China Healthcare Weekly (Aug.18) – TCM Formula Granules VBP, Global Financing Rebound, CR Sanjiu

By Xinyao (Criss) Wang

  • For a considerable period of time, the industry has been speculating about when the large-scale VBP of TCM formula granules will officially begin. Now, here it comes. 
  • Primary market and other financing except IPO in European and US biopharma industry shows a significant signal of recovery. However, IPOs remain stagnant. 
  • We analyzed key points about China Resources Sanjiu. Sanjiu is expected to have better performance in 2023 than 2022, but we advise investors to allow a sufficient margin of safety.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Celltrion, Sanei Architecture, T&K Toka, MPI, Chindata

By David Blennerhassett

Mayne Pharma (MYX AU): Sale of Retail Generic Portfolio Shifts Focus on US Women’s Health and Derma

By Tina Banerjee

  • Mayne Pharma (MYX AU) divested its retail generic portfolio. The divestment is part of the transformation strategy which refocused the company on the U.S. women’s healthcare and dermatology markets.
  • Mayne Pharma will announce FY23 result on August 25. With business restructuring and cost management, the company is expected to cut net loss significantly and turn EBITDA positive from FY24.
  • Mayne Pharma announced a share buyback for up to 10% of issued capital, which will be funded through cash reserves. As of April 30, Mayne Pharma held A$239M in cash.

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Aug 20
0

Daily Brief Consumer: ZJLD Group , Joyful Honda, Trip.com Group , Brilliance China Automotive and more

By | Consumer, Daily Briefs

In today’s briefing:

  • HSCI Index Rebalance: 22 Adds, 27 Deletes & Changes to Southbound Stock Connect
  • Joyful Honda (3191) – Repeats Its ASR In Double the Size
  • HSCEI Index Rebalance: Trip.com (9961 HK) Replaces CG Services (6098 HK)
  • Index Rebalance & ETF Flow Recap: ASX, NEXT50, MVMVA, MVMVW, Celltrion, Brilliance, KQ150, HSCI

HSCI Index Rebalance: 22 Adds, 27 Deletes & Changes to Southbound Stock Connect

By Brian Freitas

  • There are 22 adds and 27 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents down to 518.
  • We expect all 22 inclusions to the HSCI will be added to Stock Connect, while 24 of the 27 HSCI deletions will be removed from Southbound Stock Connect.
  • Since the end of June, shares held though Southbound Connect have increased on 20 of the 27 HSCI deletions and there could be some unwinding in the next two weeks.

Joyful Honda (3191) – Repeats Its ASR In Double the Size

By Travis Lundy

  • Last year, I wrote about Joyful Honda (3191 JP)‘s implementation of a ¥2.5bn ToSTNeT-3 into Accelerated Share Repurchase. It was the first such transaction I knew of in Japan.
  • This year, they have just announced another for nearly twice the size. It is worth looking at the details and comparing the stock vs Peers.
  • It is also worth understanding exactly what the incentives are for whom and how that impacts the path. And who might respond to it.

HSCEI Index Rebalance: Trip.com (9961 HK) Replaces CG Services (6098 HK)

By Brian Freitas

Index Rebalance & ETF Flow Recap: ASX, NEXT50, MVMVA, MVMVW, Celltrion, Brilliance, KQ150, HSCI

By Brian Freitas

  • Friday was the review cutoff for the September rebalance of the ASX family of indices. The September changes for the Hang Seng family of indices were also announced.
  • The September changes for the SSE STAR50 (STAR50 INDEX) will be announced after the close of trading on 25 August.
  • For a second week running, there were big inflows to mainland China ETFs and were spread across multiple index trackers. There were outflows from iShares Emerging Markets (EEM US). 

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Aug 20
0

Most Read: Japan Post Holdings, Celltrion Inc, Trent Ltd, Celltrion Healthcare , ZJLD Group , SK Rent A Car, Tokyo Stock Exchange Tokyo Price Index Topix, Silicon Motion Technology and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins
  • Celltrion Merger: Index Implications
  • Celltrion Merger Swap: Conditions & Schedule
  • NIFTY NEXT50 Index Rebalance: Five Changes; Big Impact; Cross Index Flow
  • Celltrion Inc/Healthcare Merger. Pharm Is Next
  • Merger Between Celltrion Inc and Celltrion Healthcare (Phase I First)
  • HSCI Index Rebalance: 22 Adds, 27 Deletes & Changes to Southbound Stock Connect
  • Fully Disseting SK Rent A Car’s Hybrid Tender Offer Disclosure, Whose Cash Offer at a 5.7% Spread
  • Share Buybacks In Japan – A 2023 Primer
  • What’s Next for SiMo?

Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins

By Travis Lundy

Celltrion Merger: Index Implications

By Brian Freitas

Celltrion Merger Swap: Conditions & Schedule

By Sanghyun Park

  • The swap prices, ₩148,853 for Celltrion Inc and ₩66,874 for Celltrion Healthcare, specified below are not tentative prices but confirmed prices. So, the merger ratio has been determined as 1:0.4492620.
  • The key focus now is the appraisal rights exercise. Both offer attractive spreads. Yet, the ₩1T combined ceiling might seem restricted considering potential dissenting Celltrion Inc shareholders exceeding expectations.
  • Nonetheless, considering the strong determination of the company towards this merger, we should consider a strategy of approaching this spread aggressively while keeping the cancellation risk in mind.

NIFTY NEXT50 Index Rebalance: Five Changes; Big Impact; Cross Index Flow

By Brian Freitas

Celltrion Inc/Healthcare Merger. Pharm Is Next

By David Blennerhassett

  • It’s finally happening:  biopharmaceuticals developer and producer Celltrion Inc (068270 KS) will acquire Celltrion Healthcare (091990 KS).  
  • Inc will issue 0.4492620 new shares for each share in Healthcare. The swap prices of ₩148,853 for Inc and ₩66,874 for Healthcare are firm. 
  • Celltrion Pharm (068760 KS) is excluded from the original three-way merger plan, but is expected to be merged with the enlarged Inc/Healthcare entity around July 2024.

Merger Between Celltrion Inc and Celltrion Healthcare (Phase I First)

By Douglas Kim

  • On 17 August, Celltrion Inc announced that it will merge with Celltrion Healthcare. The merger ratio is 0.449262 Celltrion Inc share for each share of Celltrion Healthcare.
  • There was a negative surprise which was that Celltrion Pharm will not be included as part of the three companies merger which has been promised in the past several years. 
  • Overall, we believe that this merger will have a positive impact on Celltrion Inc and Celltrion Healthcare’s share prices. 

HSCI Index Rebalance: 22 Adds, 27 Deletes & Changes to Southbound Stock Connect

By Brian Freitas

  • There are 22 adds and 27 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents down to 518.
  • We expect all 22 inclusions to the HSCI will be added to Stock Connect, while 24 of the 27 HSCI deletions will be removed from Southbound Stock Connect.
  • Since the end of June, shares held though Southbound Connect have increased on 20 of the 27 HSCI deletions and there could be some unwinding in the next two weeks.

Fully Disseting SK Rent A Car’s Hybrid Tender Offer Disclosure, Whose Cash Offer at a 5.7% Spread

By Sanghyun Park

  • With just the SK Networks stake, both of these conditions are already satisfied. So, the key point will be how quickly the spread of the cash offer narrows next Monday.
  • We need to watch whether the spread for the exchange offer opens. As SK Networks is a K200 constituent, it’s subject to short selling, making a Long Short play possible.
  • Worth noting, among the 24% minority shareholders, NPS and KIT hold a combined 15%, potentially leading to limited market circulation volume. This is something we should also be mindful of.

Share Buybacks In Japan – A 2023 Primer

By Travis Lundy

  • The TSE and Government are pressuring low-PBR companies to DO SOMETHING to raise their PBR to >1.0x. The easiest way to do that is raise ROE.
  • Raising R requires customers “agree” (buying more, paying a higher price, etc). Lowering E means buying back shares or paying big special dividends. That’s easier for a company.
  • So buybacks have been increasing in number, and breadth, and to some degree in size. This insight describes the mechanics/details of how buybacks work in Japan.

What’s Next for SiMo?

By Jim Handy

  • MaxLinear’s acquisition of Silicon Motion has been abandoned, with both sides threatening arbitration. 
  • It is difficult to understand why the acquisition would have resulted in the synergies projected by management.  The businesses are very different.
  • Assuming the companies go different ways, expect for SiMo to perform as it has in the past.

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Aug 19
0

Daily Brief Quantitative Analysis: ASX Short Interest Weekly (Aug 11th): CSL and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • ASX Short Interest Weekly (Aug 11th): CSL, BHP, Lynas Rare Earth, Igo, Rio Tinto, Macquarie
  • Hong Kong Buybacks Weekly (Aug 18th): CK Asset, Tianli Intl, Launch Tech

ASX Short Interest Weekly (Aug 11th): CSL, BHP, Lynas Rare Earth, Igo, Rio Tinto, Macquarie

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of ASX Stocks as of Aug 11th (reported today) which has an aggregated short interest worth USD15.8bn.
  • We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
  • We highlight short interest changes in CSL, BHP, Lynas Rare Earth, Igo, Rio Tinto, Macquarie.

Hong Kong Buybacks Weekly (Aug 18th): CK Asset, Tianli Intl, Launch Tech

By Ke Yan, CFA, FRM

  • We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Aug 18th based on HKEx daily reports. 
  • In the past 7 days, the top 3 companies that repurchased the most shares from the market were CK Asset (1113 HK), Tianli International (1773 HK), Launch Tech (2488 HK). 
  • In the past 30 days, the top 3 companies that repurchased the most shares from the market were AIA (1299 HK), CK Asset (1113 HK), Deewin (2418 HK).

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Aug 19
0

Daily Brief ESG: Limited Number of Business Types with Great Opportunities for Women Is at Heart of the Problem and more

By | Daily Briefs, ESG

In today’s briefing:

  • Limited Number of Business Types with Great Opportunities for Women Is at Heart of the Problem

Limited Number of Business Types with Great Opportunities for Women Is at Heart of the Problem

By Aki Matsumoto

  • The relationship between % of female managers and P/B doesn’t appear to be as strong as the significant correlation found between % of female directors and the value creation indices
  • Currently, companies in business categories where women have greater opportunities to play active roles (new business models) are appointing female employees to management positions, and such  companies have higher P/Bs.
  • Since the gender wage gap is attributed to % of female managers, unless a company has significant opportunities for women to play active roles, the gender wage gap is large.

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Aug 19
0

Daily Brief Private Markets: Etisalat’s VC Arm and more

By | Daily Briefs, Private Markets

In today’s briefing:

  • Etisalat’s VC Arm, Singtel Innov8 Join Airalo’s US$60M Series B Round

Etisalat’s VC Arm, Singtel Innov8 Join Airalo’s US$60M Series B Round

By e27

  • Airalo, an e-SIM marketplace, has secured US$60 million in a Series B investment round from a clutch of investors, its Co-Founder Ahmet Bahadir Ozdemir said in a LinkedIn post.
  • The investors participating in the round are Etisalat’s e& capital, Liberty Global, Singtel Innov8, Orange Ventures, Deutsche Telekom’s T.Capital, KPN Ventures, and Telefonica.
  • Existing investors Antler, Rakuten Ventures, Peak XV Partners’s Surge, and I2BF Global Ventures also joined.

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Aug 19
0

Daily Brief Technical Analysis: 10-Yr Treasury Yield and DXY at Key Inflection Points; $ACWI Testing $93; Energy/HC/Tech/CD Buys and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • 10-Yr Treasury Yield and DXY at Key Inflection Points; $ACWI Testing $93; Energy/HC/Tech/CD Buys

10-Yr Treasury Yield and DXY at Key Inflection Points; $ACWI Testing $93; Energy/HC/Tech/CD Buys

By Joe Jasper

  • Global equities under pressure; we discussed in our August 3,2023 Int’l Compass how it could be the start of a ~15% pullback in $ACWI, which would put it at $84-$85.
  • We also discussed how it is possible that this is a normal 3%-6% pullback to the major $93 support level (which it tested today).
  • If the 10-year Treasury yield and DXY remain below their respective resistance levels, we remain buyers on this pullback to $93 on ACWI-US.

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Aug 19
0

Daily Brief Thematic (Sector/Industry): Japan Weekly | Stocks Lower and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Japan Weekly | Stocks Lower
  • Signs Abound that Asia Gaming Gaining Strength Despite China Macro Woes

Japan Weekly | Stocks Lower

By Mark Chadwick

  • Indiscriminate selling of Japanese stocks with only 10% of stocks up on the week – Topix -3% lower week-on-week
  • Lots of scary headlines with US mortgage rates hitting 20 year highs and China’s real estate sector imploding 
  • We highlight the stocks that have been moving in the market this week

Signs Abound that Asia Gaming Gaining Strength Despite China Macro Woes

By Howard J Klein

  • Decline in China economy has tinted investor views into the Asian casino sector. But valuations are attractive.
  • GGR continues to gain but high youth unemployment blemishes estimates of the return of younger demos who comprise a key segment of Macau visitors.
  • Strong entry points for Wynn Macau and Sands China persist, but investors still appear to be hesitant to enter the sector until more visible signs of China recovery begin.

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Aug 19
0

Daily Brief Event-Driven: Celltrion Inc/Healthcare Merger. Pharm Is Next and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Celltrion Inc/Healthcare Merger. Pharm Is Next
  • Merger Between Celltrion Inc and Celltrion Healthcare (Phase I First)
  • Fully Disseting SK Rent A Car’s Hybrid Tender Offer Disclosure, Whose Cash Offer at a 5.7% Spread

Celltrion Inc/Healthcare Merger. Pharm Is Next

By David Blennerhassett

  • It’s finally happening:  biopharmaceuticals developer and producer Celltrion Inc (068270 KS) will acquire Celltrion Healthcare (091990 KS).  
  • Inc will issue 0.4492620 new shares for each share in Healthcare. The swap prices of ₩148,853 for Inc and ₩66,874 for Healthcare are firm. 
  • Celltrion Pharm (068760 KS) is excluded from the original three-way merger plan, but is expected to be merged with the enlarged Inc/Healthcare entity around July 2024.

Merger Between Celltrion Inc and Celltrion Healthcare (Phase I First)

By Douglas Kim

  • On 17 August, Celltrion Inc announced that it will merge with Celltrion Healthcare. The merger ratio is 0.449262 Celltrion Inc share for each share of Celltrion Healthcare.
  • There was a negative surprise which was that Celltrion Pharm will not be included as part of the three companies merger which has been promised in the past several years. 
  • Overall, we believe that this merger will have a positive impact on Celltrion Inc and Celltrion Healthcare’s share prices. 

Fully Disseting SK Rent A Car’s Hybrid Tender Offer Disclosure, Whose Cash Offer at a 5.7% Spread

By Sanghyun Park

  • With just the SK Networks stake, both of these conditions are already satisfied. So, the key point will be how quickly the spread of the cash offer narrows next Monday.
  • We need to watch whether the spread for the exchange offer opens. As SK Networks is a K200 constituent, it’s subject to short selling, making a Long Short play possible.
  • Worth noting, among the 24% minority shareholders, NPS and KIT hold a combined 15%, potentially leading to limited market circulation volume. This is something we should also be mindful of.

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