Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

China Conch Venture Holdings / Event-Driven

<ul>
<li>
<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 (586 HK)</a> shares are down 20% the past two days. <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 (600585 CH)</a> is down ~8% today. CCV's implied stub is toward the historical low-end.</li>
<li>Preceding my comments on China Conch/Anhui 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>



China Conch Venture (586 HK) shares are down 20% the past two days. Anhui Conch Cement (600585 CH) is down ~8% today. CCV's implied stub is toward the historical low-end.
Preceding my comments on China Conch/Anhui 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: Both CCV (586 HK) And Anhui Conch Come Off The Boil

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 148 stocks over the last week. The average A-H premium was 111.2% as of Sep 20th.</li>
<li>The average A-H premium changed by -0.3ppt week-on-week, led by consumer discretionary, communication services, materials and offset by consumer staples, health care.</li>
<li>We highlight weekly changes in A-H premium for RemeGen, JOINN, Shenzhen Expressway, Anhui Expressway, GAC Group, Ganfeng Lithium.</li>
</ul>


We analyse the changes of A-H premium on 148 stocks over the last week. The average A-H premium was 111.2% as of Sep 20th.
The average A-H premium changed by -0.3ppt week-on-week, led by consumer discretionary, communication services, materials and offset by consumer staples, health care.
We highlight weekly changes in A-H premium for RemeGen, JOINN, Shenzhen Expressway, Anhui Expressway, GAC Group, Ganfeng Lithium.


A-H Premium Weekly (Sep 20th):RemeGen, JOINN, Shenzhen Expressway, Anhui Expressway, GAC Group

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li>Consumer sectors in China are gaining more focus as the government lays out steps to increase domestic consumption.</li>
<li>Hong Kong markets performed well relative to region during recent market turmoil.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-education-group-holdin" target="_blank" data-smartkarma-citation="entities:18218:1" rel="noopener">China Education Group (839 HK)</a> and <a href="https://www.smartkarma.com/entities/china-reinsurance-group-corp" target="_blank" data-smartkarma-citation="entities:993:1" rel="noopener">China Reinsurance (Group) (1508 HK)</a> experienced breakouts and <a href="https://www.smartkarma.com/entities/china-telecom-corp-ltd-h" target="_blank" data-smartkarma-citation="entities:1015:1" rel="noopener">China Telecom (H) (728 HK)</a> had a breakdown. <a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd" target="_blank" data-smartkarma-citation="entities:159:1" rel="noopener">Anhui Conch Cement (914 HK)</a> is more positive.
</li>
</ul>


Consumer sectors in China are gaining more focus as the government lays out steps to increase domestic consumption.
Hong Kong markets performed well relative to region during recent market turmoil.

China Education Group (839 HK) and China Reinsurance (Group) (1508 HK) experienced breakouts and China Telecom (H) (728 HK) had a breakdown. Anhui Conch Cement (914 HK) is more positive.



Technically Speaking, Breakouts and Breakdowns: HONG KONG (AUGUST 9)

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/asia-cement-china-holdings" target="_blank" data-smartkarma-citation="entities:3374:1" rel="noopener">Asia Cement China (743 HK)</a>’s IFA opines that <a href="https://www.smartkarma.com/entities/asia-cement-corp" target="_blank" data-smartkarma-citation="entities:15350:1" rel="noopener">Asia Cement (1102 TT)</a>’s HK$3.22 privatisation offer is fair and reasonable. The scheme vote is on 26 August. </li>
<li>The IFA valiantly justifies that an offer materially below net cash is fair and reasonable. The crux of the justification lies in the fortuitous disclosure of material capex requirements.</li>
<li>While no shareholder holds the 10% blocking stake, the high AGM minority participation rates, retail opposition and unconvincing IFA report suggest a high chance of a deal break.</li>
</ul>



Asia Cement China (743 HK)’s IFA opines that Asia Cement (1102 TT)’s HK$3.22 privatisation offer is fair and reasonable. The scheme vote is on 26 August. 
The IFA valiantly justifies that an offer materially below net cash is fair and reasonable. The crux of the justification lies in the fortuitous disclosure of material capex requirements.
While no shareholder holds the 10% blocking stake, the high AGM minority participation rates, retail opposition and unconvincing IFA report suggest a high chance of a deal break.


Asia Cement China (743 HK): Scheme Vote on 26 August Has a High Deal Break Risk

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>A month out from cutoff for the September rebalance, we see one potential change for the <a href="https://www.smartkarma.com/entities/ishares-china-large-cap-etf" target="_blank" data-smartkarma-citation="entities:766:1" rel="noopener">iShares China Large-Cap (FXI) (FXI US)</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/china-tower-corp-ltd" target="_blank" data-smartkarma-citation="entities:27037:1" rel="noopener">China Tower (788 HK)</a> is a potential inclusion while <a href="https://www.smartkarma.com/entities/china-international-capital-corporation-ltd" target="_blank" data-smartkarma-citation="entities:1071:1" rel="noopener">China International Capital Corporation (3908 HK)</a> should be deleted from the ETF.</li>
<li>Shorts have been dropping in <a href="https://www.smartkarma.com/entities/china-tower-corp-ltd" target="_blank" data-smartkarma-citation="entities:27037:1" rel="noopener">China Tower (788 HK)</a> and are near their lows while increasing in <a href="https://www.smartkarma.com/entities/china-international-capital-corporation-ltd" target="_blank" data-smartkarma-citation="entities:1071:1" rel="noopener">China International Capital Corporation (3908 HK)</a>. </li>
</ul>


A month out from cutoff for the September rebalance, we see one potential change for the iShares China Large-Cap (FXI) (FXI US). 

China Tower (788 HK) is a potential inclusion while China International Capital Corporation (3908 HK) should be deleted from the ETF.
Shorts have been dropping in China Tower (788 HK) and are near their lows while increasing in China International Capital Corporation (3908 HK). 


FXI Rebalance Preview: One High Probability Change; One More Possible

China

Anhui Conch Cement Company Limited manufactures cement products. The Company produces silicate cements, slag silicate cements, composite silicate cements, cement clinkers, and other products. Anhui Conch Cement Cement markets its products throughout China and worldwide.

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Anhui Conch Cement (914 HK)

StubWorld: Both CCV (586 HK) And Anhui Conch Come Off The Boil

I'm disinclined to set up the stub here. CCV's share price movement remains tethered to Anhui Conch. And I don't believe China's real estate...

David Blennerhassett

A-H Premium Weekly (Sep 20th):RemeGen, JOINN, Shenzhen Expressway, Anhui Expressway, GAC Group

We analyzed A-H premium changes in the past week and highlight A-H premium changes for RemeGen, JOINN, Shenzhen Expressway, Anhui Expressway, GAC...

Ke Yan, CFA, FRM

Technically Speaking, Breakouts and Breakdowns: HONG KONG (AUGUST 9)

HK markets had lower volatility than other regional markets this week. China Ed and China Re had technical break outs while China Tel broke...

David Mudd

Asia Cement China (743 HK): Scheme Vote on 26 August Has a High Deal Break Risk

The IMAX China precedent suggests that minorities can and will vote down a low-balled offer. The risk (12.5% downside to the undisturbed price)...

Arun George

FXI Rebalance Preview: One High Probability Change; One More Possible

There should be 1 change for the FXI ETF in Sep. There could be another change if Wuxi Apptec underperforms some of the other stocks by 3% over the...

Brian Freitas

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