Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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<p>This week in StubWorld ...</p>
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<p><a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a>'s NAV discount has widened to levels around last August's Partial Offer - yet the longer-term discount remains wider still.</p>
<p>And <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> releases its FY20 results after the close of market today. Will this be accompanied by a large placement by <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a>?</p>
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<p>Preceding my comments on PCCW and Tencent 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><span>Reports are now emerging PCCW is in the cross-hairs to be deleted from the MSCI in the May review.</span></p>
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<p>As always, more below the fold.</p>
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This week in StubWorld ...




PCCW Ltd (8 HK)'s NAV discount has widened to levels around last August's Partial Offer - yet the longer-term discount remains wider still.
And Tencent Holdings (700 HK) releases its FY20 results after the close of market today. Will this be accompanied by a large placement by Prosus (PRX NA)?




Preceding my comments on PCCW and Tencent 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%.




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.


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<p>This week in StubWorld ...</p>
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<p>A change of pace with two infrequently discussed stubs in unwind territory:<br><a href="https://www.smartkarma.com/entities/jafco-co-ltd" target="_blank" data-smartkarma-citation="entities:8848:1" rel="noopener"></a></p>
<p><a href="https://www.smartkarma.com/entities/jafco-co-ltd" target="_blank" data-smartkarma-citation="entities:8848:1" rel="noopener"></a><a href="https://www.smartkarma.com/entities/news-corp-class-b" target="_blank" data-smartkarma-citation="entities:5990:1" rel="noopener">News Corp (NWSA US)</a><a href="https://www.smartkarma.com/entities/jafco-co-ltd" target="_blank" data-smartkarma-citation="entities:8848:1" rel="noopener">  / </a><a href="https://www.smartkarma.com/entities/rea-group-ltd" target="_blank" data-smartkarma-citation="entities:699:1" rel="noopener">REA Group Ltd (REA AU)</a>, and<br><a href="https://www.smartkarma.com/entities/jafco-co-ltd" target="_blank" data-smartkarma-citation="entities:8848:1" rel="noopener">Jafco Co Ltd (8595 JP)</a> / <a href="https://www.smartkarma.com/entities/nomura-research-institute-ltd" target="_blank" data-smartkarma-citation="entities:18129:1" rel="noopener">Nomura Research Institute Ltd (4307 JP)</a>.</p>
<p><em>and ...</em></p>
<p>two lesser-known stubs in set-up territory:<br><br><a href="https://www.smartkarma.com/entities/iljin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:11265:1" rel="noopener">Iljin Holdings (015860 KS)</a> / <a href="https://www.smartkarma.com/entities/iljin-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:4098:1" rel="noopener">Iljin Electric (103590 KS)</a>, and<br><a href="https://www.smartkarma.com/entities/sakata-inx-corp" target="_blank" data-smartkarma-citation="entities:19446:1" rel="noopener">Sakata Inx Corp (4633 JP)</a>  / <a href="https://www.smartkarma.com/entities/siix-corp" target="_blank" data-smartkarma-citation="entities:13244:1" rel="noopener">Siix Corp (7613 JP)</a>.</p>
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<p>Preceding my comments on these holding company relationships<a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener"></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 ...



A change of pace with two infrequently discussed stubs in unwind territory: 
News Corp (NWSA US)  / REA Group Ltd (REA AU), and Jafco Co Ltd (8595 JP) / Nomura Research Institute Ltd (4307 JP).
and ...
two lesser-known stubs in set-up territory:  Iljin Holdings (015860 KS) / Iljin Electric (103590 KS), and Sakata Inx Corp (4633 JP)  / Siix Corp (7613 JP).



Preceding my comments on these holding company relationships 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: News Corp/REA Group, Jafco/Nomura Research, Iljin Holdings/Iljin Electric, Sakata/SIIX

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

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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

Hong Kong

PCCW Limited, through its subsidiaries, provides telecommunications, Internet access, multimedia services and related equipment.  The Company also offers computer, engineering, and other technical services in Hong Kong.  In addition, PCCW invests in and develops system integration and technology-related business, infrastructure and properties in Hong Kong and China.

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PCCW Ltd (8 HK)

StubWorld: PCCW, Naspers/Tencent

There exit few positives in PCCW's stub ops. I would look to reverse the stub - Short PCCW, Long HKT. I believe a more suitable discount to NAV is...

David Blennerhassett

StubWorld: News Corp/REA Group, Jafco/Nomura Research, Iljin Holdings/Iljin Electric, Sakata/SIIX

Looking at consensus numbers, the majority of forward growth is coming from REA, not the stub ops. From a NAV viewpoint, News Corp is trading rich....

David Blennerhassett

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

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