In today’s briefing:
- HHI–Mipo Merger Swap: Deal Mechanics & Spread Play Opportunities
- A Merger Between HD Hyundai Heavy Industries and HD Hyundai Mipo
- Comfortdelgro (CD): Growth Evident and Cheap
- Korean Air: A Major Rights Offering Capital Raise Likely In Next 1-2 Years
- AUX Electric IPO: Forecasts and Valuation
- Shanghai Top Numerical Control Technology Pre-IPO: Flying High but Not Without Turbulence
- Tsubakimoto Kogyo (8052 JP) – Q1 FY2026/3 off to a Strong Start
HHI–Mipo Merger Swap: Deal Mechanics & Spread Play Opportunities
- HHI–Mipo merger spread looks minimal, but today’s MASGA-driven pop signals momentum flows—likely to mean-revert toward appraisal rights once the theme dissipates.
- Froth lifted prices past fundamentals—once it unwinds, HHI–Mipo could diverge from swap ratio, creating the spread window where traders can get paid.
- This isn’t classic merger arb—it’s about fading a policy-fueled pop, riding the snapback toward appraisal baseline, with flow-driven swings creating short-term tactical arb setups.
A Merger Between HD Hyundai Heavy Industries and HD Hyundai Mipo
- It was announced today that HD Hyundai Heavy Industries will merge with HD Hyundai Mipo. The merger ratio between HD Hyundai Heavy Industries and HD Hyundai Mipo is 1:0.4059146.
- HD Korea Shipbuilding & Offshore Engineering (009540 KS) will own a 66.29% stake in the merged entity.
- HD KSOE is proceeding with this merger of its two major subsidiaries ahead of the full-scale launch of the MASGA (“Make America Shipbuilding Great Again”) project.
Comfortdelgro (CD): Growth Evident and Cheap
- Public transport and taxi segments in Singapore provide much-needed stability for the group, not much downside surprise is expected. Now 54% of its revenue is generated overseas.
- Comfortdelgro Corp (CD SP) subsidiary, Vicom Ltd (VCM SP) is in charge of the OBU upgrade in Singapore, providing some high-margin incremental operating profit.
- It trades at 14x PE, and its share price is almost at historical low, creating another reason to build positions on this.
Korean Air: A Major Rights Offering Capital Raise Likely In Next 1-2 Years
- We believe a major rights offering capital raise is likely for Korean Air Lines (003490 KS) in the next 1-2 years.
- On 25 August, Korean Air announced a 70 trillion won investment plan in the United States. This plan is likely to have been pressured heavily by the Korean government.
- A big problem with this plan is Korean Air does not produce enough cash flow and its balance sheet is not strong enough to invest such huge amounts of capital.
AUX Electric IPO: Forecasts and Valuation
- Aux Electric (2580 HK) has announced terms for its HKEx IPO and plans to issue 207m shares at HK$16.00-17.42 per share and will raise around US$460m.
- The company’s low-price strategy has helped expand its top line and market share in a short span of time; however, margins lag behind large air conditioner peers.
- We think AUX should be compared against Hisense due to their higher dependence on ODM sales and believe AUX’s IPO is valued attractively compared to Hisense.
Shanghai Top Numerical Control Technology Pre-IPO: Flying High but Not Without Turbulence
- Shanghai Top Numerical Control Technology (1726745D CH) is looking to raise about US$100m in its upcoming Hong Kong IPO.
- STNCT presents a compelling growth story, underpinned by its strong foothold in the aviation segment and improving financial performance. However, several risks like decline in sales units temper the upside.
- In this note, we look at the company’s past performance.
Tsubakimoto Kogyo (8052 JP) – Q1 FY2026/3 off to a Strong Start
- Tsubakimoto Kogyo Co., Ltd., (hereafter, the Company) announced Q1 FY2026/3 result on July 25, 2025.
- The Company delivered a strong start to FY2026, posting double-digit sales growth and significant profit increase, supported by substantial order backlog.
- This marked a notable YoY rebound, as Q1 FY2025/3 temporarily declined due to reactionary effects from FY2024/3.
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