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

<ul>
<li>
<a href="https://www.bloomberg.com/news/articles/2023-02-28/hong-kong-s-hkbn-is-said-to-get-1-billion-buyout-offer-from-hgc" target="_blank" rel="noopener">Bloomberg reported</a><a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a> has received a takeover offer from HGC Global Communications at a valuation of more than US$1 billion (implies around HK$6 per share).</li>
<li>The shares rose 11.6% to HK$5.59 before entering a trading halt. The rumoured price is underwhelming compared to historical multiples and share prices. </li>
<li>HKBN has a relatively concentrated shareholder register which suggests that the rumoured takeover premium of around 20% is not going to cut it.</li>
</ul>



Bloomberg reportedHKBN Ltd (1310 HK) has received a takeover offer from HGC Global Communications at a valuation of more than US$1 billion (implies around HK$6 per share).
The shares rose 11.6% to HK$5.59 before entering a trading halt. The rumoured price is underwhelming compared to historical multiples and share prices. 
HKBN has a relatively concentrated shareholder register which suggests that the rumoured takeover premium of around 20% is not going to cut it.


HKBN (1310 HK): Trading Halt, HGC’s Rumoured Takeover Offer

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a>'s FY22 revenue, EBITDA, and profit increased by 2%, 6%, and 11% to HK$36.1bn,  HK$12.4bn, and HK$834mn.</li>
<li>
<a href="https://www.smartkarma.com/entities/hkt-ltd" target="_blank" data-smartkarma-citation="entities:874:1" rel="noopener">HKT Ltd (6823 HK)</a>'s revenue, EBITDA, and profit increased by 0.5%, 3%, and 0.4% to HK$34.1bn,  HK$13.1bn, and HK$4.7mn.</li>
<li>The dividend pass-through is 100%. PCCW's current discount to NAV is in line with its 52-week average.</li>
</ul>



PCCW Ltd (8 HK)'s FY22 revenue, EBITDA, and profit increased by 2%, 6%, and 11% to HK$36.1bn,  HK$12.4bn, and HK$834mn.

HKT Ltd (6823 HK)'s revenue, EBITDA, and profit increased by 0.5%, 3%, and 0.4% to HK$34.1bn,  HK$13.1bn, and HK$4.7mn.
The dividend pass-through is 100%. PCCW's current discount to NAV is in line with its 52-week average.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a> is coming up "cheap" on my monitor, both from a discount to NAV and implied stub angle. </li>
<li>Preceding my comments PCCW / <a href="https://www.smartkarma.com/entities/hkt-ltd" target="_blank" data-smartkarma-citation="entities:874:1" rel="noopener">HKT Ltd (6823 HK)</a> and <a href="https://www.smartkarma.com/entities/bank-of-kyoto" target="_blank" data-smartkarma-citation="entities:5248:1" rel="noopener">Bank of Kyoto (8369 JP)</a> 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>



PCCW Ltd (8 HK) is coming up "cheap" on my monitor, both from a discount to NAV and implied stub angle. 
Preceding my comments PCCW / HKT Ltd (6823 HK) and Bank of Kyoto (8369 JP) 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%.


Hutchison Telecommunications Hong Kong / Event-Driven

Hutchison Telecommunications Hong Kong (215 HK)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hutchison-telecomm-hong-kong" target="_blank" data-smartkarma-citation="entities:141:1" rel="noopener">Hutchison Telecommunications (215 HK)</a>'s share price is up 33% month to date.</li>
<li>The average volume in June has been 11.9mn shares per day, compared to 3.8mn shares on average over the past year, and 3mn in the past six months. </li>
<li>Of interest, Southbound buying has accelerated in the last two weeks, with a holding of 0.76% of shares out, up from 0.11% at the beginning of the month. </li>
</ul>



Hutchison Telecommunications (215 HK)'s share price is up 33% month to date.
The average volume in June has been 11.9mn shares per day, compared to 3.8mn shares on average over the past year, and 3mn in the past six months. 
Of interest, Southbound buying has accelerated in the last two weeks, with a holding of 0.76% of shares out, up from 0.11% at the beginning of the month. 


<ul>
<li>
<a href="https://www.bloomberg.com/news/articles/2022-05-18/hong-kong-telco-hkbn-said-to-draw-interest-from-stonepeak-pag" target="_blank" rel="noopener">Bloomberg reported</a><a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co Inc (KKR US)</a> and PAG are carrying out due diligence on <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a>, with a view to launching a privatisation bid.</li>
<li>HKBN has a relatively concentrated shareholder register which suggests a requirement for a high takeover premium.</li>
<li>Precedent transactions suggest a privatisation forward EV/EBITDA multiple of at least 10x, implying a minimum offer price of HK$11.80 per share, a 23% premium to the last close. </li>
</ul>



Bloomberg reportedKKR &amp; Co Inc (KKR US) and PAG are carrying out due diligence on HKBN Ltd (1310 HK), with a view to launching a privatisation bid.
HKBN has a relatively concentrated shareholder register which suggests a requirement for a high takeover premium.
Precedent transactions suggest a privatisation forward EV/EBITDA multiple of at least 10x, implying a minimum offer price of HK$11.80 per share, a 23% premium to the last close. 


Hong Kong

HKT is Hong Kong's premier telecommunications service provider and a leading innovator, offering fixed-line, mobile, broadband internet, and media entertainment services. The company also provides enterprise solutions, digital ventures, and other services such as its loyalty program, financial services, and health technology. HKT was incorporated in 2011 and is headquartered in Quarry Bay, Hong Kong, with its origins tracing back to the Hong Kong Telephone Company Limited established in 1925.

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HKT (6823 HK)

HKBN (1310 HK): Trading Halt, HGC’s Rumoured Takeover Offer

It will be tough to pull off privatisation at the rumoured valuation of more than US$1bn (around HK$6 per share). Nevertheless, the renewed...

Arun George

PCCW And HKT's 2022 Results

Ideally, I would prefer to be aligned with Richard Li - and therefore be Long PCCW, short HKT here. However, right this moment, the discount to...

David Blennerhassett

StubWorld: PCCW Coming Up "Cheap"

I would still be invested where Richard Li is - and therefore be Long PCCW, short HKT here. I expect the NAV discount to narrow towards its one...

David Blennerhassett

Hutch Tel (215 HK): Something's Brewing

Hutch Tel appears to be in play. And Hong Kong has had a tendency for news leakage ahead of events. Even after the recent run-up, Hutch Tel does...

David Blennerhassett

HKBN in the Crosshairs of KKR and PAG

Bloomberg reported that KKR and PAG could launch a privatisation bid. Precedent transactions suggest a privatisation forward EV/EBITDA multiple of...

Arun George

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