In today’s briefing:
- Foshan Haitian Flavouring & Food (3288 HK): Offering Details & Index Inclusion
- [Quiddity Index] Nikkei 225 Sep25 Rebal: One ADD/DEL? Kokusai a Question, but 2 Ad Hoc Events Coming
- HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September 2025
- HDB Financial IPO: Offer Details & Index Entry Timing
- Kolmar Group Chairman Yoon: A Rare Case Of “I Want My Shares Back”
- [Japan Activism] Mitsui Matsushima (1518) Ups Buyback Tender to 35.8%, Murakami-San Group To Sell
- UK Course-Corrected CPI Stays High
- Quiddity Leaderboard STAR 50/100 Sep25: Some High-Impact Names; New Sector-Neutral Pair Trade Ideas
- Mayne Pharma (MYX AU): Entering Uncharted Territory as the Scheme Vote Passes
- Eternal Beauty IPO – Not Expensive but Its Not Enticing Either
Foshan Haitian Flavouring & Food (3288 HK): Offering Details & Index Inclusion
- Foshan Haitian Flavouring & Food (603288 CH)‘s global offering opens today and the raise could reach up to US$1.5bn if the offer-size adjustment option and the overallotment option are exercised.
- There is a large allocation to cornerstone investors. The discount of around 22% to the A-shares is attractive given the recent trend for Midea (300 HK) and CATL (3750 HK).
- The H-shares could be added to a global index and the FXI ETF in December. Inclusion in the HSCI should be in September and Southbound Stock Connect in July.
[Quiddity Index] Nikkei 225 Sep25 Rebal: One ADD/DEL? Kokusai a Question, but 2 Ad Hoc Events Coming
- The March 2025 Nikkei 225 review came out with a sparse set of changes. That gives us hints for the September 2025 review.
- For the moment, that leads me to believe we get ONE ADD and ONE DELETE though up to three of each is possible.
- For now, Fast Retailing (9983 JP) capping is off, but there’s an ad hoc coming in late Q3 or early Q4 and the Sony Financial spinoff to look forward to.
HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September 2025
- We see 21 potential and close adds and 34 potential and close deletes for the Hang Seng Composite Index in September. Some of the stocks are close on market cap/liquidity.
- There have been some big listings in the last couple of months and those stocks should be added to the index in September. That increases the number of potential deletions.
- There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.
HDB Financial IPO: Offer Details & Index Entry Timing
- HDB Financial Services Ltd (0117739D IN) is looking to list on the exchanges by selling up to INR125bn (US$1.46bn) of stock at a valuation of around INR 620bn (US$7.2bn).
- The stock will not get Fast Entry to either of the global indices. The earliest inclusion in a global index should take place in December.
- HDB Financial Services Ltd‘s peers have traded well over the last 6 months and that could spill over into demand for the stock. Grey market premium is pretty high.
Kolmar Group Chairman Yoon: A Rare Case Of “I Want My Shares Back”
- Chairman Yoon Dong-han, founder of the Kolmar Group, has filed a lawsuit against his eldest son, Vice Chairman Yoon Sang-hyun of Kolmar Holdings, demanding the return of Kolmar Holdings shares.
- This is a rare case of a chairman demanding his shares back from his son.
- A key question is can there be an M&A fight for Kolmar Holdings even without the father getting his shares back? And the answer would be yes.
[Japan Activism] Mitsui Matsushima (1518) Ups Buyback Tender to 35.8%, Murakami-San Group To Sell
- Today after the close, Mitsui Matsushima (1518 JP) announced it would increase its buyback from 3.5mm shares to 4.0mm shares (31.3% to 35.8%). It also announced a Tender Offer Buyback.
- The tender offer starts tomorrow and goes til mid-July, paid 8 August. Murakami Group will tender a minimum of 3.3mm shares (more likely 4.2mm).
- This is not a huge immediate win, but it’s OK. And it changes the structure of the company’s balance sheet, ROE, effective ROE, and possibly its dividend.
UK Course-Corrected CPI Stays High
- UK inflation unsurprisingly slowed in May as a correction to vehicle excise duty knocked 0.1pp from the rate, reversing all the upside to our above-consensus April forecast.
- Services inflation aligns with the BoE’s forecast from its May forecast, where MPC members were biased towards slowing their easing. Underlying rates remain too high.
- Inflation keeps trending above the consensus, cumulating a 1pp error since rate cuts began, but aligning with our forecast from 1yr and 2yrs ago. We remain hawkish.
Quiddity Leaderboard STAR 50/100 Sep25: Some High-Impact Names; New Sector-Neutral Pair Trade Ideas
- STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
- STAR 100 index tracks the next 100 names (51st-150th ranks) and it represents the mid-cap segment of the STAR market.
- In this insight, we take a look at the potential ADDs/DELs for the STAR 50 and STAR 100 indices for the September 2025 index rebal event.
Mayne Pharma (MYX AU): Entering Uncharted Territory as the Scheme Vote Passes
- To no one’s surprise, the Mayne Pharma (MYX AU) scheme vote comfortably passed. The scheme remains conditional on FIRB approval and no material adverse change (which Cosette alleges).
- The Mayne/Cosette court case wades into uncharted territory as it brings many firsts, such as the first MAC-related dispute to be heard in Australian courts with a qualified MAC threshold.
- While Western case law burdens the buyer with establishing a MAC breach, it is unclear whether Mayne will get a favourable ruling, as Cosette could have a case. Tread carefully.
Eternal Beauty IPO – Not Expensive but Its Not Enticing Either
- Eternal Beauty Holdings Limited is looking to raise around US$144m in its Hong Kong IPO.
- Eternal Beauty is the largest brand management company of perfumes in the combined markets of Mainland China, Hong Kong and Macau, in terms of retail sales in 2023.
- We have looked at the company’s past performance in our previous note. In this note we talk about valuations.
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