In today’s briefing:
- Nikkei 225 Index Rebalance: 🚨Ibiden (4062 JP) To Replace Nidec (6594 JP) 🚨
- Tsuruha (3391 JP)/Welcia (3141 JP): Index Promotion & Passive Flows Likely Priced In
- [Japan Special] Ibiden (4062) Replaces Nidec (6594) In Nikkei 225 on Accounting – A VERY BIG DEAL
- Solactive Global Lithium Index Rebalance: Two Adds and Capping Changes
- Seres (9927 HK): Index Inclusion Timeline for a Max Offering of US$2.2bn; Big Discount to A-Shares
- [Japan Offering] Kasumigaseki Capital (3498 JP) – BIG Primary for Big Plans
- [Japan M&A/Activism] Ashimori Industry (3526 JP) Minimum Lower, May Be a Tough Call
- Lenskart IPO: Earliest Index Inclusion in June
- LG Chem (051910 KS): Palliser Targets Steep NAV Discount
- Running Through the Context Behind Chatter of HMC Rolling Out a Pref‑tilted First‑leg Buyback
Nikkei 225 Index Rebalance: 🚨Ibiden (4062 JP) To Replace Nidec (6594 JP) 🚨
- The JPX has designated Nidec Corp (6594 JP) as a ‘Security on Special Alert’ due to a disclaimer of opinion in the annual report (among other issues).
- Nikkei has announced the deletion of Nidec Corp (6594 JP) from the Nikkei 225 (NKY INDEX). Ibiden Co Ltd (4062 JP) will be added to the index.
- Nidec Corp (6594 JP) should also be deleted from the TSE Tokyo Price Index TOPIX (TPX INDEX). Both index deletions should take the stock a lot lower from here.
Tsuruha (3391 JP)/Welcia (3141 JP): Index Promotion & Passive Flows Likely Priced In
- Tsuruha Holdings (3391 JP) acquires Welcia Holdings (3141 JP) in just over 4 weeks. Aeon Co Ltd (8267 JP)‘s tender offer for Tsuruha Holdings (3391 JP) could commence in December/January.
- The enlarged Tsuruha Holdings (3391 JP) could migrate upward in the MGlobal Index and that will bring in large passive flows. But there is one thing to watch out for.
- Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) have outperformed peers over the last 6 months and now trade at a higher forward PE.
[Japan Special] Ibiden (4062) Replaces Nidec (6594) In Nikkei 225 on Accounting – A VERY BIG DEAL
- In June, Nidec Corp (6594 JP) announced they would delay the release of their yuho for three months because of an internal investigation into NIDEC FIR INTERNATIONAL (Italy).
- In September they launched a special committee. Shares fell 22%. Last Thursday, the company cancelled its interim dividend. Today, the JPX designated Nidec as Security on Special Alert.
- This is a VERY BIG DEAL. Nikkei225 deletes Nidec 5-Nov-2025, replaced by Ibiden Co Ltd (4062 JP) (PAF 1.0x). Designation also triggers TOPIX deletion for Nidec, likely on 30 October.
Solactive Global Lithium Index Rebalance: Two Adds and Capping Changes
- Solactive has announced the review results for the Global Lithium Index. There are two additions for the index and there will also be capping changes for some stocks.
- Estimated one-way turnover is 26.3% and will result in a round-trip trade of US$813m. There are some stocks with over 0.5x ADV to trade.
- The index has broken out of the secular downtrend, but investors continue to redeem units from the ETFs tracking the index.
Seres (9927 HK): Index Inclusion Timeline for a Max Offering of US$2.2bn; Big Discount to A-Shares
- Seres Group (601127 CH) could raise up to HK$17.4bn (US$2.24bn) in its H-share listing if the Offer Size Adjustment Option and the Overallotment Option are both exercised.
- There is a big allocation to cornerstone investors that is locked up for 6 months. That eliminates the already small possibility of Fast Entry inclusion to global indexes.
- Seres (9927 HK) should be added to Southbound Stock Connect from the open of trading on 1 December following the end of the Price Stabilisation period.
[Japan Offering] Kasumigaseki Capital (3498 JP) – BIG Primary for Big Plans
- On Friday, Kasumigaseki Capital (3498 JP) announced Aug-25 earnings and a combination ¥45-50bn primary+secondary offering worth 5.3mm shares, 6x ADV, and a float increase of 37%. Shares fell 15% today.
- 2yrs ago they did a large offering. It went well. They’d had a ridiculous plan to grow OP 6x from ¥3.5bn to ¥20bn in 2yrs to Aug-26. Then by Aug-25.
- They got to ¥8.5bn in Aug-24 and now ¥18.9bn in Aug-25 and now guide to ¥26.5bn in Aug-26 (the original plan having been ¥20bn).
[Japan M&A/Activism] Ashimori Industry (3526 JP) Minimum Lower, May Be a Tough Call
- In August, Toyoda Gosei (7282 JP) announced a deal for Ashimori Industry (3526 JP) at 1.000x book value after writedowns. That was not a coincidence.
- The takeover is cheap for what it is. No synergies were counted. But it wasn’t truly offensive. MURAKAMI Takateru aimed an activist broadside, bought 19.73% across four entities. Then stopped.
- The Bidder lowered the Tender Offer Minimum from 2.3081mm shares (38.29%) to 1.8001mm shares (29.86%). Shares dropped. As of 24-Sep, 2,111,226 shares had been tendered. This looks done. Maybe.
Lenskart IPO: Earliest Index Inclusion in June
- Lenskart Solutions (0370405Z IN) is looking to list on the exchanges by selling 181.05m shares via a primary and secondary offering to raise US$829m at a valuation of US$7.95bn.
- The price band has been set at INR 382-402/share, and the issue is likely to price at the top end of the range.
- The stock will not get Fast Entry to global indices. Inclusion at regular rebalances will commence in June 2026 but flow will be small given the low float.
LG Chem (051910 KS): Palliser Targets Steep NAV Discount
- Last week, London-based activist Palliser Capital tapped LG Chem (051910 KS) to remedy its NAV market discount. Palliser also said it now holds a little over 1% in LG Chem.
- LG Chem’s large NAV discount is well known. It has been present since ~82%-held LG Energy Solution (373220 KS) (LGES) was listed in January 2022.
- An obvious solution is to pare down the LGES stake, and buy back shares. Yet the discount remains as the market views management as being (stubbornly) set in their ways.
Running Through the Context Behind Chatter of HMC Rolling Out a Pref‑tilted First‑leg Buyback
- HMC buyback ~₩0.8–1.0tn (~1.5% SO). Street focus is ord/pref split, with prefs at ~25% discount. Mgmt urgency: lift equity value as K‑market rallies.
- Narrowing the pref gap seen as the cleanest lever—shareholder‑friendly signal, draws real money/offshore flows, de‑risks policy optics—so locals expect the first buyback leg skewed to prefs.
- Street sees HMC aiming mid‑teens pref discount via year‑end pref‑heavy buyback and dividend tax reform. Catalysts make narrowing trend look achievable.
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