In today’s briefing:
- Socionext (6526 JP) – Pre-IPO Lockup Expiry Offering Will Double Real World Float
- Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?
- Socionext Placement – A US$1.8bn Cleanup, Will Have to Give up Some of Its 6x Listing Gains
- HSCEI Index Rebalance Preview: Deletions Fairly Certain; Uncertainty Among the Adds
- SF Holdings A/H Listing – Early Look – Front Running
- Quiddity Leaderboard for Hang Seng Index Sep 23: Beigene Vs Peers An Interesting Trade
- Delisting of 5 Korean Preferred Stocks on 17 July
- Hyundai G.F. Holdings’ Stock Swap with Hyundai Green Food & Hyundai Dept Store
- The Rise of the Fourth Telco in Korea – Breaking the Oligopoly
- Hong Kong Buybacks Weekly (Jul 7th): Tencent, AIA, Kuaishou Technology
Socionext (6526 JP) – Pre-IPO Lockup Expiry Offering Will Double Real World Float
- Today after the close, SoC and market darling Socionext (6526 JP) announced that DBJ, Fujitsu, and Panasonic would offer the remaining shares they in a US$1.8bn secondary offering.
- Pshaw…. that’s only 2.5 days of 20-day ADV… Not a lot. But in fact, that is a LOT of stock.
- I harp on understanding shareholder structure. I think it worthwhile. Here it matters too.
Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?
- We finally got to 80 Hang Seng Index constituents in June. Now comes the next step of moving up to 100 index constituents though there is no timeline for completion.
- The conclusions of the market consultation on the inclusion of foreign stocks in the Hang Seng Index should be announced soon though implementation could start only in December.
- We highlight 10 potential inclusions to the index with passive trading impact varying from 1.5-5.6 days of ADV. There are large shorts on some of the stocks.
Socionext Placement – A US$1.8bn Cleanup, Will Have to Give up Some of Its 6x Listing Gains
- Three shareholders of Socionext (6526 JP) aim to raise around US$1.8bn via selling all of their shares in Socionext.
- Socionext was listed on 12th Oct 2022, when it raised US$457m in its upsized Japan IPO. Its six-month lockup expired in Apr 2023. Its shares are up 6x since listing.
- In this note, we talk about the deal dynamics and run the deal through our ECM framework.
HSCEI Index Rebalance Preview: Deletions Fairly Certain; Uncertainty Among the Adds
- Country Garden Services Holdings (6098 HK) and Zhongsheng Group (881 HK) are high probability deletions in September, while Trip.com (9961 HK) is a high probability inclusion.
- The second add could be BeiGene Ltd (6160 HK) if it passes the velocity test. If not, Chow Tai Fook Jewellery (1929 HK) will be added.
- With the exception of Zhongsheng Group (881 HK), short interest has been rising on all the other stocks and could affect how the stocks trade close to implementation date.
SF Holdings A/H Listing – Early Look – Front Running
- S.F. Holding (002352 CH) (SFH), China’s largest express delivery company, aims to raise around US$2-3bn in its H-share listing in Hong Kong.
- SFH is the largest integrated express logistics service provider in China and the fourth largest in the world. It has been listed on the Shenzhen Stock Exchange since 2017
- In this note, we look at its past performance and other deal dynamics that might impact the listing.
Quiddity Leaderboard for Hang Seng Index Sep 23: Beigene Vs Peers An Interesting Trade
- In this insight, we take a look at some of the names with high likelihood of being involved in index changes for the Hang Seng Index in September 2023.
- The index changes for the September 2023 rebalance could be announced in mid-August and implemented in early-September.
- Although the index methodology is highly subjective and predicting index changes is extremely tricky, the HSI is an important index in the region and here are our thoughts for September.
Delisting of 5 Korean Preferred Stocks on 17 July
- The Korea Exchange officially announced today that the following five preferred stocks will be delisted on 17 July.
- These five stocks including Samsung Heavy Industries Pref, SK Networks Pref, DB Hitek Pref, Hyundai BNG Steel Pref, and Heungkuk Fire & Marine Insurance Pref 2B fell sharply today.
- Despite the warning by the Korea Exchange since end of May, it was not until today that these five stocks dropped sharply. On average, these five stocks fell 44% today.
Hyundai G.F. Holdings’ Stock Swap with Hyundai Green Food & Hyundai Dept Store
- Hyundai G.F. Holdings will conduct a tender offer to Hyundai Green Food and Hyundai Dept Store shareholders. The tendering period is August 11-September 1.
- The target volume is 10,125,700 (Hyundai Green Food) and 4,669,556 (Hyundai Dept Store), corresponding to 29.89% and 19.95% of the outstanding shares, respectively.
- We should approach this event trading with caution, taking into account the risk of an unhedged setup while monitoring the potential widening of the spread opening during the tendering period.
The Rise of the Fourth Telco in Korea – Breaking the Oligopoly
- The Korean government announced today that it will allow a fourth telco in Korea in order to reduce the oligopoly structure dominated by the three existing telcos.
- This decision to allow another telco in Korea will have a major negative impact on the existing three telcos in Korea.
- On a relative basis, we think that this could have a worse impact than LG Uplus as compared to SK Telecom due to greater price sensitivity of LG Uplus’ customers.
Hong Kong Buybacks Weekly (Jul 7th): Tencent, AIA, Kuaishou Technology
- We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jul 7th based on HKEx daily reports.
- In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Kuaishou Technology (1024 HK).
- In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), CK Asset (1113 HK).
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
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
