Event-Driven Archives | Page 36 of 187 | Smartkarma

This morning, Nidec Corp (6594 JP)announced that it intended to launch a Tender Offer on Makino Milling Machine Co (6135 JP) without the support of Makino management.
The same pattern as Takisawa Machine Tool (6121 JP). Nidec decides, relying on the METI Guidelines for Corporate Takeovers for procedure, announces, and puts the onus on the Target to accept.
But shareholders should hope Makino Milling takes a page from the example provided by Chilled & Frozen Logistics Holdings (9099 JP) back in spring 2024. This could get funky.

What We’ve Got on Samsung Electronics’ Value-Up Disclosure

Yesterday, the FSC pushed for value-up policies, but the real buzz was about Samsung Electronics hinting at rolling out its own value-up plan soon.
Samsung may raise its dividend payout from 50% to 60% and could issue a special dividend if semiconductor results improve or FCF exceeds expectations.
Samsung’s value-up disclosure may not cause short-term price action but could strengthen downside support. It may focus on dividends over buybacks, potentially boosting preferred stock.

Makino Milling Machine (6135 JP): Nidec’s (6594 JP) Hostile Preconditional Tender Offer at JPY11,000

Nidec Corp (6594 JP) announced a hostile preconditional tender offer for Makino Milling Machine Co (6135 JP) at JPY11,000 per share, an 18.9% premium to the last close.
The offer is preconditioned on several regulatory approvals. It is scheduled to start on 4 April, even if the Board does not recommend it.
The Board has three options: engage to facilitate a friendly offer, find a white knight bidder and launch an ambitious MTM plan to thwart the offer.

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Dec 27

Daily Brief Event-Driven: Shin Kong/Taishin Merger – Proceeding Apace and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Shin Kong/Taishin Merger – Proceeding Apace
Macromill (3978 JP) – Five Major Investors Have 50+%; CVC Extends and Will Need to Bump Or Walk
CPMC Holdings (906 HK): On the Cusp of Being Declared Unconditional
Malaysia Airports (MAHB MK): Awaiting the Consortium’s Next Move
Event Driven: Demerger of OneSource: A Multi-Modality CDMO
A Potential JV Between E Mart and Alibaba’s Korean Operations Could Value the JV at About $4 Billion
InnoScience Technology (2577 HK): Low IPO Free Float Delays Global Index Inclusion

Shin Kong/Taishin Merger – Proceeding Apace

Once shareholders of Shin Kong Financial Holding (2888 TT) and Taishin Financial Holding (2887 TT) agreed to the merger two months ago, that meant an FSC submission would come shortly.
It came on 3rd December. Normally it takes two months, but can be extended. It appears the TFTC submission (which is considered wholly separately) was made as early as September.
This should get approved within the timeframe or not long afterwards. There is one known “document” missing from the application as of submission, but it shouldn’t be a problem.

Macromill (3978 JP) – Five Major Investors Have 50+%; CVC Extends and Will Need to Bump Or Walk

Three pre-existing Large Shareholders have not sold down. Two new 5+% shareholders have appeared since Tender Launch. Together, their reports give them 51.7% of shares out.
That provides them with a significantly strong implied negotiating hand. Given the midpoint of the Target Company’s Advisor’s DCF Range, I expect a bump.
Today the Bidder extended for 10 more days. They didn’t have the shares to close. I expect they won’t unless they bump a lot.

CPMC Holdings (906 HK): On the Cusp of Being Declared Unconditional

CPMC Holdings (906 HK)’s offer from ORG Technology Co., Ltd. A (002701 CH) is HK$7.21 with a 50% minimum acceptance condition. The first closing date is 10 January.
CCASS data shows that Mr Wei has tendered (22.01% of outstanding shares). Including acceptances, ORG’s shareholding was 46.63% of outstanding shares as of 24 December.
The Board supports the offer, and it is close to being declared unconditional. At the last close and 25 January payment, the gross/annualized spread was 0.8%/10.9%.

Malaysia Airports (MAHB MK): Awaiting the Consortium’s Next Move

Malaysia Airports Holdings (MAHB MK)‘s voluntary conditional RM11.00 offer from the consortium has a first closing date of 8 January.
Unusually, the independent directors and adviser have differing opinions – the directors and adviser agree that the offer is NOT fair. However, the directors opine that it is NOT reasonable.
The consortium has three options – keep terms unchanged (hope for the best), bump or lower the acceptance threshold. The most likely option is to lower the acceptance threshold.

Event Driven: Demerger of OneSource: A Multi-Modality CDMO

By Nimish Maheshwari

OneSource is riding the surging demand for GLP-1 drugs, a market projected to reach $30 Billion by 2030, with its expertise in Drug-Device Combination (DDC) solutions.
OneSource is projected to achieve revenue of $350-$400 million over the next 3-4 years from $145 million in 2024 , with an impressive EBITDA margin approaching 40% from 25% in 2024.
OneSource is expected to receive Listing Approval from the Stock Exchanges during Q4 FY25

A Potential JV Between E Mart and Alibaba’s Korean Operations Could Value the JV at About $4 Billion

By Douglas Kim

On 26 December, Reuters mentioned that E Mart could announce a major JV announcement with Alibaba Group Holding’s Korean operations that could value the JV at about $4 billion.
The official launch of the JV is expected to take place sometime in 1H 2025. Gmarket and AliExpress Korea will become subsidiaries of this JV.
Although this is not a done deal, this potential JV between Gmarket and AliExpress Korea is likely to have a positive impact on E Mart Inc (139480 KS).

InnoScience Technology (2577 HK): Low IPO Free Float Delays Global Index Inclusion

By Dimitris Ioannidis

InnoScience Suzhou Technology (2577 HK) is anticipated to debut at the HKEX on 30 December 2024 with a valuation between $3.5bn – $3.9bn.
InnoScience Suzhou Technology (2577 HK) is forecasted to fail the fcap threshold in the first place for both global indices due to small size offering and lock-ups.
The security is expected to be added in China all-world or small-cap at the September 2025 review following the 6-month lock-up expiry.

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Dec 26

Daily Brief Event-Driven: Korea: Potential Relegations from K League 1 and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Korea: Potential Relegations from K League 1

Korea: Potential Relegations from K League 1

There are quite a few stocks in Korea that have underperformed their peers and could be deleted from global passive portfolios in February.
There are still 3 weeks left for the stocks to redeem themselves and avoid relegation from the K League, so watch out for big price moves.
Based on our estimate of passive assets, trackers will need to trade between US$45m to US$114m of the stocks. Impact will vary between 2.6x-30x of ADV to trade.

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Dec 25

Daily Brief Event-Driven: Korea FSC Official: New Rule to Block “Treasury Stock Magic” Takes Effect on 31st and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Korea FSC Official: New Rule to Block “Treasury Stock Magic” Takes Effect on 31st
Suntec REIT (SUN SP): Tang’s Offer Now Open

Korea FSC Official: New Rule to Block “Treasury Stock Magic” Takes Effect on 31st

Korea FSC announced on the 24th that the updated Capital Markets Act rules, approved by the Cabinet, will take effect on the 31st.
Banning new shares to treasury stocks during spin-offs could shift board focus in Korea, reducing big shareholder influence and prioritizing the broader shareholder base.
The capital markets law change could shift shareholder returns from buybacks to dividends, marking a key inflection point for traders, especially in Korea’s preferred stock market.

Suntec REIT (SUN SP): Tang’s Offer Now Open

On the 5th December, Gordan Tang (& his wife Celine) acquired 2.14% in Suntec REIT (SUN SP), lifting their stake to 31.45% from 29.31%, triggering a MGO.
This is appears to be a technical Offer. The Offer price is S$1.16/share against a S$1.17/share undisturbed price. Timing, however, IS curious after ESR Group (1821 HK)‘s recent Offer.
The Offer Doc is now out and shareholders can tender. At S$1.18/share as I type, zero tendering should occur. The Offer closes on the 20 January, unless extended.

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Dec 24

Daily Brief Event-Driven: Honda (7267 JP) – MAMMOTH New ¥1.1Trln Stock Buyback and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Honda (7267 JP) – MAMMOTH New ¥1.1Trln Stock Buyback
Henlius (2696 HK): Circ Out. 22nd Jan H-Class Meeting
[Japan Activism] Exedy (7278) – Murakami-San Selling into the Buyback
EQD | Nikkei Index Options Weekly – December 16 – 20
EQD | Hong Kong Single Stock Options Weekly December 16 – 20
EQD | Kospi Index Options Weekly – December 16 – 20
VCredit (2003 HK): Ma Does Makes His Move. But Nothing To Shout About
Goldlion Holdings (533 HK): Chairman’s Scheme Privatisation Is a Done Deal
GA Pack (468 HK): The State of Play
LG CNS IPO: Limited Float Pushes Back Passive Buying

Honda (7267 JP) – MAMMOTH New ¥1.1Trln Stock Buyback

Today, along with the announcement of Memorandum of Understanding between Honda Motor (7267 JP), and Nissan Motor (7201 JP) to work towards negotiating a Joint Holding Company by June 2025…
Honda cancelled their existing ¥100bn buyback, and initiated a truly mammoth NEW Buyback – up to 1.1 billion shares (23.7% of TSO), spending up to ¥1.1trln on market through Dec-2025.
Assuming the stock pops, it is probably “only” worth 15-18%, but that’s still a LOT. At that rate it boosts BVPS by 8+% on its own, and EPS by 17%.

Henlius (2696 HK): Circ Out. 22nd Jan H-Class Meeting

After Shanghai Henlius Biotech (2696 HK) secured NDRC approval on the 22nd Nov; fulfilled pre-cons on the 16th December, the Circular was dispatched last night, the 22nd December.
The EGM/H-share class meeting will take place on the 22nd January, one day past my estimate. Settlement should be on ore around the 18th Feb, a week beyond my estimate.
Trading at a gross/annualised spread off 2.9%/20.3%. Still attractive here.

[Japan Activism] Exedy (7278) – Murakami-San Selling into the Buyback

Exedy Corp (7278 JP) announced a big buyback. Murakami-san did not sell the first pop. The shares fell. Exedy started buying back and the shares went up. Now Murakami’s selling.
Today after the close, Murakami Group companies announced that City Index Elevens had started selling. They sold 1.25% of shares out in 6 trading days to 16 December.
I expect they sold another 2% in the past week through today. Shares tanked today. This is not a good signal. And it comes earlier than I expected.

EQD | Nikkei Index Options Weekly – December 16 – 20

By John Ley

All 5 trading days of the past week saw non-volatile price declines but with implied vols still ticking higher leaving historic vol and implied vol moving in opposite directions.
Trading activity focused on Puts, 59.5% of all options trades were Puts last week
Postions being covered into market weakness as seen from large decrease in open interest (60% of the decline was Puts).

EQD | Hong Kong Single Stock Options Weekly December 16 – 20

By John Ley

Communication Services had 39% of single stock option volumes vs only 22% of the open interest highlighting short expiry / speculative nature of trading.
Tencent and Baidu heading in opposite directions – Baidu vol on the inexpensive side vs Tencent vol.
Xiaomi one of only 2 optionable names trading at 52-week high (Sunny optical being the other).

EQD | Kospi Index Options Weekly – December 16 – 20

By John Ley

Kospi is now off 20% from its 52-week highs. Historic vols are picking up and implieds looking like good value given market dynamics.
Hedging increased with broad based positioning in Puts across out-of-the-money strikes.
Heavier volume in Puts with 53.2% of added open interest being Puts.

VCredit (2003 HK): Ma Does Makes His Move. But Nothing To Shout About

When VCredit Holdings (2003 HK), a provider of consumer financial services in China, was suspended pursuant to the Takeovers Code, I expected an Offer from Ma Ting Hung, VCredit’s chairman.
Well, we do have an Offer. Ma acquired 4.19% via two SPAs, lifting his stake to 44.04%. Stephen Liu (an ED) also acquired 1.43% via an SPA.
As Ma, Liu, and other parties, are presumed to be acting in concert, an unconditional MGO is triggered. But at HK$1.80/share, a 9.09% discount to undisturbed.

Goldlion Holdings (533 HK): Chairman’s Scheme Privatisation Is a Done Deal

On 17 December, Goldlion Holdings (533 HK) announced a scheme offer from Mr Tsang (Chairman/CEO) at HK$1.5232 per share, a 71.1% premium to the undisturbed price of HK$0.89 (20 November).
The key condition is the scheme approved by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). The shareholder with a blocking stake is a seller.
The offer is reasonable compared to peer multiples and historical trading ranges. At the last close and for a late April payment, the gross/annualised spread is 7.3%/22.7%.

GA Pack (468 HK): The State of Play

On 20 December, Shandong Xinjufeng Technology Packaging (301296 CH) satisfied the precondition for its Greatview Aseptic Packaging (468 HK) offer. The offer document will be despatched by 27 December.
Analysing the EGM vote on 18 October suggests that the 50% minimum acceptance condition will be met if no competing management offer is made.
Management will oppose the offer, but the last EGM protest votes suggest that many minorities will ignore management. At the last close, the gross/annualised spread was 2.3%/25.3%.

LG CNS IPO: Limited Float Pushes Back Passive Buying

LG CNS (LGCNSZ KS) is looking to raise up to KRW 1,199bn (US$830m), valuing the company at KRW 6 trillion (US$4.15bn) at the top end of the IPO price range.
As a member of the IT sector, inclusion in the KOSPI200 Index will only take place via Fast Entry (near impossible) or as a large-scale company.
Inclusion in global indices could commence in September 2025 and will be easier if the identity of the pre-IPO minority shareholders is disclosed or if the strategic investors sell.

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Dec 23

Daily Brief Event-Driven: NEC Networks (1973 JP) Next To Last Showdown – NEC Lowers Minimum and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

NEC Networks (1973 JP) Next To Last Showdown – NEC Lowers Minimum, Bumps Tiny, Ignores Synergies
Henlius (2696 HK): Interesting Shareholder Movements with the Vote on 22 January
Pentmaster (1665 HK): Malaysian Parent’s Offer For Pseudo Dual-Listing
Japan: Potential Passive Selling in February
Merger Arb Mondays (23 Dec) – Seven & I, Fuji Soft, NEC Networks, Pentamaster, Goldlion, Henlius
Ping An Healthcare and Technology (1833 HK) – Cash Dividend Or Scrip Dividend?
Korea’s Dem Leader: PBR Under 0.3x Should Be Hostile M&A Targets – Names That Could Feel the Heat
KOSPI Size Indices: Overlap Between Global Passive Selling & Downward Migrations
Analyzing the Regulatory Loophole in Kaspi’s Acquisition of D-Market’s Controlling Stake and Potential Outcomes
Strategic Transactions and Legal Developments: HEPS, ACC:OL, ABCP, BELFB, NWOR:L, EMBRAC, AVAP:L

NEC Networks (1973 JP) Next To Last Showdown – NEC Lowers Minimum, Bumps Tiny, Ignores Synergies

On Friday, NEC Corp (6701 JP) raised the price for its Tender Offer on Nec Networks & System Integr (1973 JP) from ¥3,250 to ¥3,300.
It also lowered the minimum to 10.153mm shares (6.82%). It had proposed to do so earlier but NESIC demanded a bump, and NEC didn’t want to.
Now it’s bumped. That’s the “final price.” But it still does not include “a fair allocation of a portion of the value that cannot be realised without an acquisition.”

Henlius (2696 HK): Interesting Shareholder Movements with the Vote on 22 January

Shanghai Henlius Biotech (2696 HK)’s IFA opines that Shanghai Fosun Pharmaceutical (Group) (2196 HK)’s HK$24.60 offer is fair and reasonable. The vote is on 22 January.
The key condition is approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders rejection). There are recent movements in H Share substantial shareholders.
Key shareholders should be supportive of the cash/scrip offer. At the last close and for a 15 February payment, the gross/annualised spread is 2.9%/16.9%.

Pentmaster (1665 HK): Malaysian Parent’s Offer For Pseudo Dual-Listing

In Pentamaster Corp: In The (EV) Driver’s Seat in February last year, I discussed Pentamaster Corp (PENT MK)‘s supply of semiconductors testers to the electric vehicle business.
A quirk of PENT was that its pseudo dual-listed twin – Pentamaster International (1665 HK) – trades at a significant discount.
In a not altogether surprising move, PENT is now seeking to take PI private by way of a Scheme at HK$1.00/share, including a HK$0.07/share dividend.

Japan: Potential Passive Selling in February

Currently, 9 stocks could be deleted from global passive portfolios in February. The deletion will lead to liquidity events where trackers will need to sell multiple days of ADV.
There has been a buildup on shorts on few stocks with minimal positioning in the other stocks. That could change once the calendar ticks over to 2025.
Kokusai Electric (6525 JP) is a potential inclusion to the Nikkei 225 (NKY INDEX) in March and this deletion could provide liquidity to enter a position ahead of that announcement.

Merger Arb Mondays (23 Dec) – Seven & I, Fuji Soft, NEC Networks, Pentamaster, Goldlion, Henlius

We 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: Arcadium Lithium (LTM AU), Seven & I Holdings (3382 JP), Get Nice Financial Group Ltd (1469 HK), ESR Group (1821 HK), Goldlion Holdings (533 HK).
Lowest spreads: Lifestyle China (2136 HK), Renewable Japan (9522 JP), Macromill, Inc (3978 JP), Fuji Soft Inc (9749 JP), Nec Networks & System Integr (1973 JP).

Ping An Healthcare and Technology (1833 HK) – Cash Dividend Or Scrip Dividend?

By Xinyao (Criss) Wang

Hopson Development (754 HK) is cash-strapped and it will most likely choose cash dividend, which would increase the likelihood that Glorious Peace’s shareholding ratio will increase to more than 50%.
If PAGD’s share price is higher than HK$6.12, there is arbitrage opportunity. Since Ping An may hope other shareholders to choose cash dividends, future stock price may fall below HK$6.12
A risk point is Ping An can actually wait for other shareholders to make their choices before making the final decisions based on the stock price situation at that time.

Korea’s Dem Leader: PBR Under 0.3x Should Be Hostile M&A Targets – Names That Could Feel the Heat

During the public hearing, Lee Jae-myung asked Simpac’s CFO about their 0.3x PBR, then remarked, “That’s prime territory for a hostile M&A.”
With PBRs under 0.3x, these companies may roll out shareholder returns to manage political pressure—definitely worth tracking from a value-up trading perspective.
Hanwha is interesting due to its room for shareholder returns and potential merger with Hanwha Energy. With the new Commercial Act, a public tender offer is likely. Worth watching closely.

KOSPI Size Indices: Overlap Between Global Passive Selling & Downward Migrations

The review period for the March rebalance of the KOSPI Size Indices commenced on 1 December and will end on 28 February.
A quarter of the way through the review period, we forecast 37 migrating stocks. Among new listings, 1 could be added to LargeCap, 3 to MidCap and 2 to SmallCap.
Four downward migrations were deleted from a global index in November. Now, three more downward migrations could be deleted from the same global index in February.

Analyzing the Regulatory Loophole in Kaspi’s Acquisition of D-Market’s Controlling Stake and Potential Outcomes

By Dalius Tauraitis

D-Market’s controlling stake is being sold to Kaspi, acquiring Class A shares at $7.57 and Class B at $4.75.
Turkish law mandates a takeover offer for minority shares, but HEPS’s ADR structure exempts it from this requirement.
Activism efforts aim to increase HEPS’s shareholders to 500, potentially forcing Kaspi to include minority shareholders.

Strategic Transactions and Legal Developments: HEPS, ACC:OL, ABCP, BELFB, NWOR:L, EMBRAC, AVAP:L

By Dalius Tauraitis

D-Market Electronic Services & Trading’s (HEPS) controlling stake is being sold to Kaspi, exploiting a regulatory loophole to avoid a mandatory takeover offer.
Aker Carbon Capture (ACC:OL) sold its business, leaving a cash shell trading at a 20% discount to net cash.
Ambase (ABCP) is litigating over an Equity Put Right, with summary judgment motions scheduled, potentially impacting share price.

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Dec 22

Daily Brief Event-Driven: HK Connect SOUTHBOUND Flows (To 20 Dec 2024); Financials and Telecoms Still Tops and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

HK Connect SOUTHBOUND Flows (To 20 Dec 2024); Financials and Telecoms Still Tops
Pentamaster International (1665 HK): Pentamaster Corp and AchiCapital’s Light Scheme Offer
Last Week In Event SPACE: Seven & I, CPMC, UBTech Robotics, Macromill, 2024 Best-Of
(Mostly) Asia-Pac M&A: Beenos, Insignia, Henlius, GAPack, Fuji Soft, Goldlion, Malaysia Airports
HSI, Nikkei 225, NIFTY 50, Kospi 200, ASX 200, CSI 300: Year-End Trends and Holiday Market Moves!
A Potential Merger Between Honda and Nissan – Impact on Hyundai Motor and Kia Corp
China Healthcare Weekly (Dec.22) – Zai Lab, Junshi, How to Choose PA Good Doctor’s Special Dividend?
Malaysia Airports (MAHB MK): IFA Says NOT Fair, But Reasonable; And To Accept Terms
A/H Premium Tracker (To 20 Dec 2024): Pairwise Intracorrelation and Vol Even Higher

HK Connect SOUTHBOUND Flows (To 20 Dec 2024); Financials and Telecoms Still Tops

SOUTHBOUND gross trading activity fell 20% week-on-week this week. Net buying was a little stronger.
Alibaba Group Holding (9988 HK) was a net SOUTHBOUND sell this week for the first weekly sell since it became Southbound-eligible. Friday was the largest one-day sell in that period.
Tech is still on the sell side and financials are still being bought very bigly.

Pentamaster International (1665 HK): Pentamaster Corp and AchiCapital’s Light Scheme Offer

Pentamaster International (1665 HK) disclosed a Cayman scheme privatisation offer from Pentamaster Corp (PENT MK) and AchiCapital at HK$1.00 (HK$0.93 cash + HK$0.07 dividend), a 56.3% premium to the undisturbed price.
The offer is final but unattractive compared to peer multiples. The shareholder with a blocking stake is a seller, but there is risk due to a high AGM participation rate.
An arguably light offer in which the Holdco is privatising its OpCo by arbitraging the valuation discrepancies across two exchanges may not sit well with minorities.

Last Week In Event SPACE: Seven & I, CPMC, UBTech Robotics, Macromill, 2024 Best-Of

The new article on Seven & I Holdings (3382 JP) from TV Tokyo is causing a dip on top of last week’s weakness. This is a dip to buy.
CPMC Holdings (906 HK)‘s Offer is now open for tendering. Ignore the rumours. Zhang Wei will tender. Expect payment before Chinese New Year.
Accounting solely for the pre-IPO investors, 164.6m shares (US$1.9bn) in UBTech Robotics (9880 HK) will be unlocked, ~39.2% of the firm’s total shares outstanding, and 91 days of three-month ADV.

(Mostly) Asia-Pac M&A: Beenos, Insignia, Henlius, GAPack, Fuji Soft, Goldlion, Malaysia Airports

I tally 51 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Two new deals this week: Goldlion Holdings (533 HK)‘s Scheme, and Beenos Inc (3328 JP)‘s Tender Offer.
Key updates/news took place on: Insignia Financial (IFL AU), Shanghai Henlius Biotech (2696 HK), GAPack (468 HK), Fuji Soft (9749 JP), Macromill (3978 JP) and Malaysia Airports Holdings (MAHB MK).

HSI, Nikkei 225, NIFTY 50, Kospi 200, ASX 200, CSI 300: Year-End Trends and Holiday Market Moves!

By Nico Rosti

As the year comes to its end, the trading calendar is impacted by two shortened weeks, with the Christmas holiday and New Year’s Day both falling midweek.
Holidays market trends can be affected by various non-market factors but it’s always good to check the indexes probability of trend reversals, to avoid surprises.
In this insight, we’ll take a quick look at the major Asia-Pacific market indices—a ‘Christmas Carousel of Odds‘ for Asian markets, if you will.

A Potential Merger Between Honda and Nissan – Impact on Hyundai Motor and Kia Corp

By Douglas Kim

A potential merger between Nissan Motor and Honda Motor would create the third largest auto group in the world.
If this merger is successful, it could have a short term positive impact on Hyundai Motor since it could result in a reduction of overlapping sales/marketing and production of Nissan.
However, a merger of Honda and Nissan could negatively impact Hyundai Motor over the long term because the merged entity could produce more high quality, price competitive vehicles.

China Healthcare Weekly (Dec.22) – Zai Lab, Junshi, How to Choose PA Good Doctor’s Special Dividend?

By Xinyao (Criss) Wang

Increasing revenue without increasing profits is “a big denial” of a company’s business model. Unless Zai Lab significantly reduces costs and maintains revenue high growth, its investment value is low.
Junshi’s 2024 revenue is likely to return to over RMB1.5 billion due to market share expansion in PD-1. Strict cost control will be the main theme for the future.
If PAGD’s share price is higher than HK$6.12, there would be arbitrage opportunity. If Ping An hopes other shareholders to choose cash dividend, future stock price may fall below HK$6.12.

Malaysia Airports (MAHB MK): IFA Says NOT Fair, But Reasonable; And To Accept Terms

Back on the 15th May, a consortium (Khazanah Nasional, EPF, the Abu Dhabi Investment Authority, and Global Infrastructure Partners) collectively holding 41.22%, launched an Offer for Malaysia Airports (MAHB MK).
After some political gymnastics, MAHB squared away the necessary regulatory approvals, and a firm Offer was made on the 15th November. The Offer Doc dispatched on the 6th December.
In the Circular on Friday, the IFA said NOT fair – with reference to a SOTP; but reasonable referencing historical market pricing and that no competing Offer will emerge.

A/H Premium Tracker (To 20 Dec 2024): Pairwise Intracorrelation and Vol Even Higher

AH Premia are all over the place this week. Despite that, pairwise intracorrelation is…. up? Yup. Average Pairwise Volatility is up even more.
Some of this may be stocks being bullied by large SOUTHBOUND flows in a quieter end-of-year market.
Finance is seeing big net SOUTHBOUND buying but that is not showing up in A/H premia. I expect things stay noisy through year-end.

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Dec 21

Daily Brief Event-Driven: 7&I (3382 JP) – Share Price Dipping Deeper Means Dipping Toes Deeper and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

7&I (3382 JP) – Share Price Dipping Deeper Means Dipping Toes Deeper
GAPack (468 HK): XJF Satisfies Pre-Cons. Management Should Back Terms
CPMC Holdings (906.HK) Update – The Critical Moment Has Arrived
High Conviction 2025: Porsche’s SE Discount to NAV Reduction
CHA Biotech Announces A Capital Raise of 41% of Outstanding Shares

7&I (3382 JP) – Share Price Dipping Deeper Means Dipping Toes Deeper

Seven & I Holdings (3382 JP) shares are in a lull here. Winter doldrums without news as the Ito consortium gets its ducks in a row and 7&i sells York.
Alimentation Couche-Tard (ATD CN) is waiting patiently. They have the ability to wait, and to fund, and pay up.
An article/show is causing a dip today on top of last week’s weakness. This is a dip to buy.

GAPack (468 HK): XJF Satisfies Pre-Cons. Management Should Back Terms

During the lunch break, Greatview Aseptic Packaging (468 HK) announced that Shandong Xinjufeng Technology Packaging (301296 CH) (XJF) had satisfied all pre-conditions – the final approvals concerned outbound direct investments.
The Offer Document, including the IFA opinion, is expected to be dispatched in seven days – or 27th December, at which time, the Offer will be open to acceptances.
Evidently the Jeff Bi/Gong Hong MGO isn’t materialising any time soon. Provided the IFA is supportive – and that should now be known – management should unanimously back XJF’s Offer.

CPMC Holdings (906.HK) Update – The Critical Moment Has Arrived

By Xinyao (Criss) Wang

The First Huarui Offer Closing Date is Jan.10 2025. The latest time/date by which the Huarui Offer can become or be declared unconditional as to acceptances is 18 February 2025.
China Foods once chose to side with Baosteel – They are both SOEs.Although regulatory agencies have given the green light, it’s still unclear if China Foods will accept Huarui Offer.
The “key variable” is Zhang Wei’s attitude. Investors can choose bet on it.It would be wise for arbitrageurs to wait until Zhang Wei makes his move before making a decision.

High Conviction 2025: Porsche’s SE Discount to NAV Reduction

By Jesus Rodriguez Aguilar

Porsche SE, a holding company, controls 53.3% of Volkswagen (VW) and 25% (+1 share) of Porsche AG, leveraging a dual-class share structure to consolidate control with minimal economic stakes.
Net debt of €5.16 billion, accrued from the Porsche AG stake acquisition, relies heavily on VW and Porsche AG dividends for debt servicing, with CF uncertainties tied to VW’s restructuring.
Porsche SE trades at a 31.8% discount to NAV, reflecting legal liabilities, debt reduction priorities, and holding structure complexities, but this discount could tighten to 20% as risks subside.

CHA Biotech Announces A Capital Raise of 41% of Outstanding Shares

By Douglas Kim

On 20 December, Chabiotech (085660 KS) announced that it plans to conduct a rights offering capital raise of 250 billion won.
The expected rights offering price is 10,800 won (27.3% lower than current price of 14,860 won). A total of 23.148 million new shares (41% of outstanding shares) will be issued.
This capital raise by CHA Biotech is likely to further negatively impact the company’s share price in the next several weeks as many investors are concerned about excessive shares dilution.

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Dec 20

Daily Brief Event-Driven: Sony To Buy 7+% Stake in Kadokawa (9468 JP) For ¥50bn and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Sony To Buy 7+% Stake in Kadokawa (9468 JP) For ¥50bn, Ending Near-Term Hopes of Takeover
SET50 Index Rebalance: Four Changes; Cal Comp🚀
Henlius (2696 HK): This Should Trade Tighter. Get Involved
MPHB Capital (MPHB MK)’s Offer: Almost There As ISM Exhausts Options
LY Corp (4689) Announces Takeover of Beenos (3328) – Lightish at ¥4,000 But A Done Deal
Quiddity Leaderboard CSI 300/500 Jun 25: ~US$5.9bn Collective One-Way Flows
Korea FSC’s Stabilization Fund: Breaking Down the Buzz and Flow Impact
Quiddity Leaderboard STAR 50/100 Mar25: Multiple Changes, Large Flows; High-Impact Trade Idea
CPMC (906 HK): Tendering Now Open
LS Electric, Then Hyundai Rotem, Now Samyang Foods and Hyundai Mipo: Same Proactive Flow?

Sony To Buy 7+% Stake in Kadokawa (9468 JP) For ¥50bn, Ending Near-Term Hopes of Takeover

Today, Kadokawa (9468 JP) announced it would sell ¥50bn of shares to Sony (6758 JP) in a 3rd Party Allotment to cement a Strategic/Capital Alliance. Sony will own 10% at ¥4,146/share.
40% of proceeds is to “create and develop new IP”, 60% is to “enhance global IP distribution”; both over 5yrs. Given ¥108bn of net cash/securities, this is a garbage reason.
Kadokawa shares have gained 44% in a month since Reuters carried an “Exclusive” article saying Sony was in talks to acquire Kadokawa. This is defensive entrenchment. The result will disappoint.

SET50 Index Rebalance: Four Changes; Cal Comp🚀

There will be 4 changes for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at the close on 30 December.
All changes are in line with our forecasts and there appears to be positioning in all the stocks.
Cal Comp Electronics Thailand (CCET TB) will have the largest passive buying a percentage of free float and could be the stock to watch.

Henlius (2696 HK): This Should Trade Tighter. Get Involved

After the China Traditional Chinese Medicine (570 HK) fiasco back in October, Hong Kong M&As have received some welcome Xmas cheer of late.
Small-Cap CM Hi-Tech (2115 HK) secured reg approvals in record time. Then CPMC (906 HK)‘s pre-cons were satisfied on 13th December. Now Shanghai Henlius (2696 HK)‘s pre-cons are also fulfilled.
Henlius’ spread narrowed after securing NDRC approval on the 22nd Nov; and again after fulfilling pre-cons this week. A 3.1% gross spread is okay. This is done. Get involved.

MPHB Capital (MPHB MK)’s Offer: Almost There As ISM Exhausts Options

MPHB Capital (MPHB MK)‘s delisting Offer via a selective capital reduction (SCR) from controlling shareholder and chairman Tan Sri Surin Upatkoon appears to be in the home straight.
The completion of the Offer has been delayed as ISM Sdn Bhd, MPHB’s minority partner in six JVs, invokes various legal options in an ongoing dispute.
The High Court has now fixed 6 January 2025 as the hearing date for the SCR petition. Assuming that is granted, payment is likely mid-Feb.

LY Corp (4689) Announces Takeover of Beenos (3328) – Lightish at ¥4,000 But A Done Deal

Early today, the Nikkei had an article saying LY (4689 JP) would launch a takeover of Beenos Inc (3328 JP). The stock went limit up. Shorts are many times ADV.
Post-Close, we get a deal much as implied by the Nikkei article. It seems light to me but the top three holders have agreed to the deal.
Regulatory will take a couple of months. This will likely fall tomorrow. If you are a long-only fund holder, think about the alternatives (read the conclusions here).

Quiddity Leaderboard CSI 300/500 Jun 25: ~US$5.9bn Collective One-Way Flows

By Janaghan Jeyakumar, CFA

CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500.
In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in June 2025.
Currently, we see 6 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index.

Korea FSC’s Stabilization Fund: Breaking Down the Buzz and Flow Impact

With the Fed shock pushing the won past 1,450 and the KOSPI down, it’s time to dig into the stabilization fund—its size, timing, and which stocks will catch the flow.
With ₩10T in play, even spread over 10 stages, it could drive significant price impact. NPS’s ₩1.5T injection in December shows how even smaller flows move the market.
The FSC plans to focus on KOSPI 200 and broad market ETFs, with new ETFs like the Value-Up Index likely getting more flow—target stocks in both for bigger impact.

Quiddity Leaderboard STAR 50/100 Mar25: Multiple Changes, Large Flows; High-Impact Trade Idea

By Janaghan Jeyakumar, CFA

STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
STAR 100 index tracks the next 100 names (51st-150th ranks) and it represents the mid-cap segment of the STAR market.
In this insight, we look at the potential ADDs/DELs for the STAR50/STAR100 indices for the March 2025 index rebal event and suggest a high impact trade idea.

CPMC (906 HK): Tendering Now Open

At a 1.5% gross spread to terms, CPMC Holdings (906 HK) is trading with completion is mind after the last pre-condition – SAFE – was satisfied on the 13th December.
The Offer Doc is now out and the transaction is open for acceptances. The First Close is the 10th January.
I’d expect this deal to turn unconditional on or before the First Close, with payment around the 20th January.

LS Electric, Then Hyundai Rotem, Now Samyang Foods and Hyundai Mipo: Same Proactive Flow?

Local hedge funds, mainly prop traders and PEs, drove the price action in LS Electric and Hyundai Rotem, and are now leading net buying in Samyang Foods and Hyundai Mipo.
Given the setup, it’s likely Samyang Foods and HD Hyundai Mipo will follow a similar move until mid-January when screening starts, so we should stay aware of this backdrop.
This gives us a chance to capture upside. Plus, since Samyang Foods and Hyundai Mipo may pull back 30-40% post-screening, there’s also a solid opportunity during that dip.

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✓ Company Data and News
✓ Events & Webinars

Dec 19

Daily Brief Event-Driven: Heiwa (6412) Announces Game-Changing Acquisition and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Heiwa (6412) Announces Game-Changing Acquisition, Gets Very Heavily Levered (Termed Debt)
How Has the Index Rebalance Strategy Performed in 2024?
Insignia Financial (IFL AU): Bain Rejection Follows Tanarra’s Lead
EQD | NDX OVERSOLD: A High Probability LONG Trade Idea
EQD | CSI 300 Stuck in Neutral: Equal Chances to Rally or Drop

Heiwa (6412) Announces Game-Changing Acquisition, Gets Very Heavily Levered (Termed Debt)

Heiwa Corp (6412 JP) got 99% of its revenue as a pachinko/pachislot machinery maker. In 2011, it bought one of Japan’s largest golf course operators, PGM Holdings, from Lone Star.
Golf course revenue is up 30% in 10yrs. Pachinko/Pachislot revenue is down by 60+% in the same period. Golf is the bulk of revenue and OP now.
Today, the company announced a stunning, even monumental acquisition to become the largest golf course operator in the world.

How Has the Index Rebalance Strategy Performed in 2024?

It has been a decent year for the index rebalance strategy, though there have been some big hiccups along the way.
Forecasting the index changes and impacts has been important, but timing (especially momentum/value regime changes) and hedge selection have also been major factors affecting the returns of the strategy.
As passive AUM continues to increase, we expect focus on the strategy to continue in 2025 with market players taking different approaches to trading the potential and announced index changes.

Insignia Financial (IFL AU): Bain Rejection Follows Tanarra’s Lead