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>The pre-condition for the <a href="https://www.smartkarma.com/entities/nws-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3350:1" rel="noopener">Nws Holdings (659 HK)</a> voluntary general offer from the Cheng family is satisfied. The total offer (HK$9.15 + 2H dividend) is HK$9.46 per share.</li>
<li>The key condition is (majority vote) approval by independent NWD shareholders. NWD’s share price decline and dependency on NWS earnings/cash flow support a NO vote.</li>
<li>A reasonable offer which reduces NWD’s gearing, results in a special dividend and helps reduce the holding company discount supports the YES vote. We think that the YES vote prevails.</li>
</ul>


The pre-condition for the Nws Holdings (659 HK) voluntary general offer from the Cheng family is satisfied. The total offer (HK$9.15 + 2H dividend) is HK$9.46 per share.
The key condition is (majority vote) approval by independent NWD shareholders. NWD’s share price decline and dependency on NWS earnings/cash flow support a NO vote.
A reasonable offer which reduces NWD’s gearing, results in a special dividend and helps reduce the holding company discount supports the YES vote. We think that the YES vote prevails.


NWS Holding (659 HK): Pre-Condition Satisfied

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/monex-group-inc" target="_blank" data-smartkarma-citation="entities:14211:1" rel="noopener">Monex (8698 JP)</a> and Docomo announced an agreement. It is not clear ANY of this has to happen at prices favourable to minorities. But equally, it won't be egregiously bad.</li>
<li>
<a href="https://www.smartkarma.com/entities/people-s-insurance-co-group-of-china-ltd-h" target="_blank" data-smartkarma-citation="entities:362:1" rel="noopener">People's Insurance (PICC) (1339 HK)</a>'s implied stub is at a lifetime low. The market is assigning HK$35.6bn less for its steady and profitable life/health insurance stub ops, year-to-date.</li>
<li>
<a href="https://www.smartkarma.com/entities/jmdc-inc" target="_blank" data-smartkarma-citation="entities:28673:1" rel="noopener">JMDC (4483 JP)</a> is a growth stock, growing organically. It is a rare enough thing. If you want to buy the back end, wait until it gets here.</li>
</ul>



Monex (8698 JP) and Docomo announced an agreement. It is not clear ANY of this has to happen at prices favourable to minorities. But equally, it won't be egregiously bad.

People's Insurance (PICC) (1339 HK)'s implied stub is at a lifetime low. The market is assigning HK$35.6bn less for its steady and profitable life/health insurance stub ops, year-to-date.

JMDC (4483 JP) is a growth stock, growing organically. It is a rare enough thing. If you want to buy the back end, wait until it gets here.


Last Week in Event SPACE: Monex/NTT, PICC/PICC P&C, Vertex

Equity Capital Markets

New World Development / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/new-world-development" target="_blank" data-smartkarma-citation="entities:7037:1" rel="noopener">New World Development (17 HK)</a> nudges an all-time low P/B and implied stub; as the privatisation of <a href="https://www.smartkarma.com/entities/nws-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3350:1" rel="noopener">NWS Holdings (659 HK)</a> moves gradually forward. </li>
<li>Preceding my comments on NWD/NWS 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>



New World Development (17 HK) nudges an all-time low P/B and implied stub; as the privatisation of NWS Holdings (659 HK) moves gradually forward. 
Preceding my comments on NWD/NWS 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%.


StubWorld: NWD (17 HK) Is Cheap. It May Get Cheaper Still

<ul>
<li>We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.</li>
<li>Highest spreads - <a href="https://www.smartkarma.com/entities/keiyo-co-ltd" target="_blank" data-smartkarma-citation="entities:14415:1" rel="noopener">Keiyo Co Ltd (8168 JP)</a>, <a href="https://www.smartkarma.com/entities/111-inc" target="_blank" data-smartkarma-citation="entities:27412:1" rel="noopener">111 Inc (YI US)</a>, <a href="https://www.smartkarma.com/entities/eoflow-co-ltd" target="_blank" data-smartkarma-citation="entities:36100:1" rel="noopener">Eoflow (294090 KS)</a>, <a href="https://www.smartkarma.com/entities/symbio-holdings-ltd" target="_blank" data-smartkarma-citation="entities:20292:1" rel="noopener">Symbio Holdings (SYM AU)</a>, <a href="https://www.smartkarma.com/entities/imax-china-holding-inc" target="_blank" data-smartkarma-citation="entities:888:1" rel="noopener">IMAX China Holding (1970 HK)</a>, <a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a>. </li>
<li>Lowest spreads  <a href="https://www.smartkarma.com/entities/yaizu-suisankagaku-industry" target="_blank" data-smartkarma-citation="entities:20044:1" rel="noopener">Yaizu Suisankagaku Industry (2812 JP)</a>, <a href="https://www.smartkarma.com/entities/healius-ltd-6d4d947d-ad32-4aea-b2d8-265f5768b55e" target="_blank" data-smartkarma-citation="entities:14208:1" rel="noopener">Healius (HLS AU)</a>, <a href="https://www.smartkarma.com/entities/pact-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:692:1" rel="noopener">Pact Group Holdings (PGH AU)</a>, <a href="https://www.smartkarma.com/entities/t-k-toka-co-ltd" target="_blank" data-smartkarma-citation="entities:18678:1" rel="noopener">T&amp;K Toka Co Ltd (4636 JP)</a>, <a href="https://www.smartkarma.com/entities/celltrion-healthcare-co-ltd" target="_blank" data-smartkarma-citation="entities:23641:1" rel="noopener">Celltrion Healthcare (091990 KS)</a>, <a href="https://www.smartkarma.com/entities/seiko-pmc-corp" target="_blank" data-smartkarma-citation="entities:13752:1" rel="noopener">Seiko Pmc Corp (4963 JP)</a>. </li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads - Keiyo Co Ltd (8168 JP), 111 Inc (YI US), Eoflow (294090 KS), Symbio Holdings (SYM AU), IMAX China Holding (1970 HK), JSR Corp (4185 JP). 
Lowest spreads  Yaizu Suisankagaku Industry (2812 JP), Healius (HLS AU), Pact Group Holdings (PGH AU), T&amp;K Toka Co Ltd (4636 JP), Celltrion Healthcare (091990 KS), Seiko Pmc Corp (4963 JP). 


Merger Arb Mondays (02 Oct) - NWS, Mason, IMAX China, Keiyo, System Info, Toyo, Symbio, Allkem

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

Thematic (Sector/Industry)

<ul>
<li>PBoC cut 25bps of RRR, being the second cut in 2023, and is expected to inject 500bn of liquidity into the system. The average RRR is 7.4% post cut</li>
<li>We look at the potential pair trade of China and HK for property.  The original thesis was that China offers higher growth to investors</li>
<li>Now, the thesis no longer holds.  The trade now becomes more complicated, given the moving pieces both from top down and bottom up.  We recommend single stock trade.</li>
</ul>


PBoC cut 25bps of RRR, being the second cut in 2023, and is expected to inject 500bn of liquidity into the system. The average RRR is 7.4% post cut
We look at the potential pair trade of China and HK for property.  The original thesis was that China offers higher growth to investors
Now, the thesis no longer holds.  The trade now becomes more complicated, given the moving pieces both from top down and bottom up.  We recommend single stock trade.


China RRR Cut, Macro, & A Debate on – Property Pair Trade “Long China and Short HK” (Or the Reverse)

Hong Kong

New World Development Company Limited, through its subsidiaries, develops and invests in properties, provides contracting services, property management, and transportation services.  The Company also operates infrastructure business, telecommunication services, department stores, hotels and restaurants, and media and technology business.

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New World Development (17 HK)

NWS Holding (659 HK): Pre-Condition Satisfied

The key condition is approval by independent NWD shareholders. There are credible arguments for both camps - we think that the YES vote prevails....

Arun George

Last Week in Event SPACE: Monex/NTT, PICC/PICC P&C, Vertex

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

StubWorld: NWD (17 HK) Is Cheap. It May Get Cheaper Still

If the Chengs aren't buying here, it doesn't exactly compel investors to do otherwise. The arb for NWS Holdings looks like a better bet here after...

David Blennerhassett

Merger Arb Mondays (02 Oct) - NWS, Mason, IMAX China, Keiyo, System Info, Toyo, Symbio, Allkem

This week, the highest gross spreads are Keiyo (58.3%), 111 (40.8%), Eoflow (22.4%), Symbio (19.3%), IMAX China (19.0%), JSR (8.3%), Boustead...

Arun George

China RRR Cut, Macro, & A Debate on – Property Pair Trade “Long China and Short HK” (Or the Reverse)

The RRR cut is another step of China's easing. We looked at the old pair trade between China and HK for property. The picture today is more...

Jacob Cheng

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