Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

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<p>This week in StubWorld ...</p>
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<p>Following the <a href="https://links.sgx.com/FileOpen/THBEV_Potential_Spin_Off_Listing_of_BeerCo.ashx?App=Announcement&amp;FileID=647386" target="_blank" rel="noopener">no-objection notice</a> from the SGX concerning its BeerCo IPO, the key focus will be on the appropriate discount <a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> will trade to the spun-off entity, and in turn, BeerCo's discount to 53.5%-held <a href="https://www.smartkarma.com/entities/saigon-beer-alcohol-beverage" target="_blank" data-smartkarma-citation="entities:23645:1" rel="noopener">Saigon Beer Alcohol Beverage (SAB VN)</a>. </p>
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<p>Preceding my comments on ThaiBev <em>and </em><a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a> are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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<p>As always, more below the fold.</p>
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This week in StubWorld ...




Following the no-objection notice from the SGX concerning its BeerCo IPO, the key focus will be on the appropriate discount Thai Beverage (THBEV SP) will trade to the spun-off entity, and in turn, BeerCo's discount to 53.5%-held Saigon Beer Alcohol Beverage (SAB VN). 




Preceding my comments on ThaiBev and PCCW Ltd (8 HK) are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


As always, more below the fold.


StubWorld: Double Stub Via ThaiBev's BeerCo IPO

Event-Driven

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<p>Last Week in Event <strong>SPACE</strong> ...</p>
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<li>Reportedly <strong><a href="https://www.smartkarma.com/entities/faw-car-company-limited-a" target="_blank" data-smartkarma-citation="entities:6497:1" rel="noopener">Faw Car Company Limited A (000800 CH)</a></strong> is allegedly jostling to take a turn at the wheel of <strong><a href="https://www.smartkarma.com/entities/brilliance-china-automotive" target="_blank" data-smartkarma-citation="entities:469:1" rel="noopener">Brilliance China Automotive (1114 HK)</a></strong>.</li>
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<strong><a href="https://www.smartkarma.com/entities/harmonic-drive-systems-inc" target="_blank" data-smartkarma-citation="entities:10238:1" rel="noopener">Harmonic Drive Systems (6324 JP)</a></strong> is now an overpriced stock with a supply overhang. The hope of a <strong><a href="https://www.smartkarma.com/entities/nabtesco-corp" target="_blank" data-smartkarma-citation="entities:13176:1" rel="noopener">Nabtesco Corp (6268 JP)</a></strong> event is now gone.</li>
<li>Whoever takes control of <a href="https://www.smartkarma.com/entities/sawada-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:7311:1" rel="noopener"><strong>Sawada Holdings (8699 JP</strong>)</a> is going to see the bulk of its major asset liquidated. Buy this stock with both hands at ¥760/share.</li>
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<p>Murakami-affiliated bidder City Index Eleventh has launched an overbid for <strong><a href="https://www.smartkarma.com/entities/japan-asia-group-ltd" target="_blank" data-smartkarma-citation="entities:12428:1" rel="noopener">Japan Asia (3751 JP)</a></strong> at ¥1,210/share. The explanation is an eye-opener, and the strategy is very well done.</p>
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<li>Ahead of the three-year anniversary lock-up expiring next month, enabling <strong><a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a></strong>/<strong><a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a></strong> to sell more shares of <strong><a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a></strong>,  Naspers' look-thru discount of 55% compares with 34% at the time of the Prosus spin-off in September 2019. </li>
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<li>Plus, other events, CCASS movements and Mood Spins.</li>
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<p><em>(This insight covers specific insights &amp; comments involving <strong>S</strong>tubs, <strong>P</strong>airs, <strong>A</strong>rbitrage, share <strong>C</strong>lassifications, and <strong>E</strong>vents - or <strong>SPACE</strong> - in the past week)</em></p>


Last Week in Event SPACE ...



Reportedly Faw Car Company Limited A (000800 CH) is allegedly jostling to take a turn at the wheel of Brilliance China Automotive (1114 HK).

Harmonic Drive Systems (6324 JP) is now an overpriced stock with a supply overhang. The hope of a Nabtesco Corp (6268 JP) event is now gone.
Whoever takes control of Sawada Holdings (8699 JP) is going to see the bulk of its major asset liquidated. Buy this stock with both hands at ¥760/share.

Murakami-affiliated bidder City Index Eleventh has launched an overbid for Japan Asia (3751 JP) at ¥1,210/share. The explanation is an eye-opener, and the strategy is very well done.

Ahead of the three-year anniversary lock-up expiring next month, enabling Prosus (PRX NA)/Naspers (NPN SJ) to sell more shares of Tencent Holdings (700 HK),  Naspers' look-thru discount of 55% compares with 34% at the time of the Prosus spin-off in September 2019. 




Plus, other events, CCASS movements and Mood Spins.


(This insight covers specific insights &amp; comments involving Stubs, Pairs, Arbitrage, share Classifications, and Events - or SPACE - in the past week)

Last Week in Event SPACE: Brilliance China, Harmonic Drive, Sawada, Japan Asia, Naspers/Tencent

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<p>This week in StubWorld ...</p>
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<p>Ahead of the three-year anniversary lock-up expiring next month, enabling <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a>/<a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> to sell more shares of <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>,  Naspers' look-thru discount of 55% compares with 34% at the time of the Prosus spin-off in September 2019. </p>
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<p>Preceding my comments on Naspers/Prosus/Tencent <em>and </em><a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a>, are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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<p>As always, more below the fold.</p>
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This week in StubWorld ...




Ahead of the three-year anniversary lock-up expiring next month, enabling Prosus (PRX NA)/Naspers (NPN SJ) to sell more shares of Tencent Holdings (700 HK),  Naspers' look-thru discount of 55% compares with 34% at the time of the Prosus spin-off in September 2019. 




Preceding my comments on Naspers/Prosus/Tencent and PCCW Ltd (8 HK), are the weekly setup/unwind tables for Asia-Pacific Holdcos.



These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.



As always, more below the fold.


StubWorld: Naspers' Unsustainable Look-Through

China Evergrande New Energy Vehicle / Equity Bottom-Up

China Evergrande New Energy Vehicle (708 HK)

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<p>This week in StubWorld ...</p>
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<p><a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande Real Estate Group (3333 HK)</a> plumbs a new discount to NAV low after <a href="https://www.smartkarma.com/entities/china-evergrande-new-energy-vehicle-group-ltd" target="_blank" data-smartkarma-citation="entities:713:1" rel="noopener">Evergrande Auto (708 HK)</a>'s meteoric post-placement gain; <a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a> discount to NAV retraces, as expected; and <a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550 KS)</a> still look cheap versus its sum of parts.</p>
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<p>Preceding my comments on these holdcos are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
</div>
<div>
<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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This week in StubWorld ...

Evergrande Real Estate Group (3333 HK) plumbs a new discount to NAV low after Evergrande Auto (708 HK)'s meteoric post-placement gain; PCCW Ltd (8 HK) discount to NAV retraces, as expected; and LG Corp (003550 KS) still look cheap versus its sum of parts.




Preceding my comments on these holdcos are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


StubWorld: Evergrande Auto, PCCW, LG Corp

<p>A number of corporate developments have unfolded at <a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a> over the past year including a partial offer from Richard Li (<em><a href="https://skr.ma/97Cbz" target="_blank" rel="noopener">PCCW: Partial Offer To Lift Li Above 30%</a></em>), lifting his stake above the general Offer threshold level of 30%; partially in-specie-ing its stake in <a href="https://www.smartkarma.com/entities/pacific-century-premium-developments-ltd" target="_blank" data-smartkarma-citation="entities:19652:1" rel="noopener">Pacific Century Premium Developments (432 HK)</a>, such that the property developer is no longer consolidated; selling NOW TV to <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 selling non-core related investments in Malaysia.</p>
<p>The Partial Offer led to a significant narrowing in PCCW's discount to NAV, where it has steadfastly remained. </p>
<p>PCCW has marginally underperformed the HSI over the past year - -4% vs -1.5% - but has outperformed <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 -13.5%. </p>
<p>Despite the gradual cleaning of house, and Li's move to consolidate greater control, PCCW's stub ops - ex-HKT - stubbornly remain in the red (on an EBITDA basis), as they have done so for near-on a decade.</p>
<p>Reports are now emerging PCCW is in the cross-hairs to be deleted from the MSCI in the May review.</p>
<p>As always, more below the fold.</p>

A number of corporate developments have unfolded at PCCW Ltd (8 HK) over the past year including a partial offer from Richard Li (PCCW: Partial Offer To Lift Li Above 30%), lifting his stake above the general Offer threshold level of 30%; partially in-specie-ing its stake in Pacific Century Premium Developments (432 HK), such that the property developer is no longer consolidated; selling NOW TV to HKT Ltd (6823 HK); and selling non-core related investments in Malaysia.
The Partial Offer led to a significant narrowing in PCCW's discount to NAV, where it has steadfastly remained. 
PCCW has marginally underperformed the HSI over the past year - -4% vs -1.5% - but has outperformed HKT Ltd (6823 HK)'s -13.5%. 
Despite the gradual cleaning of house, and Li's move to consolidate greater control, PCCW's stub ops - ex-HKT - stubbornly remain in the red (on an EBITDA basis), as they have done so for near-on a decade.
Reports are now emerging PCCW is in the cross-hairs to be deleted from the MSCI in the May review.
As always, more below the fold.

Hong Kong

PCCW Limited is a Hong Kong-based information and communication technology (ICT) and telecommunications company. It provides fixed-line, broadband, mobile communication, and media entertainment services, including the OTT video streaming service Viu, alongside IT solutions and property development. The company is headquartered in Hong Kong and was founded in 1925.

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PCCW (8 HK)

StubWorld: Double Stub Via ThaiBev's BeerCo IPO

I estimate minimal upside for ThaiBev here if assuming a 25% discount to NAV. ThaiBev is trading at 16.5x trailing EV/EBITDA, but its forward EV...

David Blennerhassett

Last Week in Event SPACE: Brilliance China, Harmonic Drive, Sawada, Japan Asia, Naspers/Tencent

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: Naspers' Unsustainable Look-Through

Long Naspers vs Tencent, is the obvious trade at the current look-through value. IF Naspers+Prosus decides to sell some more Tencent, expect...

David Blennerhassett

StubWorld: Evergrande Auto, PCCW, LG Corp

Chine Evergrande (3333 HK) looks "cheap" and Evergrande Auto (708 HK) frothy, suggesting a set-up here. Personally, I would avoid both.

David Blennerhassett

PCCW (8 HK): Possible MSCI Deletion

PCCW appears to be fully priced at 2+STD on a NAV discount. I would look to unwind here if already in, and look to reverse the stub - Short PCCW,...

David Blennerhassett

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