Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: Haier, Tokyo Dome, Cowell, Infratil, Link Admin, Sapporo/Asahi, Mcdonald's

After shares were <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1210/2020121000121.pdf" target="_blank" rel="noopener">suspended</a> before trading yesterday pursuant to the Hong Kong Code on Takeovers and Mergers, camera modules for mobile devices player <a href="https://www.smartkarma.com/entities/cowell-e-holdings-inc" target="_blank" data-smartkarma-citation="entities:336:1" rel="noopener">Cowell E Holdings (1415 HK)</a> has now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1210/2020121000859.pdf" target="_blank" rel="noopener">announced</a> Kwak Joung Hwan,  founder and current Executive Chairman of the company, has entered into a SPA with Luxvision Innovation to sell his 44.87% stake.
Should the SPA complete  - and the SPA has limited conditions - a mandatory general offer (MGO) would be triggered at the same price under the SPA, or HK$5.87/share, a 2.98% premium to last close, but a 52.2% premium to the average close over the past three months.
The key condition to the MGO is Luxvision holding 50% of the voting rights of Cowell at the close of the Offer. No irrevocables have been given.
It is not Luxvision's intention to delist the company. This is a change of control as Kwak exits.  Expect shares to trade around the Offer price. The price has not been declared final.
More below the fold.

After shares were suspended before trading yesterday pursuant to the Hong Kong Code on Takeovers and Mergers, camera modules for mobile devices player Cowell E Holdings (1415 HK) has now announced Kwak Joung Hwan,  founder and current Executive Chairman of the company, has entered into a SPA with Luxvision Innovation to sell his 44.87% stake.
Should the SPA complete  - and the SPA has limited conditions - a mandatory general offer (MGO) would be triggered at the same price under the SPA, or HK$5.87/share, a 2.98% premium to last close, but a 52.2% premium to the average close over the past three months.
The key condition to the MGO is Luxvision holding 50% of the voting rights of Cowell at the close of the Offer. No irrevocables have been given.
It is not Luxvision's intention to delist the company. This is a change of control as Kwak exits.  Expect shares to trade around the Offer price. The price has not been declared final.
More below the fold.

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.

<a href="https://www.smartkarma.com/entities/cowell-e-holdings-inc" target="_blank" data-smartkarma-citation="entities:336:1" rel="noopener">Cowell E Holdings (1415 HK)</a> is a major supplier of camera modules for mobile devices to leading mobile device manufacturers such as <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple Inc (AAPL US)</a>. On Thursday after market close, Cowell announced a sale and purchase agreement (SPA) and a possible mandatory conditional cash offer. As the offeror will acquire more than 30% of the voting rights because of the SPA, the Takeovers Code requires the offeror to make a mandatory conditional cash offer for all the issued shares. The offer price of HK$5.87 per share, which is in line to SPA price, is a 2.98% premium to the last trading price of HK$5.70 per share (9 December prior to the trading halt). <div class="content-highlight">The offer is conditional on the offeror and concert parties holding more than 50% of the voting rights. Post the SPA completion, the offeror will hold 44.87% of the outstanding shares and voting rights. In combination with a reasonable price, we think that offer will fulfil the completion condition and become unconditional. </div>

Cowell E Holdings (1415 HK) is a major supplier of camera modules for mobile devices to leading mobile device manufacturers such as Apple Inc (AAPL US). On Thursday after market close, Cowell announced a sale and purchase agreement (SPA) and a possible mandatory conditional cash offer. As the offeror will acquire more than 30% of the voting rights because of the SPA, the Takeovers Code requires the offeror to make a mandatory conditional cash offer for all the issued shares. The offer price of HK$5.87 per share, which is in line to SPA price, is a 2.98% premium to the last trading price of HK$5.70 per share (9 December prior to the trading halt). The offer is conditional on the offeror and concert parties holding more than 50% of the voting rights. Post the SPA completion, the offeror will hold 44.87% of the outstanding shares and voting rights. In combination with a reasonable price, we think that offer will fulfil the completion condition and become unconditional. 

Cowell E Holdings’ Possible Mandatory Conditional Cash Offer

When investors are chucking in the towel, including the event space (RV, risk arb etc.), it's time for some old school perspective.
In this insight, I look at <a href="https://en.wikipedia.org/wiki/Benjamin_Graham" target="_blank" rel="noopener">Benjamin Graham</a>'s Net Nets, or working capital (current assets less current liabilities), then subtract any debt not included in current liabilities. To make it simple, I use current assets less total liabilities.
This set of data is what Graham would deem stocks priced for liquidation.
I calculate 1,087 stocks trading below their net current asset value (NCAV) across Japan, Hong Kong, Korea, Australia, Taiwan and Singapore.
That number declines to 114 for stocks which trade &gt;US1$mn/day (3-month basis), and just 20 trading &gt;US$5mn/day.
A rundown of those stocks is shown below.

When investors are chucking in the towel, including the event space (RV, risk arb etc.), it's time for some old school perspective.
In this insight, I look at Benjamin Graham's Net Nets, or working capital (current assets less current liabilities), then subtract any debt not included in current liabilities. To make it simple, I use current assets less total liabilities.
This set of data is what Graham would deem stocks priced for liquidation.
I calculate 1,087 stocks trading below their net current asset value (NCAV) across Japan, Hong Kong, Korea, Australia, Taiwan and Singapore.
That number declines to 114 for stocks which trade &gt;US1$mn/day (3-month basis), and just 20 trading &gt;US$5mn/day.
A rundown of those stocks is shown below.

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Equity Capital Markets

FIT Hon Teng, a subsidiary of Taiwan listed <a href="https://www.smartkarma.com/entities/745" target="_blank" data-smartkarma-citation="entities:745:1">Hon Hai Precision Industry (2317 TT)</a>, is planning to raise US$1-1.5bn to expand its business. In this insight, I will look at FIT's competitiveness and related party transaction, its recent acquisition of Avago's optical module business, and compare FIT's financial and operational metrics with other listed subsidiaries of Hon Hai.

FIT Hon Teng, a subsidiary of Taiwan listed Hon Hai Precision Industry (2317 TT), is planning to raise US$1-1.5bn to expand its business. In this insight, I will look at FIT's competitiveness and related party transaction, its recent acquisition of Avago's optical module business, and compare FIT's financial and operational metrics with other listed subsidiaries of Hon Hai. 

FIT Hon Teng IPO Early Thought: Parent Hon Hai Has a Different Focus

China

Cowell e Holdings is a supplier of precision optical modules and components for electronic mobile devices, including smartphones, multimedia tablets, and smart driving systems. The company specializes in the design, development, manufacturing, and sale of these optical modules and camera components. It was founded in 2006 and is headquartered in Dongguan, China.

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Cowell e (1415 HK)

Last Week in Event SPACE: Haier, Tokyo Dome, Cowell, Infratil, Link Admin, Sapporo/Asahi, Mcdonald's

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

Cowell (1415 HK): "Maintain Listing" MGO

Buy Cowell close to terms. This deal could potentially turn unconditional well before the sale and purchase agremeent long-stop.

David Blennerhassett

Cowell E Holdings’ Possible Mandatory Conditional Cash Offer

Cowell announced a possible mandatory conditional cash offer at HK$5.87 per share. In combination with a reasonable price, we think that offer will...

Arun George

Asia-Pac Stocks Priced For Liquidation

When investors are chucking in the towel, including the event space (RV, risk arb etc.), it's time for some old school perspective. In this...

David Blennerhassett

FIT Hon Teng IPO Early Thought: Parent Hon Hai Has a Different Focus

FIT Hon Teng, a subsidiary of Taiwan listed Hon Hai Precision Industry (2317 TT), is planning to raise US$1-1.5bn to expand its business. In this...

Ke Yan, CFA, FRM

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