In today’s briefing:
- Woodside / BHP Petroleum Merger – Thinking About Flows (Still a Flowback Sell)
- FTSE China A50 Index Rebalance Preview: PetroChina, Gree Out Due to Ground Rule Change
- Delhivery IPO: Offering Details & Index Inclusion Timeline
- Health And Happiness (H&H) (1112.HK) – High Bankruptcy Risk Together with Gloomy Prospects
- Yamada Denki – GINORMOUS Buyback To Dramatically Boost EPS and ROE
Woodside / BHP Petroleum Merger – Thinking About Flows (Still a Flowback Sell)
- The Merger of Woodside Petroleum (WPL AU) with BHP Group Ltd (BHP AU) subsidiary BHP Petroleum sees a vote 19 May and likely Effective Date by 1 June.
- BHP would go ex-dividend on 25 May, with the in-specie dividend payment WPL shares delivered on 1 June and tradable one day later.
- As discussed in Woodside / BHP Petroleum Merger On Tap; Index Impact Minimal but Flowback May Not Be, major index impact is minimal, but monsters lurk beneath the tranquil surface.
FTSE China A50 Index Rebalance Preview: PetroChina, Gree Out Due to Ground Rule Change
- A Ground Rule change to the index universe will result in the deletion of PetroChina (601857 CH) and Gree Electric Appliances (000651 CH) from the FTSE China A50 Index (XIN9I).
- Potential inclusions at the June rebalance are Poly Real Estate Group Co., Ltd (600048 CH) and Anhui Conch Cement (600585 CH). China Citic Bank Corp (601998 CH) is close.
- Assuming three changes are implemented, one-way turnover at the rebalance is estimated at 3.05% and will result in a one-way trade of CNY 1,484m.
Delhivery IPO: Offering Details & Index Inclusion Timeline
- Delhivery (1058656D IN) is looking at raising INR 52,350m (US$685m) in its IPO by selling up to 113.3m shares at a range of INR 462-487/share.
- At the mid point of the IPO range, Delhivery (1058656D IN) will be valued at INR 344.8bn (US$4.5bn) while the free float market cap will be much lower.
- Delhivery (1058656D IN) could get entry to the FTSE All-World Index at the December QIR, while inclusion in the MSCI India Index could take place at the May 2023 SAIR.
Health And Happiness (H&H) (1112.HK) – High Bankruptcy Risk Together with Gloomy Prospects
- H&H is faced with multiple challenges. Internally, the performance is under pressure, with stagnating revenue, decreasing profits, cash flow shortage and bankruptcy risk.It’s difficult for H&H to turn things around.
- Externally, factors such as the declining birth rate, lower demand, fierce competition in the infant formulas market, rising costs due to inflation, and economic slowdown worsen the Company’s prospects.
- Based on our 2022 forecast (14% or lower adjusted EBITDA margin,1%-2% or flat revenue growth), we do not think H&H is a good investment. We are conservative about its outlook.
Yamada Denki – GINORMOUS Buyback To Dramatically Boost EPS and ROE
- Yamada Denki (9831 JP) reported earnings (Revs -7.6% (slight beat), OP -28.6% (slight miss), NP -2.4% (slight miss)), and slightly upbeat forecasts to Mar-2023 (Revs +4.6%, OP +12.5%, NP +2.9%)
- They also announced an unchanged dividend at ¥18/share, and a VERY BIG BUYBACK. This is one of the largest, most aggressive, on-market buyback programs I have ever seen.
- Previous buybacks have been duds. Yamada Denki is not playing around this time. This time it will be a buy.
Before it’s here, it’s on Smartkarma
