In today’s briefing:
- FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: BIG Impact Changes
- United Tractors (UNTR IJ) Buyback – Sure to Be Impactful
- WCP IPO: Hooked on Lithium
- Renesas Electronics (6723 JP): Tie-Ups with Tata Group Add to Growth Potential
- WCP IPO – The Positives – Past Sales Have Been Very Strong
FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: BIG Impact Changes
- The FTSE TWSE Taiwan Dividend+ Index is a funky one that weights stocks by dividend yield. Given dependency on dividends and stock prices, the potential adds/deletes can change often.
- We currently see three changes to the index in December, with another stock very close to deletion zone. Given the difference in market cap and dividend yield, impacts are big.
- There will be large flows on the current index names at the September rebalance due to capping.
United Tractors (UNTR IJ) Buyback – Sure to Be Impactful
- Yesterday, United Tractors (UNTR IJ) announced a large share buyback. It’s a big buyback but perhaps not as big as the headlines (which say “up to 20%”).
- The buyback is for 5 trillion rupiah which is about 5% of market cap, and will be conducted on-market over the next three months.
- Looking at the early market reaction, my opinion is that the market does not seem to understand the consequences.
WCP IPO: Hooked on Lithium
- WCP (WCP KS), a lithium-ion batteries separator company, is planning to launch a KRW900 billion (US$692 million) IPO in August.
- The price range of KRW80,000-100,000 implies a market cap of KRW2.7-3.4 trillion (US$2.1-2.6 billion).
- WCP has attractive fundamentals due to the favourable demand/supply balance, technology, strong revenue growth and improving margins.
Renesas Electronics (6723 JP): Tie-Ups with Tata Group Add to Growth Potential
- Renesas and Tata Group companies have announced a new partnership in electronic systems and wireless telecom for automotive and other applications.
- Specifically, they are working on the development of electric vehicles and industrial system solutions combining their semiconductor, IT system and manufacturing expertise.
- This should provide a significant boost to their business in India and global markets. As Mio Kato wrote in late April, Renesas – Like We Said… Accelerating
WCP IPO – The Positives – Past Sales Have Been Very Strong
- WCP aims to raise around US$690m via selling a mix of primary and secondary shares in its Korean IPO.
- WCP designs, manufactures, and sells separators, which are one of the four core materials for secondary Lithium-ion batteries
- In this note, we will talk about the positive aspects of the deal.
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