In today’s briefing:
- Chery Auto (9973 HK) IPO: No Inclusion in Global Indices; HSTECH Is Interesting
- HKBN (1310 HK): Mobile’s Offer Is Done. Now For The Back End
- [Japan ECM] Kokusai Elec (6525) – KKR’s Lock Up Expiry in 3 Weeks – $700mm Clean-Up Coming?
- Quiddity Leaderboard HSIII Dec25/Mar26: Interesting Implications of the Recent Methodology Changes
- Zijin Gold (2259 HK) IPO: HSCI Fast Entry; Quick Stock Connect Add; Global Indices Entry in 2026
- [Japan M&A/Activism] The Nagging Little Detail In the Soft99 MBO Extension Target Doc
- Flagging a New Passive Flow Trading Opportunity Triggered by Korea’s Divvy Policy Momentum
- HMM: Results of the Tender Offer
- Underweight/Short Alibaba (9988 HK): Quant Model Flags Mean Reversion After 40% Post-Earnings Surge
- Quiddity Leaderboard CSI 300/500 Dec25: Inflows Vs Outflows Positive So Far But Time For Caution
Chery Auto (9973 HK) IPO: No Inclusion in Global Indices; HSTECH Is Interesting
- Chery Automobile Co. Ltd. (9973 HK)‘s IPO range is HK$27.75-HK$30.75/share and will raise up to HK$10bn (US$1.3m) if the oversubscription option is exercised, valuing the company at HK$169bn (US$21.7bn).
- The stock should be added to the HSCI Index in December and that will make the stock eligible for inclusion in Southbound Stock Connect.
- There will be no inclusion in global indexes for the next year, but there is a possibility of inclusion in the Hang Seng TECH Index (HSTECH INDEX) in December.
HKBN (1310 HK): Mobile’s Offer Is Done. Now For The Back End
- China Mobile (941 HK)‘s Offer for HKBN Ltd (1310 HK) will be declared unconditional tomorrow (3rd September), the first closing date.
- As I type, 19.03% of shares out have tendered, lifting Mobile’s stake to 48.9%. Additional shares will tip in today and tomorrow, as per your typical last minute flurry.
- It is not Mobile’s intention to delist HKBN. There will be investors playing the backend on the expectation of a higher Offer down the track.
[Japan ECM] Kokusai Elec (6525) – KKR’s Lock Up Expiry in 3 Weeks – $700mm Clean-Up Coming?
- Kokusai Electric (6525 JP) was IPOed too cheap in 2023 after a couple of years in the wilderness and an aborted private sale effort, blocked on antitrust grounds.
- It nearly tripled, there was an offering announced at ¥5,000+ priced ¥4,500+. Shares fell back to IPO price, then bounced, and we got a July follow-on offering at ¥3,000+.
- I suggested here the back end could be squeezy. It was for a hot minute, then it wasn’t. Now the stock is up 50% in 2 weeks. Watch out!
Quiddity Leaderboard HSIII Dec25/Mar26: Interesting Implications of the Recent Methodology Changes
- The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
- In this insight, we take a look at the impact of the new selection methodology for the December 2025 and March 2026 rebal/review events.
- We have also presented our index change expectations for the next semiannual index review which will take place in March 2026 (regular ADDs/DELs only take place in March and September).
Zijin Gold (2259 HK) IPO: HSCI Fast Entry; Quick Stock Connect Add; Global Indices Entry in 2026
- Zijin Gold (2259 HK) is looking to raise up to HK$28.7bn (US$3.7bn) in its IPO, valuing the company at HK$191.6bn (US$24.6bn).
- Zijin Mining (2899 HK) will hold between 85-86.7% of Zijin Gold and that will limit the free float of the stock. Half the IPO has been allotted to cornerstones.
- Zijin Gold could be added to the HSCI via Fast Entry and to Stock Connect in October. Global index inclusion should take place in the first half of 2026.
[Japan M&A/Activism] The Nagging Little Detail In the Soft99 MBO Extension Target Doc
- Yesterday, Soft99 Corp (4464 JP) announced a slight change in its “Target Opinion Document” after the MBO Bidco extended its TOB by 8 days the day before.
- The detail was not in the MBO Bidco extension. It was just revealed in an added note on p3 of the Target Opinion.
- That details matters A LOT to people looking at the Effissimo Overbid. The company’s Board has some serious work ahead.
Flagging a New Passive Flow Trading Opportunity Triggered by Korea’s Divvy Policy Momentum
- PLUS High Dividend ETF (161510 KS) reshuffle is now a key flow catalyst: June saw GS E&C and HD Hyundai out, Hyundai Motor in, with sharp one-day moves.
- December review shaping up as 2-in/2-out: Seoul Guarantee (031210) and LG Corp (003550) in, Shinhan (055550) and KB (105560) out.
- Passive flows: Shinhan/KB ~0.3–0.4x DTV, LG ~3x, Seoul Guarantee 5–6x. With AUM up 30% since June, upcoming adds face outsized passive impact.
HMM: Results of the Tender Offer
- On 17 September, HMM Co., Ltd. (011200 KS) announced the results of the tender offer.
- Its two largest shareholders (Korea Development Bank – KDB and Korea Ocean Business Corp – KOBC) both participated in the tender offer.
- With end of the tender offer, we believe there could be a renewed focus on the continued decline in the global shipping rates which is negative on HMM.
Underweight/Short Alibaba (9988 HK): Quant Model Flags Mean Reversion After 40% Post-Earnings Surge
- Context: The Alibaba (9988 HK) / Hang Seng Index (HSI INDEX) price-ratio deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
- Highlights: Going long the Hang Seng Index and short Alibaba (9988 HK) targets a 12% 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.
Quiddity Leaderboard CSI 300/500 Dec25: Inflows Vs Outflows Positive So Far But Time For Caution
- CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500 names.
- In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in December 2025.
- Currently, we see 11 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index.
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