In today’s briefing:
- [Japan M&A] YAGEO Upping the Stakes in the Game of 🐓 over Shibaura (6957 JP)
- Shibaura Electronics (6957 JP): Method in the Madness as Yageo Bumps Twice in Two Days
- Tencent (700 HK) Vs. Hang Seng (HSI INDEX): Price-Ratio Hits Trigger Zone
- Hang Seng Index (HSI) Rebalance: Pop Mart, China Telecom, JD Logistics Added to Get to 88 Members
- [Quiddity Index] Sep25 HSTECH Review Announced; No Name Changes, Big Flows
- [Quiddity Index] Sep25 HS Internet & IT Index Review; Funding Flows Dominate in $850mm Trade
- Taiwan Dual-Listings Monitor: TSMC Premium Spike Opportunity; ASE Hard Bounce to Prem from Discount
- Intel (INTC.US): Intel–U.S. Government Equity Deal: Implications and Industry Perspective
- Meta Is Ripping Apart Its AI Division—& Betting Big To Catch OpenAI
- Amdocs: Surging Ahead By Transforming Cloud, Data, & Network Monetization!
[Japan M&A] YAGEO Upping the Stakes in the Game of 🐓 over Shibaura (6957 JP)
- On 14-Aug, Minebea Mitsumi (6479 JP) upped their TOB on Shibaura Electronics (6957 JP) from ¥5,500 to ¥6,200, but set the close before rival bidder YAGEO’s likely FEFTA approval date.
- On 21-Aug, YAGEO responded by upping the bid 7% to ¥6,635. Minebea responded by saying no raise, no extension. Minebea was playing chicken. Shares fell Friday.
- Very early Saturday, the Nikkei reported YAGEO would raise to the “¥7,100 range.” Reuters later reported YAGEO had raised to ¥7,130. Exactly 15% above Minebea. On YAGEO’s website.
Shibaura Electronics (6957 JP): Method in the Madness as Yageo Bumps Twice in Two Days
- On 21 August, Yageo Corporation (2327 TT) increased its Shibaura Electronics (6957 JP) offer by 7.0% to JPY6,635. On 23 August, Yageo further increased its offer by 7.5% to JPY7,130.
- The offer is partially in reaction to Minebea’s recent comments around Yageo securing FEFTA approval. Crucially, Yageo finally provided an update suggesting that only a few issues remained.
- Yageo’s JPY7,130 offer is not over-the-top, as Minebea’s 10x EV/EBIT pricing guideline outlined on 18 August potentially justified a JPY7,300 offer. The likelihood of Minebea walking has increased.
Tencent (700 HK) Vs. Hang Seng (HSI INDEX): Price-Ratio Hits Trigger Zone
- Context: The Tencent (700 HK) vs. Hang Seng Index (HSI INDEX) price-ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
- Highlights: After Tencent’s recent outperformance, going long the HSI and short Tencent targets an 8% return.
- Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.
Hang Seng Index (HSI) Rebalance: Pop Mart, China Telecom, JD Logistics Added to Get to 88 Members
- China Telecom (H) (728 HK), JD Logistics (2618 HK) and Pop Mart (9992 HK) will be added to the Hang Seng Index (HSI INDEX) at the close on 5 September.
- Estimated one-way turnover is 2.5% and the estimated round-trip trade is HK$11.25bn (US$1.44bn). The official capping will be done based on closing prices from 2 September.
- At 88 constituents, we near the 100-index member target. The target is likely to be reached by early-2027 – maybe 2026 given mainland companies listing of H-shares on the HKEX.
[Quiddity Index] Sep25 HSTECH Review Announced; No Name Changes, Big Flows
- On Friday 22 August, the Hang Seng Index team announced the changes to the Hang Seng Technology Index for the September 2025 rebalance.
- Team Quiddity had one low conviction ADD/DEL pair “predicted” but there were no name changes announced.
- Horizon Robotics (9660 HK) is a big FAF upweight, as expected. There are other small changes and big capping/re-capping moves. We see US$3.9bn to trade.
[Quiddity Index] Sep25 HS Internet & IT Index Review; Funding Flows Dominate in $850mm Trade
- On Friday 22 August, the Hang Seng Index team announced the changes to the Hang Seng Internet and IT Index for the September 2025 rebalance.
- There are 3 ADDs and 3 DELs. We predicted 2/3 ADDs and 3/3 DELs correctly.
- The funding flows and FAF re-weight flows are bigger than the ADD/DEL flows but there should be ~US$850mm to trade.
Taiwan Dual-Listings Monitor: TSMC Premium Spike Opportunity; ASE Hard Bounce to Prem from Discount
- TSMC: +25.6% Premium: Latest Spike is Opportunity to Short the ADR Spread
- UMC: +2.0% Premium; Near Level to Go Short the ADR Spread
- ASE: +5.1% Premium; Good Level to Take Profits on Previous Long Since Parity
Intel (INTC.US): Intel–U.S. Government Equity Deal: Implications and Industry Perspective
- Intel has reached an agreement with the U.S. government, under which Washington will invest $8.9bn for a 9.9% equity stake in the company.
- Intel benefits from the optics of government backing, which could help sentiment and prevent downside pressure on the stock in the short term, i.e. near-term optics positive, fundamentals unchanged.
- TSMC’s Japan and Germany fabs were structured through co-investments and partnerships, with equity involvement only when tied to technology access (e.g., Sony CMOS JV).
Meta Is Ripping Apart Its AI Division—& Betting Big To Catch OpenAI
- In a high-stakes move to stay competitive in the rapidly evolving AI landscape, Meta Platforms is radically restructuring its artificial intelligence organization.
- The company is dismantling its existing Meta Superintelligence Labs (MSL) and splitting it into four specialized groups—focused on research, product, infrastructure, and superintelligence.
- This development follows months of internal tension and strategic uncertainty, culminating in a significant leadership pivot with the appointment of Scale AI’s founder Alexandr Wang as Meta’s new Chief AI Officer.
Amdocs: Surging Ahead By Transforming Cloud, Data, & Network Monetization!
- Amdocs recently announced its financial performance for the third quarter of fiscal year 2025, which showcased mixed results and highlighted the company’s strategic focus areas and operational achievements.
- The company recorded a revenue of $1.14 billion, marking a 3.5% increase in pro forma constant currency compared to the previous year.
- This was aided by significant contributions from various regions, most notably a record quarter in Europe.
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