This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
1. Sun Corp (6736) – CLBT Has Round-Tripped, But Now Better ParentCo and a Buyback so Set-Up Is Better
- 12 months on from the Tender Offer which changed the shape of the shareholder register, Sun Corp (6736 JP) is up small and its main asset Cellebrite is -10%.
- The value of the rest of Sun Corp has probably increased to cover that 10% through new business earnings, but the main value is still Cellebrite. An exit still awaited.
- Now Cellebrite is lower, and SunCorp is lower (but recently rising) and SunCorp has announced a buyback which accounts for a big chunk of Real World Float. Hmmm…
2. [Japan M&A] Taisei Corp To Take Toyo Construction (1890 JP) Private – Governance Torture Ends
- In March 2022, Infroneer bid ¥770. The Board said “too low” but then accepted. A month later, YFO offered ¥1,000. Too high, bad owner, not accepted.
- Summer 2023 after a year of palm to the face for YFO, the Board was partly spilled. YFO bid ¥1,255/share and the Board said the premium was too low.
- Now, the Board has accepted a bid from Taisei at a roughly similar premium. But the price is ¥1,750/share. Infroneer and YFO have agreed to sell. Minorities win… -ish
3. Kangji Medical (9997 HK): Consortium’s Light Preconditional Scheme Offer
- Hangzhou Kangji Medical Instrument Co., Ltd. (9997 HK) disclosed a preconditional privatisation from a consortium at HK$9.25, a 9.9% premium to last close and a 21.7% premium to the undisturbed price.
- The precondition relates to SAMR approval. The key condition will be approval by at least 75% disinterested shareholders (<10% of all disinterested shareholders’ rejection). The offer is final.
- The scheme vote risk is medium-to-high due to an unattractive offer, a blocking stake below the substantial disclosure threshold, unfavourable AGM voting patterns, and emerging retail opposition.
4. Identifying the SK Square Vs. Hynix Price Ratio Reversion Alpha Setup
- Hunting the reversion point for Square-Hynix price ratio amid local buzz: need clear pro-business tax signals and Hynix’s downtrend to continue despite today’s bounce.
- Tax tweak likely turns neutral despite gov’s cautious tone today. Hynix’s bounce faces headwinds from supply ramp and yield issues, so fresh rally odds remain slim.
- Focus on hunting SK Square vs. Hynix price ratio reversion, pairing it with Samsung Long/Hynix Short for a strong short-term trade setup to ride the trend.
5. [Japan M&A] Minebea Matches YAGEO for Shibaura Elec (6957) At ¥6,200. Presses on Early Cashout
- After three months of NOT matching YAGEO’s bid for Shibaura Electronics (6957 JP) at ¥6,w00 as YAGEO’s proposal continues its long plod through FEFTA review, Minebea-Mitsumi has now matched ¥6,200.
- Key is that their bid closes before the indicative deadline for YAGEO to receive word on FEFTA approval. They are hoping this bid mollifies the irrevocables and everyone else.
- But if YAGEO cares, it could bump to ¥6,300 tomorrow and extend its tender offer which closes on Monday. But the put option is now struck higher, which de-risks this.
6. Why We’re Eyeing KRX’s Sep 29 KCMC Event for Dividend Momentum Trades
- KCMC 2025 will likely reveal fresh, unpriced stimulus details, potentially sparking a price rally like last year’s 2% KOSPI 200 jump on the value-up ETF rollout.
- The key wildcard at KCMC 2025 is dividends—shifting from Yoon’s Japan-style ROE grind to a Taiwan-style push for bigger shareholder payouts.
- With Sept 29 approaching, dividend policy buzz may drive price moves—smart to prep dividend momentum trades to front-run this catalyst.
7. Current Samsung Biologics Split Dynamics with Alpha Potential Both Ways
- One of the hottest local plays is gauging KRX and FSS leanings on Biologics split, which could drive short-term alpha across the three Samsung names alongside battery and HBM flows.
- Short-Term focus is KRX pre-listing review and FSS registration window. Once approval and lock-up kick in, Biologics and Samsung Electronics could outperform Samsung C&T.
- From a risk-hedge angle, this is a long-short alpha setup: if the split fails, Samsung C&T likely takes the hit, offering alpha potential both ways.
8. Merger Arb Mondays (11 Aug) – Mayne, PointsBet, Infomedia, Ashimori, Toyo Const, HKBN, Joy City
- 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), Ashimori Industry (3526 JP), ENN Energy (2688 HK), Ci Medical (3540 JP), Joy City Property (207 HK), Santos Ltd (STO AU).
- Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Ainsworth Game Technology (AGI AU), Welcia Holdings (3141 JP), ZEEKR (ZK US), Soft99 Corp (4464 JP).
9. [Japan M&A] Founder, KEPCO, Try ¥2,750 Bain-Led MBO on Rezil (176A). Light Given Growth – Bumpity?
- To my knowledge, this may be the first Tender Offer takeout proposal on a “new ticker.” Rezil (176A JP) was listed just 16mos ago.
- This takeout is done on a highish-growth stock at 11.7x 1yr forward EV/EBITDA. It’s not expensive, but they have ~60%. BUT… there’s another Potential Player who may have Big Thoughts.
- Slightly long-dated, small-cap, likely to be illiquid. Watch how it trades early for hints.
10. Value Unlock SG: Value Creation Via Corporate Action. May the Wind Carry Many More Sails
- A wave of corporate actions by SGX-listed companies has unlocked substantial shareholder value and re-rated select stocks in recent months. In this note, we spotlight five standout cases.
- Our top picks with the strongest catalysts for further upside after delivering significant shareholder returns over the past year are – Keppel Corp (KEP SP) and Yangzijiang Financial (YZJFH SP).
- The outsized value creation delivered by these companies should serve as a wake-up call for other managements to follow suit and initiate actions to boost returns and unlock shareholder value.
