Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a>, a Hong Kong broadband play, is never short on privatisation rumours. <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> is reportedly (again) holding talks with HKBN's major shareholders. </li>
<li>China Mobile is a logical suitor. I highly doubt a non-PRC (government-affiliated) corporation would be permitted to take HKBN private.</li>
<li>Previous takeover rumours over the years came to nought. It may be different this time. HKBN was <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1119/2024111900127.pdf" target="_blank" rel="noopener">suspended this morning</a> pursuant to the Takeovers Code.
</li>
</ul>



HKBN Ltd (1310 HK), a Hong Kong broadband play, is never short on privatisation rumours. China Mobile (941 HK) is reportedly (again) holding talks with HKBN's major shareholders. 
China Mobile is a logical suitor. I highly doubt a non-PRC (government-affiliated) corporation would be permitted to take HKBN private.
Previous takeover rumours over the years came to nought. It may be different this time. HKBN was suspended this morning pursuant to the Takeovers Code.



HKBN (1310 HK): China Mobile Comes Knocking. Again.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I (3382 JP)</a> selling <a href="https://www.smartkarma.com/entities/seven-bank-ltd" target="_blank" data-smartkarma-citation="entities:16063:1" rel="noopener">Seven Bank (8410 JP)</a> is obvious. It has been obvious. It is non-core. It's always been non-core. It was made  clear in previous Strategy announcements,</li>
<li>
<a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a>'s premium to NAV is unjustified. However reversing the stub has not been going to plan of late, as the NAV premium continues to widen.</li>
<li>Mavcom HAS approved the <a href="https://www.smartkarma.com/entities/malaysia-airports-holdings-bhd" target="_blank" data-smartkarma-citation="entities:117:1" rel="noopener">Malaysia Airports Holdings (MAHB MK)</a> deal. But still welcomes public consultation. So, approved or not?</li>
</ul>



Seven &amp; I (3382 JP) selling Seven Bank (8410 JP) is obvious. It has been obvious. It is non-core. It's always been non-core. It was made  clear in previous Strategy announcements,

PCCW Ltd (8 HK)'s premium to NAV is unjustified. However reversing the stub has not been going to plan of late, as the NAV premium continues to widen.
Mavcom HAS approved the Malaysia Airports Holdings (MAHB MK) deal. But still welcomes public consultation. So, approved or not?


Last Week in Event SPACE: Seven & I/Seven Bank, PCCW, Malaysia Airports, I'rom Group

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a> was trading at an unjustifiable premium to NAV at the time of my last report back in August. Now it's even more unjustifiable. </li>
<li>Preceding my comments on PCCW/<a href="https://www.smartkarma.com/entities/hkt-ltd" target="_blank" data-smartkarma-citation="entities:874:1" rel="noopener">HKT Ltd (6823 HK)</a>, and <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a>/<a href="https://www.smartkarma.com/entities/arm-holdings-inc" target="_blank" data-smartkarma-citation="entities:21816:1" rel="noopener">ARM Holdings (ARM US)</a>, are the current setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>



PCCW Ltd (8 HK) was trading at an unjustifiable premium to NAV at the time of my last report back in August. Now it's even more unjustifiable. 
Preceding my comments on PCCW/HKT Ltd (6823 HK), and Softbank Group (9984 JP)/ARM Holdings (ARM US), are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: PCCW's Questionable NAV Premium. Plus Softbank Vs. Arm

Huafa Property Services Group / Event-Driven

<ul>
<li>Ahead of <a href="https://www.smartkarma.com/entities/huafa-property-services-group" target="_blank" data-smartkarma-citation="entities:5841:1" rel="noopener">Huafa Property Services Group (982 HK)</a>'s Scheme Meeting tomorrow, the 28th August, 42.57% of shares outstanding moved out of CCASS on the 8th July.</li>
<li>One argument for Huafa trading wide-ish to terms is due to "suspicious" CCASS moves between the Offer announcement and the vote. </li>
<li>Some investors even cite the <a href="https://www.smartkarma.com/entities/golden-throat-holdings-group" target="_blank" data-smartkarma-citation="entities:22664:1" rel="noopener">Golden Throat Holdings (6896 HK)</a> debacle. This is not a Golden Throat situation. Not even close. It is decidedly less interesting and benign.</li>
</ul>


Ahead of Huafa Property Services Group (982 HK)'s Scheme Meeting tomorrow, the 28th August, 42.57% of shares outstanding moved out of CCASS on the 8th July.
One argument for Huafa trading wide-ish to terms is due to "suspicious" CCASS moves between the Offer announcement and the vote. 
Some investors even cite the Golden Throat Holdings (6896 HK) debacle. This is not a Golden Throat situation. Not even close. It is decidedly less interesting and benign.


Huafa Prop (982 HK)'s CCASS Movements: Nothing To See Here

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li>The epicenter of the Asian ETF selloff last week was Japan, recording an outflow of nearly $100B from equity funds taking the net flows back to breakeven for the YTD.</li>
<li>
<a href="https://www.smartkarma.com/entities/seazen" target="_blank" data-smartkarma-citation="entities:14882:1" rel="noopener">Seazen (Formerly Future Land) (1030 HK)</a> and <a href="https://www.smartkarma.com/entities/swire-properties-ltd" target="_blank" data-smartkarma-citation="entities:5775:1" rel="noopener">Swire Properties (1972 HK)</a> had positive announcements while <a href="https://www.smartkarma.com/entities/new-oriental-education-techn" target="_blank" data-smartkarma-citation="entities:32210:1" rel="noopener">New Oriental Education &amp; Techn (9901 HK)</a> and <a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings (9987 HK)</a> announced earnings.
</li>
<li>
<a href="https://www.smartkarma.com/entities/china-unicom-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:1016:1" rel="noopener">China Unicom Hong Kong (762 HK)</a> shares are under pressure as the telco sector goes through a price war in cloud services and investors take profits from high dividend names.
</li>
</ul>


The epicenter of the Asian ETF selloff last week was Japan, recording an outflow of nearly $100B from equity funds taking the net flows back to breakeven for the YTD.

Seazen (Formerly Future Land) (1030 HK) and Swire Properties (1972 HK) had positive announcements while New Oriental Education &amp; Techn (9901 HK) and Yum China Holdings (9987 HK) announced earnings.


China Unicom Hong Kong (762 HK) shares are under pressure as the telco sector goes through a price war in cloud services and investors take profits from high dividend names.



The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 10)

Hong Kong

PCCW Limited, through its subsidiaries, provides telecommunications, Internet access, multimedia services and related equipment.  The Company also offers computer, engineering, and other technical services in Hong Kong.  In addition, PCCW invests in and develops system integration and technology-related business, infrastructure and properties in Hong Kong and China.

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PCCW Ltd (8 HK)

HKBN (1310 HK): China Mobile Comes Knocking. Again.

Shares are suspended - so there's nothing to be done right now. A rumoured HK$5/share is probably ok. A 16% premium to last close. But perhaps ~33%...

David Blennerhassett

Last Week in Event SPACE: Seven & I/Seven Bank, PCCW, Malaysia Airports, I'rom Group

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

StubWorld: PCCW's Questionable NAV Premium. Plus Softbank Vs. Arm

Valuation-wise, PCCW is trading full. I'd reverse the stub here, however this unjustifiable NAV premium has become even more unjustiifiable. Avoid....

David Blennerhassett

Huafa Prop (982 HK)'s CCASS Movements: Nothing To See Here

One argument for Huafa trading wide to terms is due to "suspicious" CCASS movements. Some investors even cite the Golden Throat debacle. Not even...

David Blennerhassett

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 10)

Japan had massive outflows in equity ETF's for the week. Property firms Seazen and Swire Properties had positive earnings news. New Oriental and...

David Mudd

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