Most Read: Toshiba Corp, Em Tech Co Ltd, Page Industries, YFY Inc, Rebellions, KT Corp, Toyota Industries and more

• Just post-close, the Nikkei reported Toshiba’s Board had agreed a JIP deal at “around ¥2trln.” Toshiba confirmed HOURS later indicating language was still being hashed out. And the dividend cancelled.
• Toshiba “supports” the deal because it aligns a single shareholder with management goals. They cannot recommend to general shareholders because it is too low. But JIP was the only bidder. 
• It raises the question of whether activists will submit to “Toshiba Fatigue” at what the Board admits is too low a price, or whether there is still fight left.

• Toshiba Corp (6502 JP) announced a pre-conditional tender offer by Japan Industrial Partners (JIP), the preferred bidder at JPY4,620 per share, a 9.7% premium to the last close price.
• The special committee opines that the offer is the best price that can be expected today, which sounds like we are recommending the offer as it is the only one.
• The offer has several negatives: a 14% price reduction during the process, below the undisturbed price, below the mid-point IFA DCF range and no serious effort on Plan B. 

• Following Nanos Co Ltd (151910 KS)‘s designation as an Investment Attention Issue, the stock will be deleted from the KOSDAQ150 Index and replaced with Em Tech Co Ltd (091120 KS).
• Passive trackers are estimated to buy 1.3 days of ADV on Em Tech Co (091120 KS) while they will need to sell 1.1 days of ADV on Nanos (151910 KS).
• Em Tech Co Ltd (091120 KS) was up yesterday but the stock is still way off its highs. The stock should trade higher over the next few days.

• On 17 February, NSE Indices announced the results of the March index review for the Nifty Next 50 Index (NIFTYJR INDEX). There are 5 adds and 5 deletes. 
• Last evening, NSE Indices announced a change in the index methodology where the cumulative weight of non-F&O stocks in the index will be capped at 10% (down from 15% earlier).
• This changes the flows at the March rebalance that will be implemented at the close of trading on 29 March.

• Toshiba released documents on the tender and a notice that the FY end dividend would be cancelled shortly after our last report was published. 
• They are interesting in that the Special Committee’s opinions are relatively frank but details on the valuation process are almost non-existent. 
• In addition, the information regarding other bids and alternatives was a little surprising to us.

• In this insight, we take look at Quiddity’s estimations for index changes and capping flows for the Taiwan Div+ index for the June 2023 review.
• I currently see 3 ADDs and 3 DELs but there are several names close to the border and expectations could change before the base date as prices move around.
• I also currently expect capping flows of US$705mn one-way with multiple names with more than five days to trade.

• Established in 2020, Rebellions is a leading AI based fabless startup in Korea. In February 2023, Rebellions launched a new artificial intelligence chip, challenging the global leader NVIDIA. 
• According to the company, its ATOM chip targets specific tasks, allowing the chip to consume only about 20% of the power of an Nvidia A100 chip on those tasks. 
• Since the company’s inception, Rebellions raised 122 billion won in funding including 30 billion won from KT. The company was last valued at 350 billion won in June 2022.

• It is virtually certain that KT’s foreign rooms will exceed 15% today or tomorrow. This month, foreign net sales of 200-300k are continuing almost every day.
• Assuming the Cutoff of the MSCI Korea Standard to be 2.7 trillion won and setting the float rate to 25%, KT beats the hurdles quite comfortably.
• If KT achieves re-inclusion with a 25% float rate, a passive inflow worth 140 billion won is expected to occur. This is a 3.55x ADTV.

• Toyota Industries (6201 JP), one of the world’s leading forklift manufacturers, has admitted to fabricating the results of parts testing, forcing some forklift shipments to be halted.
• TICO has decided to suspend the shipping of three models of forklifts equipped with the suspect engines, which account for ~6% of total forklift sales (in terms of count). 
• Shares, quite rightly, have taken a hit. But this correction appears excessive.

In the next installment of our Webinar Wednesdays, we go live with Smartkarma Insight Provider, Andreas Steno as he gives us a detailed tour around forward looking inflation indicators for all major economies.

From touchpoints like how money growth is outright negative in the West, to trends being opposite in China/Japan, join us as we dive deeper into the topic with Andreas and Smartkarma’s Co-founder, Raghav Kapoor.

The webinar will be hosted on Wednesday, 5 April 2023, 17:00 SGT/HKT.

Andreas Steno is the founder and Head of Research of the European Power Research house “Steno Research.” Building on years of experience as Global Chief Strategist at Nordea Bank, he is one of the most quoted and sought-after macro analysts out there. Andreas’ expertise is the macro strategy, energy, real estate and equity spaces, but doesn’t shy away from hot takes on other topics if the underlying analysis is strong enough. Andreas anchors the weekly editorial ‘Steno Signals’ and other watch series from Steno Research.