In today’s briefing:
- Select Sector Indices and S&P Equal Weight Rebalance: US$15.5bn Flow Post Capping
- Fengxiang (9977 HK): Privatisation by PAG?
- Quiddity Leaderboard HSTECH Jun25: US$204mn One-Way; No Index Changes Likely
- Hong Kong Single Stock Options Weekly (March 10 – 14): Sentiment Shifts, Option Volumes Cool
- Hyundai India’s ₹31,500 Cr Related-Party Deal Sparks Governance Debate
- Monster Beverage Corporation: An Insight Into Its Market Share Dynamics
- Stellantis: Is There Any Scope For Market Share Improvement In The Near Future?
- MBOs Will Rise, Even if Companies and Funds Are Sleeping in the Same Bed but Having Different Dreams
- LE: Snapping the Catalog: Reaching the Next Level; Reiterate Buy, $20 PT
- Hormel Foods Corporation: Strategic Transformation & Modernization Initiatives As A Powerful Growth Flywheel!
Select Sector Indices and S&P Equal Weight Rebalance: US$15.5bn Flow Post Capping
- Constituent changes to the S&P 500 INDEX and capping changes will result in a round-trip trade of US$15.5bn across the Select Sector indices and the S&P500 Equal Weight Index.
- The Select Sector index trackers and S&P500 Equal Weight trackers will need to buy the adds to the S&P500 INDEX and sell the deletes, further increasing flow for the stocks.
- The VanEck Vectors Semiconductor (SMH US) ETF will be selling Broadcom (AVGO US) at the same time as the Select Sector and S&P500 Equal Weight Index trackers.
Fengxiang (9977 HK): Privatisation by PAG?
- Shandong Fengxiang (9977 HK) entered a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers.” PAG, the controlling shareholder, likely aims to privatise Fengxiang.
- The offer will likely be structured as a privatisation by merger by absorption requiring approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders rejection).
- The presence of several substantial shareholders necessitates a reasonable offer. An offer of HK$1.80-2.00 (a 21%—33% premium to the last close) could win over these shareholders’ backing.
Quiddity Leaderboard HSTECH Jun25: US$204mn One-Way; No Index Changes Likely
- 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 rankings of potential ADDs and potential DELs for the June 2025 index rebal event.
- We see zero index changes based on the latest available data but we estimate there to be US$204mn one-way flows due to capping.
Hong Kong Single Stock Options Weekly (March 10 – 14): Sentiment Shifts, Option Volumes Cool
- Market sentiment shifted again this week, with participation in stock gains dropping sharply from last week’s levels.
- Option volumes continued to decline from February peaks, though single stocks saw a notable increase in activity on Friday.
- We cover stocks with liquid options that have earnings reports in the coming week.
Hyundai India’s ₹31,500 Cr Related-Party Deal Sparks Governance Debate
- Hyundai Motor India (HYUNDAI IN) has proposed seven related-party transactions worth over INR 31,500 crore, just months after its record-breaking IPO.
- Proxy advisors are sharply divided, with concerns around valuation, transparency, and fairness, raising governance red flags for a newly listed company.
- Despite likely approval due to promoter holding, investor trust hinges on how Hyundai communicates and ensures accountability post-IPO.
Monster Beverage Corporation: An Insight Into Its Market Share Dynamics
- Monster Beverage Company’s recent quarterly and full-year earnings provide insight into both the strengths and challenges faced by the company in a dynamic and competitive market.
- The company reported record quarterly net sales of $1.81 billion, reflecting a 4.7% increase over the prior year, or 7.8% on a foreign currency-adjusted basis.
- This growth was fueled by a strong performance in the global energy drink market, with particular strength in regions like EMEA and Asia-Pacific, where growth rates reached double digits.
Stellantis: Is There Any Scope For Market Share Improvement In The Near Future?
- Stellantis’ full-year 2024 results present a period of transition and challenge for the company as it navigates a demanding market environment.
- The company emphasized a strong focus on product launches, stakeholder trust, and regional empowerment.
- Notably, Stellantis launched new models in both the U.S. and Europe, such as the Dodge Daytona, Wagoneer S, and Grande Panda, indicating a strategic push to capture consumer interest.
MBOs Will Rise, Even if Companies and Funds Are Sleeping in the Same Bed but Having Different Dreams
- Even if a company goes private due to listing costs, it is good for investors to shift to a more share price-conscious management in order to maintain the listing.
- Many companies want to take over management rights with the founding family, but find it not easy to continue as a publicly traded company and consider going private.
- New problems lie ahead in the coming years between founding families who chose MBO to inherit the management control of “family business” and MBO funds who have to Exit.
LE: Snapping the Catalog: Reaching the Next Level; Reiterate Buy, $20 PT
- We are reiterating our Buy rating, projections and $20 price target for Lands’ End after reviewing the March catalog.
- With the March “The Power of Pretty” theme, Lands’ End has taken the next major step in creating a lifestyle driven catalog which can serve as a guide for multiple categories, offerings and looks for the Lands’ End shopper.
- Focusing on both “The Power” and “The Pretty” of many categories, the March catalog offers multiple complete looks.
Hormel Foods Corporation: Strategic Transformation & Modernization Initiatives As A Powerful Growth Flywheel!
- Hormel Foods Corporation recently held its first quarter earnings call for the fiscal year 2025, presenting a mix of promising developments and ongoing challenges.
- The company has demonstrated resilience with a top-line growth of 1% in organic net sales, meeting expectations despite a challenging environment marked by dynamic consumer conditions and supply chain pressures.
- Hormel Foods’ strength lies significantly in its value-added product portfolio, which continued to perform well, providing robust growth driven by brands such as SPAM, Applegate, Jennie-O, and Hormel Black Label Bacon.
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