Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

A drop in global demand resulted in international salmon prices declining 28% in the first six months of 2020. 
In June of last year, China experienced a second Covid outbreak in Beijing that Chines authorities attributed to chopping boards used to handle imported salmon at the Xinfadi meat wholesale market. 
Tasmania's <a href="https://www.smartkarma.com/entities/huon-aquaculture-group-ltd" target="_blank" data-smartkarma-citation="entities:12348:1" rel="noopener">Huon Aquaculture (HUO AU)</a> and <a href="https://www.smartkarma.com/entities/tassal-group-ltd" target="_blank" data-smartkarma-citation="entities:16234:1" rel="noopener">Tassal (TGR AU)</a> both sell salmon to China, although China's imports are primarily sourced from Chile, Denmark, and Norway.  
On the 26 February this year, Huon <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02347852-3A562617?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> a loss of A$95.3mn for the 1H21, including a non-impairment charge of A$113.9mn. In a <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02336871-3A560489?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">market update</a> earlier that month, Huon said salmon prices had declined ~40% relative to the first six months of 2020.
Concurrent with its 1H21 results, Huon said...
<blockquote>
In light of recent unsolicited approaches, the board has initiated a strategic review to assess the potential for corporate-level transactions for the benefit of shareholders.
</blockquote>
In a follow-up announcement on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02387935-3A569418?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">25 June</a>, Huon said that strategic review remains ongoing. 
Huon is in need of cash in the face of burgeoning debt amid falling salmon prices and rising freight expenses. A possible placement has been floated, although it would need to be substantial, which would reduce the Bender family's major shareholding. 
A more likely outcome was a take-private transaction, yet an ongoing auction process, one that was (allegedly) repeatedly extended, appeared to be losing traction. As of about a week ago, reportedly only Brazil's <a href="https://www.smartkarma.com/entities/jbs-sa" target="_blank" data-smartkarma-citation="entities:24455:1" rel="noopener">JBS SA (JBSS3 BZ)</a> was still in the running.
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<h3>The New News</h3>
Huon has now <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02404691-3A572314?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> a firm Offer with JBS.
</div>
<div>
Under the terms of the Offer, by way of Scheme, Huon shareholders will receive A$3.85/share in cash. A fully-franked dividend of $0.0125/share  - if paid - will be netted. The cash price is a 61% premium to the last close, before the strategic review was announced on the 26 February. 
The founding family (the Benders) with 53% intend to vote all of their shares in support of the Scheme, in the absence of a superior offer.
In addition to a shareholder vote, this Offer requires approval from FIRB.
A Scheme meeting is expected to take place late October with possible competition in November. 
</div>
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More below the fold.
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A drop in global demand resulted in international salmon prices declining 28% in the first six months of 2020. 
In June of last year, China experienced a second Covid outbreak in Beijing that Chines authorities attributed to chopping boards used to handle imported salmon at the Xinfadi meat wholesale market. 
Tasmania's Huon Aquaculture (HUO AU) and Tassal (TGR AU) both sell salmon to China, although China's imports are primarily sourced from Chile, Denmark, and Norway.  
On the 26 February this year, Huon announced a loss of A$95.3mn for the 1H21, including a non-impairment charge of A$113.9mn. In a market update earlier that month, Huon said salmon prices had declined ~40% relative to the first six months of 2020.
Concurrent with its 1H21 results, Huon said...

In light of recent unsolicited approaches, the board has initiated a strategic review to assess the potential for corporate-level transactions for the benefit of shareholders.

In a follow-up announcement on the 25 June, Huon said that strategic review remains ongoing. 
Huon is in need of cash in the face of burgeoning debt amid falling salmon prices and rising freight expenses. A possible placement has been floated, although it would need to be substantial, which would reduce the Bender family's major shareholding. 
A more likely outcome was a take-private transaction, yet an ongoing auction process, one that was (allegedly) repeatedly extended, appeared to be losing traction. As of about a week ago, reportedly only Brazil's JBS SA (JBSS3 BZ) was still in the running.

The New News
Huon has now announced a firm Offer with JBS.


Under the terms of the Offer, by way of Scheme, Huon shareholders will receive A$3.85/share in cash. A fully-franked dividend of $0.0125/share  - if paid - will be netted. The cash price is a 61% premium to the last close, before the strategic review was announced on the 26 February. 
The founding family (the Benders) with 53% intend to vote all of their shares in support of the Scheme, in the absence of a superior offer.
In addition to a shareholder vote, this Offer requires approval from FIRB.
A Scheme meeting is expected to take place late October with possible competition in November. 


More below the fold.





Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Thematic (Sector/Industry)

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices. Companies mentioned this week:<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/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/jbs-sa" target="_blank" data-smartkarma-citation="entities:24455:1" rel="noopener">JBS SA (JBSS3 BZ)</a>, <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a>

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices. Companies mentioned this week:Alibaba Group (9988 HK), TSMC (2330 TT), JBS SA (JBSS3 BZ), Prosus (PRX NA)

Global Emerging Markets Weekly: 4 June 2021

Latest News from the World’s Leading Innovators

Granite Bay Capital

An innovation focussed investment company

Granite Bay Capital is an innovation focussed investment company with a deep focus on the companies at the leading edge of innovation across major themes such as AI, ubiquitous computing, sustainability, automation and longevity.

Headline Developments It’s a big edition this week, so settle in! Elon Musk’s Boring Company (private) broke ground this week, shooting Tesla (TSLA) passengers through a high-speed tunnel under Las Vegas.  The loop comprises 2.7km of tunnels, built 30 feet under the Las Vegas Convention Center.

Headline Developments It’s a big edition this week, so settle in! Elon Musk’s Boring Company (private) broke ground this week, shooting Tesla (TSLA) passengers through a high-speed tunnel under Las Vegas.  The loop comprises 2.7km of tunnels, built 30 feet under the Las Vegas Convention Center.

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

EURO STOXX 50 Price EUR / Technical Analysis

Our intermediate-term outlook remains constructive with major support levels holding on the broad global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE). Still, we continue to see some reason for caution as various market dynamics have deteriorated, leading us to a more neutral outlook in the near-term.

Our intermediate-term outlook remains constructive with major support levels holding on the broad global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE). Still, we continue to see some reason for caution as various market dynamics have deteriorated, leading us to a more neutral outlook in the near-term.

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

While 2020 began on an optimistic note, sentiment has changed significantly with the outbreak of the COVID-19 coronavirus, which has spread rapidly across continents.آ  In our view, key concerns include: [1] potential demand impact on industries with significant human interaction; [2] potential impact on the economy if consumer sentiment deteriorates materially; [3] potential impact on labour force productivity; [4] potential impact on the supply chains of industries; and [5] potential impact on financial markets. We are cautious on companies which are highly levered, cyclical, have limited liquidity or significant debt maturities in the near term. In the report, we assess the impact of COVID-19 on: [1] Europe, China/Asia and the Americas; [2] supply chains; and [3] the sectors and companies under our coverage.

  While 2020 began on an optimistic note, sentiment has changed significantly with the outbreak of the COVID-19 coronavirus, which has spread rapidly across continents.آ    In our view, key concerns include: [1] potential demand impact on industries with significant human interaction; [2] potential impact on the economy if consumer sentiment deteriorates materially; [3] potential impact on labour force productivity; [4] potential impact on the supply chains of industries; and [5] potential impact on financial markets. We are cautious on companies which are highly levered, cyclical, have limited liquidity or significant debt maturities in the near term.   In the report, we assess the impact of COVID-19 on: [1] Europe, China/Asia and the Americas; [2] supply chains; and [3] the sectors and companies under our coverage. 

COVID-19: Impact On Global High Yield - Lucror Analytics

United States

JBS S.A. operates as a processor of a range of meats. The Company processes meats, such as beef, pork, lamb and chicken, as well as the hides. JBS exports its products throughout the world.

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JBS S/A (JBSS3 BZ)

JBS Nets Huon Agriculture (ASX: HUO)

The company is on the back foot in the face of increasing debt amid falling salmon prices and skyrocketing freight prices. JBS appears the only...

David Blennerhassett

Global Emerging Markets Weekly: 4 June 2021

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity...

Wium Malan, CFA

Weekly Innovation Review (WIRE) #35

Headline Developments It’s a big edition this week, so settle in!Elon Musk’s Boring Company (private) broke ground this week,...

Granite Bay Capital

Major Breakout For EURO STOXX 50

Our intermediate-term outlook remains constructive with major support levels holding on the broad global indexes (MSCI ACWI, ACWI ex-US, EM, and...

Vermilion Research

COVID-19: Impact On Global High Yield - Lucror Analytics

While 2020 began on an optimistic note, sentiment has changed significantly with the outbreak of the COVID-19 coronavirus, which has spread...

Lucror Analytics

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