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Most Read: Toshiba Corp, Evergrande Property Services, China Life Insurance Co H and more

In today’s briefing:

  • Toshiba – The EGM Showdown
  • Toshiba – Rumoured Deal for Kioxia a Big Positive
  • HSCEI June 2021 Index Rebalance Preview – Three Adds, Four Deletes Possible
  • Asia Short Interest: Tencent, Ping An, Baidu, BASE, Toshiba, GMO Payment, BeNext, Inventec, Mediatek
  • 5 Charts to Gauge the Progress of China Life’s “Revitalization” Strategy

Toshiba – The EGM Showdown

By Mio Kato

With Toshiba’s EGM set for tomorrow, we summarise its dispute with shareholders Effissimo and Farallon and discuss potential implications of the vote, not just for Toshiba, but for Japan more broadly.


Toshiba – Rumoured Deal for Kioxia a Big Positive

By Mio Kato

Positive news flow for Toshiba continues as the Nikkei reported that both Micron and Western Digital have expressed interest in acquiring equity affiliate Kioxia for as much as $30bn. With Toshiba owning 40.2% of the company that would be a significant haul for the company regardless of whether the quoted figure is market cap or EV.


HSCEI June 2021 Index Rebalance Preview – Three Adds, Four Deletes Possible

By Brian Freitas

The Hang Seng Indexes Company Limited (HSIL) will announce the results of the June 2021 review of the Hang Seng Family of Indexes on 21 May. The constituent changes will be effective after the close of trading on 4 June.

The review period for the June review ended on 31 March and stocks that had at least 1 month of trading history by that date are eligible for inclusion in the Hang Seng China Enterprises Index (HSCEI INDEX).

Baidu (9888 HK) will be a Fast Entry inclusion into the index at the close of trading on 8 April and no stock will be deleted on that date.

At the June review, we see a high probability of Evergrande Auto (708 HK) and BYD (1211 HK) and being included in the index, and of China Tower (788 HK), Guangdong Investment (270 HK) and China Unicom Hong Kong (762 HK) being deleted from the index.

There is a slightly lower probability of Evergrande Property Services (6666 HK) being included in the index and of Anhui Conch Cement Co Ltd H (914 HK) being excluded.

Li Ning Co Ltd (2331 HK) is a close add and the corresponding deletion is Shimao Property Holdings (813 HK).

The June review also sees a change in the index methodology where all stocks will be capped at 8% of the index weight.


Asia Short Interest: Tencent, Ping An, Baidu, BASE, Toshiba, GMO Payment, BeNext, Inventec, Mediatek

By Brian Freitas

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.

There was no report from the SFC this week since Friday was a holiday. The report should be published on Wednesday when markets reopen. For the week from 29 March – 1 April, the highest shorts in notional terms were on Tencent Holdings (700 HK), Tracker Fund of Hong Kong Ltd (2800 HK), Ping An Insurance (H) (2318 HK), Meituan (3690 HK) and Baidu (9888 HK)

In Japan, stocks that saw the most shorts were BASE Inc (4477 JP), Toshiba Corp (6502 JP), GMO Payment Gateway (3769 JP), freee (4478 JP) and Sanken Electric (6707 JP) while shorts decreased on ENEOS Holdings (5020 JP), Japan Airport Terminal Co (9706 JP), Mitsubishi UFJ Lease & Finance (8593 JP), Change Inc (3962 JP) and BeNEXT Group (2154 JP). Shorts increased in the Information Technology and Indsutrials sectors, and decreased in the the Energy sector.


5 Charts to Gauge the Progress of China Life’s “Revitalization” Strategy

By Alec Tseung

The article used 5 charts to showcase the progress of the “revitalization” strategy launched by China Life Insurance Co H (2628 HK) in 2019.

These charts indicated that China Life is on the right track of executing its transformation and has seen improving growth profile and margin since then. However, such improvement in its fundamentals has unlikely been priced in yet, as evidenced by the company’s sluggish share price performance since the end of 2019.

Regression analysis using regional peers indicated that the company is currently undervalued and has a potential upside of around 20% if its current P/B is to trade in line with the justifiable P/B. 


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