This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.
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1. Voyah Auto (7489 HK): Index & Flow Implications
- Following Dongfeng Motor (489 HK)‘s distribution, VOYAH Automobile Technology Company (7489 HK) shares start trading on the HKEX (388 HK) on 19 March.
- Some global trackers will sell VOYAH Automobile shares at the close on listing day. The stock will be sell-only in Stock Connect for the foreseeable future.
- VOYAH Automobile‘s peers have traded higher over the last few days and that could provide a tailwind for the stock. Valuations are in line with peers.
2. Sunway Healthcare: Index Flows Next Week
- After a huge jump in its stock price on listing day, Sunway Healthcare will be added to the Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX) next week.
- There will be also inflows to the stock from passive trackers of one global index. That should provide some support for the stock.
- Active managers in Malaysia use the Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX) as a benchmark and there will be buying in Sunway Healthcare from those funds too.
3. Dongfeng Motor (489 HK): Thoughts on VOYAH’s Listing on 19 March
- On 9 March, the vote on the Dongfeng Motor (489 HK) comfortably passed. The offer is HK$6.68 per H Share + 0.3552608 VOYAH H Shares per H Share.
- VOYAH Automobile Technology Company (7489 HK) is set to be listed on 19 March. At the Dongfeng’s last close price of HK$9.54, the implied value of VOYAH is HK$8.05.
- Despite the market turmoil, VOYAH’s peers have fared well, up 7% since the vote. My VOYAH valuation range is HK$10.76 to HK$14.01, with a midpoint of HK$12.45.
4. [Japan Event] Rumblings at TEPCO (9501) Send the Stock Limit Up
- 15 years ago last week, Japan was struck by a huge earthquake accompanied by a tsunami causing nearly 20,000 deaths, and knocking out a TEPCO nuclear power plant, causing disaster.
- The govt+public blamed TEPCO, which has paid out ¥11trln+ of compensation so far. 15yrs later, the company is trying to find a way to grow its way out of debt.
- Today, the Asahi said alliance proposals had come in, including a takeover proposal. The stock went limit up. This is early, and there are LOTS of considerations.
5. [Japan Activism] Elliott Buys Stake In Mitsui OSK (9104) Targets Capital With a Following Wind
- Not long ago, Reuters came out with a headline saying Elliott had taken a “significant stake” in Mitsui O.S.K. Lines (9104 JP) (“MOL”). Minutes later, Elliott issued a press release.
- Shares had been trading at 0.77x book (0.85x TBV) after rising significantly these past few months. They popped 10+% in short order.
- Elliott sees Mitsui OSK as undervalued, wants to “work constructively” with MOL to ensure its “upcoming MTMP” is “appropriately ambitious.” They are pushing with a tailwind.
6. Take on Chey Tae-Won’s Remarks About the Hynix ADR Play
- Hynix will likely present ADR plans at the March 25 AGM. Chey Tae-won’s GTC comments signal the internal decision is done; timing and optics are now the focus.
- March 25 AGM is ideal for Hynix ADR: timing aligns with HBM4 Q2 validation to capture post-milestone valuation uplift.
- Once Hynix announces the ADR, staged 5% buybacks provide strong support, setting up short-term outperformance versus Square, fueled by buyback demand and anticipatory positioning ahead of U.S. passive flows.
7. Merger Arb Mondays (16 Mar) – Skyworth, ENN, BlueScope, Pepper, Humm, Makino, Sankei, MCJ, IJM
- I summarise the latest spreads and newsflow for the merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, the Philippines, Thailand, and Chinese ADRs.
- Highest spreads: Qoria (QOR AU), Skyworth Group Limited (751 HK), Ijm Corp Bhd (IJM MK), Bluescope Steel (BSL AU), Pepper Money (PPM AU), ENN Energy (2688 HK), Humm.
- Lowest spreads: Bright Smart Securities (1428 HK), BioDlink International (1875 HK), Sankei Real Estate (2972 JP), Itochu Shokuhin (2692 JP), MCJ Co Ltd (6670 JP).
8. [Japan M&A/Activism] Maven Writes a Letter on MCJ (6670)
- The Bain-Founder TOB launched on MCJ Co Ltd (6670 JP) in February was at the wrong price. Low-mid single digit equity check to FCF. That’s cheap.
- The Special Committee – unaided by its own advisors – decided the final price was inadequate, but somehow also agreed to not not support it. One committee member dissented.
- Ascender Capital wrote a letter one week later. The stock has traded through terms since announcement. Maven published an open letter today. That’s late. Maybe too late. But we’ll see.
9. Parsing the Underlying Implications of Samsung’s Shareholder Return Comments at Today’s AGM
- Samsung just reaffirmed existing payouts, KRW 9.8tn regular, KRW 1.3tn FY2025 special, and the KRW 16tn buyback, with no new FY2026 dividends or buybacks.
- The AGM’s schedule update covers only the FY2027–FY2029 three-year plan; no guidance or timing was given for FY2026 incremental shareholder returns.
- Local consensus sees FY2026 net income near KRW 170tn, implying KRW 70–80tn for 50% FCF payout; tomorrow’s value-up likely gives a first peek at incremental returns, affecting pref discount.
10. Samsung Just Dropped Its Value-Up Filing: Key Highlights and This Year’s DPS Estimate
- Samsung’s value-up confirms ~KRW 65–70T CAPEX and a hard 50% FCF payout, removing market overhang and signaling strong shareholder returns despite no explicit payout ratio.
- With CAPEX ~KRW 70T and FCF ~KRW 170T, Samsung’s cash build could reach KRW 260–270T, giving the market a solid base to model DPS and structure narratives.
- Samsung’s 50% FCF payout leaves ~KRW 75T for shareholder returns, implying ~KRW 5,500/share special dividend and total DPS ~KRW 7,000, or ~5% yield on preferred shares.
