In today’s briefing:
- Sigma Healthcare (SIG AU): Index Inclusions & Upweights Increase Passive Buying to A$2.7bn
- Henlius (2696 HK): Anxiety Creeping Back Ahead of the 22 January Vote
- Jiangsu Hengrui Pharma (600276 CH): Index Inclusion Post H-Share Listing
- Shanghai Henlius Biotech (2696 HK) – Some Thoughts About the Privatization
- TELO: Another Dose of Encouraging Tests
Sigma Healthcare (SIG AU): Index Inclusions & Upweights Increase Passive Buying to A$2.7bn
- SigmaHealthcare and ChemistWarehouse shareholders meet on 29 January. If the merger resolutions are approved, Second Court Hearing is on 3 February and the merger will be effective on 4 February.
- Upward migration in one large global index could take place on 13 February while upweights and upward migrations in the S&P/ASX indices should be at the close on 21 March.
- Upward migration in the other global index could take place in March or June. Total passive buying estimate is A$2.76bn. This will be offset by positioning and CWG shareholders selling.
Henlius (2696 HK): Anxiety Creeping Back Ahead of the 22 January Vote
- The vote on Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is on 22 January. The gross spread widened after the initial tightening due to the precondition satisfaction.
- Several readers have enquired about my thoughts on the widening spread. Our conversations have raised several potential concerns that could explain it.
- I think these concerns are unwarranted, and the vote should pass. At the last close and for a 15 February payment, the gross/annualised spread is 4.7%/55.0%.
Jiangsu Hengrui Pharma (600276 CH): Index Inclusion Post H-Share Listing
- Jiangsu Hengrui Medicine (600276 CH) has filed for a listing on the HKEX (388 HK) and reports indicate that the raise will be at least US$2bn.
- In line with the Midea Group (300 HK) and S.F. Holding (6936 HK) H-share listings, the discount on the H-shares could be in the 20-25% range.
- There will be no Fast Entry in any indices but there will be index inclusions in multiple indices if the raise is larger or once the cornerstone investor lock-up ends.
Shanghai Henlius Biotech (2696 HK) – Some Thoughts About the Privatization
- For Fosun, every major capital operation is the result of careful consideration after a long time. If it is a deal that Mr. Guo fully supports, there’s basically no problem.
- For the privatization, the board of directors of Henlius has no special opposition. We think that this privatization would have no impact on the operation of Henlius in the future,
- As the phenomenon of undervaluation of Henlius is difficult to fundamentally change, the Cancellation Price is attractive for most investors. There’re risks if choosing Share Alternative. Cash Alternative is preferred.
TELO: Another Dose of Encouraging Tests
- Telomir Pharmaceuticals is a preclinical stage company focused on the science of lengthening telomere caps, which the company believes will extend human lifespans and improve quality of life as people age.
- Preclinical tests showed that the company’s signature therapy, Telomir-1, appeared to correct a rare genetic condition that shortens life span, continuing a string of positive test announcements.
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