In today’s briefing:
- Merger Arb Mondays (29 Sep) – Soft99, Ashimori, Mandom, Paramount, OneConnect, Dongfeng, Spindex
- HK Connect SOUTHBOUND Flows (To 26 Sep 2025); BIG Single Stock Trading Again, Big Net, But Hs Fall
- Beijing Roborock (688169.SS): Structural Margin Recovery to Drive Re-Rating; HK Listing Key Catalyst
- Genky Drugstores (9267 JP) Aims for 10% Growth
- Behind % Rising Female Board Members, How Many Companies Make Progress Reforming Their Boards?
Merger Arb Mondays (29 Sep) – Soft99, Ashimori, Mandom, Paramount, OneConnect, Dongfeng, Spindex
- 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: Mayne Pharma (MYX AU), Smart Share Global (EM US), ENN Energy (2688 HK), Dongfeng Motor (489 HK), Soft99 Corp (4464 JP), Joy City Property (207 HK).
- Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Humm Group (HUM AU), Mandom Corp (4917 JP), Paramount Bed Holdings Co Lt (7817 JP).
HK Connect SOUTHBOUND Flows (To 26 Sep 2025); BIG Single Stock Trading Again, Big Net, But Hs Fall
- Gross SOUTHBOUND volumes just over US$19bn a day this past 5-day week. Big. Quite decent net buying flows too though the market fell.
- The recommended name last week was short Alibaba (9988 HK) was +4.65% on the week despite HK being down across the board.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Pairs Monitor are both there for all SK readers.
Beijing Roborock (688169.SS): Structural Margin Recovery to Drive Re-Rating; HK Listing Key Catalyst
- Roborock’s margins are expected to bottom-out after a tough four quarters of strategically prioritizing market share at the cost of margins. 3Q-4Q25 will mark the start of new margin cycle.
- Margins stabilizing at the new normal of 12-14% NPM will mean earnings will track revenue growth going forward. Meanwhile, revenues can surprise on the upside with >25% CAGR in medium-term.
- HK-Listing into 2H25/ 1H26 is a strong catalyst which can bring in fresh money, and improve disclosure standards – a key concern. We expect 70% upside in our bull case.
Genky Drugstores (9267 JP) Aims for 10% Growth
- Genky Drugstores is one of three hybrid food & drug chains, all of which target the discount end of the market.
- Unlike rivals, Genky’s blends in-house control of both store and product development, and logistics.
- This level of control and discipline is making Genky a growing threat to competitors in central Japan.
Behind % Rising Female Board Members, How Many Companies Make Progress Reforming Their Boards?
- Amidst very modest improvements in corporate governance over the past few years, the percentage of female board members has steadily increased.
- Even if the %of female board members rises, there’re concerns that it will be a repeat of governance reforms that have’t achieved to transform management into one that creates value.
- Whether companies that step forward with diversity-conscious boards of directors can use this as a catalyst for management change, and promote female executive directors within companies, will be closely watched.
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