Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/first-pacific-co-ltd" target="_blank" data-smartkarma-citation="entities:173:1" rel="noopener">First Pacific Co (142 HK)</a> is a Southeast Asian conglomerate that has been handicapped by its listing in the Hong Kong market over the last several years.</li>
<li>As Southeast Asian markets (Indonesia and Philippines) begin to re-rate on the back of a more accommodating Fed policy, First Pacific is beginning to participate in the uptrend.</li>
<li>Metro Pacific Investments Corp (MPIC), the second largest piece of the company's NAV has been active in acquiring more infrastructure assets since being privatized last year.</li>
</ul>



First Pacific Co (142 HK) is a Southeast Asian conglomerate that has been handicapped by its listing in the Hong Kong market over the last several years.
As Southeast Asian markets (Indonesia and Philippines) begin to re-rate on the back of a more accommodating Fed policy, First Pacific is beginning to participate in the uptrend.
Metro Pacific Investments Corp (MPIC), the second largest piece of the company's NAV has been active in acquiring more infrastructure assets since being privatized last year.


BUY: First Pacific Company (142 HK): Right Stock Trapped in the Wrong Market

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In <a href="https://skr.ma/wK6xN" target="_blank" rel="noopener">First Pacific (142 HK): Maynilad's IPO Price Firmed</a>, I discussed Maynilad's upcoming IPO, a company controlled by MPIC, which in turn, is controlled by <a href="https://www.smartkarma.com/entities/first-pacific-co-ltd" target="_blank" data-smartkarma-citation="entities:173:1" rel="noopener">First Pacific Co (142 HK)</a>.</li>
<li>Since that note, I have tracked down Maynilad's elusive prospectus.</li>
<li>This insight is largely a rehash of yesterday's note, together with updated numbers applying prospectus figures. I thought this warranted a fresh insight as opposed to a boomerang.</li>
</ul>


In First Pacific (142 HK): Maynilad's IPO Price Firmed, I discussed Maynilad's upcoming IPO, a company controlled by MPIC, which in turn, is controlled by First Pacific Co (142 HK).
Since that note, I have tracked down Maynilad's elusive prospectus.
This insight is largely a rehash of yesterday's note, together with updated numbers applying prospectus figures. I thought this warranted a fresh insight as opposed to a boomerang.


First Pacific (142 HK): Maynilad's IPO (Now With Prospectus Numbers)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/first-pacific-co-ltd" target="_blank" data-smartkarma-citation="entities:173:1" rel="noopener">First Pacific Co (142 HK)</a>'s 49.9%-held MPIC is spinning off Maynilad, a distributor of potable water and provider of sewage services, on the Philippine exchange.</li>
<li>The IPO has been priced at PHP 15/share, down 25% from earlier expectations. Proceeds may reach PHP 34bn (~US$580mn), in the largest Filipino IPO since 2021. </li>
<li>First Pac's NAV discount has drifted off a recent multi-year narrowing, but remains elevated for a multiple cross-border, difficult to short holdco.</li>
</ul>



First Pacific Co (142 HK)'s 49.9%-held MPIC is spinning off Maynilad, a distributor of potable water and provider of sewage services, on the Philippine exchange.
The IPO has been priced at PHP 15/share, down 25% from earlier expectations. Proceeds may reach PHP 34bn (~US$580mn), in the largest Filipino IPO since 2021. 
First Pac's NAV discount has drifted off a recent multi-year narrowing, but remains elevated for a multiple cross-border, difficult to short holdco.


First Pacific (142 HK): Maynilad's IPO Price Firmed

<ul>
<li>In <a href="https://skr.ma/EZx9j" target="_blank" rel="noopener">StubWorld: First Pacific (142 HK) Looking Stretched</a>, I saw <a href="https://www.smartkarma.com/entities/first-pacific-co-ltd" target="_blank" data-smartkarma-citation="entities:173:1" rel="noopener">First Pacific Co (142 HK)</a>'s discount to NAV at ~30%, around its narrowest level in a decade.</li>
<li>That analysis applied a fixed value for MPIC (delisted in 4Q23). However, if applying a look-through into 23.7%-held <a href="https://www.smartkarma.com/entities/manila-electric-company" target="_blank" data-smartkarma-citation="entities:3527:1" rel="noopener">Manila Electric Company (MER PM)</a>, that NAV discount widens. Currently ~40%.</li>
<li>By that yardstick this is the narrowest NAV discount since early 2018. This appears too tight. The benefits from the proposed spin-off of Maynilad appear baked in.</li>
</ul>


In StubWorld: First Pacific (142 HK) Looking Stretched, I saw First Pacific Co (142 HK)'s discount to NAV at ~30%, around its narrowest level in a decade.
That analysis applied a fixed value for MPIC (delisted in 4Q23). However, if applying a look-through into 23.7%-held Manila Electric Company (MER PM), that NAV discount widens. Currently ~40%.
By that yardstick this is the narrowest NAV discount since early 2018. This appears too tight. The benefits from the proposed spin-off of Maynilad appear baked in.


First Pacific (142 HK) Is Fully Valued Here

<ul>
<li>MBK has made a legally binding bid for <a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a>. Stay long if you still hold or buy the dip. Buy at under ¥11,200.</li>
<li>Given the share price decline, <a href="https://www.smartkarma.com/entities/nufarm-ltd-australia" target="_blank" data-smartkarma-citation="entities:1128:1" rel="noopener">Nufarm (NUF AU)</a>'s board is under pressure to do "something". Nufarm would be better off selling its entire operations, as opposed to offloading divisions.</li>
<li>
<a href="https://www.smartkarma.com/entities/dic-corp" target="_blank" data-smartkarma-citation="entities:7343:1" rel="noopener">Dic Corp (4631 JP)</a> is (also) under pressure from activist Oasis Management. Buy large dips rather than chase another day of a big gain.</li>
</ul>


MBK has made a legally binding bid for Makino Milling Machine Co (6135 JP). Stay long if you still hold or buy the dip. Buy at under ¥11,200.
Given the share price decline, Nufarm (NUF AU)'s board is under pressure to do "something". Nufarm would be better off selling its entire operations, as opposed to offloading divisions.

Dic Corp (4631 JP) is (also) under pressure from activist Oasis Management. Buy large dips rather than chase another day of a big gain.


Last Week in Event SPACE: Makino Milling Machine, Nufarm, Dic Corp, HKBN

Philippines

DMCI Holdings Inc., through its subsidiaries, provides general construction and infrastructure construction. DMCI also develops real estate and mines coal. In addition, DMCI manufactures cement and other products.

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

DMCI Holdings (DMC PM)

BUY: First Pacific Company (142 HK): Right Stock Trapped in the Wrong Market

Since our insight on 1st Pac last Sept., the stock has gained 33%. Company had solid 2024 results. MPIC, the undervalued Phil./Indonesia...

David Mudd

First Pacific (142 HK): Maynilad's IPO (Now With Prospectus Numbers)

This insight is largely a rehash of yesterday's note, together with updated numbers applying prospectus figures. I thought this warranted a fresh...

David Blennerhassett

First Pacific (142 HK): Maynilad's IPO Price Firmed

First Pac's NAV discount is elevated for a multiple cross-border, difficult to short holdco. Maynilad's IPO was priced below expectations. Plus the...

David Blennerhassett

First Pacific (142 HK) Is Fully Valued Here

First Pac 's NAV discount has significantly narrowed, and is around the lowest since early 2018. Tight for a multiple cross-border, difficult to...

David Blennerhassett

Last Week in Event SPACE: Makino Milling Machine, Nufarm, Dic Corp, HKBN

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

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)