In today’s briefing:
- Gold Miners ETF (GDX US): Benchmark Change; 8 Adds, 24 Deletes, US$12.7bn Trade
- MV Global Junior Gold Miners Index Rebalance: 13 Adds, 2 Deletes; US$2.5bn Trade
- Merger Arb Mondays (15 Sep) – Santos, Soft99, Technopro, Mandom, Shengjing Bank, Dongfeng Motor
- PolyNovo (PNV AU): Solid FY25 Performance; Label and Geography Expansion to Accelerate Growth
- Verbrec Ltd – Big discount plus growth
Gold Miners ETF (GDX US): Benchmark Change; 8 Adds, 24 Deletes, US$12.7bn Trade
- There is 1 add for the MarketVector Global Gold Miners Index but the VanEck Gold Miners ETF will buy 8 stocks and sell 24 stocks due to a benchmark change.
- Estimated one-way turnover is 26.8% and the round-trip trade for the ETF is US$12.7bn. There are 23 stocks with over 5x ADV to trade.
- The ETF adds have underperformed the ETF sells in the last month, but a basket of ETF upweights has outperformed a basket of ETF downweights.
MV Global Junior Gold Miners Index Rebalance: 13 Adds, 2 Deletes; US$2.5bn Trade
- There are 13 adds, 2 deletes and 1 listing change for the VanEck Vectors Junior Gold Miners ETF (GDXJ US) in September. There are capping and float changes too.
- Estimated one-way turnover is 14.5% resulting in a round-trip trade of US$2.5bn. There are 12 stocks with over 3x ADV to trade from passive trackers.
- There are multiple stocks that will have same-way flows from other index trackers at the same time, and the impact will be amplified.
Merger Arb Mondays (15 Sep) – Santos, Soft99, Technopro, Mandom, Shengjing Bank, Dongfeng Motor
- I summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Soft99 Corp (4464 JP), Mayne Pharma (MYX AU), Smart Share Global (EM US), Shengjing Bank Co Ltd H (2066 HK), Dongfeng Motor (489 HK), ENN Energy (2688 HK).
- Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Humm Group (HUM AU), Mandom Corp (4917 JP), Ainsworth Game Technology (AGI AU), PointsBet Holdings (PBH AU).
PolyNovo (PNV AU): Solid FY25 Performance; Label and Geography Expansion to Accelerate Growth
- PolyNovo Ltd (PNV AU) reported 29% YoY growth in FY25 revenue to A$119M, driven by 29% YoY growth in U.S. sales to A$88M. RoW sales grew 30% YoY to AS$30M.
- PolyNovo expects continued sales growth as multiple products received relevant regulatory clearance. Leveraging on proven track record in full thickness burn procedures, PolyNovo is driving adoption in additional surgical areas.
- Strong FY25 result enhances conviction on the growth prospects. Broader rollout of NovoSorb MTX across multiple regions and increasing demand from plastic and reconstructive procedures are expected drive growth.
Verbrec Ltd – Big discount plus growth
- Verbrec Limited (ASX:VBC) provides engineering, asset management, operations and maintenance, and training to the energy, mining, infrastructure and defence industries in Australia, New Zealand, PNG and the Pacific Islands.
- The company operates two divisions in Engineering (~90% of FY25 revenue) and Competency Training (~10% of FY25 revenue).
- The company has announced that it has signed an agreement to sell Competency Training to RelyOn Australia Pty Ltd for a headline purchase price of $11.5m, payable full in cash on completion, but subject to adjustments for working capital and net cash/debt at completion.
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