Daily BriefsEvent-Driven

Event-Driven: JMDC Inc, Li Ning, EVE Energy, Samsung Fire & Marine Insurance (Pref), Unimicron Technology, China Huarong Asset Management, Kansai Super Market, Kumho Petro Chemical, So-Young, Hanssem Co Ltd and more

In today’s briefing:

  • A Really BIG Event for JMDC (4483)
  • FTSE China 50 Index Rebalance Preview: Li Ning (2331) Should Replace Country Garden (2007)
  • FTSE China A50 Index Rebalance Preview: Two Sets of Changes
  • Korea Prefs Yearend Dividend Plays
  • FTSE TWSE Taiwan 50 Index Rebalance Preview: Unimicron Should Replace Far Eastern New Century
  • China Huarong (2799 HK)’s Full Circulation
  • The Kobe District Court Decides To Halt the Kansai Super Merger – Kansai Super Will Appeal
  • Yearend Dividend-Hunt Buying Vs. Majority Shareholder Transfer Tax-Triggered Selling
  • So-Young’s Derisory Privatisation Bid
  • Hanssem – Share Buyback Worth 60 Billion Won, Higher Dividend Payout, & Teton Capital Going Active

A Really BIG Event for JMDC (4483)

By Travis Lundy

  • JMDC Inc (4483 JP) is an interesting company with a high-flying stock price and valuation. 
  • As one of the larger companies in the TSE Mothers universe, it still had not announced its intentions regarding TSE, and today we have the reason why
  • JMDC will move from Mothers to TSE1 on 29 November, and this will be a biggie. 

FTSE China 50 Index Rebalance Preview: Li Ning (2331) Should Replace Country Garden (2007)

By Brian Freitas

  • At the end of the review period for the December rebalance of the FTSE China 50 Index, we see Li Ning (2331 HK) replacing Country Garden Holdings Co (2007 HK)
  • Due to capping changes and the add/delete, the one-way turnover at the rebalance jumps to 5.95% and will result in a one-way trade of HK$2,770m.
  • Li Ning (2331 HK) trades at expensive valuations compared to its peers but has strong momentum. Country Garden trades cheaper than its peers and is still underperforming.

FTSE China A50 Index Rebalance Preview: Two Sets of Changes

By Brian Freitas

  • At the end of the review period, we expect Zhangzhou Pientzehuang Pharmaceutical and EVE Energy to be added to the index, replacing Sany Heavy Industry and Anhui Conch Cement.
  • We estimate one-way turnover at 3.14% and that will result in a one-way trade of CNY 1,591m. Impact on the stocks appears subdued given the extremely high liquidity.
  • The inclusions have outperformed the deletion by a large margin and there are opportunities to exit overvalued/ enter undervalued stocks using the passive flow to minimize impact.

Korea Prefs Yearend Dividend Plays

By Sanghyun Park

  • Based on last Friday’s closing price, the three stocks with a 20D MA sigma below -1.0 are LG Electronics 1P, Samsung SDI 1P, and Samsung E-M 1P.
  • Among the preferred shares with a yearend dividend yield of 5% or higher based on the FnGuide consensus, Kumho Petro Chemical 1P has a dividend yield of close to 10%.
  • Four prefs have a Pref/Ord dividend yield spread of more than 2%p among those with a yearend dividend yield of more than 5%.

FTSE TWSE Taiwan 50 Index Rebalance Preview: Unimicron Should Replace Far Eastern New Century

By Brian Freitas


China Huarong (2799 HK)’s Full Circulation

By David Blennerhassett

  • China Huarong Asset Management (2799 HK), which is expected to be in contravention of Hong Kong’s public float, is contemplating the “full circulation” of some domestic shares. 
  • If implemented, the conversion of these domestic shares would be largely ceremonial.
  • To date, 28 companies have sought approval to convert their domestic shares and/or unlisted foreign shares into H shares on the Hong Kong exchange. 

The Kobe District Court Decides To Halt the Kansai Super Merger – Kansai Super Will Appeal

By Travis Lundy

  • The Kobe District Court today granted the provisional disposition to block the Kansai Super Market (9919 JP) merger with two subsidiaries of H2 O Retailing (8242 JP)
  • The Court said that the “method of resolution of the EGM” was “illegal or significantly unjust.”
  • The Share Exchange scheduled for December 1st is now suspended, and we await Kansai Super’s appeal, but this sets up an interesting December for the stock.

Yearend Dividend-Hunt Buying Vs. Majority Shareholder Transfer Tax-Triggered Selling

By Sanghyun Park

  • Another thing to consider in strategic trades aimed at the buying trend for yearend dividend hunting is the ₩1B majority shareholder transfer tax-triggered selling trend.
  • But the degree of direct conflict between the buying force targeting dividends and this factor at the point close to the ex-dividend date should not be as large as expected.
  • Considering a gradual preemptive sale of yearend tax evasion until the ex-dividend, we should consider shortening the trading time frame of the yearend dividend play close to the ex-dividend.

So-Young’s Derisory Privatisation Bid

By Arun George

  • So-Young (SY US) is a leading Chinese plastic surgery platform. It was listed on 2 May 2019 and raised $162.9 million at $13.80 per ADS. 
  • It has received a non-binding privatisation proposal from Mr Xing Jin (co-founder, Chairman and CEO) at $5.30 per ADS, a 22.7% premium to the last close price. 
  • The offer price is derisory in the context of historical multiples and share prices. Nevertheless, Xing Jin already meets the two-thirds voting power threshold.    

Hanssem – Share Buyback Worth 60 Billion Won, Higher Dividend Payout, & Teton Capital Going Active

By Douglas Kim

  • After the market close today, Hanssem, one of the largest furniture companies in Korea, announced that it will conduct a share buyback worth 60 billion won and raise dividend payouts.
  • Hanssem will start to provide quarterly dividend payments starting 1Q 2022. A 50% dividend payout on estimated net profit of 84.7 billion won would be 1,800 won in DPS.
  • The combination of share buyback, higher dividend payouts, and a change to quarterly dividend payments is likely to result in positive capital inflow to Hanssem. 

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