In today’s briefing:
- CSI A500 Index Rebalance Preview: Many Changes Expected; US$1bn Trade
- Interglobe Aviation (Indigo) Placement – Another US$800m+ Deal by Co-Founder
- A/H Premium Tracker (To 23 May 2025): AH Premia Contract, H Premia Names Perform Best; Batteries!
- CSI All Share Real Estate Sector Index Rebalance Preview: Multiple Changes in June
- LS Marine Solution: Rights Offering Capital Raise of 278 Billion Won
- LS Marine Solution’s Rights Deal Is Serving up a Pretty Rare Arbitrage Hunting Ground
- TransDigm Group: An Insight Into Its Recent Aftermarket Growth, Market Dynamics & Key Growth Levers!
- The Beat Ideas: Jubilant Ingrevia-Specialty Formula for Margin Expansion
- Jacobs Solutions Is Tapping Into The Global Infrastructure Boom To Lead In Clean Water & Energy Revolution; What’s The Expected Revenue Impact?
- Monthly Chinese Express Tracker | Volume Firm, Price Benign | ZTO Under Pressure? (May 2025)
CSI A500 Index Rebalance Preview: Many Changes Expected; US$1bn Trade
- There could be 18 changes for the CSI A500 Index at the June rebalance. Turnover is estimated at 1.7% and the round-trip trade is around US$1bn.
- The index was launched in September 2024, and the passive trackers have taken in a chunk of money since then. The flows to the stocks add to other index flows.
- A long add/short deletes trade has been stable over the last few months. The forecast adds could outperform following announcement of the index changes on Friday.
Interglobe Aviation (Indigo) Placement – Another US$800m+ Deal by Co-Founder
- InterGlobe Aviation Ltd (INDIGO IN)‘s co-founder, Rakesh Gangwal, aims to raise around US$803m via selling around a 3.3% stake in Indigo.
- He had earlier stated his intention to pare down his stake after a long drawn, and very public battle, with his co-founder Rahul Bhatia. He has sold many times before.
- In this note, we run the deal through our ECM framework and comment on deal dynamics.
A/H Premium Tracker (To 23 May 2025): AH Premia Contract, H Premia Names Perform Best; Batteries!
- AH spreads are slightly narrower, but performance is concentrated in fewer names and broad spread volatility is up. BYD (1211 HK) now 5% through. CATL 10% through will help.
- It feels like there were some concentrated shorts on H vs A. BYD performance on CATL and Hang Seng upweight/inclusion exacerbate the issue. CATL H less liquid than people think.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.
CSI All Share Real Estate Sector Index Rebalance Preview: Multiple Changes in June
- There could be up to 8 adds and 3 deletes for the CSI All Share Real Estate Sector Index in June.
- Estimated one-way turnover is 3.2% at the rebalance leading to a round-trip trade of CNY 456m. There are a few stocks with over 0.5x ADV to trade.
- The forecast adds and deletes have performed in line over the last few months, and the announcement of the changes could lead to short-term outperformance.
LS Marine Solution: Rights Offering Capital Raise of 278 Billion Won
- After the market close on 26 May, LS Marine Solution (060370 KS) announced that it plans to conduct a capital raise worth 278.3 billion won.
- LS Marine Solution plans to issue 19.57 million new shares in this capital raise, which represents 60% of its outstanding shares.
- Despite the company’s strong sales and profit growth, LS Marine Solution’s valuation multiples may be a bit too aggressive, especially with the major rights offering that will dilute existing shareholders.
LS Marine Solution’s Rights Deal Is Serving up a Pretty Rare Arbitrage Hunting Ground
- This raise stands out with a near-60% issuance ratio—fat rights per share make pre-positioning before ex-date a compelling trade with solid pickup potential.
- LS Cable holds 66.75% and has been steadily upping its stake—likely all-in on this raise, which adds serious anchor support and puts a strong floor under the rights.
- Skip chasing rights—this setup favors buying shares pre–ex-rights, where the embedded rights value likely beats the ex-day drop, making it a clean trade.
TransDigm Group: An Insight Into Its Recent Aftermarket Growth, Market Dynamics & Key Growth Levers!
- TransDigm Group Inc.’s recent earnings discussion sheds light on both its strengths and challenges, providing insights into the company’s ongoing strategies and performance outlook.
- During the second quarter of fiscal 2025, TransDigm reported strong operational performance with significant contributions from its commercial aftermarket and defense market channels.
- Revenue from these divisions displayed healthy growth, while commercial OEM revenues remained largely flat compared to the previous year, indicating an area of potential improvement as production recovers from past disruptions.
The Beat Ideas: Jubilant Ingrevia-Specialty Formula for Margin Expansion
- Jubilant Ingrevia has launched its “Pinnacle 3.4.5” strategy targeting 3x revenue and 4x EBITDA growth by FY30, signaling a focused shift toward higher-margin segments.
- The company’s business mix is rapidly evolving, with Specialty Chemicals and Nutrition now contributing 62% of revenue, improving margin visibility and reducing cyclicality.
- With increasing downstream integration, global CDMO expansion, and a robust R&D pipeline, Jubilant Ingrevia is transitioning into a structurally higher-margin, innovation-driven player.
Jacobs Solutions Is Tapping Into The Global Infrastructure Boom To Lead In Clean Water & Energy Revolution; What’s The Expected Revenue Impact?
- Jacobs Solutions Inc. (Jacobs) has reported its fiscal second-quarter 2025 results, reflecting a mixture of strategic realignments and robust operational performance, but amidst some challenges.
- The company’s strategic move to separate its former CMS and C&I businesses has been completed, enabling a reduction in outstanding indebtedness and the final distribution of Amentum shares to shareholders is scheduled for May 30.
- This strategic focus allows Jacobs to sharpen its portfolio around its core capabilities.
Monthly Chinese Express Tracker | Volume Firm, Price Benign | ZTO Under Pressure? (May 2025)
- Chinese parcel volume growth in April was solid, and unit price trend appears benign
- No signs (yet) of aggressive moves by ZTO Express to recovery volume share in Q225
- Besides SF, express companies have struggled to differentiate themselves in recent years
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