In today’s briefing:
- HSBC (5 HK)’s Clean Offer for Hang Seng (11 HK)’s Minorities
- Vietnam: Global Index Inclusion & Passive Flows
- [Japan M&A/Activism] Soft99 Board Rebuts Effissimo’s Rebuttal. Still An Awful “Fiduciary” Response
- FineToday Holdings (420A JP) IPO: The Investment Case
- Hang Seng Bank (11 HK): HSBC (5 HK)’s Scheme Privatisation Is a Done Deal
- Quiddity Leaderboard Hang Seng Index Dec25: BeOne, Innovent, & Other Potential Surprises
- Asian Equities: A Few Singapore Small and Mid-Cap Jewels
- Quiddity Leaderboard HSCEI Dec25: Final Ranks; Three ADDs/DELs Likely
- UK: Poor Productivity Paradigms
- Maynilad Water Services IPO – Recent Updates, Peer Comparison and Thoughts on Valuation
HSBC (5 HK)’s Clean Offer for Hang Seng (11 HK)’s Minorities
- Hang Seng Bank (11 HK) has announced an Offer from controlling parent (63.3551%), HSBC Holdings (5 HK), by way of a Scheme, in a HK$106bn (US$13.6bn) deal.
- The Scheme Consideration is HK$155/share, a 30.3% premium to last close. The price is final. A “third interim dividend” will be added. Optically, the price is bang on.
- The long stop for conditions is the 30th September 2026. I think this transaction can be wrapped up in around five months.
Vietnam: Global Index Inclusion & Passive Flows
- After years of being on the watchlist, Vietnam will be added to a global index in September 2026 as long as progress is made on one key issue.
- The final decision will be made in March 2026, and the implementation of the inclusion will take place in phases.
- We currently see 21 stocks meeting the inclusion criteria. There are others that are close to the inclusion thresholds, and the list will change over the next few months.
[Japan M&A/Activism] Soft99 Board Rebuts Effissimo’s Rebuttal. Still An Awful “Fiduciary” Response
- Today after the close, Soft99 Corp (4464 JP)‘s Board issued a statement on “Our View” of Effissimo’s “Our View” Press Release. It’s bad.
- But it points out the “weaknesses” that Effissimo’s Tender Offer Press Release had as it concerns a counterbid. And that tells you how Effissimo should amend their Tender Offer docs.
- Soft99 Board’s response is interesting. It asks Effissimo to not be coercive (i.e. bid for 50%+) in response to the MBO Bid’s coerciveness. Not a winning argument but not impossible.
FineToday Holdings (420A JP) IPO: The Investment Case
- FineToday Holdings Co Ltd (289A JP), a Japanese personal care business, is seeking to raise US$286 million. It previously pulled an IPO to raise US$500 million in December 2024.
- FineToday has four product categories: Hair care, Skin care, Body care and others. Hair care is the largest category, accounting for 49.0% of 1H25 revenue.
- The investment case rests on top-tier revenue growth, top-quartile profitability, peer-leading FCF generation and manageable leverage.
Hang Seng Bank (11 HK): HSBC (5 HK)’s Scheme Privatisation Is a Done Deal
- Hang Seng Bank (11 HK) announced a scheme privatisation offer from HSBC Holdings (5 HK) at HK$155, a 30.3% premium to the undisturbed price.
- Based on an estimated 2025 third dividend of HK$1.3 per share, the total consideration is HK$156.30 per share. The offer price is final.
- The offer is attractive compared to peer multiples and historical trading ranges. At the current price and for a late March payment, the gross/annualised spread is 2.9%/6.2%.
Quiddity Leaderboard Hang Seng Index Dec25: BeOne, Innovent, & Other Potential Surprises
- The Hang Seng Index is the benchmark index for Hong Kong stocks. It follows a highly-subjective selection process which makes it difficult to predict index changes.
- In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes during the next review in December 2025.
- The index changes are expected to be confirmed on 21st November 2025.
Asian Equities: A Few Singapore Small and Mid-Cap Jewels
- Singapore’s stellar performance has been propelled primarily by large caps. We think investors should focus on SMID now, as MAS’s S$5bn EQDP incentivizes fund managers to look outside index stocks.
- We screen SMID stocks in SGX with above-market forecast earnings growth, EPS estimate upgrades over past 6 months, low leverage and reasonable growth adjusted valuations (PEG<1.4x).
- Eight SMID stocks come up on our screen, spread across various sectors, but tilted towards Energy and Minerals and Mining. Most are net cash companies with ROEs higher than COEs.
Quiddity Leaderboard HSCEI Dec25: Final Ranks; Three ADDs/DELs Likely
- The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
- In this insight, we take a look at the potential index changes and capping flows for HSCEI index rebal event in December 2025.
- We expect three ADDs and three DELs for December 2025. We also estimate there to be US$303mn in one-way flows.
UK: Poor Productivity Paradigms
- The OBR looks likely to trim its productivity trend assumption to 1%, which would still be a bullish break from the current stagnation. Trends rarely break outside recessions.
- High taxes are squeezing the most productive and being transferred to the inactive. It should not be surprising that the UK’s political choices have stalled productivity.
- We see no reason to think the UK will pull off an internationally exceptional jobs-light boom from here. Ongoing stagnation would extend the UK’s rule for fiscal slippage.
Maynilad Water Services IPO – Recent Updates, Peer Comparison and Thoughts on Valuation
- Maynilad Water Services (MYNLD PH) (MWS) is looking to raise around US$450m in its upcoming Philippines IPO.
- MWS is a leading global water utility player operating the largest concession by population served within a single concession area in the Philippines and Southeast Asia (SEA), as per GlobalData.
- We have looked at the past performance in our previous note. In this note, we talk about the IPO pricing
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