In today’s briefing:
- Clearing Up the Confusion: Ex-Rights Trading in Korean Rights Offerings
- Chagee Holdings Limited (CHA): Chinese Tea Company Moves Forward with IPO Despite Macro Risks
- Chagee IPO: Trading at a Discount to Peers but with Geopolitical Overhang
- Suzuki Motor (7269 JP): The Current Playbook
- Jiaxin International Resources Investment Limited Pre-IPO Tearsheet
Clearing Up the Confusion: Ex-Rights Trading in Korean Rights Offerings
- Not much juice at ex-rights — price move’s small, and shorting’s risky with recall risk and having to compensate the lender for lost rights.
- Some locals chase rights instead, but it’s not really a go-to trade with all the cost/efficiency uncertainty.
- First round price pre–ex-rights sets the floor for arb margins and anchors rights pricing once they start trading — key level to keep in the playbook.
Chagee Holdings Limited (CHA): Chinese Tea Company Moves Forward with IPO Despite Macro Risks
- Chinese Tea Company is moving ahead with the IPO despite heavy Macro-Economic winds.
- The company is seeking up to $412m with a high-end pricing and already includes $205m worth of buying on the cover of the prospectus.
- There are. more questions than answers regarding this IPO due to the current uncertainty in the market.
Chagee IPO: Trading at a Discount to Peers but with Geopolitical Overhang
- Chagee Holdings (CHA US) is looking to raise up to US$411m in its upcoming US IPO.
- It is a leading premium tea drinks brand, serving healthy and delicious freshly-made tea drinks.
- We have looked at the company’s past performance and provided our initial thoughts on valuations. In this note, we talk about the IPO pricing.
Suzuki Motor (7269 JP): The Current Playbook
- Since the announcement of the US$1.1 billion secondary offering, Suzuki Motor (7269 JP)’s shares have remained broadly unchanged at the undisturbed price of JPY1570.5 per share (7 April).
- It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Suzuki’s share performance is the joint best among recent large placements.
- However, the shares have underperformed the Nikkei 225 index (up 7.9%). The offering will likely be priced on 14 April. The average large Japanese placement tends to generate positive returns.
Jiaxin International Resources Investment Limited Pre-IPO Tearsheet
- Jiaxin International Resources Investment Limited (JIRI) is looking to raise about US$140m in its upcoming Hong Kong IPO. The deal will be run by CICC.
- It’s a pre-revenue tungsten mining company with the world’s largest open-pit tungsten mine in terms of mineral resources of tungsten trioxide (WO3) in 2024, as per Frost & Sullivan (F&S).
- Mining operation is conducted by a local subsidiary while JIRI is responsible for the processing operation and sales of the product to its customers.
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