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Most Read: JD Logistics, Toshiba Corp, GS Retail, SF Real Estate Investment Trust, Samsung Electronics Pref Shares and more

In today’s briefing:

  • JD Logistics (京东物流) Pre-IPO – Thoughts on Valuation
  • TOPIX Inclusion Trade Summary: April 2021
  • GS Retail Merger Swap Arb Trade Begins This Monday
  • SF REIT Pre-IPO – One Trick Pony, Who’s Not Doing the Trick
  • Samsung Family Stake Change Filings: Ramifications for SamE 1P Discount

JD Logistics (京东物流) Pre-IPO – Thoughts on Valuation

By Zhen Zhou, Toh

JD Logistics (JDL HK) is looking to raise US$4bn in its upcoming Hong Kong IPO. 

JD Logistics (JDL) was the leading supply chain solutions and logistics services provider in China in terms of revenue in 2018 and 2019. The company offers a full spectrum of supply chain solutions and logistics services ranging from warehousing to distribution, spanning across manufacturing to end-customers, covering regular and specialized items. 

In this note, we will share our forecast and assumptions as well as thoughts on where JDL should trade.

We had previously covered the IPO in:


TOPIX Inclusion Trade Summary: April 2021

By Janaghan Jeyakumar, CFA

In January and February 2021 we saw a large wave of TSE1 Section Transfers as many small cap names rushed to get promoted before the new (and more stringent) Section Transfer Requirements were implemented (application deadline November 1, 2020). In contrast, not a single TSE1 Section Transfer was announced in the months of March and April 2021. 

However, during the month of April, we witnessed TSE’s Annual Liquidity Factor Review which caused dozens of stocks to enjoy Index Upweights during the April-end Inclusion Event collectively amount to an estimated upweight size of approximately US$1bn. 

Below is a look at the performance of the TOPIX-related event trades covered by Quiddity in the Pre-event, Live-event, and Post-event categories during the month of April 2021.  


GS Retail Merger Swap Arb Trade Begins This Monday

By Sanghyun Park

GS Retail merger swap with GS Home Shopping is still in progress. It is a stock swap. The GS Home Shopping shareholders will get 4.22368 GS Retail shares for each GS Home Shopping share.

Overview (₩B)
TypeStock swap
AcquirerGS Retail Co Ltd (007070)
Target companyGS Home Shopping Inc. (028150)
Swap price for GS Retail₩33,800
Swap price for GS Home Shopping₩142,762
Swap ratio4.2236834
Source: DART

May 28 is the big day to ger shareholder approval for the merger. Stock repurchase right exercise will proceed on May 28 to June 17.

Of course, it is only for those who purchased the shares before November 11 last year. But stock swap arb trade? Everyone can do it any time from now until the trade suspension begins June 29.

Timetable
Dissenting opinion notice5. 13 ~ 27
EGM5. 28
Stock purchase right exercise5. 28 ~ 6. 17
Trade suspension (GS Home Shopping)6. 29 ~ 7. 15
Listing7. 16
Source: DART

SF REIT Pre-IPO – One Trick Pony, Who’s Not Doing the Trick

By Sumeet Singh

SF Real Estate Investment Trust (SFREIT), a logistics-focused REIT, aims to raise around US$300m in its Hong Kong IPO. SF REIT is sponsored by SF Holdings, listed in Shenzhen.

At the time of listing, SFREIT will own three properties located in Hong Kong, Foshan and Wuhu, all of which are modern logistics properties. The assets have an aggregated gross lettable area of approximately 307,617.5 sqm with an appraised value of HK$6.1bn, as at Mar 2021. The average occupancy of the properties was 95.3%, with a weighted average age of 3.5 years and weighted average remaining land tenure of 37.9 years.


Samsung Family Stake Change Filings: Ramifications for SamE 1P Discount

By Sanghyun Park

We saw a series of filings by Samsung affiliates on the major shareholder stake changes due to the inheritance.

Here are the links to the regulatory filings at DART of the three companies:

Samsung said that the late chairman Lee Kun-hee didn’t leave any will. So, the inheritance went at a 1/3 (spouse) to 2/3/N (each child) ratio, except for Samsung Life Insurance under the family members’ mutual consent.

As for Samsung Life Insurance, the mother, Hong Ra-hee, gave up on her share. Instead, Lee Jae-yong got 1/2, and Lee Bu-jin (elder daughter) received 2/3/2. The youngest one, Lee Seo-hyun, took 1/3/2.

Samsung Electronics Co LtdBeforeAfter
Hong Ra-hee0.91%2.30%
Lee Jae-yong0.70%1.63%
Lee Bu-jin0.00%0.93%
Lee Seo-hyun0.00%0.93%
Source: DART
Samsung C&T CorpBeforeAfter
Hong Ra-hee0.00%0.97%
Lee Jae-yong17.48%18.13%
Lee Bu-jin5.60%6.24%
Lee Seo-hyun5.60%6.24%
Source: DART
Samsung Life Insurance co., LtdBeforeAfter
Lee Jae-yong0.06%10.44%
Lee Bu-jin0.00%6.92%
Lee Seo-hyun0.00%3.46%
Source: DART

As a result, we can safely say that the entire Samsung Group is under Lee Jae-yong’s firm control.

  • He single-handedly controls 18.13% of Samsung C&T, the de facto holding company.
  • He then owns 29.28% of Samsung Life Insurance, including C&T’s 19.34% stake in Life.
  • Lastly, he governs Samsung Electronics with a 15.15% stake, including Life’s 8.51% and C&T’s 5.01%.
Lee Jae-yong’s controlling stake
Samsung C&T Corp18.13%
Samsung Life Insurance co., Ltd29.78%
 – Including the stake owned by Samsung C&T19.34%
Samsung Electronics Co Ltd15.15%
 – Including the stake owned by Samsung C&T8.51%
 – Including the stake owned by Samsung Life Insurance5.01%
Source: DART

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