In today’s briefing:
- HSTECH Index Rebalance Preview (Sep): Free Float & Capping Changes To Drive Flows
- StubWorld: Prosus & Naspers Gain On Buyback Funded By Tencent Share Sale
- Socar IPO Valuation Analysis
- PayPal Stock: Be Careful Of Looking At Price In Isolation
HSTECH Index Rebalance Preview (Sep): Free Float & Capping Changes To Drive Flows
- We do not expect any inclusions or exclusions for the Hang Seng Tech Index (HSTECH INDEX) at the September rebalance.
- Float and capping changes will lead to a one-way turnover of 6.5% and that will result in a one-way trade of HK$4,913m.
- SenseTime Group (20 HK) will have the largest buying flow due a potential increase in free float. The stock is also a potential inclusion to the HSCEI INDEX in September.
StubWorld: Prosus & Naspers Gain On Buyback Funded By Tencent Share Sale
- It’s been a long-time coming. Prosus (PRX NA) and parent Naspers (NPN SJ) will gradually sell down their stake in Tencent (700 HK) to fund a share purchase program.
- Preceding my comments on Prosus and Naspers, are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % of market capitalisation greater than 20%.
Socar IPO Valuation Analysis
- Our base case valuation of Socar is target price of 27,967 won, which is 18% lower than the low end of the IPO price range of 34,000 won.
- Given the lack of upside, we would Pass on this IPO. Our valuation is also 23% lower than the valuation that Lotte Rental paid for its 13.9% stake in Socar.
- We estimate Socar to generate sales of 396.4 billion won (up 37.2% YoY) and EBITDA margins of 12.6% in 2022.
PayPal Stock: Be Careful Of Looking At Price In Isolation
- Business unit growth is slowing down after two years of exponential transaction growth.
- High-yield debt is in bad shape considering the economy, according to a quantitative risk analysis.
- PayPal owns a few promising subsidiaries. Yet, it could be a while before they provide significant value, says analyst.
Before it’s here, it’s on Smartkarma
