Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

Melco International Development / Equity Bottom-Up

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<p>This week in StubWorld ...</p>
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<p><a href="https://www.smartkarma.com/entities/melco-international-development-ltd" target="_blank" data-smartkarma-citation="entities:809:1" rel="noopener">Melco International Development (200 HK)</a>'s underperformance against 56.8% held <a href="https://www.smartkarma.com/entities/melco-crown-entertainme-adr" target="_blank" data-smartkarma-citation="entities:810:1" rel="noopener">Melco Resorts &amp; Entertainment (MLCO US)</a> sees an all-time low NAV discount and implied stub; and the simple ratio (Melco/MLCO) is around its lowest level since Melco took majority control in the Macau gaming play.</p>
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<p>Preceding my comments on Melco and xx are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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<p>As always, more below the fold.</p>
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This week in StubWorld ...




Melco International Development (200 HK)'s underperformance against 56.8% held Melco Resorts &amp; Entertainment (MLCO US) sees an all-time low NAV discount and implied stub; and the simple ratio (Melco/MLCO) is around its lowest level since Melco took majority control in the Macau gaming play.




Preceding my comments on Melco and xx are the weekly setup/unwind tables for Asia-Pacific Holdcos.

These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.

As always, more below the fold.


StubWorld: Melco's All-Time Low As Macau Stocks Lag Las Vegas Plays

Event-Driven

Last Week in Event SPACE: Kerry Logistics, Sanken Electric, Vocus Comms, Toa Oil, ThaiBev, Sharp

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<p>A double-dose of StubWorld this week ...</p>
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<p><a href="https://www.smartkarma.com/entities/wynn-resorts-ltd" target="_blank" data-smartkarma-citation="entities:606:1" rel="noopener">Wynn Resorts (WYNN US)</a> six-month outperformance versus 72%-held <a href="https://www.smartkarma.com/entities/wynn-macau-ltd" target="_blank" data-smartkarma-citation="entities:473:1" rel="noopener">Wynn Macau Ltd (1128 HK)</a> pitches the current share price at a premium to its NAV.</p>
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<p>Preceding my comments on Wynn are the updated setup/unwind tables for Asia-Pacific Holdcos.</p>
</div>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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<p>As always, more below the fold.</p>
</div>


A double-dose of StubWorld this week ...



Wynn Resorts (WYNN US) six-month outperformance versus 72%-held Wynn Macau Ltd (1128 HK) pitches the current share price at a premium to its NAV.



Preceding my comments on Wynn are the updated setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


As always, more below the fold.


StubWorld: Wynn Trading At A Premium To NAV

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Thematic (Sector/Industry)

<p>Current investment levels in Macau Gaming stocks are low compared to history across all of our ownership measures.  Declines that started in 2014 were accentuated by the COVID crisis, as EM funds repositioned in to safer corners of the market.  From a positioning perspective, this leaves plenty of upside should a change in sentiment occur.  Active EM exposure is now close to a 10-year low, there are many previous investors sitting on the sidelines and current investors are far from overstretched.</p><p>At present though, EM investors bullish on the fundamental case for Macau Gaming stocks should be aware that this is largely an anti-consensus view.  74% of EM active funds do not have exposure and neither does the benchmark MSCI Emerging Markets index.  If it does pays off, it will provide valuable outperformance against both the benchmark and the active peer group in the year to come.  </p><p><em>The analysis looks at the collective allocations in Macau Gaming stocks from a pool of 243 actively managed Global Emerging Market funds, with combined AUM of $460bn,</em></p>

Current investment levels in Macau Gaming stocks are low compared to history across all of our ownership measures.  Declines that started in 2014 were accentuated by the COVID crisis, as EM funds repositioned in to safer corners of the market.  From a positioning perspective, this leaves plenty of upside should a change in sentiment occur.  Active EM exposure is now close to a 10-year low, there are many previous investors sitting on the sidelines and current investors are far from overstretched.At present though, EM investors bullish on the fundamental case for Macau Gaming stocks should be aware that this is largely an anti-consensus view.  74% of EM active funds do not have exposure and neither does the benchmark MSCI Emerging Markets index.  If it does pays off, it will provide valuable outperformance against both the benchmark and the active peer group in the year to come.  The analysis looks at the collective allocations in Macau Gaming stocks from a pool of 243 actively managed Global Emerging Market funds, with combined AUM of $460bn,

Macau Gaming:  Beaten up Sector Has Potential to Reverse

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

<p>Last week, New York Governor pointed towards legalizing online gambling to try to plug the budget gaps that COVID has blown open. He wants to raise $500M in revenues annually. We don't think he will get there, but we do think NY is a $700M TAM.</p><p>At $52, is it time to re-engage on Draft Kings even after an 11% rally?</p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p></div>

Last week, New York Governor pointed towards legalizing online gambling to try to plug the budget gaps that COVID has blown open. He wants to raise $500M in revenues annually. We don't think he will get there, but we do think NY is a $700M TAM.At $52, is it time to re-engage on Draft Kings even after an 11% rally?Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

NY State To Legalize Gambling, Double Down on DraftKings?

United States

Wynn Resorts, Limited owns and operates luxury hotels and destination casino resorts in Las Vegas, Nevada, Macau, and China. The Company offers amenities such as guest rooms and suites, restaurants, golf course, and an on-site luxury automotive dealership.

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Wynn Resorts (WYNN US)

StubWorld: Melco's All-Time Low As Macau Stocks Lag Las Vegas Plays

Melco is a set-up here - go Long Melco and Short MLCO. Even taking the view that sentiment/growth for casino stocks is better in the US than in...

David Blennerhassett

Last Week in Event SPACE: Kerry Logistics, Sanken Electric, Vocus Comms, Toa Oil, ThaiBev, Sharp

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

StubWorld: Wynn Trading At A Premium To NAV

Geographic exposure will be key in post-COVID recovery. My forward bet lies with Asia-Pacific gaming stocks - especially in Macau - to outperform...

David Blennerhassett

Macau Gaming: Beaten up Sector Has Potential to Reverse

As sentiment begins to turn in Macau Gaming stocks, Global EM investors are positioned at their lowest levels in a decade.

Steven Holden

NY State To Legalize Gambling, Double Down on DraftKings?

After New York's Governor signaled he would legalize gambling, we revisit our previous bullish thesis on DraftKings to see if now is the time to re...

Aaron Gabin

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