In today’s briefing:
- Foshan Haitian Flavouring & Food (3288 HK): Offering Details & Index Inclusion
- [Japan M&A] Carlyle Deal for TRYT (9164) – Great Exit for Speculators as HR Co Targets Are Desirable
- Horizon Robotics Placement – Momentum Is Strong but Raising Seems Opportunistic
- Toyota Industries (6201 JP): Thoughts on Intrinsic Value
- Virgin Australia (VGN AU): Touch & Go for Index Inclusion
- Kioxia IPO Lockup Expiry – US$6.7bn Release, with Shareholders Eager to Sell
- Preferred Shares of Five Major Korean Holdcos – Likely to Close the Gap Further With Common Shares
- CSI Hong Kong Connect Internet Index Rebalance: 10 Changes & Big Impact
- MINISO (9896 HK)’s (Possible) TOP TOY Spin-Off Is Priced In
- Foshan Haitian Flavouring A/H Listing – Strong Cornerstone, Weak Momentum
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.
[Japan M&A] Carlyle Deal for TRYT (9164) – Great Exit for Speculators as HR Co Targets Are Desirable
- In early February, articles suggesting the PE owner of TRYT (9164 JP) wanted to cash out. Performance post-IPO had been bad. Catching up to the IPO price would be tough.
- But a second round of bidding came about, so the stock went limit up. Then it settled in the ¥480 range for three weeks. Then started to climb.
- Now the company and its PE firm owner have announced a sale to a new PE Firm at ¥880/share. This is below IPO Price but it will get done.
Horizon Robotics Placement – Momentum Is Strong but Raising Seems Opportunistic
- Horizon Robotics (9660 HK) raised around US$800m in its Hong Kong IPO in October 2024. It’s back again to raise another US$600m via a placement.
- Horizon Robotics (HR) is a provider of advanced driver assistance systems (ADAS) and autonomous driving (AD) solutions for passenger vehicles, empowered by its proprietary software and hardware technologies.
- In this note we talk about the deal dynamics and run the deal through our ECM framework.
Toyota Industries (6201 JP): Thoughts on Intrinsic Value
- Several investors have sharply criticised Toyota Industries (6201 JP)’s preconditional tender offer from Toyota Fudosan. Oasis is pushing for a higher offer.
- The offer has several issues that are detrimental to minorities’ interests. The key grievance is that it is below TICO’s intrinsic value.
- Due to TICO’s varied business units, SoTP valuation is the most appropriate methodology. My analysis suggests a base case intrinsic value of around JPY19,000.
Virgin Australia (VGN AU): Touch & Go for Index Inclusion
- Virgin Australia Holdings (VGN AU) is looking to raise A$685m in a secondary offering, valuing the company at A$2.27bn. The stock is expected to start trading on 24 June.
- Bain Capital and management are escrowed on their shares till early 2026. There is no escrow for Qatar Airways, but they have indicated that their shareholding is strategic.
- Virgin Australia Holdings (VGN AU) could be added to the S&P/ASX 300 Index in September and there could be global index inclusions in November and December.
Kioxia IPO Lockup Expiry – US$6.7bn Release, with Shareholders Eager to Sell
- Kioxia Holdings (285A JP) raised around US$800m (including over-allocation) in its Japan IPO, after pricing its IPO in the middle of its range. Its IPO linked lockup will expire soon.
- Kioxia is a manufacturer and a global leader in flash memory and solid state drives for smartphones, PCs, enterprise servers and data centers.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
Preferred Shares of Five Major Korean Holdcos – Likely to Close the Gap Further With Common Shares
- In this insight, we discuss the preferred shares of five major holding companies and how the share price gap relative to their common counterparts could decrease.
- There is a relatively easy way to improve shareholder value of these holding companies which is to cancel the entire preferred shares that trade at discount to their common counterparts.
- The common shares of these five companies have experienced an average share price appreciation of 33.2% YTD versus 28.7% appreciation for their preferred shares counterparts.
CSI Hong Kong Connect Internet Index Rebalance: 10 Changes & Big Impact
- There are 5 constituent changes for the CSI Hong Kong Connect Internet Index in June. Plus there are capping changes for some stocks.
- A lot of the adds have moved significantly in the last couple of days, so the impact over the next couple of days will be smaller.
- There could be opportunities to trade the reversion strategy. Getting borrow may not be easy on some names.
MINISO (9896 HK)’s (Possible) TOP TOY Spin-Off Is Priced In
- Three months ago, local media reported that Chinese lifestyle retailer MINISO Group Holding (9896 HK) was considering spinning off its collectible toy unit TOP TOY on the Hong Kong exchange.
- Reportedly, MINISO could raise ~US$300mn from an IPO. MINISO has now confirmed that a spin-off is being contemplated; although a proposal is only at a preliminary stage.
- TOP TOY has been a growth engine. But its contribution to the group is still ~6%. Applying a holding company discount, post spin-off, MINISO’s upside appears limited.
Foshan Haitian Flavouring A/H Listing – Strong Cornerstone, Weak Momentum
- Foshan Haitian Flavouring & Food (603288 CH) (FHCC), China’s leading condiments company, aims to raise around US$1.2bn in its H-share listing.
- FHCC is China’s leading condiments company within its main product categories of soy sauce, oyster sauce, flavored sauce, specialty condiment products and other products.
- We have looked at the past performance and likely A/H premium in our previous note. In this note, we talk about the IPO pricing.
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