In today’s briefing:
- Hang Seng Biotech Index Rebalance Preview: Methodology Change Leads to 20 Deletions
- Merger Arb Mondays (11 Aug) – Mayne, PointsBet, Infomedia, Ashimori, Toyo Const, HKBN, Joy City
- SSI Weekly Newsletter: Key Updates on Mergers, Legal Disputes, Asset Sales, and Shareholder Votes
- BeiGene (6160.HK/ONC US) 25Q2 – The High Growth of BRUKINSA May Not Bring High Valuation
- Innogen IPO: Competition Mars Outlook, Long Way To Go, Listing Gain Only Incentive For Now
- Terumo Corp (4543 JP): Record High Profits in Q1FY26; Tariff Impact Lowered; FY Guidance Reiterated
Hang Seng Biotech Index Rebalance Preview: Methodology Change Leads to 20 Deletions
- A methodology change for the Hang Seng Biotech Index (HSHKBIO Index) will result in 20 deletions at the close of trading on 5 September.
- Estimated one-way turnover at the rebalance is 9.5% resulting in a round-trip trade of HK$1.3bn (US$162m). Passive trackers need to sell between 0.05-1x ADV in the deletes.
- The forecast deletes have underperformed the other index constituents since the start of the year but there has been little movement since the announcement of the methodology change.
Merger Arb Mondays (11 Aug) – Mayne, PointsBet, Infomedia, Ashimori, Toyo Const, HKBN, Joy City
- 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), Ashimori Industry (3526 JP), ENN Energy (2688 HK), Ci Medical (3540 JP), Joy City Property (207 HK), Santos Ltd (STO AU).
- Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Ainsworth Game Technology (AGI AU), Welcia Holdings (3141 JP), ZEEKR (ZK US), Soft99 Corp (4464 JP).
SSI Weekly Newsletter: Key Updates on Mergers, Legal Disputes, Asset Sales, and Shareholder Votes
- Mayne Pharma faces legal challenges with Cosette over merger termination, maintaining no breach occurred; hearing set for September 9.
- OCI N.V. plans $700m shareholder return via capital repayment and extraordinary dividend, with ex-dividend date on August 18.
- Banxa’s acquisition vote set for August 28, with regulatory approvals pending; spread narrows from 38% to 25%.
BeiGene (6160.HK/ONC US) 25Q2 – The High Growth of BRUKINSA May Not Bring High Valuation
- BeiGene’s 25Q2 performance beat expectations. The main driver was still BRUKINSA. The growth rate of tislelizumab was surprising.Sales of tislelizumab in international market is expected to be reflected in 25H2.
- BeiGene’s turnaround from losses to profits has entered the countdown.However, investors may not be happy with the net profit margin brought by single revenue driver Brukinsa based on our calculation.
- There’s no next blockbuster that can drive BeiGene to a big step forward.This is why the market is reluctant to offer higher valuation, despite current high growth in product revenue.
Innogen IPO: Competition Mars Outlook, Long Way To Go, Listing Gain Only Incentive For Now
- Guangzhou Innogen Pharmaceutical Group launched its Hongkong IPO aiming to raise up to HK$683M. The company plans to sell 36.6M shares at HK$18.68 per share.
- Innogen discovers, develops, and commercializes innovative therapies for diabetes and other metabolic diseases. Their portfolio currently comprises of one core product, Efsubaglutide Alfa, for treatment of type 2 diabetes.
- The GLP-1 drug market is slowly tending towards an overheated zone with upcoming Ozempic’s patent expiry in 2026.
Terumo Corp (4543 JP): Record High Profits in Q1FY26; Tariff Impact Lowered; FY Guidance Reiterated
- Terumo Corp (4543 JP) reported strong Q1FY26 result, with better-than-expected profitability. Despite of flat revenue, Q1FY26 operating and net profit increased 20%+, through pricing measures and continuous cost control.
- The company lowered FY26 tariff impact to ¥10B from ¥17B. Impact now is primarily expected in the second half (¥4 each for Q3 and Q4).
- Terumo reiterated FY26 guidance. Q1FY26 revenue, operating profit, and net profit represent progress rate of 25%, 29%, and 29%, respectively.
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