In today’s briefing:
- NWS Holding (659 HK): Pre-Conditional VGO from the Cheng Family
- Redox (RDX AU) IPO – Offering Details & Index Inclusion
- Tryt IPO – The Negatives – Margins Have Consistently Narrowed and Gearing Could Cap Growth
- J&T Global Express Pre-IPO – The Positives – Growing Fast, Expanding Geographically
- Quiddity Leaderboard TDIV Sep 23: Potential ~US$130mn Flows Caused by T100 DEL and AUM Change
- Walsin Lihwa Placement – Well-Flagged with Rising Short Interest. Has a Decent Track Record as Well
- Quiddity Leaderboard T50/100 Jun 23: Wisdom Marine Facing TDIV Deletion
- TRYT IPO: The Bull Case
- J&T Global Express Pre-IPO – The Negatives – Adjusted Sales Growth Was Negative
- Russell 2000 (IWM) Testing $180 Support; Breadth Remains Constructive; Construction/Engineering Buys
NWS Holding (659 HK): Pre-Conditional VGO from the Cheng Family
- Nws Holdings (659 HK) announced a pre-conditional voluntary general offer from the Cheng family at HK$9.15 or HK$9.47 per share (with a potential 2HFY2023 dividend of HK$0.32 per share).
- The pre-condition related to regulatory approval from the Insurance Authority of Hong Kong and the Bermuda Monetary Authority is a formality due to the Cheng family’s current sway over NWS.
- The key condition is approval by independent New World Development (17 HK) shareholders which is likely as the offer is attractive, reduces NWD’s gearing and results in a special dividend.
Redox (RDX AU) IPO – Offering Details & Index Inclusion
- Redox (RDX AU), a leading chemical and ingredients distributor, is looking to raise A$402m (US$268m) in its IPO and is expected to start trading on the ASX on 3 July.
- With the float expected to be over 30%, the stock is eligible for inclusion in the S&P/ASX indices but limited trading history could only mean S&P/ASX300 inclusion in March 2024.
- With 70% of the shares subject to lock-up arrangements, buying from ASX300 passive trackers will be small and there will be limited inclusion in other indices too.
Tryt IPO – The Negatives – Margins Have Consistently Narrowed and Gearing Could Cap Growth
- Tryt Inc (9164 JP) is looking to raise about US$460m in its Japan IPO.
- Tryt Inc (Tryt) offers employee placement services and temporary staffing services for the elderly care, nursing care and childcare workers segments.
- In this note, we will talk about the not so positive aspects of the deal.
J&T Global Express Pre-IPO – The Positives – Growing Fast, Expanding Geographically
- J&T Express, a global logistics service provider, is looking to raise about US$1bn in its upcoming Hong Kong IPO.
- As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
- In this note, we talk about the positive aspects of the deal.
Quiddity Leaderboard TDIV Sep 23: Potential ~US$130mn Flows Caused by T100 DEL and AUM Change
- In this insight, we take a look at Quiddity’s flow expectations for the September 2023 index rebalance.
- Since the semi-annual rebalance events are in June and December, there will not be any “regular” changes caused by dividend-yield rankings.
- However, external factors such as deletion from the selection universe and a shift in tracking AUM assumptions can still trigger US$130mn capping flows in September 2023.
Walsin Lihwa Placement – Well-Flagged with Rising Short Interest. Has a Decent Track Record as Well
- Walsin Lihwa (1605 TT) is looking to raise US$355m in its Taiwan GDS offering.
- The firm is offering 27m GDS at a 4.8-7.8% discount to last close. The deal isn’t a very large one for the firm to digest on an ADV basis.
- As per the firm, proceeds from this GDS issuance is expected to purchase raw materials in foreign currencies.
Quiddity Leaderboard T50/100 Jun 23: Wisdom Marine Facing TDIV Deletion
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the September 2023 Rebalance.
- At present, I see two changes for the T50 index and one change for the T100 index.
- The T100 change is an important one as the expected DEL Wisdom Marine Lines (2637 TT) could also get deleted from the TDIV index.
TRYT IPO: The Bull Case
- Tryt Inc (9164 JP), a leading professional recruiting and temporary staffing service in Japan, seeks to raise US$450 million. Pricing is on 5 July, and book-building is 6-11 July.
- In 2022, Tyrt was the leading provider of personnel dispatch and personnel introduction services in Japan’s welfare and nursing sector.
- The key elements of the bull case rest on large addressable markets, favourable market trends, strong pro-forma revenue growth, top quartile EBITDA margins and rising staff retention rates.
J&T Global Express Pre-IPO – The Negatives – Adjusted Sales Growth Was Negative
- J&T Express, a global logistics service provider, is looking to raise about US$1bn in its upcoming Hong Kong IPO.
- As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
- In this note, we talk about the not-so-positive aspects of the deal.
Russell 2000 (IWM) Testing $180 Support; Breadth Remains Constructive; Construction/Engineering Buys
- We discussed last week how consolidation was likely, so far that has played out with the SPX back testing the 4300-4325 area which we anticipated would cap upside for 2023.
- We continue to watch short-term support at 4300, and we cannot be bearish if the S&P 500 is above 4300.
- The Russell 2000 (IWM) is back to test support at $180; we would expect to see this hold as support, but a failure to hold would mean a trip to $170
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