Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Quantitative Analysis

<p>This insight re-introduces a weekly monitor for H-Share/A-Share spreads.</p>
<p>The monitor will be published every weekend for the data ending the previous week. It includes all stocks where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...</p>
<ul>
<li>H/A Discount,</li>
<li>movement in H/A Discount over 5 and 20 days,</li>
<li>a 52-week Z-score for the spread,</li>
<li>A chart showing evolution of the H/A spread over the last 20 days,</li>
<li>Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, </li>
<li>There is also a chart showing the narrowest and widest spread and the average spread over the last three years. </li>
</ul>
<p>In the example for the H/A spreads in the <strong>Materials</strong> sector below, spreads were generally flat over the past five days and were wider by 1.5% over the past 20 days. Southbound were net buyers on average on the H side of each pair over both 5 days and 20 days. <a href="https://www.smartkarma.com/entities/shandong-gold-mining-co-ltd-61153493-5437-47ee-a8d3-aec41fb7f1da" target="_blank" data-smartkarma-citation="entities:27455:1" rel="noopener">Shandong Gold Mining Co., Ltd. (1787 HK)</a> and <a href="https://www.smartkarma.com/entities/ganfeng-lithium-co-ltd" target="_blank" data-smartkarma-citation="entities:26795:1" rel="noopener">Ganfeng Lithium (1772 HK)</a> are spreads at the relatively narrow end of their 52-week ranges, while <a href="https://www.smartkarma.com/entities/maanshan-iron-steel-h" target="_blank" data-smartkarma-citation="entities:204:1" rel="noopener">Maanshan Iron &amp; Steel H (323 HK)</a>, <a href="https://www.smartkarma.com/entities/bbmg-corp-h" target="_blank" data-smartkarma-citation="entities:2821:1" rel="noopener">BBMG Corp H (2009 HK)</a>, <a href="https://www.smartkarma.com/entities/sinopec-shanghai-petrochemical-co-ltd" target="_blank" data-smartkarma-citation="entities:17576:1" rel="noopener">Sinopec Shanghai Petrochemical (338 HK)</a>, and <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 Co Ltd H (914 HK)</a> are at the wider end of their 52-week ranges. The average spread in the sector widened somewhat dramatically in the month of August as seen on the chart, but stabilized at the beginning of September.</p>
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</section>
</section>
<p>Commentary is offered for the major movers and influences along with market observations on the sector rotation movement and particularly significant changes.</p>
<div class="content-highlight">
<p>Recommendations are in highlights like this.</p>
</div>
<section class="figure">
<p>More below the fold.  </p>
<hr>
<p><em>By the way, there are two versions of the Spread Evolution mini charts. Input is welcomed in the Discussion section as to which one is preferred (bars or lines).</em></p>
</section>

This insight re-introduces a weekly monitor for H-Share/A-Share spreads.
The monitor will be published every weekend for the data ending the previous week. It includes all stocks where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...

H/A Discount,
movement in H/A Discount over 5 and 20 days,
a 52-week Z-score for the spread,
A chart showing evolution of the H/A spread over the last 20 days,
Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, 
There is also a chart showing the narrowest and widest spread and the average spread over the last three years. 

In the example for the H/A spreads in the Materials sector below, spreads were generally flat over the past five days and were wider by 1.5% over the past 20 days. Southbound were net buyers on average on the H side of each pair over both 5 days and 20 days. Shandong Gold Mining Co., Ltd. (1787 HK) and Ganfeng Lithium (1772 HK) are spreads at the relatively narrow end of their 52-week ranges, while Maanshan Iron &amp; Steel H (323 HK), BBMG Corp H (2009 HK), Sinopec Shanghai Petrochemical (338 HK), and Anhui Conch Cement Co Ltd H (914 HK) are at the wider end of their 52-week ranges. The average spread in the sector widened somewhat dramatically in the month of August as seen on the chart, but stabilized at the beginning of September.






Commentary is offered for the major movers and influences along with market observations on the sector rotation movement and particularly significant changes.

Recommendations are in highlights like this.


More below the fold.  

By the way, there are two versions of the Spread Evolution mini charts. Input is welcomed in the Discussion section as to which one is preferred (bars or lines).


Quiddity Weekly H/A: Share Spread Monitor 16 Oct 2020

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.

Event-Driven

<p><a href="https://www.smartkarma.com/entities/cimc-tianda-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15431:1" rel="noopener">CIMC-TianDa Holdings (445 HK)</a> is China’s leading player in airport equipment and firefighting &amp; rescue equipment, with growing businesses in material handling systems and automated parking systems. Originally China Fire Safety Enterprise, CIMC-Tianda was created through the reverse takeover of Pteris Group, which resulted in <a href="https://www.smartkarma.com/entities/china-international-marine-cntnrs-gp-ltd" target="_blank" data-smartkarma-citation="entities:11752:1" rel="noopener">China International Marine Cntnrs Gp (2039 HK)</a> becoming the majority shareholder. </p><p>CIMC-Tianda has received a privatisation offer at HK$0.266 in cash per share. The joint offerors are Expedition Holding and Sharp Vision. Expedition Holding is wholly-owned by Macao QiXin One Belt One Road Investment Fund, a private equity fund, while Sharp Vision is a wholly-owned subsidiary of CIMC. The privatisation price is a 20.36% premium to the share price of HK$0.221 on the last trading day (28 September).</p><div class="content-highlight"><p>The key conditions precedents are the headcount test and the scheme approved by at least 75% disinterested shareholders (&lt;10% disinterested shareholders rejection). <a href="https://www.smartkarma.com/entities/wison-engineering-services-co" target="_blank" data-smartkarma-citation="entities:24534:1" rel="noopener">Wison Engineering Services Co (2236 HK)</a> will fully exercise its conversion rights (420.2 million new shares converted from its convertible bonds) before the scheme record date. The joint offerors and concert parties represent 12,566.9 million shares or 75.53% of shares outstanding (including Wison Energy’s convertibles). Disinterested scheme shareholders represent 4,071.2 million shares or 24.47% of shares outstanding which implies the 10% blocking stake is 407.1 million shares or 2.45% of shares outstanding (including Wison Energy’s convertibles). Overall, we believe that the privatisation price while not a knockout bid is good enough to get the proposal over the line. </p></div>

CIMC-TianDa Holdings (445 HK) is China’s leading player in airport equipment and firefighting &amp; rescue equipment, with growing businesses in material handling systems and automated parking systems. Originally China Fire Safety Enterprise, CIMC-Tianda was created through the reverse takeover of Pteris Group, which resulted in China International Marine Cntnrs Gp (2039 HK) becoming the majority shareholder. CIMC-Tianda has received a privatisation offer at HK$0.266 in cash per share. The joint offerors are Expedition Holding and Sharp Vision. Expedition Holding is wholly-owned by Macao QiXin One Belt One Road Investment Fund, a private equity fund, while Sharp Vision is a wholly-owned subsidiary of CIMC. The privatisation price is a 20.36% premium to the share price of HK$0.221 on the last trading day (28 September).The key conditions precedents are the headcount test and the scheme approved by at least 75% disinterested shareholders (&lt;10% disinterested shareholders rejection). Wison Engineering Services Co (2236 HK) will fully exercise its conversion rights (420.2 million new shares converted from its convertible bonds) before the scheme record date. The joint offerors and concert parties represent 12,566.9 million shares or 75.53% of shares outstanding (including Wison Energy’s convertibles). Disinterested scheme shareholders represent 4,071.2 million shares or 24.47% of shares outstanding which implies the 10% blocking stake is 407.1 million shares or 2.45% of shares outstanding (including Wison Energy’s convertibles). Overall, we believe that the privatisation price while not a knockout bid is good enough to get the proposal over the line. 

CIMC Partners up to Privatise CIMC-TianDa

David Blennerhassett

<div>
<p>After shares were <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0929/2020092900089.pdf" target="_blank" rel="noopener">halted</a> before trading opened on the 29 September pursuant to the Hong Kong Code on Takeovers and Mergers,  <a href="https://www.smartkarma.com/entities/cimc-tianda-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15431:1" rel="noopener">CIMC-TianDa Holdings (445 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1004/2020100400027.pdf" target="_blank" rel="noopener">announced</a> on the 4 October an Offer by way of a Scheme primarily from <a href="https://www.smartkarma.com/entities/china-international-marine-cntnrs-gp-ltd" target="_blank" data-smartkarma-citation="entities:11752:1" rel="noopener">China International Marine Cntnrs Gp (2039 HK)</a> (CIMC). </p>
<p>The cancellation price is HK$0.266/share, a 20.66% premium to last close. The price is final.</p>
<p>CIMC, together with joint offeror concert parties hold 75.53% of CIMC-Tianda, following the conversion of a CB held by <a href="https://www.smartkarma.com/entities/wison-engineering-services-co" target="_blank" data-smartkarma-citation="entities:24534:1" rel="noopener">Wison Engineering Services Co (2236 HK)</a>. Therefore Scheme Shareholders will comprise 24.47% of shares out.</p>
</div>
<div>
<p>Conditions to the Scheme are standard - at a Court Meeting, at least 75% of Independent Shares vote FOR the Scheme &amp; not more than 10% of ALL Independent Shares against, or 2.447% of shares out. The headcount applies as CIMC-Tianda is Cayman incorporated.</p>
</div>
<div>
<p>Despite solid 1H20 earnings, the announcement indicates those earnings were propped up by orders from last year, and it has proven challenging to procure a stable supply of raw materials and to complete new orders. Given this uncertain backdrop - one expected when exposed to the global aviation industry -  pricing appears <em>okay</em>.</p>
</div>
<div>
<p>As always, more below the fold.</p>
</div>


After shares were halted before trading opened on the 29 September pursuant to the Hong Kong Code on Takeovers and Mergers,  CIMC-TianDa Holdings (445 HK) announced on the 4 October an Offer by way of a Scheme primarily from China International Marine Cntnrs Gp (2039 HK) (CIMC). 
The cancellation price is HK$0.266/share, a 20.66% premium to last close. The price is final.
CIMC, together with joint offeror concert parties hold 75.53% of CIMC-Tianda, following the conversion of a CB held by Wison Engineering Services Co (2236 HK). Therefore Scheme Shareholders will comprise 24.47% of shares out.


Conditions to the Scheme are standard - at a Court Meeting, at least 75% of Independent Shares vote FOR the Scheme &amp; not more than 10% of ALL Independent Shares against, or 2.447% of shares out. The headcount applies as CIMC-Tianda is Cayman incorporated.


Despite solid 1H20 earnings, the announcement indicates those earnings were propped up by orders from last year, and it has proven challenging to procure a stable supply of raw materials and to complete new orders. Given this uncertain backdrop - one expected when exposed to the global aviation industry -  pricing appears okay.


As always, more below the fold.


CIMC-Tianda (445 HK): Scheme Offer Lead By CIMC

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

AP Moeller - Maersk A/S / Equity Bottom-Up

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/134/295/original/BANNER-CARGO.png?1589834679" class="editor-image img-responsive" data-smartkarma-image-id="134295"></figure>
<p>Covid-19 and the measures put in place to slow its spread have wreaked havoc on ocean and air cargo markets in 2020. April data show a number of highly unusual market dynamics at work. </p>
<p>Our model shows container rates dipped in April, falling 5% YoY. Despite this decline, we believe container rates are supported by an unusual equipment shortage. Furthermore, we believe carrier margins could remain stable in Q220 as ship fuel costs have declined sharply compared to 2019.</p>
<p>In air cargo, an unprecedented set of circumstances led to a  dramatic rise of yields (pricing) in April. In the case of two Taiwanese airlines with significant exposure to cargo, air cargo demand increased by just 3% YoY in April, but yields more than doubled, boosting segment revenues. </p>
<p>Low fuel prices and an equipment shortage may continue to limit the deterioration of container shipping profitability in 2020. Meanwhile, even unprecedented price increases in air cargo are not enough to offset the dramatic declines of most airlines' passenger revenues. </p>


Covid-19 and the measures put in place to slow its spread have wreaked havoc on ocean and air cargo markets in 2020. April data show a number of highly unusual market dynamics at work. 
Our model shows container rates dipped in April, falling 5% YoY. Despite this decline, we believe container rates are supported by an unusual equipment shortage. Furthermore, we believe carrier margins could remain stable in Q220 as ship fuel costs have declined sharply compared to 2019.
In air cargo, an unprecedented set of circumstances led to a  dramatic rise of yields (pricing) in April. In the case of two Taiwanese airlines with significant exposure to cargo, air cargo demand increased by just 3% YoY in April, but yields more than doubled, boosting segment revenues. 
Low fuel prices and an equipment shortage may continue to limit the deterioration of container shipping profitability in 2020. Meanwhile, even unprecedented price increases in air cargo are not enough to offset the dramatic declines of most airlines' passenger revenues. 

TRACKING TRAFFIC/Containers & Air Cargo: Box Rates Dip in April, Air Cargo Yields Double!

<p>Our monthly index suggests average container rates in March <em>increased</em> by 7.6% YoY despite measurably weak trade activity in key export and import markets. Although we believe overall container shipping revenues declined  in March (on lower volumes), unit pricing has held up surprisingly well due to a developing equipment shortage.</p>
<p>What's behind the equipment shortage? Weak North American imports from previous months and slower turnaround times resulted in a sharp decline in the export of empty containers in March (-35% YoY, mainly to Asia). The resulting shortage of empties in key cargo origins means that even though there is plenty of space on ships, there is nevertheless an equipment shortage that appears to be contributing to tight market conditions. In the near-term this is positive for container carriers, container leasing companies, and probably Asian container manufacturers, too.</p>
<p>Bunker (ship fuel) prices in mid-April were down sharply compared to mid-March (-30%) and April 2019 (-38%). With fuel equivalent to 15-20% of a typical container carrier's revenue, the sharp drop in bunker prices is a good thing for carrier profitability. If the equipment shortage we noted above is not resolved quickly, we believe carrier profitability in Q2 2020 could beat low expectations.</p>
<p><strong>Conclusion: </strong>Container shipping rates appear to be holding up much better than expected due to a developing equipment shortage, which may take some time to resolve. Carriers also benefit from sharply lower fuel prices, and near-term profitability may surprise on the upside. In addition to container carriers like <a href="https://www.smartkarma.com/entities/evergreen-marine-corp-ltd" target="_blank" data-smartkarma-citation="entities:15428:1" rel="noopener">Evergreen Marine Corp (2603 TT)</a> and Danish giant <a href="https://www.smartkarma.com/entities/ap-moeller-maersk-a-s" target="_blank" data-smartkarma-citation="entities:22428:1" rel="noopener">Ap Moeller - Maersk A/S (MAERSKB DC)</a>, we believe container leasing companies like <a href="https://www.smartkarma.com/entities/triton-international-limited" target="_blank" data-smartkarma-citation="entities:23598:1" rel="noopener">Triton International (TRTN US)</a> and even container manufacturers (<a href="https://www.smartkarma.com/entities/singamas-container-hldgs" target="_blank" data-smartkarma-citation="entities:13602:1" rel="noopener">Singamas Container Hldgs (716 HK)</a>, <a href="https://www.smartkarma.com/entities/china-international-marine-cntnrs-gp-ltd" target="_blank" data-smartkarma-citation="entities:11752:1" rel="noopener">China International Marine Cntnrs Gp (2039 HK)</a> could benefit from an equipment shortage in the near-term. </p>

Our monthly index suggests average container rates in March increased by 7.6% YoY despite measurably weak trade activity in key export and import markets. Although we believe overall container shipping revenues declined  in March (on lower volumes), unit pricing has held up surprisingly well due to a developing equipment shortage.
What's behind the equipment shortage? Weak North American imports from previous months and slower turnaround times resulted in a sharp decline in the export of empty containers in March (-35% YoY, mainly to Asia). The resulting shortage of empties in key cargo origins means that even though there is plenty of space on ships, there is nevertheless an equipment shortage that appears to be contributing to tight market conditions. In the near-term this is positive for container carriers, container leasing companies, and probably Asian container manufacturers, too.
Bunker (ship fuel) prices in mid-April were down sharply compared to mid-March (-30%) and April 2019 (-38%). With fuel equivalent to 15-20% of a typical container carrier's revenue, the sharp drop in bunker prices is a good thing for carrier profitability. If the equipment shortage we noted above is not resolved quickly, we believe carrier profitability in Q2 2020 could beat low expectations.
Conclusion: Container shipping rates appear to be holding up much better than expected due to a developing equipment shortage, which may take some time to resolve. Carriers also benefit from sharply lower fuel prices, and near-term profitability may surprise on the upside. In addition to container carriers like Evergreen Marine Corp (2603 TT) and Danish giant Ap Moeller - Maersk A/S (MAERSKB DC), we believe container leasing companies like Triton International (TRTN US) and even container manufacturers (Singamas Container Hldgs (716 HK), China International Marine Cntnrs Gp (2039 HK) could benefit from an equipment shortage in the near-term. 

TRACKING TRAFFIC/Container Shipping: Shortage of Empties Creates Surprisingly Tight Conditions

China

China International Marine Containers (Group) Co., Ltd. designs and manufactures containers, airport facilities, internal combustion power-generating equipment, and trailers.  The Company also operates in the timber industry and real estate development.

China International Marine Cntnrs Gp (2039 HK)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

China International Marine Cntnrs Gp (2039 HK)

CIMC Partners up to Privatise CIMC-TianDa

CIMC-TianDa Holdings (445 HK) CIMC-Tianda is China’s leading player in airport equipment and firefighting & rescue equipment, with growing...

Arun George

CIMC-Tianda (445 HK): Scheme Offer Lead By CIMC

After shares were halted after trading closed on the 29 September pursuant to the Hong Kong Code on Takeovers and Mergers, Hengxing Gold Holding...

David Blennerhassett

TRACKING TRAFFIC/Containers & Air Cargo: Box Rates Dip in April, Air Cargo Yields Double!

Covid-19 and the measures put in place to slow its spread have wreaked havoc on ocean and air cargo markets in 2020. April data show a number of...

Tracking Traffic

TRACKING TRAFFIC/Container Shipping: Shortage of Empties Creates Surprisingly Tight Conditions

Our monthly index suggests average container rates in March increased by 7.6% YoY despite measurably weak trade activity in key export and import...

Tracking Traffic

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Quiddity Weekly H/A: Share Spread Monitor 16 Oct 2020

Weekly Monitor for H-Share/A-Share spreads showing spread/discount performance, spread Z-scores, southbound buying and selling and net activity...

Travis Lundy

CIMC Partners up to Privatise CIMC-TianDa

CIMC-TianDa Holdings (445 HK) CIMC-Tianda is China’s leading player in airport equipment and firefighting & rescue equipment, with growing...

Arun George

CIMC-Tianda (445 HK): Scheme Offer Lead By CIMC

After shares were halted after trading closed on the 29 September pursuant to the Hong Kong Code on Takeovers and Mergers, Hengxing Gold Holding...

David Blennerhassett

TRACKING TRAFFIC/Containers & Air Cargo: Box Rates Dip in April, Air Cargo Yields Double!

Covid-19 and the measures put in place to slow its spread have wreaked havoc on ocean and air cargo markets in 2020. April data show a number of...

Tracking Traffic

TRACKING TRAFFIC/Container Shipping: Shortage of Empties Creates Surprisingly Tight Conditions

Our monthly index suggests average container rates in March increased by 7.6% YoY despite measurably weak trade activity in key export and import...

Tracking Traffic