Research from Asian Century Stocks, Asian Century Stocks

Michael Fritzell

Research from Asian Century Stocks

Providing financial journalism in the Asia-Pacific

Asian Century Stocks

Asian Century Stocks is a newsletter providing financial journalism for companies and stocks in the Asia-Pacific. 
The Asian Century Stocks logotype “百” stands for “one hundred” or a “century”. The economic centre of gravity is moving towards Asia. Yet most global investors are missing out.

Equity Bottom-Up

Jardine Matheson Holdings / Equity Bottom-Up

<ul><li>After Ben Keswick took over Jardine Matheson, the company has slowly transitioned away from being an owner-operator to more of a portfolio manager.</li><li>The privatization of Jardine Strategic was under-priced, but it also simplified the corporate structure. That should be positive for minorities in the long term.</li><li>Jardine Matheson’s own board has now been stacked with private equity professionals. And new CEO Lincoln Pan comes from private equity firm PAG, where he built up its non-China business.</li></ul>

After Ben Keswick took over Jardine Matheson, the company has slowly transitioned away from being an owner-operator to more of a portfolio manager.The privatization of Jardine Strategic was under-priced, but it also simplified the corporate structure. That should be positive for minorities in the long term.Jardine Matheson’s own board has now been stacked with private equity professionals. And new CEO Lincoln Pan comes from private equity firm PAG, where he built up its non-China business.

A New Era for Jardine Matheson: An Under-The-Radar Transformation.

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/keppel-dc-reit" target="_blank" data-smartkarma-citation="entities:85:1" rel="noopener">Keppel DC REIT (KDCREIT SP)</a> will replace <a href="https://www.smartkarma.com/entities/jardine-cycle-carriage-ltd" target="_blank" data-smartkarma-citation="entities:347:1" rel="noopener">Jardine Cycle &amp; Carriage (JCNC SP)</a> in the <a href="https://www.smartkarma.com/entities/spdr-straits-times-index-etf" target="_blank" data-smartkarma-citation="entities:35880:1" rel="noopener">SPDR Straits Times Index ETF (STTF SP)</a> at the close on 20 June.</li>
<li>The <a href="https://www.smartkarma.com/entities/spdr-straits-times-index-etf" target="_blank" data-smartkarma-citation="entities:35880:1" rel="noopener">SPDR Straits Times Index ETF (STTF SP)</a> will need to trade between 3-5 days of ADV in the add and delete.</li>
<li>The ETF trading could help <a href="https://www.smartkarma.com/entities/keppel-dc-reit" target="_blank" data-smartkarma-citation="entities:85:1" rel="noopener">Keppel DC REIT (KDCREIT SP)</a> break out of its short-term downtrend and could add further pressure on <a href="https://www.smartkarma.com/entities/jardine-cycle-carriage-ltd" target="_blank" data-smartkarma-citation="entities:347:1" rel="noopener">Jardine Cycle &amp; Carriage (JCNC SP)</a>. </li>
</ul>



Keppel DC REIT (KDCREIT SP) will replace Jardine Cycle &amp; Carriage (JCNC SP) in the SPDR Straits Times Index ETF (STTF SP) at the close on 20 June.
The SPDR Straits Times Index ETF (STTF SP) will need to trade between 3-5 days of ADV in the add and delete.
The ETF trading could help Keppel DC REIT (KDCREIT SP) break out of its short-term downtrend and could add further pressure on Jardine Cycle &amp; Carriage (JCNC SP). 


STTF Index Rebalance: Keppel DC REIT Replaces Jardine Cycle & Carriage

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Malaysia Airports Holdings / Event-Driven

<ul>
<li>Back on the 15th May, a consortium (Khazanah Nasional, EPF, the Abu Dhabi Investment Authority, and Global Infrastructure Partners) collectively holding 41.22%, launched an Offer for <a href="https://www.smartkarma.com/entities/malaysia-airports-holdings-bhd" target="_blank" data-smartkarma-citation="entities:117:1" rel="noopener">Malaysia Airports (MAHB MK).</a>
</li>
<li>After some political gymnastics, MAHB squared away the necessary regulatory approvals, and a firm Offer was made on the 15th November. The Offer Doc dispatched on the 6th December. </li>
<li>In the Circular on Friday, the IFA said NOT fair - with reference to a SOTP; but reasonable referencing historical market pricing and that no competing Offer will emerge. </li>
</ul>


Back on the 15th May, a consortium (Khazanah Nasional, EPF, the Abu Dhabi Investment Authority, and Global Infrastructure Partners) collectively holding 41.22%, launched an Offer for Malaysia Airports (MAHB MK).

After some political gymnastics, MAHB squared away the necessary regulatory approvals, and a firm Offer was made on the 15th November. The Offer Doc dispatched on the 6th December. 
In the Circular on Friday, the IFA said NOT fair - with reference to a SOTP; but reasonable referencing historical market pricing and that no competing Offer will emerge. 


Malaysia Airports (MAHB MK): IFA Says NOT Fair, But Reasonable; And To Accept Terms

<ul>
<li>Low-Cost retailer <a href="https://www.smartkarma.com/entities/miniso-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:36659:1" rel="noopener">MINISO (9896 HK)</a> has <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0923/2024092301478.pdf" target="_blank" rel="noopener">entered into SPAs to acquire a 29.4% stake</a> in supermarket chain <a href="https://www.smartkarma.com/entities/yonghui-superstores-co-ltd" target="_blank" data-smartkarma-citation="entities:15910:1" rel="noopener">Yonghui (601933 CH)</a> from <a href="https://www.smartkarma.com/entities/dfi-retail-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:7427:1" rel="noopener">DFI (DFI SP)</a> and two units of <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (9618 HK)</a>. </li>
<li>Upon the completion of this US$890mn transaction, which is subject to regulatory and shareholder approvals, MINISO would become Yonghui's largest shareholder. And DFI would exit its entire stake.</li>
<li>Ye Guofu, MINISO's founder/chairman, views the transaction “<a href="https://thelowdown.momentum.asia/miniso-spends-us890-million-to-challenge-sams-club-in-china/" target="_blank" rel="noopener">With a brave heart, start a new world!</a>”. Yonghui has been spilling red ink since FY21. Perhaps "brave soul" is more apt.</li>
</ul>


Low-Cost retailer MINISO (9896 HK) has entered into SPAs to acquire a 29.4% stake in supermarket chain Yonghui (601933 CH) from DFI (DFI SP) and two units of JD.com (9618 HK). 
Upon the completion of this US$890mn transaction, which is subject to regulatory and shareholder approvals, MINISO would become Yonghui's largest shareholder. And DFI would exit its entire stake.
Ye Guofu, MINISO's founder/chairman, views the transaction “With a brave heart, start a new world!”. Yonghui has been spilling red ink since FY21. Perhaps "brave soul" is more apt.


DFI Exits Yonghui, MINISO Enters: Who Got The Short End Of The Stick?

<ul>
<li>After publishing my insight (<a href="https://skr.ma/y1QWE" target="_blank" rel="noopener">Jardine Matheson (JM SP): Trading "Cheap"</a>) last week, my NAV calcs were called into question by some readers, when compared to street estimates.</li>
<li>Which is cool. I'm big enough to admit mistakes, where needed. So I've done some digging, including a back and forth with <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a>.</li>
<li>The upshot? I have not lead you astray. You've been coming to the right place.</li>
</ul>


After publishing my insight (Jardine Matheson (JM SP): Trading "Cheap") last week, my NAV calcs were called into question by some readers, when compared to street estimates.
Which is cool. I'm big enough to admit mistakes, where needed. So I've done some digging, including a back and forth with Jardine Matheson Holdings (JM SP).
The upshot? I have not lead you astray. You've been coming to the right place.


Jardine Matheson (JM SP): Squeezing More Life Out Of The NAV

Singapore

Jardine Cycle & Carriage Limited operates as an investment holding company. The Company, through its subsidiaries, invests in automotive, consumer finance, utilities and infrastructure, heavy equipment and mining, property, agribusiness, cement, and consumer products businesses. Jardine Cycle & Carriage serves customers in South East Asia.

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Jardine Cycle & Carriage (JCNC SP)

A New Era for Jardine Matheson: An Under-The-Radar Transformation.

After Ben Keswick took over Jardine Matheson, the company has slowly transitioned away from being an owner-operator to more of a portfolio manager.

Asian Century Stocks

STTF Index Rebalance: Keppel DC REIT Replaces Jardine Cycle & Carriage

Keppel DC REIT will replace Jardine Cycle & Carriage in the STTF SP at the close on 20 June. Passives will need to trade between 3-5x ADV in the...

Brian Freitas

Malaysia Airports (MAHB MK): IFA Says NOT Fair, But Reasonable; And To Accept Terms

A "not fair, but reasonable" conclusion has generally not proven to be an impediment to securing shareholder support. If late-Jan payment, trading...

David Blennerhassett

DFI Exits Yonghui, MINISO Enters: Who Got The Short End Of The Stick?

DFI doesn't appear too demanding here; but has already run up ~9% on the news. I 'd get involved on any weakness. JMH does look attractive here....

David Blennerhassett

Jardine Matheson (JM SP): Squeezing More Life Out Of The NAV

I've bolted on US$0.5bn to NAV. That adjustment doesn't move the needle. Look to set up the stub: Long JMH, short DFI, HKL, MO & JC&C on a...

David Blennerhassett

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