In today’s briefing:
- ChiNext/ChiNext 50 Index Rebalance: US$1.3bn Round-Trip Trade
- Makino Milling Machine (6135 JP): MBK’s Preconditional Offer Is Not the Likely Endgame
- StubWorld: DFI Exits Robinson Retail
- Wuxi Lead Intelligent Equipment A/H Listing – Market Leader but Has Been Facing Industry Headwinds
- Action Construction Equipment: Record Performance, Defence Opportunity, Agri Turnaround
ChiNext/ChiNext 50 Index Rebalance: US$1.3bn Round-Trip Trade
- There are 8 changes for the ChiNext Index (SZ399006 INDEX EQUITY) and 5 changes for the ChiNext 50 Index at the June rebalance.
- We correctly forecast 7/8 and 8/8 for the Chinext Index adds/deletes and were 4/5 and 5/5 for the Chinext50 Index adds/deletes.
- Based on the estimated passive tracking AUM, the round-trip trade across both indices is estimated to be CNY 9.55bn (US$1.33bn).
Makino Milling Machine (6135 JP): MBK’s Preconditional Offer Is Not the Likely Endgame
- Makino Milling Machine Co (6135 JP) announced a preconditional tender offer from MBK Partners at JPY11,751, a 4.8% premium to last close and a 6.8% premium to Nidec’s withdrawn JPY11,000 offer.
- The offer is broadly in line with the midpoint of the IFA DCF valuation range. The tender offer is expected to commence in early December.
- Despite the offer resulting from an auction, there remains a medium probability that Nidec Corp (6594 JP) or a spurned white knight bidder (Candidate A) emerges with a higher offer.
StubWorld: DFI Exits Robinson Retail
- Jardine Matheson (JM SP)‘s 77.8%-held DFI Retail Group (DFI SP) has sold its entire 22.2% stake in Robinsons Retail Holdings (RRHI PM) for ~US$283mn to “support its capital allocation strategy“.
- Preceding my comments on Matheson are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Wuxi Lead Intelligent Equipment A/H Listing – Market Leader but Has Been Facing Industry Headwinds
- Wuxi Lead Intelligent Equipmen (300450 CH) aims to raise around US$400m in its H-share listing.
- WLIE is a global platform-based intelligent equipment enterprise, offering intelligent equipment and solutions to a wide range of emerging and high-end manufacturing industries.
- In this note, we look at its past performance and other deal dynamics that might impact the listing.
Action Construction Equipment: Record Performance, Defence Opportunity, Agri Turnaround
- Action Construction Equipment (ACCE IN) achieved record revenue and profits in FY25 and Q4, demonstrating strong execution and margin expansion.
- Secured single largest order from Ministry of Defence, boosting future defense contribution and supporting Make in India.
- Management is cautiously optimistic for FY26 due to temporary factors like BS5 price impact, but confident in medium to long-term growth prospects.
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