In today’s briefing:
- Advantest (6857) – Strong SoC Sales, Record Profits, Bullish Guidance, and a Buyback (+ Index Flow)
- Compact Summary of Hanwha Group Reorganization
- End of Mandatory Lock-Up Periods for 49 Companies in Korea in August 2022
- ACS/Thiess/MACA: Generous Premium
Advantest (6857) – Strong SoC Sales, Record Profits, Bullish Guidance, and a Buyback (+ Index Flow)
- Advantest Corp (6857 JP) yesterday announced Q1 results, with Revenues/OP/NP at record levels, a H1 div hike of 30%, guidance well ahead of consensus, and a buyback.
- They also announced a Mid-Term Plan revision which shows forward guidance better than consensus.
- The buyback is smaller than the last one BUT float is not what you think it is. Understanding float dynamics here is key.
Compact Summary of Hanwha Group Reorganization
- Hanwha Group announced another large-scale reorganization directly involving Hanwha Corp, Hanwha Aerospace, and Hanwha Impact. Several deal contracts arise, two of which require shareholder approval. However, none grants appraisal rights.
- The market responded quite positively to this. Direct parties to the reorganization were Hanwha Corp and Hanwha Aerospace, up 7.83% and 19.93%, respectively, on Friday.
- This event has little room for event trading for its size. We have no choice but to approach this event with outright momentum trading, which inevitably increases the risk-reward ratio.
End of Mandatory Lock-Up Periods for 49 Companies in Korea in August 2022
- We discuss end of the mandatory lock-up periods for 49 stocks in Korea in August 2022, among which 3 are in KOSPI and 46 are in KOSDAQ.
- These 49 stocks on average could be subject to further selling pressures in August and could underperform relative to the market.
- Among these 49 stocks, the top five market cap stocks include Wemade, HPSP, Sungeel Hitech, Wemade Max, and Eoflow. These companies could be exposed to greater selling pressures in August.
ACS/Thiess/MACA: Generous Premium
- Thiess is launching an agreed offer to acquire 100% of MACA Ltd (MLD AU) at AUD 1.025/share, in cash, cum dividend, a 28% premium, 2.8x EV/Fwd EBITDA. Minimum acceptance condition is 90%.
- Thiess is gaining scale with the acquisition of MACA. I believe that in the future ACS/Hochtief/CIMIC will seek to acquire the whole of Thiess.
- Gross spread (as of 29 July) is 2.43%, for a deal with high chances to complete. I would be long at this price.
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