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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/haier-electronics-group-co" target="_blank" data-smartkarma-citation="entities:4877:1" rel="noopener">Haier Electronics Group Co (1169 HK)</a> and <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology Company Limited (1833 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/sunny-optical-tech" target="_blank" data-smartkarma-citation="entities:13363:1" rel="noopener">Sunny Optical (2382 HK)</a> and <a href="https://www.smartkarma.com/entities/aia-group-ltd" target="_blank" data-smartkarma-citation="entities:14895:1" rel="noopener">AIA Group Ltd (1299 HK)</a>. Shorts increased in Financials and Health Care stocks, and decreased on Consumer Discretionary, Industrials, Communication Services, Information Technology and Real Estate names.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a>, <a href="https://www.smartkarma.com/entities/nippon-building-fund-inc" target="_blank" data-smartkarma-citation="entities:1900:1" rel="noopener">Nippon Building Fund (8951 JP)</a>, <a href="https://www.smartkarma.com/entities/mercari-inc" target="_blank" data-smartkarma-citation="entities:27149:1" rel="noopener">Mercari Inc (4385 JP)</a> and <a href="https://www.smartkarma.com/entities/miura-co-ltd" target="_blank" data-smartkarma-citation="entities:20185:1" rel="noopener">Miura Co Ltd (6005 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/fuji-corp-aichi" target="_blank" data-smartkarma-citation="entities:12942:1" rel="noopener">Fuji Machine Mfg (6134 JP)</a>, <a href="https://www.smartkarma.com/entities/casio-computer-co-ltd" target="_blank" data-smartkarma-citation="entities:18338:1" rel="noopener">Casio Computer (6952 JP)</a> and <a href="https://www.smartkarma.com/entities/ricoh-company-ltd" target="_blank" data-smartkarma-citation="entities:15359:1" rel="noopener">Ricoh Company Ltd (7752 JP)</a>. Sectorally, shorts increased on Consumer Discretionary, Real Estate and Financials, while shorts were covered on Consumer Staples.</p></div><div><p>In Korea, the biggest increase in shorts were seen on <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a>, <a href="https://www.smartkarma.com/entities/hyundai-heavy-industries" target="_blank" data-smartkarma-citation="entities:10155:1" rel="noopener">Hyundai Heavy Industries (009540 KS)</a> and <a href="https://www.smartkarma.com/entities/samsung-sdi-co-ltd" target="_blank" data-smartkarma-citation="entities:503:1" rel="noopener">Samsung SDI (006400 KS)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/amorepacific-corp" target="_blank" data-smartkarma-citation="entities:20854:1" rel="noopener">Amorepacific Corp (090430 KS)</a>, <a href="https://www.smartkarma.com/entities/sk-chemicals-co-ltd-new" target="_blank" data-smartkarma-citation="entities:26190:1" rel="noopener">Sk Chemicals Co Ltd/New (285130 KS)</a>, <a href="https://www.smartkarma.com/entities/s-oil-corp" target="_blank" data-smartkarma-citation="entities:1667:1" rel="noopener">S Oil Corp (010950 KS)</a> and <a href="https://www.smartkarma.com/entities/hmm-co-ltd" target="_blank" data-smartkarma-citation="entities:13494:1" rel="noopener">HMM Co., Ltd. (011200 KS)</a>. </p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/asustek-computer-inc" target="_blank" data-smartkarma-citation="entities:13002:1" rel="noopener">Asustek Computer (2357 TT)</a>, <a href="https://www.smartkarma.com/entities/wiwynn-corp" target="_blank" data-smartkarma-citation="entities:27838:1" rel="noopener">Wiwynn Corp (6669 TT)</a>, <a href="https://www.smartkarma.com/entities/acer-inc" target="_blank" data-smartkarma-citation="entities:15726:1" rel="noopener">Acer Inc (2353 TT)</a> and <a href="https://www.smartkarma.com/entities/largan-precision-co-ltd" target="_blank" data-smartkarma-citation="entities:9126:1" rel="noopener">Largan Precision (3008 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/unimicron-technology-corp" target="_blank" data-smartkarma-citation="entities:18778:1" rel="noopener">Unimicron Technology (3037 TT)</a>, <a href="https://www.smartkarma.com/entities/century-iron-steel-indus" target="_blank" data-smartkarma-citation="entities:8853:1" rel="noopener">Century Iron &amp; Steel Indus (9958 TT)</a>, <a href="https://www.smartkarma.com/entities/yageo-corporation" target="_blank" data-smartkarma-citation="entities:13212:1" rel="noopener">Yageo Corporation (2327 TT)</a> and <a href="https://www.smartkarma.com/entities/formosa-petrochemical-corp" target="_blank" data-smartkarma-citation="entities:20875:1" rel="noopener">Formosa Petrochemical (6505 TT)</a>. </p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Ping An Insurance (H) (2318 HK), Alibaba Group (9988 HK), Haier Electronics Group Co (1169 HK) and Ping An Healthcare and Technology Company Limited (1833 HK) while there was short covering on Meituan (3690 HK), Tencent Holdings (700 HK), Sunny Optical (2382 HK) and AIA Group Ltd (1299 HK). Shorts increased in Financials and Health Care stocks, and decreased on Consumer Discretionary, Industrials, Communication Services, Information Technology and Real Estate names.In Japan, stocks that saw the most shorts were Itochu Corp (8001 JP), Nippon Building Fund (8951 JP), Mercari Inc (4385 JP) and Miura Co Ltd (6005 JP) while shorts decreased on Toshiba Corp (6502 JP), Fuji Machine Mfg (6134 JP), Casio Computer (6952 JP) and Ricoh Company Ltd (7752 JP). Sectorally, shorts increased on Consumer Discretionary, Real Estate and Financials, while shorts were covered on Consumer Staples.In Korea, the biggest increase in shorts were seen on Hyundai Motor Co (005380 KS), Hyundai Heavy Industries (009540 KS) and Samsung SDI (006400 KS) while shorts were covered on Amorepacific Corp (090430 KS), Sk Chemicals Co Ltd/New (285130 KS), S Oil Corp (010950 KS) and HMM Co., Ltd. (011200 KS). Stocks in Taiwan that saw the highest increase in shorts were Asustek Computer (2357 TT), Wiwynn Corp (6669 TT), Acer Inc (2353 TT) and Largan Precision (3008 TT) while shorts were covered on Unimicron Technology (3037 TT), Century Iron &amp; Steel Indus (9958 TT), Yageo Corporation (2327 TT) and Formosa Petrochemical (6505 TT). 

Asia Short Interest Weekly: Haier, Sunny Optical, Itochu, Mercari, Toshiba, HMM, Asustek, Acer

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<div>
<p>Back on the 19 December 2019, following a brief <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2019/1213/2019121300104.pdf" target="_blank" rel="noopener">suspension</a> pursuant to the Takeovers Code,  <a href="https://www.smartkarma.com/entities/haier-electronics-group-co" target="_blank" data-smartkarma-citation="entities:4877:1" rel="noopener">Haier Electronics Group Co (1169 HK)</a> (HEG) <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2019/1216/2019121600924.pdf" target="_blank" rel="noopener">announced</a> its parent, <a href="https://www.smartkarma.com/entities/qingdao-haier-co-ltd-a" target="_blank" data-smartkarma-citation="entities:7196:1" rel="noopener">Haier Smart Home (600690 CH)</a> (HSH) was contemplating taking Haier private with newly issued Hong Kong shares, implying HSH was seeking an H-share listing, either first, or concurrent with the share swap.</p>
<p>A little over seven months later, HEG <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0731/2020073101131.pdf" target="_blank" rel="noopener">announced</a> a pre-conditional Scheme such that HEG shareholder will receive 1.6 new HSH H shares plus HK$1.95 in cash. A 632-page Application Proof for the listing of HSH H-shares has been <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0911/2020091100023.pdf" target="_blank" rel="noopener">lodged</a>. This will be a <a href="https://en-rules.hkex.com.hk/entiresection/2269" target="_blank" rel="noopener">listing by introduction</a>.</p>
</div>
<div>
<p>The pre-condition (HSH's shareholders and CSRC approval) were <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0901/2020090103529.pdf" target="_blank" rel="noopener">fulfilled</a> on the 1 September.</p>
<p>The Scheme Document has now been <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1116/2020111600005.pdf" target="_blank" rel="noopener">despatched</a> - all 1,052 pages of it. The Court Meeting/SGM will be held on the 9 December, with the expected listing of the HSH H shares on the 22 December. The IFA (Somerley) considers the Offer to be fair &amp; reasonable.</p>
<p>The Valuation Advisor (Platinum Advisors) has bumped the mid-point of the Offer Consideration to $38.03, up from $31.51 in late July. That revised assessment covers global peers, SoTPs, and direct comparables. HSH is up 51%/73% since the deal transaction was floated in December, and confirmed in July. HEG is up 62%/36% during the same time frame.</p>
<p>This mid-point assessment is just a valuer's opinion. There is no guarantee this is where the Hs will trade. </p>
<p>And that is the key question: where will the unlisted HSH H-shares trade with respect to the HSH A-shares? </p>
<p>More below the fold.</p>
</div>
<div></div>
<div>
<p></p>
</div>


Back on the 19 December 2019, following a brief suspension pursuant to the Takeovers Code,  Haier Electronics Group Co (1169 HK) (HEG) announced its parent, Haier Smart Home (600690 CH) (HSH) was contemplating taking Haier private with newly issued Hong Kong shares, implying HSH was seeking an H-share listing, either first, or concurrent with the share swap.
A little over seven months later, HEG announced a pre-conditional Scheme such that HEG shareholder will receive 1.6 new HSH H shares plus HK$1.95 in cash. A 632-page Application Proof for the listing of HSH H-shares has been lodged. This will be a listing by introduction.


The pre-condition (HSH's shareholders and CSRC approval) were fulfilled on the 1 September.
The Scheme Document has now been despatched - all 1,052 pages of it. The Court Meeting/SGM will be held on the 9 December, with the expected listing of the HSH H shares on the 22 December. The IFA (Somerley) considers the Offer to be fair &amp; reasonable.
The Valuation Advisor (Platinum Advisors) has bumped the mid-point of the Offer Consideration to $38.03, up from $31.51 in late July. That revised assessment covers global peers, SoTPs, and direct comparables. HSH is up 51%/73% since the deal transaction was floated in December, and confirmed in July. HEG is up 62%/36% during the same time frame.
This mid-point assessment is just a valuer's opinion. There is no guarantee this is where the Hs will trade. 
And that is the key question: where will the unlisted HSH H-shares trade with respect to the HSH A-shares? 
More below the fold.






Haier Electric (1169 HK): The "H-Share" Guessing Game

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/yihai-int-l-holding-ltd" target="_blank" data-smartkarma-citation="entities:22803:1" rel="noopener">Yihai Int’L Holding (1579 HK)</a>, <a href="https://www.smartkarma.com/entities/haier-electronics-group-co" target="_blank" data-smartkarma-citation="entities:4877:1" rel="noopener">Haier Electronics Group Co (1169 HK)</a> and <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>, <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> and <a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a>. Shorts increased in Industrials, Consumer Discretionary and Real Estate stocks and decreased in Financial names.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/square-enix-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15003:1" rel="noopener">Square Enix Holdings (9684 JP)</a>, <a href="https://www.smartkarma.com/entities/anritsu-corp" target="_blank" data-smartkarma-citation="entities:3700:1" rel="noopener">Anritsu Corp (6754 JP)</a>, <a href="https://www.smartkarma.com/entities/casio-computer-co-ltd" target="_blank" data-smartkarma-citation="entities:18338:1" rel="noopener">Casio Computer (6952 JP)</a> and <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 Inc (2413 JP)</a>, <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon Inc (7751 JP)</a>, <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a> and <a href="https://www.smartkarma.com/entities/ana-holdings-inc" target="_blank" data-smartkarma-citation="entities:5308:1" rel="noopener">Ana Holdings (9202 JP)</a>. Sectorally, shorts increased on Communication Services, Health Care and Information Technology, while shorts were covered on Consumer Discretionary and Financials.</p></div><div><p>In Korea, the biggest increase in shorts was on <a href="https://www.smartkarma.com/entities/netmarble-corporation" target="_blank" data-smartkarma-citation="entities:22839:1" rel="noopener">Netmarble Corporation (251270 KS)</a>, while shorts were covered on <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/sk-innovation-co-ltd" target="_blank" data-smartkarma-citation="entities:1268:1" rel="noopener">SK Innovation (096770 KS)</a>, <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a> and <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a>. News <a href="https://www.businesskorea.co.kr/news/articleView.html?idxno=54911" target="_blank" rel="noopener">reports</a> have indicated that the FSC will lift the temporary short sell ban on 15 March 2021 and will apply to all stocks irrespective of market cap. Earlier reports had indicated that the short sell ban would stay in place for small cap stocks.</p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/au-optronics-corp" target="_blank" data-smartkarma-citation="entities:6704:1" rel="noopener">Au Optronics (2409 TT)</a>, <a href="https://www.smartkarma.com/entities/innolux-corp" target="_blank" data-smartkarma-citation="entities:4509:1" rel="noopener">Innolux Corp (3481 TT)</a>, <a href="https://www.smartkarma.com/entities/acer-inc" target="_blank" data-smartkarma-citation="entities:15726:1" rel="noopener">Acer Inc (2353 TT)</a> and <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>  while shorts were covered on <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 TT)</a>, <a href="https://www.smartkarma.com/entities/yageo-corporation" target="_blank" data-smartkarma-citation="entities:13212:1" rel="noopener">Yageo Corporation (2327 TT)</a>, <a href="https://www.smartkarma.com/entities/largan-precision-co-ltd" target="_blank" data-smartkarma-citation="entities:9126:1" rel="noopener">Largan Precision (3008 TT)</a> and <a href="https://www.smartkarma.com/entities/walsin-technology-corp" target="_blank" data-smartkarma-citation="entities:11084:1" rel="noopener">Walsin Technology (2492 TT)</a>.</p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Alibaba Group (9988 HK), Yihai Int’L Holding (1579 HK), Haier Electronics Group Co (1169 HK) and HKEX (388 HK) while there was short covering on Tencent Holdings (700 HK), Ping An Insurance (H) (2318 HK), Meituan (3690 HK) and NetEase (9999 HK). Shorts increased in Industrials, Consumer Discretionary and Real Estate stocks and decreased in Financial names.In Japan, stocks that saw the most shorts were Square Enix Holdings (9684 JP), Anritsu Corp (6754 JP), Casio Computer (6952 JP) and Tsuruha Holdings (3391 JP) while shorts decreased on M3 Inc (2413 JP), Canon Inc (7751 JP), Rakuten Inc (4755 JP) and Ana Holdings (9202 JP). Sectorally, shorts increased on Communication Services, Health Care and Information Technology, while shorts were covered on Consumer Discretionary and Financials.In Korea, the biggest increase in shorts was on Netmarble Corporation (251270 KS), while shorts were covered on Samsung Electronics (005930 KS), SK Innovation (096770 KS), Hyundai Motor Co (005380 KS) and Celltrion Inc (068270 KS). News reports have indicated that the FSC will lift the temporary short sell ban on 15 March 2021 and will apply to all stocks irrespective of market cap. Earlier reports had indicated that the short sell ban would stay in place for small cap stocks.Stocks in Taiwan that saw the highest increase in shorts were Au Optronics (2409 TT), Innolux Corp (3481 TT), Acer Inc (2353 TT) and TSMC (2330 TT)  while shorts were covered on Novatek Microelectronics Corp (3034 TT), Yageo Corporation (2327 TT), Largan Precision (3008 TT) and Walsin Technology (2492 TT).

Asia Short Interest Weekly: Shorts Continue to Rise in HK, Japan & Taiwan; Korea Ban to Be Lifted

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

Haier Smart Home / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd" target="_blank" data-smartkarma-citation="entities:7196:1" rel="noopener">Haier Smart Home (600690 CH)</a> has filed for an IPO on the Hong Kong Stock Exchange and simultaneously plans to privatise <a href="https://www.smartkarma.com/entities/haier-electronics-group-co" target="_blank" data-smartkarma-citation="entities:4877:1" rel="noopener">Haier Electronics Group Co (1169 HK)</a> . However, the success of the IPO is dependent on Privatisation materialising.</li>
<li>We have covered Haier Smart Homes (HSH) in detail in our previous reports where we concluded that we were positive on the company’s growth prospects.</li>
</ul><blockquote>
<p><em>We remain positive on the company’s growth prospects given its well diversified product portfolio, large exposure to growing overseas markets and the ability to generate synergies through its acquisitions which should help the company expand its margins</em></p>
<p><em>- Previous Insight</em></p>
</blockquote><ul>
<li>Since we have already discussed about the company’s businesses and the outlook for each segment in detail in our previous insights, we intend to provide an update on the company’s recent financial performance and any changes to the company’s business outlook since we last wrote on the company.</li>
<li>Read our previous insights on the company:</li>
</ul><p><a href="https://www.smartkarma.com/insights/haier-sh-diversified-product-mix-overseas-exposure-and-synergies-to-support-a-higher-valuation" target="_blank" rel="noopener">https://www.smartkarma.com/insights/haier-sh-diversified-product-mix-overseas-exposure-and-synergies-to-support-a-higher-valuation</a>.</p><p><a href="https://www.smartkarma.com/insights/haier-sh-emerging-markets-refrigerator-growth-cushions-slowdown-in-china-and-developed-markets" target="_blank" rel="noopener">https://www.smartkarma.com/insights/haier-sh-emerging-markets-refrigerator-growth-cushions-slowdown-in-china-and-developed-markets</a></p><p><a href="https://www.smartkarma.com/insights/haier-sh-part-ii-lower-exposure-to-declining-ac-market-while-synergies-help-margin-expansion" target="_blank" rel="noopener">https://www.smartkarma.com/insights/haier-sh-part-ii-lower-exposure-to-declining-ac-market-while-synergies-help-margin-expansion</a>.</p>



Haier Smart Home (600690 CH) has filed for an IPO on the Hong Kong Stock Exchange and simultaneously plans to privatise Haier Electronics Group Co (1169 HK) . However, the success of the IPO is dependent on Privatisation materialising.
We have covered Haier Smart Homes (HSH) in detail in our previous reports where we concluded that we were positive on the company’s growth prospects.

We remain positive on the company’s growth prospects given its well diversified product portfolio, large exposure to growing overseas markets and the ability to generate synergies through its acquisitions which should help the company expand its margins
- Previous Insight

Since we have already discussed about the company’s businesses and the outlook for each segment in detail in our previous insights, we intend to provide an update on the company’s recent financial performance and any changes to the company’s business outlook since we last wrote on the company.
Read our previous insights on the company:
https://www.smartkarma.com/insights/haier-sh-diversified-product-mix-overseas-exposure-and-synergies-to-support-a-higher-valuation.https://www.smartkarma.com/insights/haier-sh-emerging-markets-refrigerator-growth-cushions-slowdown-in-china-and-developed-marketshttps://www.smartkarma.com/insights/haier-sh-part-ii-lower-exposure-to-declining-ac-market-while-synergies-help-margin-expansion.

Haier Smart Homes IPO: Growing Exposure to Emerging Markets and M&A Opportunities to Drive Growth

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<p><a href="https://www.smartkarma.com/entities/haier-electronics-group-co" target="_blank" data-smartkarma-citation="entities:4877:1" rel="noopener"></a>On the 31 July, <a href="https://www.smartkarma.com/entities/haier-electronics-group-co" target="_blank" data-smartkarma-citation="entities:4877:1" rel="noopener">Haier Electronics Group Co (1169 HK)</a> (HEG) <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0731/2020073101131.pdf" target="_blank" rel="noopener">announced</a> a pre-conditional Scheme such that HEG shareholder will receive 1.6 new <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd" target="_blank" data-smartkarma-citation="entities:7196:1" rel="noopener">Haier Smart Home (600690 CH)</a> (HSH) H shares plus HK$1.95 in cash. </p>
<p>The pre-condition concerned approval from HSH's shareholders and CSRC approval. The pre-conditions were <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0901/2020090103529.pdf" target="_blank" rel="noopener">fulfilled</a> on the 1 September. The next step in this process is for HEG shareholders to vote on the Scheme. The despatch of the Scheme Doc has now been extended to the 30 November, from 4 September previously.</p>
<p> A 632-page Application Proof for the listing of HSH H-shares has now been <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0911/2020091100023.pdf" target="_blank" rel="noopener">lodged</a>. This will be a <a href="https://en-rules.hkex.com.hk/entiresection/2269" target="_blank" rel="noopener">listing by introduction</a>.</p>
<p>The question at the time of the Scheme announcement, as it is now - is where will the HSH (as yet unlisted) H-shares trade with respect to the HSH A-shares? </p>
<p>An independent valuer backed out an indicative value under the Scheme of HK$31.11-HK$31.90 - or $31.51 at the mid-point. However, this was just a valuer's opinion. There is no guarantee this is where the Hs will trade. </p>
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<p>The market is assigning around a 37% discount (HSH Hs vs. HSH As). Relative to a basket of liquid A/Hs and listed A/H peers, this is a level to get involved.</p>
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<p>More below the fold.</p>
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On the 31 July, Haier Electronics Group Co (1169 HK) (HEG) announced a pre-conditional Scheme such that HEG shareholder will receive 1.6 new Haier Smart Home (600690 CH) (HSH) H shares plus HK$1.95 in cash. 
The pre-condition concerned approval from HSH's shareholders and CSRC approval. The pre-conditions were fulfilled on the 1 September. The next step in this process is for HEG shareholders to vote on the Scheme. The despatch of the Scheme Doc has now been extended to the 30 November, from 4 September previously.
 A 632-page Application Proof for the listing of HSH H-shares has now been lodged. This will be a listing by introduction.
The question at the time of the Scheme announcement, as it is now - is where will the HSH (as yet unlisted) H-shares trade with respect to the HSH A-shares? 
An independent valuer backed out an indicative value under the Scheme of HK$31.11-HK$31.90 - or $31.51 at the mid-point. However, this was just a valuer's opinion. There is no guarantee this is where the Hs will trade. 


The market is assigning around a 37% discount (HSH Hs vs. HSH As). Relative to a basket of liquid A/Hs and listed A/H peers, this is a level to get involved.


More below the fold.


Hong Kong

Haier Electronics Group Co., Ltd. is an affiliate of Haier Group Corporation that designs, develops, manufactures, and sells consumer electronics, including mobile phones, computers, and televisions. The parent company, Haier Group, was founded in 1984 and is headquartered in Qingdao, Shandong, China.

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Haier Electronics (1169 HK)

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