In today’s briefing:
- HK Connect SOUTHBOUND Flows (To 20 Dec 2024); Financials and Telecoms Still Tops
- Pentamaster International (1665 HK): Pentamaster Corp and AchiCapital’s Light Scheme Offer
- Last Week In Event SPACE: Seven & I, CPMC, UBTech Robotics, Macromill, 2024 Best-Of
- (Mostly) Asia-Pac M&A: Beenos, Insignia, Henlius, GAPack, Fuji Soft, Goldlion, Malaysia Airports
- HSI, Nikkei 225, NIFTY 50, Kospi 200, ASX 200, CSI 300: Year-End Trends and Holiday Market Moves!
- A Potential Merger Between Honda and Nissan – Impact on Hyundai Motor and Kia Corp
- China Healthcare Weekly (Dec.22) – Zai Lab, Junshi, How to Choose PA Good Doctor’s Special Dividend?
- Malaysia Airports (MAHB MK): IFA Says NOT Fair, But Reasonable; And To Accept Terms
- A/H Premium Tracker (To 20 Dec 2024): Pairwise Intracorrelation and Vol Even Higher
HK Connect SOUTHBOUND Flows (To 20 Dec 2024); Financials and Telecoms Still Tops
- SOUTHBOUND gross trading activity fell 20% week-on-week this week. Net buying was a little stronger.
- Alibaba Group Holding (9988 HK) was a net SOUTHBOUND sell this week for the first weekly sell since it became Southbound-eligible. Friday was the largest one-day sell in that period.
- Tech is still on the sell side and financials are still being bought very bigly.
Pentamaster International (1665 HK): Pentamaster Corp and AchiCapital’s Light Scheme Offer
- Pentamaster International (1665 HK) disclosed a Cayman scheme privatisation offer from Pentamaster Corp (PENT MK) and AchiCapital at HK$1.00 (HK$0.93 cash + HK$0.07 dividend), a 56.3% premium to the undisturbed price.
- The offer is final but unattractive compared to peer multiples. The shareholder with a blocking stake is a seller, but there is risk due to a high AGM participation rate.
- An arguably light offer in which the Holdco is privatising its OpCo by arbitraging the valuation discrepancies across two exchanges may not sit well with minorities.
Last Week In Event SPACE: Seven & I, CPMC, UBTech Robotics, Macromill, 2024 Best-Of
- The new article on Seven & I Holdings (3382 JP) from TV Tokyo is causing a dip on top of last week’s weakness. This is a dip to buy.
- CPMC Holdings (906 HK)‘s Offer is now open for tendering. Ignore the rumours. Zhang Wei will tender. Expect payment before Chinese New Year.
- Accounting solely for the pre-IPO investors, 164.6m shares (US$1.9bn) in UBTech Robotics (9880 HK) will be unlocked, ~39.2% of the firm’s total shares outstanding, and 91 days of three-month ADV.
(Mostly) Asia-Pac M&A: Beenos, Insignia, Henlius, GAPack, Fuji Soft, Goldlion, Malaysia Airports
- I tally 51 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Two new deals this week: Goldlion Holdings (533 HK)‘s Scheme, and Beenos Inc (3328 JP)‘s Tender Offer.
- Key updates/news took place on: Insignia Financial (IFL AU), Shanghai Henlius Biotech (2696 HK), GAPack (468 HK), Fuji Soft (9749 JP), Macromill (3978 JP) and Malaysia Airports Holdings (MAHB MK).
HSI, Nikkei 225, NIFTY 50, Kospi 200, ASX 200, CSI 300: Year-End Trends and Holiday Market Moves!
- As the year comes to its end, the trading calendar is impacted by two shortened weeks, with the Christmas holiday and New Year’s Day both falling midweek.
- Holidays market trends can be affected by various non-market factors but it’s always good to check the indexes probability of trend reversals, to avoid surprises.
- In this insight, we’ll take a quick look at the major Asia-Pacific market indices—a ‘Christmas Carousel of Odds‘ for Asian markets, if you will.
A Potential Merger Between Honda and Nissan – Impact on Hyundai Motor and Kia Corp
- A potential merger between Nissan Motor and Honda Motor would create the third largest auto group in the world.
- If this merger is successful, it could have a short term positive impact on Hyundai Motor since it could result in a reduction of overlapping sales/marketing and production of Nissan.
- However, a merger of Honda and Nissan could negatively impact Hyundai Motor over the long term because the merged entity could produce more high quality, price competitive vehicles.
China Healthcare Weekly (Dec.22) – Zai Lab, Junshi, How to Choose PA Good Doctor’s Special Dividend?
- Increasing revenue without increasing profits is “a big denial” of a company’s business model. Unless Zai Lab significantly reduces costs and maintains revenue high growth, its investment value is low.
- Junshi’s 2024 revenue is likely to return to over RMB1.5 billion due to market share expansion in PD-1. Strict cost control will be the main theme for the future.
- If PAGD’s share price is higher than HK$6.12, there would be arbitrage opportunity. If Ping An hopes other shareholders to choose cash dividend, future stock price may fall below HK$6.12.
Malaysia Airports (MAHB MK): IFA Says NOT Fair, But Reasonable; And To Accept Terms
- Back on the 15th May, a consortium (Khazanah Nasional, EPF, the Abu Dhabi Investment Authority, and Global Infrastructure Partners) collectively holding 41.22%, launched an Offer for Malaysia Airports (MAHB MK).
- After some political gymnastics, MAHB squared away the necessary regulatory approvals, and a firm Offer was made on the 15th November. The Offer Doc dispatched on the 6th December.
- In the Circular on Friday, the IFA said NOT fair – with reference to a SOTP; but reasonable referencing historical market pricing and that no competing Offer will emerge.
A/H Premium Tracker (To 20 Dec 2024): Pairwise Intracorrelation and Vol Even Higher
- AH Premia are all over the place this week. Despite that, pairwise intracorrelation is…. up? Yup. Average Pairwise Volatility is up even more.
- Some of this may be stocks being bullied by large SOUTHBOUND flows in a quieter end-of-year market.
- Finance is seeing big net SOUTHBOUND buying but that is not showing up in A/H premia. I expect things stay noisy through year-end.
Before it’s here, it’s on Smartkarma
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