In today’s briefing:
- POSCO Future M: A Rights Offering Capital Raise of 1.1 Trillion Won
- HSTECH Index Rebalance Preview: BYD (1211 HK) Could Replace China Literature (772 HK); Huge Trade
- CATL (3750 HK) H-Share IPO: Fast Entry to Global Indices Is Touch & Go
- Canvest (1381 HK): Buy Here, And On Weakness
- STAR50/STAR100 Index Rebalance Preview: Strong Outperformance for STAR50 Changes
- Mayne Pharma (MYX AU): MAC Musings
- [Japan Activism] Murakami Owns ~42% and Company Announces 31.3% Buyback
- [Japan Buyback] Sankyo (6417) – Starts Buying Bigly. Again. Re-Levered It Has A Super-High ROE
- CATL A/H Listing – More like ADR Secondary Listing than an A/H Listing – Performance & Subscription
- GENDA Placement – Good Track Record & Sort off Well Flagged but Relatively Large
POSCO Future M: A Rights Offering Capital Raise of 1.1 Trillion Won
- Posco Future M (003670 KS) announced today that it plans to complete a rights offering capital raise of 1.1 trillion won.
- The capital raise will involve 11.483 million new shares, representing 14.8% of current outstanding shares. The expected rights offering price is 95,800 won, which is 15.8% lower than current price.
- We have a Negative view on POSCO Future M and this capital raise, which is likely to have a negative impact on its shares due to the dilution risk.
HSTECH Index Rebalance Preview: BYD (1211 HK) Could Replace China Literature (772 HK); Huge Trade
- The review period for the June rebalance of the HSTECH INDEX ended on 31 March, the changes will be announced on 16 May and implemented on 6 June.
- Following the launch of the God’s Eye ADAS, BYD (1211 HK) could become eligible for index inclusion after meeting the Autonomous theme and Innovation screening.
- The inclusion of BYD (1211 HK) in the index could result in China Literature (772 HK) being deleted from the index in June.
CATL (3750 HK) H-Share IPO: Fast Entry to Global Indices Is Touch & Go
- Contemporary Amperex Technology (CATL) (300750 CH) could raise up to US$5.1bn in its H-share listing if the Offer Size Adjustment Option and the Overallotment Option are both exercised.
- There is a huge allocation to cornerstone investors that is locked up for 6 months. That significantly reduces float and the probability of Fast Entry inclusion to global indexes.
- CATL (3750 HK) will be added to Southbound Stock Connect from the open of trading on 16 June following the end of the Price Stabilisation period.
Canvest (1381 HK): Buy Here, And On Weakness
- Ahead of the 12th May shareholder to vote on Grandblue’s Offer, recent price action in Canvest (1381 HK) has been odd, with considerable selling volume.
- By all accounts, a chunk of that selling was brought about by an event desk in Singapore shutting down. Elsewhere, via numerous inquiries, I see nothing deal specific.
- In recent positive developments, AEP (3.62% of shares out) is supportive; there are no material updates in s329 announcements; and I see nothing of note when inspecting the shareholder register.
STAR50/STAR100 Index Rebalance Preview: Strong Outperformance for STAR50 Changes
- With the review period complete, we forecast 1 change for the SSE STAR50 (STAR50 INDEX) and 4 changes for the STAR100 Index in June.
- We estimate turnover of 2.26% for the SSE STAR50 (STAR50 INDEX) and 5.05% for the STAR100 Index. The estimated round-trip trade is CNY 8.1bn (US$1.11bn).
- There are multiple stocks that are forecast adds or deletes for other indices and the passive flows will be a lot larger than just for the STAR50/STAR100 indices.
Mayne Pharma (MYX AU): MAC Musings
- Back on the 21st Feb 2025, Mayne Pharma (MYX AU), a leader in dermatology and women’s health, entered into a Scheme with US-based pharmaceutical outfit, Cosette Pharmaceuticals, at A$7.40/share.
- The transaction is progressing – the HSR Act condition was satisfied last week. A Scheme Booklet should be issued shortly, with an expected vote mid-June and late-June/early-July implementation.
- Shares declined 3.1% yesterday over concerns a MAC could be triggered on the back of the Trump’s executive order on pharma. The impact is likely mixed, but leans neutral.
[Japan Activism] Murakami Owns ~42% and Company Announces 31.3% Buyback
- With earnings today (which beat guidance), Mitsui Matsushima (1518 JP) announced upbeat guidance for next year, a very large dividend hike from ¥130/share to ¥230/share, and a Very Large Buyback.
- The buyback is ¥20bn (vs ¥47bn market cap) or 3.5mm shares (31.3%). It starts 2 June. Astute Murakami trackers may recognise the potential pattern here.
- If the company buys back all 3.5mm shares at just below book, EPS of ¥756 = 12.9% ROE and PER of 7.8x. Even up 30% from here that isn’t super-rich.
[Japan Buyback] Sankyo (6417) – Starts Buying Bigly. Again. Re-Levered It Has A Super-High ROE
- On 12 May 2025, Sankyo Co Ltd (6417 JP) announced earnings (Revenue -3.7%yoy, OP +1.5%, Net Profit +0.4%) with guidance for March 2026 showing Revs, OP, and NP all falling.
- OP and NP would fall 14.4% and 18.5% respectively. The dividend is expected to fall ¥10 to ¥90/share which would be a 41.6% payout ratio.
- The company also announced a BIG BUYBACK – Up to ¥60bn buying up to 30.0mm shares (13.66%), starting today and going through 31 March 2026.
CATL A/H Listing – More like ADR Secondary Listing than an A/H Listing – Performance & Subscription
- Contemporary Amperex Technology (CATL) (300750 CH) , one of the world’s largest battery solutions providers, aims to raise around US$4bn in its H-share listing.
- CATL is the global leader in new energy vehicle battery solutions, in China and globally, as per SNE Research. Its A-shares have been listed since 2018.
- In this note, we talk about the IPO pricing and how it compares to some of the past listings.
GENDA Placement – Good Track Record & Sort off Well Flagged but Relatively Large
- GENDA (9166 JP), along with a selling shareholder, is looking to raise around US$190m to partly fund its M&A.
- Genda develops and operates amusement facilities in Japan, primarily operating under its Genda GiGO Entertainment subsidiary.
- In this note, we will talk about the placement and run the deal through our ECM framework.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Analytics and News
- ✓ Events & Webinars
