In today’s briefing:
- Idemitsu (5019): First SumiChem’s, Now JERA’s Stake in Fuji Oil (5017) To Go to 22%. It’s Coming…
- Market Chats About What Really Went Down with HPSP This Morning
- Hollysys (HOLI US): Keep Calm as Closing Date Slips
- Quiddity Leaderboard BSE/SENSEX Jun 24: Jio Financial Addition Creates New Possibilities
- Megastudy Education: A Major Shareholder Return Policy in 2024-2026
- J&T Global Express IPO Lock-Up Expiry – Tiny Float with 87%+ Stake Lockup Release Worth >US$8.8bn
- Prysmian/Encore Wire: Agreed Offer
- EQD | Hang Seng Down: Upcoming Bounce May Not Mean Rally Continuation
Idemitsu (5019): First SumiChem’s, Now JERA’s Stake in Fuji Oil (5017) To Go to 22%. It’s Coming…
- In the mid-late teens, four refinery groups merged to create two refinery groups – JX and Tonen General became JXTG under ENEOS Holdings (5020 JP) and Idemitsu took over ShowaShell.
- When Idemitsu got ShowaShell, it got 50+% in Toa Oil Co Ltd (5008 JP), 6.58% of Fuji Oil Co Ltd (5017 JP). In 2020, they tried to buy in Toa.
- That was delayed by an activist. Today, Idemitsu announced they had gone to 23% in Fuji Oil. That stake will go up before it goes down.
Market Chats About What Really Went Down with HPSP This Morning
- This morning’s HPSP (403870 KS) situation began with Maekyung’s report, indicating Crescendo PE contacted local bankers for the controlling stake sale.
- The surge in HPSP’s stock price after Maekyung’s report suggests Crescendo PE’s tacit approval, implying their involvement in the news’s emergence.
- Despite the likely confirmed sale of Crescendo PE’s stake, timing remains uncertain due to disclosure rules. Continued monitoring is vital, considering potential market reactions later.
Hollysys (HOLI US): Keep Calm as Closing Date Slips
- On 15 April, Hollysys Automation Technologies (HOLI US) issued a 6-K filing stating that Ascendent remains in the process of obtaining regulatory approvals.
- The gross spread has widened to 8% as the closing date has slipped from the end of March guidance, and an updated timeline is lacking.
- A delay in securing regulatory approvals is not uncommon. However, regulatory approvals should be forthcoming as the transaction involves Chinese entities (including a SASAC entity) acquiring a Chinese-focused company.
Quiddity Leaderboard BSE/SENSEX Jun 24: Jio Financial Addition Creates New Possibilities
- In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the June 2024 index rebal event.
- Wipro Ltd (WPRO IN)‘s deletion from Sensex is imminent but there are question marks over the top replacement names as this involves some subjectivity.
- For BSE 100, Jio Financial Services (JIOFIN IN) is a new potential ADD and that has caused major changes to the index change expectations I had previously.
Megastudy Education: A Major Shareholder Return Policy in 2024-2026
- On 16 April, Megastudyedu Co, Ltd. (215200 KS) announced a major shareholder return plan, driving up its share price by 14.2% to 60,400 won.
- Driven by this attractive shareholder return plan combined with improving fundamentals, we believe that Megastudy Education’s shares could continue to outperform the market in the next several months.
- The total shareholder returns including share buybacks/cancellation and dividends are 60% of the company’s non-consolidated net profit from 2024 to 2026.
J&T Global Express IPO Lock-Up Expiry – Tiny Float with 87%+ Stake Lockup Release Worth >US$8.8bn
- J&T Global Express, a global logistics provider, raised about US$500m in its Hong Kong IPO in Oct 2023. Its pre-IPO investors will be released from its IPO linked lockup soon.
- As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 25.4% market share as per 2023 parcel volume.
- In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.
Prysmian/Encore Wire: Agreed Offer
- Prysmian SpA (PRY IM) agreed to acquire Encore Wire (WIRE US) for $290/share in cash, 29% premium to 90-day VWAP, implied EV of €4,264 million, 11x EV/NTM EBITDA and 16.9x Fwd P/E.
- Encore wire has traded at an average 6.4x EV/EBITDA and 10.6x P/E over the last 5 years. I set my TP at $290. Synergies could be valued at $51/share.
- The shares are trading slightly above the offer price. Gross spread is +0.2%. The volume traded since announcement has been very strong. There is room for some sweetening. Long.
EQD | Hang Seng Down: Upcoming Bounce May Not Mean Rally Continuation
- The HSI INDEX is currently down for the 2nd week in a row and it is quite oversold on a WEEKLY basis.
- A temporary reversal could come as soon as this week or next week, but we don’t think this will mark a restart of the previous rally.
- Look at the 16250-16050 area to go LONG, this is the area where the index most likely will print a temporary bottom.
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