In today’s briefing:
- CATL H Share Listing: AH Discount Views
- ShinKong (2888 TT)/Taishin (2887 TT) – Time To Deal Is Shorter, But Risk To Peers Is Higher
- CATL: Launch of Book Building for Hong Kong Listing
- Quiddity Leaderboard CSI 300/500 Jun25: Momentum Turning Positive for This Major Rebal Trade
- Hang Seng Indexes: ADR Depositary Holding Changes; Round-Trip Trade Is US$5.1bn; NetEase Outperforms
- Gold Road Enters Scheme With Gold Fields
- Rare Arb Opportunity from ATS Breakout in Korea: Day-Night Spread
- Quiddity Leaderboard TDIV Jun25: US$2.5bn One-Way; Several High-Impact Flow Names
- MongoDB (MDB US): Fast-Exit from Nasdaq100 in May 2025
- Gold Road (GOR AU): Gold Fields (GFI SJ) Attractive Scheme Offer
CATL H Share Listing: AH Discount Views
- Contemporary Amperex Technology (CATL) (300750 CH), the world’s largest supplier of EV and ESS batteries, is set to launch an H Share listing to raise US$5 billion.
- In CATL H Share Listing: The Investment Case, a leading market position, forecasted return to growth, peer-leading profitability, cash generation, peer-leading FCF margin and an attractive valuation are highlighted.
- In this note, I examine the likely discount CATL will offer its H Shares compared to the A Shares.
ShinKong (2888 TT)/Taishin (2887 TT) – Time To Deal Is Shorter, But Risk To Peers Is Higher
- The last couple of days have seen the TWD increase value against the USD extremely sharply. This has caused the Shin Kong/Taishin risk arb spread to widen.
- There is no expectation that the merger will be delayed, but the change in USDTWD rate introduces a new dynamic into the ShinKong-as-Taishin-vs Peers trade.
- Careful consideration of this trade going forward is worthwhile. What may have been the better trade may no longer be the better trade.
CATL: Launch of Book Building for Hong Kong Listing
- According to Reuters, CATL plans to launch its Hong Kong listing process including book building during the week of 12 May.
- We estimate CATL to generate revenue of 423.6 billion RMB (up 17% YoY) and net profit of 55.6 billion RMB (up 13.1% YoY) in 2025.
- Our base case valuation of CATL is implied market cap of 1.3 trillion CNY which is 32% higher than current market cap. We believe CATL’s shares are undervalued.
Quiddity Leaderboard CSI 300/500 Jun25: Momentum Turning Positive for This Major Rebal Trade
- CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500 names.
- In this insight, we have presented our final expectations for ADDs and DELs for the upcoming semiannual index rebal event in June 2025.
- We expect 6 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index during this index review based on the latest available data.
Hang Seng Indexes: ADR Depositary Holding Changes; Round-Trip Trade Is US$5.1bn; NetEase Outperforms
- Most Secondary-listed companies have announced the number of shares that underlie ADRs and are held by the ADR depositaries as of end-March (or around that time).
- There are some significant increases in the number of shares held by the ADR depositaries. That changes the free float for the stocks and consequently the estimated flows.
- NetEase (9999 HK), Trip.com Group (9961 HK), Baidu (9888 HK) and Weibo (9898 HK) will have passives buying, while NIO (9866 HK) switches to a sell.
Gold Road Enters Scheme With Gold Fields
- Back on the 24th March, Gold Road (GOR AU) rejected an unsolicited offer from Gold Fields (GFI SJ) of $2.27/share cash plus GOR’s effective interest in De Grey Mining (DEG AU).
- GFI has now bumped the cash terms to $2.52/share or an all-in price of ~A$3.40/share, a 43% premium to undisturbed. This includes a A$0.35/share fully franked dividend (if paid).
- Conditions include the standard Scheme vote plus FIRB. 7.5% of shares out are supportive. Implementation is expected in October 2025.
Rare Arb Opportunity from ATS Breakout in Korea: Day-Night Spread
- Local traders are targeting the spread between day and NXT’s after-hours, a classic arb play similar to what Japanese instos used when ATS first launched, now emerging in Korea.
- The gap persists because institutional flow on NXT is still minimal, with recent data showing instos accounting for just 1-2% of total turnover.
- NXT’s night session is seeing heavy retail flow, providing instos with the liquidity to trade. This creates a rare opportunity to capitalize on early inefficiencies before others catch on.
Quiddity Leaderboard TDIV Jun25: US$2.5bn One-Way; Several High-Impact Flow Names
- The TDIV index tracks the top 50 names in the Taiwan Stock Exchange with the highest dividend yields. It is a yield-weighted index with unique capping rules.
- In this insight, we take look at Quiddity’s expectations for index changes and capping flows for the TDIV Index for the June 2025 index rebal event.
- We expect five changes for the TDIV index and there could be index flows of US$2.5bn one-way due to capping.
MongoDB (MDB US): Fast-Exit from Nasdaq100 in May 2025
- MongoDB (MDB US) is forecasted to be deleted from Nasdaq100 on 16 May due to an index weighting of lower than 0.1% on the last day of March and April.
- Shopify (SHOP US) is the forecasted replacement. The company became eligible following its listing transfer from NYSE to Nasdaq on 31 March.
- Alnylam Pharmaceuticals (ALNY US) and eBay Inc (EBAY US) are the main addition candidates for the acquisition of Ansys Inc (ANSS US) by mid-2025 and the December 2025 review.
Gold Road (GOR AU): Gold Fields (GFI SJ) Attractive Scheme Offer
- Gold Road Resources (GOR AU) has entered a scheme with Gold Fields Ltd (GFI SJ). The consideration is A$2.52 cash + value per share of Northern Star Resources (NST AU) stake.
- The proposal is a logical consolidation to eliminate dissynergies between the JV partners. The offer is attractive compared to peer multiples, precedent transactions and historical trading ranges.
- The vote is low-risk, with irrevocables representing 7.51% of the outstanding shares. At the last close and for an early October payment, the gross/annualised spread was 4.1%/10.0%.
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