In today’s briefing:
- ITC Hotels: Index Implications of Demerger from ITC Ltd (ITC IN)
- Australia: Six Stocks in Passive Selling Crosshairs for February
- ITC Hotels Demerger: Listing Anticipation and Index Implications
- Macromill (3978 JP): CVC Bumping Its Offer Is Inevitable
- Sun Art Retail (6808 HK): BABA Takes Massive Hit After Inking SPA @ HK$1.38
- ITC Hotels Demerger: An Emerging Behemoth & Hospitality Play
- Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (November and December 2024)
- Can TSE’s “Examples of Bad Disclosures” Help Companies Shift to Shareholder-Oriented Management?
- HK-Listed Apparel & Footwear Screener: Winners and Losers, Picks For 2025
- Singapore’s Cove nets US$4.5M to scale co-living in South Korea, Japan | e27
ITC Hotels: Index Implications of Demerger from ITC Ltd (ITC IN)
- ITC Ltd (ITC IN) will demerge its Hotels business with the ex-date set as 6 January and shareholders receiving 1 share of ITC Hotels for 10 shares of ITC Ltd.
- ITC Ltd (ITC IN) shareholders will own 100% of ITC Hotels – 60% will be owned directly and 40% will be owned through their shareholding in ITC Ltd (ITC IN).
- There will be a lot of selling in ITC Hotels within a few days of listing from different passive index trackers and that could provide buying opportunities for those interested.
Australia: Six Stocks in Passive Selling Crosshairs for February
- Up to six Aussie stocks could be deleted from global passive portfolios in February. The final list of deletions depends on stock performance over the next 2-3 weeks.
- If deleted, passive trackers will need to sell between A$370m-A$500m in the stocks. Impact is high at between 7-24 days of ADV.
- The potential deletions have underperformed the S&P/ASX 200 (AS51 INDEX) over every time period from 1 week to 3 months. Positioning is still low in a few stocks.
ITC Hotels Demerger: Listing Anticipation and Index Implications
- ITC Hotels is demerging with ITC Ltd (ITC IN) to create value for ITC shareholder and unlock value in hotel business.
- Record date for ITC Hotel demerger is 6-Jan-25 and listing can be done in 60 days after NCLT order i.e. 16-Dec-24.
- Discussed inclusion and exclusions of various Index including MSCI Emerging Markets Index (MXEF INDEX), FTSE and NIFTY Index (NIFTY INDEX) & S&P BSE SENSEX Index (SENSEX INDEX EQUITY).
Macromill (3978 JP): CVC Bumping Its Offer Is Inevitable
- On 26 December, CVC extended its Macromill, Inc. (3978 JP) offer period by 10 business days to 17 January. The offer price remained unchanged, but it was not declared final.
- The extension is unsurprising as the shares have traded above terms for 30 out of 32 trading days. The emergence of Oasis as the largest shareholder is an added complication.
- Lowering the minimum acceptance condition is not a viable option. A bump is increasingly likely. Trading patterns suggest a minimum required revised offer of around JPY1,200.
Sun Art Retail (6808 HK): BABA Takes Massive Hit After Inking SPA @ HK$1.38
- HK$1.38/Share. That’s the key takeaway as Alibaba Group (9988 HK) enters an SPA to offload its 78.7% stake in Sun Art (6808 HK) at HK$1.38/share, a 14.13% discount to undisturbed.
- The buyer, Paragon Shine, an entity under Chinese PE outfit DCP Capital, is paying ~HK$12.3bn compared to BABA’s HK$28.1bn purchase of a 51% stake in October 2020.
- Should the SPA complete, an unconditional MGO is triggered. But the question is: why would BABA be cashing out at this price?
ITC Hotels Demerger: An Emerging Behemoth & Hospitality Play
- ITC Ltd (ITC IN) Hotels demerger aims to unlock the intrinsic value of the hotels business and enable a sharper focus on growth.
- ITC Hotels is aiming to reach a portfolio of 200+ hotels with 18,000+ keys by 2030 from a robust pipeline of 140 Hotels with about 13000 Keys in 2024.
- ITC Hotels inheriting a strong balance sheet with zero debt and cash reserves may list around 113-170 per share.
Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (November and December 2024)
- In this insight, we discuss the alpha generation through companies that have been buying back their shares in the Korean stock market in November and December 2024.
- On average, the share buyback announcements for the 52 companies that announced share buybacks in Korea represented 2.2% of outstanding shares.
- Major companies that have announced share buybacks in Korea in the past two months include Celltrion, Samsung Electronics, Doosan Bobcat, and Hyundai Motor.
Can TSE’s “Examples of Bad Disclosures” Help Companies Shift to Shareholder-Oriented Management?
- The most common example of poor disclosure is “Disclosure is merely a list of initiatives. The timing of achievement, numerical targets, necessary resources, etc. should be explained.
- Poor disclosure examples that “do not analyze issues or consider additional actions in a flexible manner” may not have a well-reasoned plan to disclose at this stage.
- It is clear that many companies are not sufficiently considering the reduction or withdrawal of unprofitable businesses, as evidenced by their low return on sales and return on capital.
HK-Listed Apparel & Footwear Screener: Winners and Losers, Picks For 2025
- Our stock screen for textile/apparel companies listed in Hong Kong for FY24 summarizes the winners and losers.
- Yue Yuen Industrial Holdings (551 HK) / JNBY Design Ltd (3306 HK) and Stella International (1836 HK) were the three best performers with returns of over 80% YTD.
- We continue to be bullish on JNBY Design Ltd (3306 HK) / Pacific Textiles (1382 HK) and like Nameson Holdings (1982 HK) for its rich dividend yield.
Singapore’s Cove nets US$4.5M to scale co-living in South Korea, Japan | e27
- Singapore-based flexible living platform Cove has announced a US$4.5 million funding round from existing investors, including Eurazeo and Keppel, along with Manchharam.
- The capital will fuel the startup’s regional expansion and transition to an asset acquisition model. This strategic shift will allow it to design and develop properties specifically tailored to the needs of its target market: young professionals and students.
- Cove’s expansion into South Korea and Japan is already underway, and the company has formed strategic joint ventures in both markets.
💡 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 Data and News
- ✓ Events & Webinars
