In today’s briefing:
- HLB Merger Arb’s Unique Timing Dynamics for a Juicy 8% Swap Spread
- A/H Premium Tracker (To 13 June 2025): HUGE H-Share Outperf Across The Board, “Beautiful Skew Move”
- HK Connect SOUTHBOUND Flows (To 13 June 2025); Volumes Up, TECH Down, HEALTHCARE Bought Big
- One of the Clues to Know How Serious a Company Is About Shifting to Management that Creates Value
- Weekly Deals Digest (15 Jun) – Haitian, Sanhua, Toyota Industries, Tryt, Fengxiang, HKBN, Mayne
- Alibaba’s Bold AI & Cloud Bet Is Driving Our Optimism–But It Comes at A BIG COST!
- How Macy’s Is Powering An Omnichannel Comeback With Bold Reinvestment Strategies!
- (Mostly) Asia-Pac M&A: New World Res., Fuji Corp, TRYT, Shinsung Tongsang, Austal, Mitsu. Shokuhin
- Rivian Just Teamed Up with Volkswagen—Can This Partnership Be a Billion-Dollar Power Move?
- Abercrombie & Fitch Co.: An Insight into its Marketing & Digital Technology Investments & Other Major Drivers
HLB Merger Arb’s Unique Timing Dynamics for a Juicy 8% Swap Spread
- Some local desks think the company pushed the timeline back to align with a potential FDA Class 1 approval for Rivoceranib expected by July.
- No word yet if it’s Class 1 or 2; Class 2 means November decision. Despite risks, local hedge desks are building arb plays, betting on the July FDA timing dynamics.
- No FDA decision by July means Class 2 and a sell-off, hitting HLB Co. hardest. Class 1 approval boosts both stocks, cuts cancellation risk, and sets the 8% spread floor.
A/H Premium Tracker (To 13 June 2025): HUGE H-Share Outperf Across The Board, “Beautiful Skew Move”
- AH spreads are SHARPLY narrower. The effect is dramatic across the “skew” i.e. very wide AH premia contracted more than very narrow premia. BYD is on its own.
- This smells very much like someone knows something. I expect RMB dual counters may be in the works. Caixin had an article Friday.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.
HK Connect SOUTHBOUND Flows (To 13 June 2025); Volumes Up, TECH Down, HEALTHCARE Bought Big
- Gross SOUTHBOUND volumes up to US$15+bn a day this past 5-day week. Net buying still positive but still below US$500mm/day.
- Among the top buys as a percentage of volume, HEALTHCARE, FINANCIALS, ENERGY stand out, dramatically. Among top sells, INFO TECH again. 9 weeks in a row negative. Tencent bigly sold.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.
One of the Clues to Know How Serious a Company Is About Shifting to Management that Creates Value
- The driver of higher stock valuations is overseas investors, and engagement by overseas investors is likely to have a positive effect on return on capital and stock valuations.
- In many aspects, companies seem to be unwilling to face shareholders. If they don’t confront shareholders and proceed with management reforms, they will not be able to implement serious initiatives.
- It can be hypothesized that the behavior of prioritizing control over the AGM over engaging with shareholders provides a clue as to the seriousness of a company’s efforts.
Weekly Deals Digest (15 Jun) – Haitian, Sanhua, Toyota Industries, Tryt, Fengxiang, HKBN, Mayne
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: Foshan Haitian Flavouring & Food Company (3288 HK) and Zhejiang Sanhua Intelligent Controls (2050 HK) H share listings and CaoCao Inc (1646553D CH) IPO.
- Event-Driven developments: Toyota Industries (6201 JP), TRYT (9164 JP), With Us Corp (9696 JP), Shandong Fengxiang (9977 HK), HKBN Ltd (1310 HK), Mayne Pharma (MYX AU).
Alibaba’s Bold AI & Cloud Bet Is Driving Our Optimism–But It Comes at A BIG COST!
- Alibaba Group delivered a mixed performance in the March quarter and for the full fiscal year 2025, showing resilience in its core operations while falling short of analyst expectations on key financial metrics.
- The company reported revenue of $32.58 billion for the quarter, marking a 7% year-over-year increase, but this fell below projections of $33.28 billion.
- Net income for the period came in at $1.71 billion, significantly lower than the anticipated $2.93 billion.
How Macy’s Is Powering An Omnichannel Comeback With Bold Reinvestment Strategies!
- Macy’s, Inc. recently reported its first quarter 2025 financial results, showing performance that outpaced prior guidance across key metrics, yet still reflecting underlying challenges present in the retail environment.
- The company’s net sales amounted to $4.6 billion, exceeding its forecast of $4.4 billion to $4.5 billion.
- The comparable sales for owned, licensed, and marketplace stores showed a decline of 1.2%, which was better than the anticipated drop of 2.5% to 4.5%.
(Mostly) Asia-Pac M&A: New World Res., Fuji Corp, TRYT, Shinsung Tongsang, Austal, Mitsu. Shokuhin
- I tally 47 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma.
- Three new deal were discussed on Smartkarma this week: New World Resources (NWC AU)‘s Scheme, and Tender Offers for Fuji Corp (7605 JP), TRYT (9164 JP), and Shinsung Tongsang (005390 KS).
- Fer.Key updates/news took place on: Austal Ltd (ASB AU), HKBN Ltd (1310 HK), Shandong Fengxiang (9977 HK), and Mitsubishi Shokuhin (7451 JP).
Rivian Just Teamed Up with Volkswagen—Can This Partnership Be a Billion-Dollar Power Move?
- Rivian Automotive reported its Q1 2025 results with several key financial and strategic developments.
- On the financial front, Rivian achieved a notable milestone by delivering its second consecutive quarter of positive gross profit, recording $206 million, a result that secured a $1 billion investment from the Volkswagen Group.
- This investment is expected to further support Rivian’s operational and strategic goals.
Abercrombie & Fitch Co.: An Insight into its Marketing & Digital Technology Investments & Other Major Drivers
- Abercrombie & Fitch has reported its first-quarter results for fiscal year 2025, delivering performance that exceeded initial projections in terms of both revenue and earnings.
- The company’s net sales reached a record $1.1 billion, marking an 8% increase compared to the previous year, exceeding the anticipated range of 4% to 6%.
- The operating margin achieved was 9.3%, and earnings per share came in at $1.59, both surpassing initial guidance.
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