In today’s briefing:
- The October TOPIX FFW Review and Shinsei Bank (8303)’s Future Float
- Bilibili (9626 HK): Implications of Dual Primary Listing
- Accenture Japan Bids a 120% Premium for Datascience Company ALBERT (3906)
- KOSPI 200 Rebalancing: Recent Changes in the Race
- CALB IPO: First Day Trading Strategy Amid Market Turmoil
- Softbank Group – Vision Fund Losses Accelerate into Quarter End
- (Mostly) Asia M&A: September 2022 Roundup
- Indian Energy Exchange (IEX IN): Immense Value at Current Levels
- End of Mandatory Lock-Up Periods for 42 Companies in Korea in October 2022
- Lionheart Studio IPO Preview
The October TOPIX FFW Review and Shinsei Bank (8303)’s Future Float
- This is a hybrid insight on the upcoming TOPIX FFW Review to be announced 7 October, and the situation around Shinsei Bank (8303 JP).
- Shinsei Bank is in “limbo” post control-acquisition by SBI Holdings (8473 JP) and an attempt to go over 50% should be in the works. When is not known.
- The TOPIX FFW Review should see ¥2.0-2.2trln of one-way flow, and amongst that flow, a large sell on Shinsei to increase Real World Float by 60+% and 25d of ADV.
Bilibili (9626 HK): Implications of Dual Primary Listing
- Earlier today, Bilibili (9626 HK) announced the voluntary conversion of its Secondary Listing on the HKEX (388 HK) to a Dual Primary Listing effective 3 October.
- Though the timing is tricky, this could result in the stock not being deleted from the Hang Seng China Enterprises Index (HSCEI INDEX) at the December rebalance.
- This could also lead to inflows at the December rebalance from Hang Seng China Enterprises Index (HSCEI INDEX) and Hang Seng Tech Index (HSTECH INDEX) trackers.
Accenture Japan Bids a 120% Premium for Datascience Company ALBERT (3906)
- Accenture Japan has just bid a 120% premium for fast-growing smallcap ALBERT Inc (3906 JP) which provides data science solutions to a focused client base.
- Revenues are growing fast. EBIT is growing faster. EBIT is expected to be 300% higher in 3 years.
- This is 50+% corporate-held. Retail decides the rest. This is probably a done deal.
KOSPI 200 Rebalancing: Recent Changes in the Race
- In addition to Lotte Confectionery, Samyang Foods is also in the inclusion zone. As for deletions, Samyang Holdings and Boryung are the most likely deletes at this point.
- Samyang Foods and Boryung have a small passive impact but have way more liquidity than Lotte and Samyang Holdings. We should approach them differently depending on the target trading window.
- Samyang Foods is in a tight situation, and Boryung’s fate depends on Samyang Foods. But given the recent price trends, Samyang Foods appears to have a good shot.
CALB IPO: First Day Trading Strategy Amid Market Turmoil
- In this insight, we discuss the first day trading strategy of CALB (3931 HK) amid market turmoil.
- CALB priced its IPO at HK$38 per share, which is at the low end of the IPO price range. CALB raised US$1.3 billion in this IPO.
- Unlike recent disappointing IPOs for Leapmotor and Onewo, we believe CALB’s IPO could perform better in its IPO debut.
Softbank Group – Vision Fund Losses Accelerate into Quarter End
- Valuation losses in the Vision Fund public portfolio are now approaching $5bn as the end of the quarter looms versus break-even as recently as 13 September
- That may have influenced the level of VF staff reductions which press reports ut at 30% versus expectations of 20% last month
- The discount remains elevated on tech weakness and that is unlikely to change
(Mostly) Asia M&A: September 2022 Roundup
- For the month of September, 11 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$3bn.
- The average premium for the new deals announced (or first discussed) in September was ~40%, and a year-to-date average of 39%.
- This compares to the average premium for all deals in 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 33%, 31%, and 31.5% respectively.
Indian Energy Exchange (IEX IN): Immense Value at Current Levels
- IEX is a play on digital infrastructure (hedge against inflation), electricity reforms, decarbonisation and energy transition
- An opportunity that offers virtuous growth, minimalistic capital needs and presents a scalable business model (addressing INR 8trn electricity market)
- India will see an average power consumption growth of 5% over the foreseeable period. Power Exchanges should outgrow this meaningfully
End of Mandatory Lock-Up Periods for 42 Companies in Korea in October 2022
- We discuss end of the mandatory lock-up periods for 42 stocks in Korea in October 2022, among which 7 are in KOSPI and 35 are in KOSDAQ.
- These 42 stocks on average could be subject to further selling pressures in October and could underperform relative to the market.
- Among these 42 stocks, the top 3 market cap stocks include NH Investment & Securities, Sungeel Hitech, and Dongwon Systems. They could be exposed to greater selling pressures in October.
Lionheart Studio IPO Preview
- Lionheart Studio is getting ready to complete its IPO in November 2022. Lionheart Studios is the second largest IPO in Korea after LG Energy Solution (373220 KS) in 2022.
- The IPO offering amount is 410 billion won to 604 billion won. This would also suggest implied market cap of 3.1 trillion won and 4.5 trillion won.
- A key investment risk for the company is its excessive reliance on one game (Odin: Valhalla Rising) for its revenue and profits.
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