In today’s briefing:
- Link REIT (823) – Anchors Aweigh! Fair Weather Sailing Ahead
- Japan Post Bank (7182) – The Flow Calendar
- Toshiba (6502) – Funding Possibly Re-Secured, Deal Possibly In Play,
- KOSDAQ150 Ad Hoc Index Rebalance: Lake Materials (281740) To Replace Kuk Il Paper (078130)
- Anycolor (5032 JP) Shows Its Colours – Great Quarter Guys! and TOPIX-Bound
- CSI300 Index Rebalance Preview: Narrowing the Gap
- An Increasing Probability of LG Corp Preferred Shares Cancellation
- Pushpay: Large & “Sophisticated Shareholders” Back Pegasus’ Revised Offer
- Harita Nickel IPO – The Negatives – Reliant on JVs and with Lygend Group. Market Is About to Shift
- DPC Dash IPO – Might Be Worth a Small Slice
Link REIT (823) – Anchors Aweigh! Fair Weather Sailing Ahead
- The Link REIT (823 HK) rights offering caused some upset amongst investors. They got dilution where they did not need it, and de-leveraging from a REIT wanting to invest.
- The units fell in price, then fell some more. Then the rights started trading.
- Last week in Link REIT (823) – Nil Paid Rights Start Trading Tomorrow – The Trades I said strategy was to be long by Tuesday or Wednesday. It’s Wednesday.
Japan Post Bank (7182) – The Flow Calendar
- The near-term Supply/Demand Balance is helped or hurt – depending on how well the deal has been placed to retail, by overseas bank turmoil.
- Quality of placement to retail is tough to know from outside. We have near-term offsets with both index demand and dividend looming.
- The biggest near-term differentiator in possible supply/demand outcomes is, of course, in the hands of the TSE Index team. And we just don’t know.
Toshiba (6502) – Funding Possibly Re-Secured, Deal Possibly In Play,
- Bloomberg has an article today after the close saying Toshiba Corp (6502 JP)‘s board will meet tomorrow to discuss the JIP bid, and the Special Committee will give its recommendations.
- The article suggests the Board may proceed with a vote. If they do, an announced bid could come as early as the afternoon.
- The world is quite volatile now, and funding is probably more precious today than yesterday. But a bid is too. All in all, I see no reason for a position.
KOSDAQ150 Ad Hoc Index Rebalance: Lake Materials (281740) To Replace Kuk Il Paper (078130)
- Following Kuk Il Paper Mfg (078130 KS)‘s designation as an Administrative Issue, the stock will be deleted from the KOSDAQ 150 Index and replaced with Lake Materials (281740 KS).
- The timing of the index change is currently uncertain but will be implemented latest by the close of trading on 6 April.
- Lake Materials (281740 KS) was up today and is nearing its highs. There could be another leg higher on the inclusion but we’d be wary of chasing the stock higher.
Anycolor (5032 JP) Shows Its Colours – Great Quarter Guys! and TOPIX-Bound
- Anycolor (5032 JP) reported Q3 results today. 9mo Revenue is now above the lower end of original forecasts for the full-year. 9mo OP is 25% higher than the original mid-range.
- The net profit forecast is now up 51% from the original mid-range, and up 128% on the year. The stock has cratered. Badly.
- It is now 19x April 2023 earnings for 90% revenue growth and 150% Net Profit growth and 40% OPM in the last quarter. Go figure.
CSI300 Index Rebalance Preview: Narrowing the Gap
- Over 85% of the way through the review period, we see 14 potential index changes at the June rebalance that will be implemented at the close on 9 June.
- We estimate a one-way turnover of 2.28% at the June rebalance leading to a one-way trade of CNY 5.95bn.
- The potential adds have outperformed the CSI 300 Index over the last two months but have underperformed the potential deletes. The gap has been narrowing recently.
An Increasing Probability of LG Corp Preferred Shares Cancellation
- In this insight, we discuss an increasing probability of the cancellation of LG Corp preferred shares.
- We provide five major reasons as to why LG Corp should cancel its entire preferred shares and how this could have a positive impact on LG Corp’s share price.
- We believe a 5-10% buyback and cancellation of LG Corp’s preferred shares in the next 1-2 years is a higher probability.
Pushpay: Large & “Sophisticated Shareholders” Back Pegasus’ Revised Offer
- Aussie PE outfit BGH Capital and consortium partner Sixth Street have increased their offer for NZ church donations group Pushpay Holdings (PPH NZ), gaining the support of its major shareholders.
- The consortium, Pegasus Bidco, will pay $NZ1.42/share, an 6% increase over the previous Offer which failed to muster investor support at the 3 March Scheme Meeting.
- The revised Offer is around the mid-point of the independent expert’s assessed valuation range of $NZ1.33 to $NZ1.53/share.
Harita Nickel IPO – The Negatives – Reliant on JVs and with Lygend Group. Market Is About to Shift
- PT Trimegah Bangun Persada Tbk (Harita Nickel) (2230010D IJ) is looking to raise about US$650m in its Indonesian IPO.
- PT Trimegah Bangun Persada Tbk (Harita Nickel, HN) is a vertically integrated pure-play nickel company operating on Obi Island, Indonesia.
- In this note, we will talk about the not so positive aspects of the deal.
DPC Dash IPO – Might Be Worth a Small Slice
- DPC Dash (1405 HK) is now looking to raise up to US$90m, after having shelved its last attempt to raise around US$75m in its Hong Kong IPO in December.
- The company is the exclusive master franchisee for Domino’s Pizza in China, HK and Macau. DPC operated 604 stores across 17 cities, as of Feb 2023.
- In this note, we run the deal through our ECM framework and talk about valuations.
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