Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Three for three. Three low-balled Hong Kong Offers, by way of Schemes, have now lapsed over the past ten weeks. </li>
<li>Both <a href="https://www.smartkarma.com/entities/goldlion-holdings-ltd" target="_blank" data-smartkarma-citation="entities:12359:1" rel="noopener">Goldlion Holdings (533 HK)</a> and <a href="https://www.smartkarma.com/entities/soundwill-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19318:1" rel="noopener">Soundwill Holdings (878 HK)</a> spectacularly failed back in May.</li>
<li>Now <a href="https://www.smartkarma.com/entities/dickson-concepts-intl-ltd" target="_blank" data-smartkarma-citation="entities:5052:1" rel="noopener">Dickson Concepts Intl (113 HK)</a> has followed suit. But the vote was (much) closer than it should have been.</li>
</ul>


Three for three. Three low-balled Hong Kong Offers, by way of Schemes, have now lapsed over the past ten weeks. 
Both Goldlion Holdings (533 HK) and Soundwill Holdings (878 HK) spectacularly failed back in May.
Now Dickson Concepts Intl (113 HK) has followed suit. But the vote was (much) closer than it should have been.


Dickson Concept (113 HK): More Minority Teeth Bared As Another Scheme Fails

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analysed the earning revision of component stocks of HSI in the past month.</li>
<li>We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.</li>
<li>We highlighted EPS revision on Xiaomi, ICBC, Tencent, China Life, Meituan, Smic.</li>
</ul>


We analysed the earning revision of component stocks of HSI in the past month.
We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.
We highlighted EPS revision on Xiaomi, ICBC, Tencent, China Life, Meituan, Smic.


HSI Index Earning Revision (May): Xiaomi, ICBC, Tencent, China Life, Meituan, Smic

<ul>
<li>After <a href="https://www.smartkarma.com/entities/goldlion-holdings-ltd" target="_blank" data-smartkarma-citation="entities:12359:1" rel="noopener">Goldlion (533 HK)</a>'s spectacular Scheme fail, <a href="https://www.smartkarma.com/entities/soundwill-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19318:1" rel="noopener">Soundwill  (878 HK)</a> appeared destined to be the next failure as shares dipped hard ahead of the Scheme vote. And fail it did.</li>
<li>Just like for Goldlion, Soundwill's Offer was clearly light. The counter-argument was that terms were, arguably, as good as it gets. And no competing Offer would emerge. Minorities voiced otherwise.</li>
<li>Hong Kong has been the proverbial graveyard for arb deals of late. However, in a positive sense, minorities in Goldlion and Soundwill simply rejected opportunistic Offers. </li>
</ul>


After Goldlion (533 HK)'s spectacular Scheme fail, Soundwill  (878 HK) appeared destined to be the next failure as shares dipped hard ahead of the Scheme vote. And fail it did.
Just like for Goldlion, Soundwill's Offer was clearly light. The counter-argument was that terms were, arguably, as good as it gets. And no competing Offer would emerge. Minorities voiced otherwise.
Hong Kong has been the proverbial graveyard for arb deals of late. However, in a positive sense, minorities in Goldlion and Soundwill simply rejected opportunistic Offers. 


Soundwill (878 HK): Thoughts On The Latest Scheme Fail

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ck-infrastructure-holdings-l" target="_blank" data-smartkarma-citation="entities:163:1" rel="noopener">CK Infrastructure Holdings (1038 HK)</a>'s share price should pick up as its portfolio of non-US infrastructure assets will become increasingly attractive.</li>
<li>Its assets will benefit from re-pricing as global inflation rates trend higher. Meanwhile, it will gain from the translation of foreign earnings back to HK$.</li>
<li>The secured 5.7% and 6.2% dividend yield for FY25F and FY26F makes CKI appealing, especially given a track record of 28 consecutive years of dividend hike.</li>
</ul>



CK Infrastructure Holdings (1038 HK)'s share price should pick up as its portfolio of non-US infrastructure assets will become increasingly attractive.
Its assets will benefit from re-pricing as global inflation rates trend higher. Meanwhile, it will gain from the translation of foreign earnings back to HK$.
The secured 5.7% and 6.2% dividend yield for FY25F and FY26F makes CKI appealing, especially given a track record of 28 consecutive years of dividend hike.


<ul>
<li>As part of a US$22.8bn transaction, BlackRock, Global Infrastructure Partners and Terminal Investment, have <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0304/2025030402128.pdf" target="_blank" rel="noopener">agreed to buy</a> two contentious Panama ports from Li Ka-shing's <a href="https://www.smartkarma.com/entities/ck-hutchison-holdings-ltd" target="_blank" data-smartkarma-citation="entities:132:1" rel="noopener">CK Hutchison (1 HK)</a> (CKH).</li>
<li>The transaction also includes an 80% stake in CKH's ports subsidiaries, which operate 43 ports comprising 199 berths in 23 countries.</li>
<li>CKH expects cash proceeds in excess of US$19bn. CKH's current market cap was - at the time of deal - also  ~US$19bn. </li>
</ul>


As part of a US$22.8bn transaction, BlackRock, Global Infrastructure Partners and Terminal Investment, have agreed to buy two contentious Panama ports from Li Ka-shing's CK Hutchison (1 HK) (CKH).
The transaction also includes an 80% stake in CKH's ports subsidiaries, which operate 43 ports comprising 199 berths in 23 countries.
CKH expects cash proceeds in excess of US$19bn. CKH's current market cap was - at the time of deal - also  ~US$19bn. 


Li Ka-Ching! Cheung Kong (1 HK) Offloads Panama Ports To Blackrock

Hong Kong

Power Assets Holdings Limited is an investment holding company primarily engaged in energy and utility-related businesses, including the generation, transmission, and distribution of electricity, oil, and gas. The company also invests in renewable energy and energy-from-waste projects across various international markets. It is headquartered in Hong Kong and traces its origins to The Hongkong Electric Company, founded in 1889.

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Power Assets (6 HK)

Dickson Concept (113 HK): More Minority Teeth Bared As Another Scheme Fails

This is a consistently profitable company. The undisturbed price was $4.78. Yet the HSI is up ~12.8% since the Offer was announced, so perhaps...

David Blennerhassett

HSI Index Earning Revision (May): Xiaomi, ICBC, Tencent, China Life, Meituan, Smic

We analyzed HSI's consensus for May 2025 and highlighted changes of EPS in Xiaomi, ICBC, Tencent, China Life, Meituan, Smic.

Ke Yan, CFA, FRM

Soundwill (878 HK): Thoughts On The Latest Scheme Fail

The outcome for Soundwill was not a big surprise. However, expect current and future illiquid small-cap arbs to trade wide(r) if there is a whiff...

David Blennerhassett

CKI (1038 HK): It Is the Best Time

CKI is poised to perform with non-US assets becoming more attractive, benefitting from global inflation and foreign earnings translation, offering...

Osbert Tang, CFA

Li Ka-Ching! Cheung Kong (1 HK) Offloads Panama Ports To Blackrock

CKH is super cheap. This deal removes a significant overhang. You could set up a long/short with CKI. Or simply buy outright in CKH. Then buy...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Dickson Concept (113 HK): More Minority Teeth Bared As Another Scheme Fails

This is a consistently profitable company. The undisturbed price was $4.78. Yet the HSI is up ~12.8% since the Offer was announced, so perhaps...

David Blennerhassett

HSI Index Earning Revision (May): Xiaomi, ICBC, Tencent, China Life, Meituan, Smic

We analyzed HSI's consensus for May 2025 and highlighted changes of EPS in Xiaomi, ICBC, Tencent, China Life, Meituan, Smic.

Ke Yan, CFA, FRM

Soundwill (878 HK): Thoughts On The Latest Scheme Fail

The outcome for Soundwill was not a big surprise. However, expect current and future illiquid small-cap arbs to trade wide(r) if there is a whiff...

David Blennerhassett

CKI (1038 HK): It Is the Best Time

​CKI is poised to perform with non-US assets becoming more attractive, benefitting from global inflation and foreign earnings translation, offering...

Osbert Tang, CFA

Li Ka-Ching! Cheung Kong (1 HK) Offloads Panama Ports To Blackrock

CKH is super cheap. This deal removes a significant overhang. You could set up a long/short with CKI. Or simply buy outright in CKH. Then buy...

David Blennerhassett

CKI is poised to perform with non-US assets becoming more attractive, benefitting from global inflation and foreign earnings translation, offering...