Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In <em><strong><a href="https://skr.ma/mqr7w" target="_blank" rel="noopener">RMB Dual Counter Trading Is Coming - This Changes AH Relationships</a></strong></em>, <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> discussed the forthcoming inclusion of RMB dual counters in the Hong Kong Southbound Connect programs.</li>
<li>This is but one of the five capital market cooperation measures <a href="http://www.csrc.gov.cn/csrc/c100028/c7474875/content.shtml" target="_blank" rel="noopener">announced</a> by the CSRC last Friday. </li>
<li>The other four measures include ETFs, improving mutual recognition of funds, increasing China IPOs in Hong Kong, and the inclusion of REITs. This insight discusses the latter.</li>
</ul>


In RMB Dual Counter Trading Is Coming - This Changes AH Relationships, Travis Lundy discussed the forthcoming inclusion of RMB dual counters in the Hong Kong Southbound Connect programs.
This is but one of the five capital market cooperation measures announced by the CSRC last Friday. 
The other four measures include ETFs, improving mutual recognition of funds, increasing China IPOs in Hong Kong, and the inclusion of REITs. This insight discusses the latter.


Travis Lundy

<ul>
<li>The <a href="https://www.smartkarma.com/entities/link-reit" target="_blank" data-smartkarma-citation="entities:872:1" rel="noopener">Link REIT (823 HK)</a> rights offering caused some upset amongst investors. They got dilution where they did not need it, and de-leveraging from a REIT wanting to invest.</li>
<li>The units fell in price, then fell some more. Then the rights started trading.</li>
<li>Last week in <a href="https://www.smartkarma.com/insights/link-reit-823-nil-paid-rights-start-trading-tomorrow-the-trades" target="_blank" data-smartkarma-citation="insights:97326" rel="noopener">Link REIT (823) - Nil Paid Rights Start Trading Tomorrow - The Trades</a> I said strategy was to be long by Tuesday or Wednesday. It's Wednesday.</li>
</ul>


The Link REIT (823 HK) rights offering caused some upset amongst investors. They got dilution where they did not need it, and de-leveraging from a REIT wanting to invest.
The units fell in price, then fell some more. Then the rights started trading.
Last week in Link REIT (823) - Nil Paid Rights Start Trading Tomorrow - The Trades I said strategy was to be long by Tuesday or Wednesday. It's Wednesday.


Link REIT (823) - Anchors Aweigh! Fair Weather Sailing Ahead

<ul>
<li>After being halted this morning before the start of trade, post-close, <a href="https://www.smartkarma.com/entities/link-reit" target="_blank" data-smartkarma-citation="entities:872:1" rel="noopener">Link REIT (823 HK)</a> announced a fully-underwritten <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0210/2023021000480.pdf" target="_blank" rel="noopener">Rights Offering</a>. </li>
<li>The Rights Offering intends to raise HK$18.8bn issuing 1 Right for every 5 Shares held, at a subscription price of HK$44.20, a 26% discount to TERP. </li>
<li>This will take an already under-levered REIT and add more capital to it. And there is going to be selling pressure at some point.</li>
</ul>


After being halted this morning before the start of trade, post-close, Link REIT (823 HK) announced a fully-underwritten Rights Offering. 
The Rights Offering intends to raise HK$18.8bn issuing 1 Right for every 5 Shares held, at a subscription price of HK$44.20, a 26% discount to TERP. 
This will take an already under-levered REIT and add more capital to it. And there is going to be selling pressure at some point.


HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>With US inflation figures higher than expectations, there is an increase in risk that the Fed's next move may be a hike.  Some HSI constituents are set to benefit.</li>
<li>
<a href="https://www.smartkarma.com/entities/orient-overseas-international" target="_blank" data-smartkarma-citation="entities:801:1" rel="noopener">Orient Overseas International (316 HK)</a>, <a href="https://www.smartkarma.com/entities/budweiser-brewing-co-apac-ltd" target="_blank" data-smartkarma-citation="entities:28077:1" rel="noopener">Budweiser Brewing APAC (1876 HK),</a> and <a href="https://www.smartkarma.com/entities/galaxy-entertainment-group-limited" target="_blank" data-smartkarma-citation="entities:806:1" rel="noopener">Galaxy Entertainment Group (27 HK)</a> have significant USD net cash position and will be gainers.</li>
<li>
<a href="https://www.smartkarma.com/entities/sunny-optical-technology-group" target="_blank" data-smartkarma-citation="entities:13363:1" rel="noopener">Sunny Optical Technology Group (2382 HK)</a> and <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home (6690 HK)</a> have large China operations but they are net long on USD balance and this will make them beneficiaries.</li>
</ul>


With US inflation figures higher than expectations, there is an increase in risk that the Fed's next move may be a hike.  Some HSI constituents are set to benefit.

Orient Overseas International (316 HK), Budweiser Brewing APAC (1876 HK), and Galaxy Entertainment Group (27 HK) have significant USD net cash position and will be gainers.

Sunny Optical Technology Group (2382 HK) and Haier Smart Home (6690 HK) have large China operations but they are net long on USD balance and this will make them beneficiaries.


HK Strategy: What Are the Winners if US Hike Rates Instead of Cut?

Listed Real Estate Asia, KT Capital Group

Jacob Cheng

Listed Real Estate Asia

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Equity Bottom-Up

<ul>
<li>We conducted fundamental analysis on Link REIT, the largest REIT In Asia, who owns and operates retail assets, office buildings and logistics in the APAC region</li>
<li>Link REIT has strong track record for capital management, we expect that to continue.  In the LT, Link REIT is on the path to grow its fund management business</li>
<li>Link REIT is currently trading at 0.64x P/B and 6% dividend yield, which is attractive from a historical perspective</li>
</ul>


We conducted fundamental analysis on Link REIT, the largest REIT In Asia, who owns and operates retail assets, office buildings and logistics in the APAC region
Link REIT has strong track record for capital management, we expect that to continue.  In the LT, Link REIT is on the path to grow its fund management business
Link REIT is currently trading at 0.64x P/B and 6% dividend yield, which is attractive from a historical perspective


LINK REIT – the Largest REIT in Asia, Firmly on a Post-Covid Recovery with Attractive Valuation

Hong Kong

Link REIT is a real estate investment trust in Hong Kong. The Trust owns and operates shopping centers, parking space facilities and real estate retail space.

Link REIT (823 HK)

HK REITs Re-Rate On Southbound Inclusion

Stick to a basket of Hong Kong-focused REITs. I'd tilt to those HK-REITs which are not 100% exposed to the office-space, such as Link REIT (823...

David Blennerhassett

Link REIT (823) - Anchors Aweigh! Fair Weather Sailing Ahead

LINK REIT Rights trading ends soon. That's an end to obvious overhang. There may be a bit more when units are delivered in a few weeks. In the...

Travis Lundy

Big Link REIT (823 HK) Rights Offering

Link REIT (823 HK) is doing a Rights Offering. The Rights Offering is to raise HK$18.5bn or so (after fees). The Offering is for 425mm shares which...

Travis Lundy

HK Strategy: What Are the Winners if US Hike Rates Instead of Cut?

HSI constituents like Orient Overseas, Budweiser Brewing, Galaxy Entertainment, Sunny Optical, and Haier Smart Home are set to gain in case the...

Osbert Tang, CFA

LINK REIT – the Largest REIT in Asia, Firmly on a Post-Covid Recovery with Attractive Valuation

Link REIT, the largest REIT in Asia, is firmly on the post-covid recovery path. The Hong Kong portfolio will see rebound. It is trading at...

Jacob Cheng

HK REITs Re-Rate On Southbound Inclusion

Stick to a basket of Hong Kong-focused REITs. I'd tilt to those HK-REITs which are not 100% exposed to the office-space, such as Link REIT (823...

David Blennerhassett

Link REIT (823) - Anchors Aweigh! Fair Weather Sailing Ahead

LINK REIT Rights trading ends soon. That's an end to obvious overhang. There may be a bit more when units are delivered in a few weeks. In the...

Travis Lundy

Big Link REIT (823 HK) Rights Offering

Link REIT (823 HK) is doing a Rights Offering. The Rights Offering is to raise HK$18.5bn or so (after fees). The Offering is for 425mm shares which...

Travis Lundy

HK Strategy: What Are the Winners if US Hike Rates Instead of Cut?

​HSI constituents like Orient Overseas, Budweiser Brewing, Galaxy Entertainment, Sunny Optical, and Haier Smart Home are set to gain in case the...

Osbert Tang, CFA

LINK REIT – the Largest REIT in Asia, Firmly on a Post-Covid Recovery with Attractive Valuation

Link REIT, the largest REIT in Asia, is firmly on the post-covid recovery path. The Hong Kong portfolio will see rebound. It is trading at...

Jacob Cheng

HSI constituents like Orient Overseas, Budweiser Brewing, Galaxy Entertainment, Sunny Optical, and Haier Smart Home are set to gain in case the...