Daily BriefsMost Read

Most Read: Toshiba Corp, Japan Airlines, Meituan, S.M.Entertainment Co, Toyo Construction, Rakuten Bank, Sun Kwang, Nitori Holdings, Cosmo Energy Holdings and more

In today’s briefing:

  • Tencent Meituan Dividend – The US$17bn Overhang Is Here – Not All Shares in CCASS, Here We Go Again!
  • Toshiba – Thoughts On The Tender Opinion
  • Nikkei 225 Index Rebalance: Passives Trade on Friday
  • Meituan (3690 HK): All Stock in CCASS Now; Tracking the Selling
  • SM Entertainment: Tender Offer Allocation Ratios Announced
  • Toyo Construction (1890) Plays Offence – A New Mid-Term Mgmt Plan with High Shareholder Payout
  • Rakuten Bank Vs SBI Sumishin Net Bank
  • Target & Timing for Flow Trading Position Setup in NICE I&S KOSPI Transfer Event
  • Nikkei 225 Index Rebalance Preview (Sep 2023): Potential Changes & Dark Horses
  • Cosmo Energy (5021) – It’s Even More On

Tencent Meituan Dividend – The US$17bn Overhang Is Here – Not All Shares in CCASS, Here We Go Again!

By Sumeet Singh

  • On 16th Nov 22, post-market close, along with its 3Q22 results Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.
  • At the time of declaration, the dividend amounted to US$20bn or 15.5% of Meituan’s outstanding shares. Its value has since declined to US$17bn
  • We have covered the background of the event in our previous notes. In this note, we talk about the recent updates.

Toshiba – Thoughts On The Tender Opinion

By Mio Kato

  • 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.

Nikkei 225 Index Rebalance: Passives Trade on Friday

By Brian Freitas


Meituan (3690 HK): All Stock in CCASS Now; Tracking the Selling

By Brian Freitas


SM Entertainment: Tender Offer Allocation Ratios Announced

By Douglas Kim

  • Korea Investment & Securities announced the final competition rate for the tender offer of SM Entertainment by Kakao Group (8,333,641 shares of SM Entertainment at 150,000 won per share).
  • The competition ratio of the tender offer was 2.2655436 to 1. Accordingly, the allocation ratio was set at 44.1395170%. 
  • At the current price of 95,100 won, SM Entertainment’s shares are undervalued by about 25% to 45% over the next 6-12 months, in our view. 

Toyo Construction (1890) Plays Offence – A New Mid-Term Mgmt Plan with High Shareholder Payout

By Travis Lundy

  • YFO continues its fight on Board governance. Toyo Construction has shifted so the Board and a Special Committee will now examine the input Toyo says YFO has not provided. 
  • Toyo also objected because it said YFO’s bid could not be sustained based on Toyo’s economics. Toyo’s fight should have been offence. With a new Medium-Term Management Plan, it is.
  • Toyo now promises strong revenue and double digit OP growth, and a ¥50/share (5.3%) dividend. Toyo is trying to pay off shareholders to support it against YFO. That’s fair/good.

Rakuten Bank Vs SBI Sumishin Net Bank

By Arun George


Target & Timing for Flow Trading Position Setup in NICE I&S KOSPI Transfer Event

By Sanghyun Park

  • NICE I&S will likely complete the transfer schedule in early May, meaning that an ad-hoc change may occur before the regular rebalancing of the KOSDAQ 150 in June.
  • If this gets completed before SK Oceanplant’s transfer listing schedule, the top reserved issue in NICE’s GICS sector (INDUSTRIALS) will be included. It is Sun Kwang (003100 KS).
  • As evidenced in the case of LX Semicon, we should set up a preemptive position for potential ADDITION at the time of the T or T-1 KRX corporate action announcement.

Nikkei 225 Index Rebalance Preview (Sep 2023): Potential Changes & Dark Horses

By Brian Freitas

  • The review period for the Nikkei 225 (NKY INDEX) September rebalance ends end July. We highlight 3 potential inclusions and exclusions for the index.
  • There are a few alternate adds that are interesting and their inclusion in the index could move things around a fair bit.
  • Due to the large size difference between the potential adds/deletes, there will be a large funding trade with passive trackers needing to sell over 0.5x ADV on many index constituents.

Cosmo Energy (5021) – It’s Even More On

By Travis Lundy

  • In mid-January, things between activist Yoshiaki Murakami and Cosmo Energy Holdings (5021 JP) came to a head. Cosmo announced a large buyback and possible takeover defence measures.
  • The buyback was a beefy chunk of the float because of the expected profit payout. On 9 February, Cosmo lowered its NP guidance by 40%. FY22 div stays at ¥150/share.
  • Last Thursday, Cosmo presented its NEW Mid-Term Management Plan. ROE targets similar. Profit targets up. Minimum div goes up; payout ratio goes up. More comes if financial health targets met.

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