Category

Daily Briefs

Oct 03
0

Daily Brief Industrials: Hyosung Heavy Industries Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • KOSPI200 Index Rebalance Preview: 4 Adds, 5 Deletes Likely in December

KOSPI200 Index Rebalance Preview: 4 Adds, 5 Deletes Likely in December

By Brian Freitas

  • 85% of the way through the review period, there could be 4 adds and 5 deletes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) in December.
  • The impact on the potential inclusions ranges from 1.4-17 days of ADV while the impact on the potential deletions varies from 4-8 days of ADV.
  • The potential adds outperformed the potential deletes early in the review period before giving up all the gains over the following months.

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Oct 03
0

Daily Brief Industrials: Hyosung Heavy Industries Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • KOSPI200 Index Rebalance Preview: 4 Adds, 5 Deletes Likely in December

KOSPI200 Index Rebalance Preview: 4 Adds, 5 Deletes Likely in December

By Brian Freitas

  • 85% of the way through the review period, there could be 4 adds and 5 deletes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) in December.
  • The impact on the potential inclusions ranges from 1.4-17 days of ADV while the impact on the potential deletions varies from 4-8 days of ADV.
  • The potential adds outperformed the potential deletes early in the review period before giving up all the gains over the following months.

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Oct 03
0

Daily Brief Energy/Materials: Korea Zinc, Greatview Aseptic Packaging, SGX Rubber Future TSR20, Nickel Industries , Mongolian Mining, Veren, Serica Energy, Atlas Lithium and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Korea Zinc’s Buyback Tender Offer at ₩830,000: Market Vibe Still Leans Towards MBK
  • Court Dismisses Injunction; Korea Zinc to Announce Buyback Tender Offer Soon
  • GA Pack (468 HK): Crunch Time
  • Korea Zinc: Plans to Buy Back and Cancel Shares Worth 2.7 Trillion Won + Team Up with Bain Capital
  • The Challenges Of Rubber Production In 2024: Weather, Pricing Dynamics, And Regulatory Implications
  • Morning Views Asia: Nickel Industries , Tata Motors ADR
  • Mongolia Mining 975 HK: Redemption of Perpetual Securities Complete, Dividend Catalyst In-Play
  • Veren Inc.: Initiation Of Coverage – Will The Acquisition of SilverBow Resources Be A Game Changer?
  • Serica Energy Plc (AIM: SQZ): Very high flow rate at new Bittern well
  • Sustainable Investing Surveyor – Atlas Lithium Corporation (ATLX)

Korea Zinc’s Buyback Tender Offer at ₩830,000: Market Vibe Still Leans Towards MBK

By Sanghyun Park

  • Korea Zinc is launching a 3.21M share buyback (15.5% of total shares) via a KRW 2.66T tender offer at ₩830,000 per share, with Bain Capital involved.
  • If tendered shares fall short, Korea Zinc and Bain Capital will buy all. If over the target, they’ll buy pro rata. Below 1,215,283 shares, they will opt out.
  • Should we dive into Korea Zinc’s risky buyback or choose safer, lower-priced MBK? The market vibe favors MBK, reflected in Korea Zinc’s closing price today.

Court Dismisses Injunction; Korea Zinc to Announce Buyback Tender Offer Soon

By Sanghyun Park

  • The court rejected MBK and Young Poong’s injunction to block Korea Zinc’s buyback, allowing Choi’s side to continue using buybacks to defend control.
  • Korea Zinc plans an emergency board meeting to launch a tender offer, using internal funds, to buy back shares at 800K-850K KRW starting around October 7.
  • If Choi converts discretionary reserves into distributable profits, Korea Zinc could unlock 2-3 trillion KRW for the buyback, but uncertainty keeps the stock around 700K KRW.

GA Pack (468 HK): Crunch Time

By Arun George

  • Unsurprisingly, the Greatview Aseptic Packaging (468 HK) Board has recommended shareholders vote against the appointment of Shandong Xinjufeng Technology Packaging (301296 CH)’s two director nominees.
  • The EGM vote on 18 October is too close to call and depends on Shandong Xinjufeng and management’s ability to rally disengaged minorities to their respective causes.   
  • Irrespective of the EGM vote results, Shandong Xinjufeng will be keen to launch its offer to ward off the threat of a possible competing offer from management. 

Korea Zinc: Plans to Buy Back and Cancel Shares Worth 2.7 Trillion Won + Team Up with Bain Capital

By Douglas Kim

  • Korea Zinc plans to repurchase and cancel shares worth 2.663 trillion won. Korea Zinc’s partner Bain Capital also plans to purchase around 430 billion won for a 2.5% stake. 
  • Korea Zinc plans to buy back shares at 830,000 won per share, which is 11% higher than MBK’s revised up tender offer price of 750,000 won.
  • Choi family/Bain Capital’s efforts to conduct a massive share buyback and cancellation at higher prices than the market price goes against the globally accepted market practices.

The Challenges Of Rubber Production In 2024: Weather, Pricing Dynamics, And Regulatory Implications

By Arusha Das

  • Price surge to continue until 2025
  • 13% higher precipitation in Thailand in Jan-Aug 2024 vs 2023

Morning Views Asia: Nickel Industries , Tata Motors ADR

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

Mongolia Mining 975 HK: Redemption of Perpetual Securities Complete, Dividend Catalyst In-Play

By Sameer Taneja

  • In a filing released last evening after the market, Mongolian Mining (975 HK) announced it had redeemed the entire outstanding principal amount of the perpetual securities and their distribution.
  • The announcement is significant as it prepares the company to distribute dividends for FY24 in the March results. 
  • The stock trades at 5.2x FY24 PE and 2.5x EV-EBITDA, and we expect the company to have massive net cash by the end of the year.

Veren Inc.: Initiation Of Coverage – Will The Acquisition of SilverBow Resources Be A Game Changer?

By Baptista Research

  • Veren has demonstrated robust financial and operational performance in the second quarter of 2024, marked by strategic advancements in both its asset base optimization and financial structure.
  • The company reported significant operational efficiency with stable production levels, having produced 192,500 barrels of oil equivalent per day (BOE/d), of which 65% comprised oil and liquids.
  • This production performance is consistent with the company’s strategic focus on high-margin liquids-rich plays in the Western Canadian Sedimentary Basin, particularly in the Alberta Montney and Kaybob Duvernay areas.

Serica Energy Plc (AIM: SQZ): Very high flow rate at new Bittern well

By Auctus Advisors

  • • The B6 well on the Bittern field is now in production at a stable gross rate of ~8 mboe/d.
  • Net to Serica, this represents ~5.2 mboe/d.
  • This is well above our expectations of ~3 mboe/d (net).

Sustainable Investing Surveyor – Atlas Lithium Corporation (ATLX)

By Water Tower Research

  • The WTR Sustainable Index was up 3.5% W/W versus the S&P 500 Index (up 0.6%), the Russell 2000 Index (down 0.1%) and the Nasdaq Index (up 1.1%).
  • Energy Technology (13.5% of the index) was up 3.3%, while Industrial Climate and Ag Technology (46.3% of the index) was up 1.1%, ClimateTech Mining was up 4.2%, and Advanced Transportation Solutions (21.0% of index) was up 8.4%.
  • Top 10 Performers: VIHD, NNOMF, WAVE, EGT, NVVE, CPWHF, VLI, XPEV, MP, DNMR

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Oct 03
0

Daily Brief Financials: China Merchants China Direct Investments, Banco De Sabadell SA, Bitcoin Pro, City of London Investment Grou and more

By | Daily Briefs, Financials

In today’s briefing:

  • CMCDI (133 HK)’s Proposals Light On Detail
  • BBVA/Sabadell: Adjustment of Exchange Equation
  • Market Musings – Reawakening The Animal Spirits
  • City of London Investment Group (CLIG): Good fund performance and solid results

CMCDI (133 HK)’s Proposals Light On Detail

By David Blennerhassett

  • Argyle Street Management (ASM), a 9.01% shareholder in China Merchants China Direct Investments (133 HK), has been (very) publicly angling for change in this closed-end fund. Here is their website.
  • The core issue is CMCDI’s P/NAV ratio of 0.41x compared to closed-end fund peers of 0.8x-0.9x. 
  • CMCDI has finally responded to ASM’s overtures with the prospect of a share buyback and a special dividend. But details are thin on the ground. 

BBVA/Sabadell: Adjustment of Exchange Equation

By Jesus Rodriguez Aguilar

  • BBVA has updated its hostile takeover offer to Banco Sabadell shareholders, proposing a cash payment of €0.29 and modifying the exchange ratio to 1 BBVA SM x 5.0196 SAB SM.
  • The adjustment aims to account for the dividends paid by both banks, as outlined in the initial announcement from May 2024. Current gross spread (ex-dividend) is -2.99%.
  • I believe this adjustment (merely optical) will be insufficient to convince Sabadell’s retail shareholders, many of whom are also clients and have an emotional attachment to the bank.

Market Musings – Reawakening The Animal Spirits

By Delphi Digital

  • The report from Delphi Digital discusses significant macroeconomic changes, including the Federal Reserve’s move to lower interest rates and China’s liquidity injections, creating a positive environment for risk assets such as cryptocurrencies.
  • In the crypto markets, there is growing optimism as BTC shows signs of a trend reversal and altcoins stage rallies.
  • ETF inflows, particularly in BTC, are increasing after a slow summer.

City of London Investment Group (CLIG): Good fund performance and solid results

By Hardman & Co

  • City of London has announced its full-year results for 2024.
  • As stated in the trading statement, FUM was $10.24bn, a 9% increase over the year.
  • While market performance offset net outflows, there was a significant improvement in the latter in the second half, which bodes well going forward.

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Oct 03
0

Daily Brief Consumer: China Resources Beverage, XPeng , Intermestic, Fast Retailing, Ginebra San Miguel , Pvh Corp, TSE Tokyo Price Index TOPIX and more

By | Consumer, Daily Briefs

In today’s briefing:

  • China Resources Beverage Pre-IPO – PHIP Updates – Revenue Slowing, Margins Growing
  • Quiddity Leaderboard HSTECH Dec 24: Midea Group Question Mark and Final Rankings for Exp ADDs/DELs
  • Intermestic IPO: Forecasts and Valuation
  • Fast Retailing(9983) | Weaving a Global Empire; FY8/25 Outlook
  • China Resources Beverage Pre-IPO – Updated Thoughts on Valuation
  • Pre-IPO China Resources Beverage (PHIP Updates) – Some Points Worth the Attention
  • Shortlist of High Conviction Philippines Equity Ideas – October 2024
  • Pvh Corp – VNCE: European Tour: Creating Key Growth Vehicle; Reiterating Buy Rating, $3 PT
  • Slightly More than the Annual IPOs, 119 Companies Newly Applied for Transitional Measures This Year

China Resources Beverage Pre-IPO – PHIP Updates – Revenue Slowing, Margins Growing

By Sumeet Singh

  • China Resources Beverage (CRB HK) is looking to raise up to US$1bn in its upcoming Hong Kong IPO. 
  • China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
  • In our earlier notes, we talked about the company’s past performance and provided our thoughts on valuations. In this note, we will look at updates from its most recent filings.

Quiddity Leaderboard HSTECH Dec 24: Midea Group Question Mark and Final Rankings for Exp ADDs/DELs

By Janaghan Jeyakumar, CFA

  • The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
  • In this insight, we take a look at the final rankings of potential ADDs and potential DELs for the December 2024 index rebal event.
  • We do not expect any changes for the HSTECH index in December 2024. However, we expect there to be capping flows of US$1,079mn one-way.

Intermestic IPO: Forecasts and Valuation

By Shifara Samsudeen, ACMA, CGMA

  • The Japanese eyewear company Intermestic (262A JP) has set the terms for its Tokyo IPO and plans to raise US$121m through the IPO.
  • Our analysis shows that the company’s IPO is valued attractively compared to JINS Inc (3046 JP) , who offers eyewear at a similar price range to Intermestic.
  • Japanese eyewear makers who have aggressively expanded into overseas markets seems to be suffering from falling sales and margins, particularly in China due to economic slowdown.

Fast Retailing(9983) | Weaving a Global Empire; FY8/25 Outlook

By Mark Chadwick

  • Fast Retailing, through its flagship Uniqlo, is redefining retail by focusing on high-quality, functional apparel, surpassing global peers in operating profit margins.
  • The company’s “scrap & build” strategy revitalizes underperforming stores in China, while expanding internationally, with a strong growth trajectory across North America and Europe.
  • With a revised fair value of 52,500 yen, we forecast significant sales growth, driven by favorable seasonal trends, global expansion and recovering consumer sentiment in China.

China Resources Beverage Pre-IPO – Updated Thoughts on Valuation

By Sumeet Singh

  • China Resources Beverage (CRB HK) is looking to raise up to US$1bn in its upcoming Hong Kong IPO.
  • China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
  • In our earlier notes, we talked about the company’s past performance and provided our initial thoughts on valuations. In this note, we will relook at valuations post its PHIP updates.

Pre-IPO China Resources Beverage (PHIP Updates) – Some Points Worth the Attention

By Xinyao (Criss) Wang

  • Nongfu Spring is able to take a price war to grab market share,but the strategy of CR Beverage forced to cut prices may not work,making its profit margin further decline.
  • CR Beverage’s business model is “single business + scale expansion”, worse than “multi-category structure + new product incubation”.Future performance growth may inevitably slow down if without the second growth curve.
  • Whether in terms of product/revenue structure, profitability, or sustainability of growth momentum, CR Beverage isn’t as good as Nongfu Spring. Valuation of CR Beverage should be lower than Nongfu Spring.

Shortlist of High Conviction Philippines Equity Ideas – October 2024

By Sameer Taneja

Pvh Corp – VNCE: European Tour: Creating Key Growth Vehicle; Reiterating Buy Rating, $3 PT

By Small Cap Consumer Research

  • We are reiterating our Buy rating, projections and $3 price target for Vince after meeting with management in their European headquarters and touring the Galeries Lafayette shop in shop in Paris.
  • We believe, with the company now well capitalized and acting in a materially more strategic fashion, the European opportunities, from owned stores to additional wholesale to category expansion, position Vince to drive material international growth going froward.
  • When coupled with strong product offerings and what we believe are material opportunities in the domestic market, we believe Vince is ideally positioned to register material top and bottom line growth, and we reiterate our Buy rating and $3 price target for VNCE.

Slightly More than the Annual IPOs, 119 Companies Newly Applied for Transitional Measures This Year

By Aki Matsumoto

  • Of the companies that have been removed from the list of companies subject to transitional measures, only about half have been able to meet the criteria for maintaining their listing.
  • It’s not easy for companies applying transitional measures to comply with the criteria for maintaining listing, so it’s realistic to move to a market with looser criteria for maintaining listing.
  • Besides problems with listing screening process, many managers consider IPO to be the goal and have little will to grow the company after listing, leading to slump in corporate value.

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Oct 03
0

Daily Brief Health Care: Sino Biopharmaceutical, Dr Lal PathLabs Ltd, BioStem Technologies , IN8bio , Oryzon Genomics and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Quiddity Leaderboard HSCEI Dec 24: Two Changes Likely; US$474mn Capping Flows One-Way
  • Dr Lal PathLabs Ltd (DLPL IN): Poised for Next Level of Growth Amid Easing Price Competition
  • BSEM: Initiates Testing and Looks to Nasdaq
  • INAB: Restructuring Narrows Focus to AML
  • Oryzon Genomics – FDA aligns on Phase III BPD plans

Quiddity Leaderboard HSCEI Dec 24: Two Changes Likely; US$474mn Capping Flows One-Way

By Janaghan Jeyakumar, CFA

  • The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
  • In this insight, we take a look at the final rankings for the HSCEI potential ADDs and potential DELs for the index rebal event in December 2024.
  • We see two ADDs/DELs – the same names we had in our last insight. At present, we expect US$474mn capping flows one-way but this can change by early-December 2024.

Dr Lal PathLabs Ltd (DLPL IN): Poised for Next Level of Growth Amid Easing Price Competition

By Tina Banerjee

  • Dr Lal PathLabs Ltd (DLPL IN) has maintained its 10% revenue growth target for the current financial year, mainly driven by 6–7% growth in patient volume.
  • The operating environment is becoming conducive. Competitive intensity in terms of predatory pricing, promotional offer, and cash burning to acquire customers, have come to an end.
  • As of Q1FY25, DLPL has net cash position of INR10B. The company is looking for small or mid-sized acquisitions in South and West India and expanding in small towns.

BSEM: Initiates Testing and Looks to Nasdaq

By Zacks Small Cap Research

  • BioStem Technologies is a leading innovator focused on harnessing the natural properties of perinatal tissue in the development, manufacture, and commercialization of allografts for regenerative therapies.
  • The company announced that it was initiating an important clinical trial to study BioREtain in diabetic foot ulcers, which is a condition impacting millions.
  • Additionally, the company announced it has filed an important document to further its quest to start trading on the Nasdaq stock exchange.

INAB: Restructuring Narrows Focus to AML

By Zacks Small Cap Research

  • IN8Bio is a clinical-stage, oncology-focused biotechnology company using ?d T cells against solid and hematological tumors.
  • Its pipeline is built on the DeltEx platform & drug-resistant immunotherapy (DRI) technology which have produced clinical candidates targeting leukemia & GBM.
  • INB-100 is evaluating leukemia in a Ph1 study, while INB-200 & INB-400 are Ph1 and Ph2 assets evaluating GBM.

Oryzon Genomics – FDA aligns on Phase III BPD plans

By Edison Investment Research

Oryzon Genomics has confirmed the FDA’s alignment with its proposed Phase III programme for vafidemstat in borderline personality disorder (BPD). Notably, the FDA acknowledged agitation and aggression (A/A) as a therapeutic indication and, as such, the State-Trait Anger Expression Inventory 2 (STAXI-2) Trait Anger may be used as a primary endpoint for Phase III (PORTICO-2). We note that vafidemstat showed statistically significant benefit by this measure in the prior Phase IIb PORTICO trial. We view the news as encouraging and believe there is a sizeable opportunity for Oryzon to develop an effective treatment for BPD, for which there are currently no approved drugs. Next steps are to submit a full trial protocol for PORTICO-2 to the FDA (expected within Q125), before a potential trial launch from H225, contingent on regulatory clearance and providing that there are no other delays.

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Oct 02
0

Daily Brief Australia: Namoi Cotton Co Operative and more

By | Australia, Daily Briefs

In today’s briefing:

  • Namoi Cotton (NAM AU): Well Played LDC

Namoi Cotton (NAM AU): Well Played LDC

By David Blennerhassett

  • A$0.77/Share. That’s Louis Dreyfus Company (LDC)’s revised unconditional bid. Plus it now holds 47.66% after Samuel Terry Asset Management, Namoi’s largest shareholder, tendered into the revised term.
  • Expect Namoi Cotton Co Operative (NAM AU)‘s board to shortly back LDC’s Offer. LDC’s Offer is $0.02/share above Olam Agri’s conditional bid.
  • After LDC first approached Namoi in November last year, this is now done. Expect Olam to tender its stake, and fold its tent. 

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Oct 02
0

Daily Brief Quantitative Analysis: Screening for GEMs: October 2024 and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • Screening for GEMs: October 2024

Screening for GEMs: October 2024

By Wium Malan, CFA

  • An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.
  • The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
  • Developed over roughly 4 years and implemented in its current state for over 3 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.

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Oct 02
0

Daily Brief Technical Analysis: Still No Decisive Breakout as SPX Tests 5783 Resistance; Ideal Time to Shift to Defensives and more

By | Daily Briefs, Technical Analysis

In today’s briefing:

  • Still No Decisive Breakout as SPX Tests 5783 Resistance; Ideal Time to Shift to Defensives

Still No Decisive Breakout as SPX Tests 5783 Resistance; Ideal Time to Shift to Defensives

By Joe Jasper

  • $SPX remains below 5783, the upper-end of important target/resistance area we’ve discussed for a month+ (5670-5783). 5670 was prior all-time high set in July, while 5783 is 2% above 5670.
  • It’s hard to call it a “decisive” breakout if SPX isn’t even 2% above its prior high.  In 2007, SPX made a top after climbing 1-2% above its prior high.
  • The 2007 topping analog has tracked the current market almost perfectly, with similar backdrops to today including new Fed cutting cycle, recession indicators going off, yield curve un-inverting, defensives outperforming

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Oct 02
0

Daily Brief Event-Driven: Mar25 Nikkei 225 Rebal: Considering Fast Retailing Capping…. Again… and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Mar25 Nikkei 225 Rebal: Considering Fast Retailing Capping…. Again…
  • HSTECH Index Rebalance Preview: $800m Round-Trip Trade
  • Choi Family Launches a Counter Tender Offer for Young Poong Precision
  • HSCEI Index Rebalance Preview: High & Low Probability Changes
  • Choi Drops a Counter-Tender for Young Poong Precision at ₩30,000 Before the Market Bell Tomorrow
  • Namoi Cotton (NAM AU): Well Played LDC
  • Young Poong Precision (036560 KS): Choi’s Opening Salvo
  • ADNOC/Covestro: Fair Offer at €62

Mar25 Nikkei 225 Rebal: Considering Fast Retailing Capping…. Again…

By Travis Lundy

  • At end-September, the Nikkei 225 semi-annual review imposed a “cap” on Fast Retailing (9983 JP) in the Average, applying a 0.9 coefficient to the Price Adjustment Factor.
  • At its current weight, Fast Retailing will be capped again in March 2025. If the stock outperforms Nikkei 225 by another 3% before 31 January 2025, it could be double-capped.
  • And an additional 16% would mean ¥1.1trln of sales in March. But like last time, this is a rubber band which stretches. Too far, and selling pressure is obvious.

HSTECH Index Rebalance Preview: $800m Round-Trip Trade

By Brian Freitas

  • The review period for the December rebalance of the Hang Seng TECH Index (HSTECH INDEX) ended on 30 September.
  • We do not forecast any constituent changes for the index. Capping changes will lead to a one-way turnover of 2.15% and a round-trip trade of HK$6.1bn (US$785m).
  • If any stocks have outsized moves on expectations of being added to or deleted from the index, there could be opportunities to enter trades.

Choi Family Launches a Counter Tender Offer for Young Poong Precision

By Douglas Kim

  • Choi family has launched a counter tender offer for Young Poong Precision at the tender offer price of 30,000 won (20% higher than MBK’s 25,000 won tender offer price). 
  • The tender offer involves a plan to acquire 3,837,500 shares (24.36% of outstanding shares) of Young Poong Precision.
  • All eyes are on the court’s decision on the injunction application for ‘prohibition of acquisition of treasury stocks by Korea Zinc’, which is expected to be announced on 2 October.

HSCEI Index Rebalance Preview: High & Low Probability Changes

By Brian Freitas

Choi Drops a Counter-Tender for Young Poong Precision at ₩30,000 Before the Market Bell Tomorrow

By Sanghyun Park

  • Choi aims to acquire 3.84 million shares (24.36%) of Young Poong Precision at ₩30,000 each, with a tender period from October 2 to November 1, managed by Hana Securities.
  • Seoul Economic Daily may not be as prominent, but they reliably scoop this type of news, making it likely Choi will announce their counter-tender for Young Poong Precision tomorrow.
  • MBK targets the full 49.14% stake, while the Choi family seeks about half, creating proration risk, which may still make MBK’s lower offer more appealing to shareholders.

Namoi Cotton (NAM AU): Well Played LDC

By David Blennerhassett

  • A$0.77/Share. That’s Louis Dreyfus Company (LDC)’s revised unconditional bid. Plus it now holds 47.66% after Samuel Terry Asset Management, Namoi’s largest shareholder, tendered into the revised term.
  • Expect Namoi Cotton Co Operative (NAM AU)‘s board to shortly back LDC’s Offer. LDC’s Offer is $0.02/share above Olam Agri’s conditional bid.
  • After LDC first approached Namoi in November last year, this is now done. Expect Olam to tender its stake, and fold its tent. 

Young Poong Precision (036560 KS): Choi’s Opening Salvo

By David Blennerhassett

  • The Choi family have launched a Tender Offer to acquire 3.937mn shares (25%) of Young Poong Precision (036560 KS) (YPP) at ₩30,000/share,  20% above MBK/Young Poong (000670 KS)‘s revised terms.
  • YPP’s key attraction is its 1.85% stake in Korea Zinc (010130 KS), which is the ultimate prize in this tussle between the Choi and Jang families. 
  • Choi’s Offer runs from today (2nd October) to 21 October. There is no minimum acceptance threshold. If successful, the Choi’s stake increases to 60.45% from 35.45% currently.  

ADNOC/Covestro: Fair Offer at €62

By Jesus Rodriguez Aguilar

  • At last, Covestro signed an Investment Agreement with ADNOC for an all-cash €62.00/share offer (same as June proposal), 54% premium to June 2023, €11.7 billion implied equity value.. 
  • The offer represents 9.1x EV/Fwd NTM EBITDA (vs. peers at 8.3x), 7.4x 26e EBITDA and 1.8x P/BVPS. The share price implies 6.4% gross spread and 66% probability of deal completion.
  • The agreement is well-crafted and now has a strong likelihood of reaching a successful completion, although there is a lengthy period before completion and likely political opposition. Long.

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