In today’s briefing:
- Canvest (1381 HK): Attractive Spread with Steady Progress in Precondition Satisfaction
- Hyundai Motor (HYUNDAI IN): Anchor Lock-Up Expiry Increases Float; Index Inclusions Near
- Henlius (2696 HK): So, When Was The Last Time A PE/VC Outfit Blocked A Deal?
- Delta Electronics (DELTA TB / 2308 TT): Off the Peak; SET50 Deletion Risk Increases
- Quiddity Leaderboard ChiNext & ChiNext 50 Jun 25: Great Momentum for the Exp ADDs Vs Exp DELs Trade
- Key Info We Need to Know About Boosting Predictability of Dividend Record Dates in Korea
- Insignia Financial (IFL AU): Bumpity Bumpity. Expect Bain To Match – Or Exceed – CC Capital’s Terms
- LG CNS IPO Book Building Results Analysis
- Event Driven: Shankara Building Products, A Demerger Play
- Macromill (3978 JP): CVC Bumps to JPY1,250, but the Offer Remains Light
Canvest (1381 HK): Attractive Spread with Steady Progress in Precondition Satisfaction
- Grandblue Environment Co A (600323 CH) continues to make steady progress in satisfying the precondition for its HK$4.90 privatisation offer for Canvest Environmental Protection Group (1381 HK).
- Two of the five preconditions are satisfied, and another will be satisfied by 20 January. The long stop date of 17 July provides ample time to satisfy the remaining two.
- Although the peers have materially re-rated, the offer implies a premium compared to peer multiples. Vote risk remains low, aided by selling by a shareholder with a blocking stake.
Hyundai Motor (HYUNDAI IN): Anchor Lock-Up Expiry Increases Float; Index Inclusions Near
- The lock-up on the second half of the anchor investor allocation for Hyundai Motor India (HYUNDAI IN) ends after market close today and the shares will be available for sale tomorrow.
- The lock-up expiry further increases free float for the stock and there will be multiple index inclusions over the next few months.
- The largest index inclusion will be in February, followed by smaller inclusions in March and June. In total, passives will mop up around 16% of the float.
Henlius (2696 HK): So, When Was The Last Time A PE/VC Outfit Blocked A Deal?
- You might have to go all the back to Guoco Group Ltd (53 HK)‘s 2012/2013 unconditional cash offer, which was ostensibly blocked by First Eagle AND Elliott Advisors.
- Otherwise, it’s slim pickings. Past Schemes or Tender Offers arguably failed as minorities were simply not supportive. There are exceptions, like Soho China (410 HK) and TCM (570 HK)
- IF LVC wish to remain active in this space/region, they appear to be going about it in a counterproductive way. I still don’t understand why they would want to block.
Delta Electronics (DELTA TB / 2308 TT): Off the Peak; SET50 Deletion Risk Increases
- Delta Electronics Thailand (DELTA TB) is trading at a huge valuation premium to Delta Electronics (2308 TT), though that has narrowed over the last couple of months.
- Delta Electronics Thailand has already been on the Market Surveillance list for 2 months and inclusion for another 2 months will mean SET 50 Index deletion in June.
- A placement by Delta Electronics (2308 TT) is not out of the question and that further increases the downside risk for Delta Electronics Thailand (DELTA TB).
Quiddity Leaderboard ChiNext & ChiNext 50 Jun 25: Great Momentum for the Exp ADDs Vs Exp DELs Trade
- The ChiNext index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
- The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
- We see 10 changes for the ChiNext index and 5 changes for the ChiNext 50 index in the next index rebal event. Combined it is about US$1bn to trade one-way.
Key Info We Need to Know About Boosting Predictability of Dividend Record Dates in Korea
- Major banks, Hyundai Motor, POSCO Holdings, and companies like HMM, which updated their articles, will likely set dividend record dates pre-AGM in the mid-to-late February window.
- Track backwardation in March futures for mispricings. Companies will likely follow last year’s playbook: AGM in mid-to-late March, record date 3–4 weeks prior, announcement 2 weeks ahead.
- Opportunity lies in the March futures basis spread between February contract and record date announcement. Watch those for potential dividend hikes and futures mispricing ahead.
Insignia Financial (IFL AU): Bumpity Bumpity. Expect Bain To Match – Or Exceed – CC Capital’s Terms
- After CC Capital waded in on the 6th January with a A$4.30/share NBIO for wealth manager Insignia Financial (IFL AU), trumping Bain’s A$4.00/share proposal, Bain subsequently matched CC Capital’s terms.
- CC Capital has now lifted is indicative Offer to A$4.60/share, a ~50% premium to undisturbed. Time for IFL to engage. And for Tanarra to be supportive.
- And Bain? I expect them to match CC Capital’s terms, again; if not a small premium.
LG CNS IPO Book Building Results Analysis
- LG CNS reported a successful IPO book building results analysis. The IPO price has been finalized at 61,900 won per share (high end of the IPO price range).
- The demand ratio from the institutional investors was 114 to 1. At the IPO price of 61,900 won, the expected market cap will be 6 trillion won.
- According to our valuation analysis, it suggests a base case target price of 76,383 won per share, which represents a 23% upside from the IPO price of 61,900 won.
Event Driven: Shankara Building Products, A Demerger Play
- Shankara Building Products L (SHANKARA IN) plans to demerge its steel manufacturing and building materials marketplace, enabling each business to operate independently with tailored leadership and capital allocation strategies.
- This separation allows for targeted expansions in non-steel product lines and dedicated manufacturing improvements, potentially raising margins and fueling profitable growth in India’s booming construction market.
- Focused leadership, improved transparency, and strategic capital deployment could enhance investor confidence, offering significant upside as Shankara refocuses on high-growth segments and streamlines its operations post-demerger.
Macromill (3978 JP): CVC Bumps to JPY1,250, but the Offer Remains Light
- Macromill, Inc (3978 JP) disclosed a revised tender offer from CVC at JPY1,250, an 8.7% premium to the previous JPY1,150 offer. The offer has been declared final.
- The revised offer is reasonable compared to historical trading ranges. Since the announcement of the offer, the share price has never exceeded it.
- CVC seeks an irrevocable from Oasis, but Oasis has several reasons to ignore the overtures. Due to the high required acceptance rate, a gross spread of 0.2% is unattractive.
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