In today’s briefing:
- Zijin Gold (2259 HK) IPO: HSCI Fast Entry; Quick Stock Connect Add; Global Indices Entry in 2026
- Sony Financial (8729 JP) Spinoff from Sony Group (6758 JP): Potential Index Flows
- Zijin Mining (2899 HK): Zijin Gold Priced At US$24bn
- The 2025 Japan September-End Rebal and Dividend Trade
- Zijin Gold IPO (2259 HK): Valuation Insights
- Jinke Smart (9666 HK): Boyu’s Offer Now Unconditional
- Another Passive Flow Trading Target Identified: Sejin Heavy in the Dec Shipbuilding ETF Rebal
- Merger Arb Mondays (22 Sep) – Technopro, Soft99, Mandom, Pacific Ind, Dongfeng, Shengjing, Smartpay
- Last Week In Event SPACE: Zijin Mining/Gold, Kokusai Electric, Santos, Krungthai Card
- Pateo Connect Pre-IPO: PHIP Update: Growth Has Not Translated to Profits
Zijin Gold (2259 HK) IPO: HSCI Fast Entry; Quick Stock Connect Add; Global Indices Entry in 2026
- Zijin Gold (2259 HK) is looking to raise up to HK$28.7bn (US$3.7bn) in its IPO, valuing the company at HK$191.6bn (US$24.6bn).
- Zijin Mining (2899 HK) will hold between 85-86.7% of Zijin Gold and that will limit the free float of the stock. Half the IPO has been allotted to cornerstones.
- Zijin Gold could be added to the HSCI via Fast Entry and to Stock Connect in October. Global index inclusion should take place in the first half of 2026.
Sony Financial (8729 JP) Spinoff from Sony Group (6758 JP): Potential Index Flows
- The ex-date for Sony Financial Group (8729 JP)‘s spinoff from Sony Corp (6758 JP) is 29 September. There will be passive flows at the close on the day.
- There will be no selling from the TOPIX Index and Fglobal trackers. There will be selling from Nikkei 225 (NKY INDEX) trackers and potentially from Mglobal trackers.
- Sony Financial Group (8729 JP) has announced a buyback of up to 1bn shares (13.99% of shares out) over the next year and that will support the stock.
Zijin Mining (2899 HK): Zijin Gold Priced At US$24bn
- The global offering doc for Zijin Gold (2259 HK) is out.
- At the IPO Price of HK$71.59/share, Zijin Gold’s implied market cap is HK$187.9bn or US$24bn. Commencement of trading is the 29th September.
- Zijin Mining (2899 HK) will hold 86.7% in Zijin Gold post-IPO (before over-allotment). Even if Zijin Gold trades north of HK$100/share, Zijin Mining is fully valued.
The 2025 Japan September-End Rebal and Dividend Trade
- Every year it’s the same trade. But sometimes it is not. This year it is Friday and Monday. Or not. Historically, the day before ex-date and ex-date see outright performance.
- The month-end and quarter-end bring big flows, or not, depending on how things have gone. This year they have gone well for equities, so odds are flows are smaller.
- Over the past 10 years or so, the two-day return on the March trade is pretty good. The September trade appears to be more mixed.
Zijin Gold IPO (2259 HK): Valuation Insights
- Zijin Gold (2259 HK) is a global leading gold mining company and the overseas gold segment of Zijin Mining Group (601899 CH). It has launched an HKEx IPO to raise US$3.2bn.
- I previously discussed the IPO in Zijin Gold IPO: The Investment Case and Zijin Gold IPO: PHIP Updates Support the Investment Thesis.
- In this note, I present my forecasts and valuation. My analysis suggests that the IPO price range is attractive.
Jinke Smart (9666 HK): Boyu’s Offer Now Unconditional
- Back on the 28th April 2025, PRC-incorporated property management play Jinke Smart Services (9666 HK) announced a possible unconditional MGO take-under at HK$6.67/share.
- The Boyu-backed Offeror and Concert Parties holding 37.86% (at the time), bought Jinke Property (000656 CH)‘s 18.05% stake at auction on the 30th March, triggering an unconditional MGO (once completed).
- The “Auction Transfer” was subject to CSDC oversight, which has now been satisfied/completed. The Composite Doc is expected to be dispatched on or before the 26th September.
Another Passive Flow Trading Target Identified: Sejin Heavy in the Dec Shipbuilding ETF Rebal
- HHI–Mipo merger overlaps Dec review: Mipo dropped Nov 26, desk holds cash, rebal Dec 12, new HHI shares list Dec 15 but capped at 10%.
- No ad-hoc replacement for Mipo Nov 26; Dec review will add a new name, likely Sejin Heavy (075580 KS), with no other significant flows flagged.
- Sejin Heavy’s recent post-rally volume cools; passive inflow ~1.5x DTV may trigger visible price action, with potential front-running 1–2 days ahead of Dec 12 ETF rebal.
Merger Arb Mondays (22 Sep) – Technopro, Soft99, Mandom, Pacific Ind, Dongfeng, Shengjing, Smartpay
- I summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Mayne Pharma (MYX AU), Smart Share Global (EM US), ENN Energy (2688 HK), Dongfeng Motor (489 HK), Oneconnect Financial Technology (6638 HK), Joy City Property (207 HK).
- Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), PointsBet Holdings (PBH AU), Mandom Corp (4917 JP), Humm Group (HUM AU), Fuji Oil Co Ltd (5017 JP).
Last Week In Event SPACE: Zijin Mining/Gold, Kokusai Electric, Santos, Krungthai Card
- Zijin Gold (2259 HK)‘s IPO is, arguably, priced reasonably. Yet, no matter how you slice it, Zijin Mining Group Co Ltd H (2899 HK) has overshot the mark.
- KKR’s lock up in Kokusai Electric (6525 JP) expires in less than three weeks. It’s not ideal stepping in front of fast-moving trains, so challenging to recommend a full-throated short.
- Abu Dhabis’ ADNOC walks away from Santos Ltd (STO AU). That was, realistically, the most likely outcome.
Pateo Connect Pre-IPO: PHIP Update: Growth Has Not Translated to Profits
- Pateo Connect Technology (PTC HK) is looking to raise around US$140m in its upcoming Hong Kong IPO.
- PTC is one of the largest domestic providers of smart cockpit and intelligent connectivity solutions in China.
- We have looked at the company’s past performance in our previous note. In this note, we will undertake a PHIP update.
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