Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

Gree Electric Appliances / Equity Bottom-Up

<p>In mid-September, it was reported by Reuters that the Chinese air conditioner maker, Gree Electric Appliances is among one of the potential bidders for Philips’ domestic appliance business. Reuters also mentioned that the other interested candidates include Midea, Haier and Joyoung.</p><p>The advisers for Philips have already sent out the teasers for potential buyers and the bidding process is expected to begin later this year. In our previous insight on Philips, we discussed in detail about the company’s announcement regarding the future of its domestic appliance business and its valuation.</p><p>Read our previous insight on Philips’ sale of its domestic appliance business and our insights on Gree:</p><p><a href="https://www.smartkarma.com/insights/philips-to-divest-domestic-appliances-business-potential-for-margin-expansion" target="_blank" data-smartkarma-citation="insights:36733" rel="noopener">Philips to Divest Domestic Appliances Business – Potential for Margin Expansion</a> </p><p><a href="https://www.smartkarma.com/insights/gree-electric-appliance-good-gree-is-losing-the-throne-to-its-ac-empire" target="_blank" data-smartkarma-citation="insights:34383" rel="noopener">Gree Electric Appliance: Good Gree Is Losing the Throne to Its AC Empire</a> </p><p><a href="https://www.smartkarma.com/insights/gree-electric-positive-sentiment-regarding-stake-sale-already-priced-in-we-remain-conservative" target="_blank" data-smartkarma-citation="insights:35339" rel="noopener">Gree Electric: Positive Sentiment Regarding Stake Sale Already Priced In; We Remain Conservative</a> </p>

In mid-September, it was reported by Reuters that the Chinese air conditioner maker, Gree Electric Appliances is among one of the potential bidders for Philips’ domestic appliance business. Reuters also mentioned that the other interested candidates include Midea, Haier and Joyoung.The advisers for Philips have already sent out the teasers for potential buyers and the bidding process is expected to begin later this year. In our previous insight on Philips, we discussed in detail about the company’s announcement regarding the future of its domestic appliance business and its valuation.Read our previous insight on Philips’ sale of its domestic appliance business and our insights on Gree:Philips to Divest Domestic Appliances Business – Potential for Margin Expansion Gree Electric Appliance: Good Gree Is Losing the Throne to Its AC Empire Gree Electric: Positive Sentiment Regarding Stake Sale Already Priced In; We Remain Conservative 

Gree Electric: A Potential Buyer for Philips’ Home Appliances Business

Equity Capital Markets

Haier Smart Home / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd" target="_blank" data-smartkarma-citation="entities:7196:1" rel="noopener">Haier Smart Home (600690 CH)</a> has filed for an IPO on the Hong Kong Stock Exchange and simultaneously plans to privatise <a href="https://www.smartkarma.com/entities/haier-electronics-group-co" target="_blank" data-smartkarma-citation="entities:4877:1" rel="noopener">Haier Electronics Group Co (1169 HK)</a> . However, the success of the IPO is dependent on Privatisation materialising.</li>
<li>We have covered Haier Smart Homes (HSH) in detail in our previous reports where we concluded that we were positive on the company’s growth prospects.</li>
</ul><blockquote>
<p><em>We remain positive on the company’s growth prospects given its well diversified product portfolio, large exposure to growing overseas markets and the ability to generate synergies through its acquisitions which should help the company expand its margins</em></p>
<p><em>- Previous Insight</em></p>
</blockquote><ul>
<li>Since we have already discussed about the company’s businesses and the outlook for each segment in detail in our previous insights, we intend to provide an update on the company’s recent financial performance and any changes to the company’s business outlook since we last wrote on the company.</li>
<li>Read our previous insights on the company:</li>
</ul><p><a href="https://www.smartkarma.com/insights/haier-sh-diversified-product-mix-overseas-exposure-and-synergies-to-support-a-higher-valuation" target="_blank" rel="noopener">https://www.smartkarma.com/insights/haier-sh-diversified-product-mix-overseas-exposure-and-synergies-to-support-a-higher-valuation</a>.</p><p><a href="https://www.smartkarma.com/insights/haier-sh-emerging-markets-refrigerator-growth-cushions-slowdown-in-china-and-developed-markets" target="_blank" rel="noopener">https://www.smartkarma.com/insights/haier-sh-emerging-markets-refrigerator-growth-cushions-slowdown-in-china-and-developed-markets</a></p><p><a href="https://www.smartkarma.com/insights/haier-sh-part-ii-lower-exposure-to-declining-ac-market-while-synergies-help-margin-expansion" target="_blank" rel="noopener">https://www.smartkarma.com/insights/haier-sh-part-ii-lower-exposure-to-declining-ac-market-while-synergies-help-margin-expansion</a>.</p>



Haier Smart Home (600690 CH) has filed for an IPO on the Hong Kong Stock Exchange and simultaneously plans to privatise Haier Electronics Group Co (1169 HK) . However, the success of the IPO is dependent on Privatisation materialising.
We have covered Haier Smart Homes (HSH) in detail in our previous reports where we concluded that we were positive on the company’s growth prospects.

We remain positive on the company’s growth prospects given its well diversified product portfolio, large exposure to growing overseas markets and the ability to generate synergies through its acquisitions which should help the company expand its margins
- Previous Insight

Since we have already discussed about the company’s businesses and the outlook for each segment in detail in our previous insights, we intend to provide an update on the company’s recent financial performance and any changes to the company’s business outlook since we last wrote on the company.
Read our previous insights on the company:
https://www.smartkarma.com/insights/haier-sh-diversified-product-mix-overseas-exposure-and-synergies-to-support-a-higher-valuation.https://www.smartkarma.com/insights/haier-sh-emerging-markets-refrigerator-growth-cushions-slowdown-in-china-and-developed-marketshttps://www.smartkarma.com/insights/haier-sh-part-ii-lower-exposure-to-declining-ac-market-while-synergies-help-margin-expansion.

Haier Smart Homes IPO: Growing Exposure to Emerging Markets and M&A Opportunities to Drive Growth

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Haier Electronics Group Co / Event-Driven

<div>
<p><a href="https://www.smartkarma.com/entities/haier-electronics-group-co" target="_blank" data-smartkarma-citation="entities:4877:1" rel="noopener"></a>On the 31 July, <a href="https://www.smartkarma.com/entities/haier-electronics-group-co" target="_blank" data-smartkarma-citation="entities:4877:1" rel="noopener">Haier Electronics Group Co (1169 HK)</a> (HEG) <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0731/2020073101131.pdf" target="_blank" rel="noopener">announced</a> a pre-conditional Scheme such that HEG shareholder will receive 1.6 new <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd" target="_blank" data-smartkarma-citation="entities:7196:1" rel="noopener">Haier Smart Home (600690 CH)</a> (HSH) H shares plus HK$1.95 in cash. </p>
<p>The pre-condition concerned approval from HSH's shareholders and CSRC approval. The pre-conditions were <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0901/2020090103529.pdf" target="_blank" rel="noopener">fulfilled</a> on the 1 September. The next step in this process is for HEG shareholders to vote on the Scheme. The despatch of the Scheme Doc has now been extended to the 30 November, from 4 September previously.</p>
<p> A 632-page Application Proof for the listing of HSH H-shares has now been <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0911/2020091100023.pdf" target="_blank" rel="noopener">lodged</a>. This will be a <a href="https://en-rules.hkex.com.hk/entiresection/2269" target="_blank" rel="noopener">listing by introduction</a>.</p>
<p>The question at the time of the Scheme announcement, as it is now - is where will the HSH (as yet unlisted) H-shares trade with respect to the HSH A-shares? </p>
<p>An independent valuer backed out an indicative value under the Scheme of HK$31.11-HK$31.90 - or $31.51 at the mid-point. However, this was just a valuer's opinion. There is no guarantee this is where the Hs will trade. </p>
</div>
<div>
<p>The market is assigning around a 37% discount (HSH Hs vs. HSH As). Relative to a basket of liquid A/Hs and listed A/H peers, this is a level to get involved.</p>
</div>
<div>
<p>More below the fold.</p>
</div>


On the 31 July, Haier Electronics Group Co (1169 HK) (HEG) announced a pre-conditional Scheme such that HEG shareholder will receive 1.6 new Haier Smart Home (600690 CH) (HSH) H shares plus HK$1.95 in cash. 
The pre-condition concerned approval from HSH's shareholders and CSRC approval. The pre-conditions were fulfilled on the 1 September. The next step in this process is for HEG shareholders to vote on the Scheme. The despatch of the Scheme Doc has now been extended to the 30 November, from 4 September previously.
 A 632-page Application Proof for the listing of HSH H-shares has now been lodged. This will be a listing by introduction.
The question at the time of the Scheme announcement, as it is now - is where will the HSH (as yet unlisted) H-shares trade with respect to the HSH A-shares? 
An independent valuer backed out an indicative value under the Scheme of HK$31.11-HK$31.90 - or $31.51 at the mid-point. However, this was just a valuer's opinion. There is no guarantee this is where the Hs will trade. 


The market is assigning around a 37% discount (HSH Hs vs. HSH As). Relative to a basket of liquid A/Hs and listed A/H peers, this is a level to get involved.


More below the fold.


China Conch Venture Holdings / Event-Driven

<div>
<p>This week in StubWorld ...</p>
</div>
<div>
<div>
<div class="content-highlight">
<p><a href="https://www.smartkarma.com/entities/china-conch-venture-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19943:1" rel="noopener">China Conch Venture Holdings (586 HK)</a> continues to underperform 17.8%-held <a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd-094855ab-abec-4b71-956b-5bfc85e22fdd" target="_blank" data-smartkarma-citation="entities:389:1" rel="noopener">Anhui Conch Cement Co Ltd A (600585 CH)</a>, with the implied stub at its lowest level since CCV was listed in December 2013.</p>
</div>
</div>
</div>
<div>
<p>Preceding my comments on CCV and <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd" target="_blank" data-smartkarma-citation="entities:7196:1" rel="noopener">Haier Smart Home (600690 CH)</a> / <a href="https://www.smartkarma.com/entities/haier-electronics-group-co" target="_blank" data-smartkarma-citation="entities:4877:1" rel="noopener">Haier Electronics Group Co (1169 HK)</a>, are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
</div>
<div>
<div>
<div class="content-remarks">
<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>
</div>
</div>
</div>


This week in StubWorld ...




China Conch Venture Holdings (586 HK) continues to underperform 17.8%-held Anhui Conch Cement Co Ltd A (600585 CH), with the implied stub at its lowest level since CCV was listed in December 2013.




Preceding my comments on CCV and Haier Smart Home (600690 CH) / Haier Electronics Group Co (1169 HK), 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%.




StubWorld: Waste Not, Want Not. China Conch Venture's All-Time Low

<div><p>This week in StubWorld ...</p></div><div><div class="content-highlight"><p><a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener"></a><a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd" target="_blank" data-smartkarma-citation="entities:7196:1" rel="noopener">Haier Smart Home (600690 CH)</a> (HSH) has been limit up the past two trading sessions (ahead of, and) in response to the privatisation of  45.68%-held <a href="https://www.smartkarma.com/entities/haier-electronics-group-co" target="_blank" data-smartkarma-citation="entities:4877:1" rel="noopener">Haier Electronics Group Co (1169 HK)</a> (HEG).  I estimate the <strong><em>premium to</em></strong> NAV at 32%. It has been higher, but only (briefly) after the privatisation was first floated back in December. </p></div></div><div><p>Preceding my comments on HSH/HEG, are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p></div><div><div><div class="content-remarks"><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></div></div></div>

This week in StubWorld ...Haier Smart Home (600690 CH) (HSH) has been limit up the past two trading sessions (ahead of, and) in response to the privatisation of  45.68%-held Haier Electronics Group Co (1169 HK) (HEG).  I estimate the premium to NAV at 32%. It has been higher, but only (briefly) after the privatisation was first floated back in December. Preceding my comments on HSH/HEG, 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%.

StubWorld: Haier Smart Home Goes Limit Up. Again

China

Haier Smart Home Co. Ltd. manufactures and distributes appliances. The Company produces air conditioners, refrigerators, freezers, small household electrical appliances, and other related products. Haier Smart Home markets its products domestically and internationally.

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Haier Smart Home (600690 CH)

Gree Electric: A Potential Buyer for Philips’ Home Appliances Business

In mid-September, it was reported by Reuters that the Chinese air conditioner maker, Gree Electric Appliances is among one of the potential bidders...

Shifara Samsudeen, FCMA, CGMA

Haier Smart Homes IPO: Growing Exposure to Emerging Markets and M&A Opportunities to Drive Growth

Haier Smart Homes has filed for an IPO on the Hong Kong Stock Exchange and simultaneously plans to privatise Haier Electronics Group. However, the...

Shifara Samsudeen, FCMA, CGMA

Haier (1169 HK): Back To Entry Levels

Haier Electronics Group Co (1169 HK) (HEG) was briefly suspended pursuant to the Takeovers Code on the 19 December 2019, which was followed by...

David Blennerhassett

StubWorld: Waste Not, Want Not. China Conch Venture's All-Time Low

This week in StubWorld ... China Conch Venture Holdings (586 HK) continues to underperform 17.8%-held Anhui Conch Cement Co Ltd A (600585 CH),...

David Blennerhassett

StubWorld: Haier Smart Home Goes Limit Up. Again

This week in StubWorld ...Haier Smart Home (600690 CH) (HSH) has been limit up the past two trading sessions (ahead of, and) in response to the...

David Blennerhassett

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