Daily BriefsEvent-Driven

Event-Driven: Siam Makro Public, SK IE Technology, Fujicco Co Ltd, Kumho Petro Chemical, SOSiLA Logistics REIT Inc, Turkiye Garanti Bankasi As and more

In today’s briefing:

  • Siam Makro (MAKRO TB): Placement, Primary Offering & Index Implications
  • SKIET Float Rate Adjustment for KOSPI 200 & MSCI Resulting from Block Deals
  • BIG Fujicco (2908 JP) Buyback
  • Potential Yearend Short-Covering Stocks in Korea
  • SOSiLA Logistics REIT (2979 JP): Offering Could Trigger Outperformance Vs Peers
  • BBVA/Garanti: Minorities Buyout

Siam Makro (MAKRO TB): Placement, Primary Offering & Index Implications

By Brian Freitas

  • Siam Makro Public (MAKRO TB) has bought the Lotus business from CPALL, CPM and CPH for THB 217.95bn by offering 5.01bn shares at THB 43.5/share.
  • CPALL, CPM and CPH will now sell 1.248bn shares to the public, while Siam Makro Public (MAKRO TB) will sell another 1.362bn new shares. This will increase the free float.
  • The higher free float will see buying by FTSE trackers in the short term, while the stock could be included in the MSCI Thailand and SET50 indices in May/June 2022.

SKIET Float Rate Adjustment for KOSPI 200 & MSCI Resulting from Block Deals

By Sanghyun Park

  • The SKIET block deals results are just out. It still fell short of the initial target of selling up to 4.8%. Also, the 7.82% discount is practically the ceiling.
  • Additional overhang risks will continue to exert structural downward pressure on SKIET’s share price.
  • However, we will see temporary events that will lead to a share price rebound. Likely, the index float rate of the KOSPI 200 and MSCI Standard will be adjusted upward.

BIG Fujicco (2908 JP) Buyback

By Travis Lundy

  • Fujicco is one of those small Japanese food companies which many investors ignore, with low volatility of revenues (until recently) and stock price.  
  • The company makes its money from sales of Kombu (a seaweed product), a wide variety of delicatessen products, boiled bean snacks, yogurt products, and desserts. It is small but ubiquitous.
  • On Monday, the company announced a BIG buyback – its first in many years. The shareholder structure and buyback format is quite informative as to how this may play out.

Potential Yearend Short-Covering Stocks in Korea

By Sanghyun Park

  • In Korea’s local stock market, intense short-covering at the yearend dividend season has been consistently observed since mid-November. So, this post screens potential short-covering stocks.
  • KOSPI stocks meeting these screening factors include Kumho Petro Chemical, SK Inc, Lotte Shopping, Mirae Asset Securities, CJ Corp, and HiteJinro.
  • In the KOSDAQ, we can obtain the following results if the same screening factors are applied: LX Semicon, BH Co Ltd, and Seegene.

SOSiLA Logistics REIT (2979 JP): Offering Could Trigger Outperformance Vs Peers

By Janaghan Jeyakumar, CFA

  • SOSiLA Logistics REIT Inc (2979 JP) (“SLR”) announced a follow-on equity offering after market close on 16th November 2021 to fund part of their recent property acquisition. 
  • The primary offer quantity is 66,600 units. In addition, there will also be an over-allotment quantity of 3,330 units. The total size of this offering could be roughly ¥11bn (~US$100mn). 
  • Below, we take a look at the attractiveness of SLR’s latest offering with greater emphasis on the potential for strong post-offering secondary market performance.

BBVA/Garanti: Minorities Buyout

By Jesus Rodriguez Aguilar

  • BBVA has finally opted to increase its investment in Garanti, despite the instability of the region. The deal makes financial sense (13.7% accretion to 2022e EPS, 2.3% accretion to TBVPS).
  • The offer price represents 3.6x 22e P/E and 0.7x P/TBV vs c. 0.8x for BBVA, with a reasonable cost in terms of capital (-46 bp in FL CET1).
  • Gross spread is 4.7% for a deal highly likely to close. Long GARAN, target price TRY 12.2.

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