In today’s briefing:
- JAPAN PASSIVE: Who Owns What 2023?
- Early HPSP Positioning Ahead of TIGER Semis Top 10 Oct Rebalance
- Regarding Next Monday’s SOL AI Semis TOP 2 Plus Rebalance
- This Week in APAC ECM (Oct 4-10): Firmus Pulls ASX IPO; Moonshot Eyes USD 5bn; Jio Sets Price Band
- October 7 MTD Reply: A Paradoxical Setup for Hynix
- Weekly Deals Digest (11 Oct) – Taiyo, Arclands, BASE, PHC, Haitong Unitrust, Cleanaway, Ingenia/Peet
- BASE (4477 JP): Maki-San Forces SBI’s Hand, but the Upside Is Largely Priced In
- Transsion Holdings H Share Listing (2636 HK): Valuation Insights
- Merger Arb Mondays (12 Oct) – Skyworth, Z Fin, OFX, Ingenia/Peet, Cleanaway, Reliance, Kakaku
- Jio Platforms IPO: Index Entry Timeline & Flow for India’s (Possibly) Largest IPO
JAPAN PASSIVE: Who Owns What 2023?
- The 2023 Version of JAPAN PASSIVE: Who Owns What? where we break down the major (and minor) passive tracking indices and which category of investor owns how much of each.
- Even if you do not “play” index changes, understanding impact is important. Advantest is up 100% in 3mos. Existing passive ownership and new passive buying were crucial to that performance.
- Understanding the nature of the ownership and flows is crucial to understanding how to trade certain stocks in Japan.
Early HPSP Positioning Ahead of TIGER Semis Top 10 Oct Rebalance
- FnGuide confirms October’s TIGER Semiconductor Top 10 rebalance is on schedule, with HPSP already moving into the top 10, ahead of DB HiTek by over KRW 0.2tn in market cap.
- With top three accounting for 75%, the remaining 25% is still a sizeable passive pool, with HPSP seeing 5.7% of SO, 7.3% of float and 4x DTV in rebalance flow.
- Local semis sentiment is weak, but local institutions, especially hedgies, are building HPSP exposure, driving outperformance and supporting an early long entry with sector beta hedged short.
Regarding Next Monday’s SOL AI Semis TOP 2 Plus Rebalance
- Jusung and Hanmi Semiconductor remain mcap Top 4, but weak momentum Z scores keep both low probability inclusion candidates for Monday’s 0167A0 rebalance.
- Samsung and Hynix stay Top 2; Samsung E-M, Square, Isu and Daeduck hold Top 4. TES stays, with Simmtech, Fadu and Hana Micron likely replacing PSK, VM and Wonik IPS.
- Simmtech is the strongest inclusion candidate, with ~KRW 200bn passive inflow, over 4% of float and ~1x recent DTV, making it a key name to watch Monday.
This Week in APAC ECM (Oct 4-10): Firmus Pulls ASX IPO; Moonshot Eyes USD 5bn; Jio Sets Price Band
- Firmus pulled its USD 5.5bn ASX IPO. AS Watson’s USD 30bn dual listing was reportedly delayed to 2027, and Moonshot reportedly eyes an HK IPO of up to USD 5bn.
- ESWIN, the week’s only HK listing, raised USD 319m and fell 1.0% on day one. Eight listings in the past month have a median return of -2.5% since IPO.
- On HKEX, one company filed an AP and three posted PHIPs. Transsion’s USD 428m A+H IPO lists on 15 Oct.
October 7 MTD Reply: A Paradoxical Setup for Hynix
- The MTD Reply may help Hynix secure dismissal, but its arguments on quarterly pricing upside and HBM’s outsized margins could reinforce peak out concerns and increase antitrust risk.
- Chey appears to be pushing back against HBM peak out concerns by accelerating capex and reinforcing management’s confidence in sustained HBM and AI demand.
- Hynix may accelerate ADR expansion ahead of the Solidigm IPO, using deeper US market ties as a shield against regulatory risk.
Weekly Deals Digest (11 Oct) – Taiyo, Arclands, BASE, PHC, Haitong Unitrust, Cleanaway, Ingenia/Peet
- A weekly summary of key developments in ECM and Event-Driven names that I track in Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India, and Chinese ADRs.
- ECM developments: Shenzhen Transsion Holdings (2636 HK), Jio Platforms Ltd (1797135D IN) and GCash (Mynt) (GCASH PM) listings.
- Event-Driven developments: Taiyo Holdings (4626 JP), Arclands Corporation (9842 JP), BASE Inc (4477 JP), PHC Holdings (6523 JP), Haitong Unitrust International Financial Leasing (1905 HK), Cleanaway Waste Management (CWY AU).
BASE (4477 JP): Maki-San Forces SBI’s Hand, but the Upside Is Largely Priced In
- Maki-San likely holds around 28% of BASE Inc (4477 JP), targets over 30% via tender and no longer backs SBI. With shares 17% above terms, SBI cannot succeed at JPY340.
- SBI likely needs JPY420–440 to beat a potential Maki tender. A token bump won’t work, so a small fill or walk-away may make more economic sense.
- At the last close (JPY399), the risk/reward is unattractive. Based on a scenario analysis of the estimated prorated value, the upside is about 6% against a 12–20% downside.
Transsion Holdings H Share Listing (2636 HK): Valuation Insights
- Shenzhen Transsion Holdings (2636 HK), Africa’s largest smartphone seller, is seeking to raise up to US$429 million at an H Share offer price range of HK$35.30-HK$38.80.
- I discussed the H Share listing in Transsion Holdings H Share Listing: The Investment Case.
- While I have concerns around the fundamentals, the proposed AH discount is attractive on several fronts.
Merger Arb Mondays (12 Oct) – Skyworth, Z Fin, OFX, Ingenia/Peet, Cleanaway, Reliance, Kakaku
- I summarise the latest spreads and newsflow for the merger arb situations covered across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, the Philippines, Thailand, and Chinese ADRs.
- Highest spreads: Skyworth (751 HK), OFX Group (OFX AU), Peet Ltd (PPC AU), Atlantic Lithium (A11 AU), Z Fin (1168 HK), Xin Yuan Enterprises (1748 HK), EQT Holdings (EQT AU).
- Lowest spreads: Kadoya Sesame Mills (2612 JP), Kakaku.com Inc (2371 JP), FleetPartners Group (FPR AU), Taiyo Holdings (4626 JP), Accent Group (AX1 AU), Gunma Bank (8334 JP).
Jio Platforms IPO: Index Entry Timeline & Flow for India’s (Possibly) Largest IPO
- Jio Platforms is looking to list later this month by selling 270m shares at up to INR 1119/share, raising INR 302bn (US$3.1bn) and valuing the company at INR 10,305bn (US$106.5bn).
- The small float (2.93% of shares out) will result in the stock missing Fast Entry to global indices. The pre-IPO lock-up expiry in April could result in global index inclusion.
- Jio Platforms Ltd (1797135D IN) will be added to some local indices in March, though inclusion in the headline indices will need to wait till at least June.
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