Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<ul>
<li>Palm oil prices are up 177% since May 2020 and 66% since June of last year. Palm oil touched a record high of RM5,700/mt the 31 January.</li>
<li>Yet while palm oil has enjoyed a meteoric price rise, the performance of listed palm oil plays has bifurcated.  </li>
<li>Valuations appear largely constrained by environmental, social, and governance concerns, resulting in plantation stocks trading below their historical averages.</li>
</ul>


Palm oil prices are up 177% since May 2020 and 66% since June of last year. Palm oil touched a record high of RM5,700/mt the 31 January.
Yet while palm oil has enjoyed a meteoric price rise, the performance of listed palm oil plays has bifurcated.  
Valuations appear largely constrained by environmental, social, and governance concerns, resulting in plantation stocks trading below their historical averages.


CPO Plays Lag Palm Oil Prices As ESG Issues Weigh

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/westports-holdings-bhd" target="_blank" data-smartkarma-citation="entities:3954:1" rel="noopener">Westports Holdings (WPRTS MK)</a> will replace <a href="https://www.smartkarma.com/entities/hap-seng-consolidated-bhd" target="_blank" data-smartkarma-citation="entities:13036:1" rel="noopener">Hap Seng Consolidated (HAP MK)</a> in the <a href="https://www.smartkarma.com/entities/kuala-lumpur-composite-index" target="_blank" data-smartkarma-citation="entities:22913:1" rel="noopener">Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX)</a> after the close of trading on 17 December.</li>
<li>
<a href="https://www.smartkarma.com/entities/hap-seng-consolidated-bhd" target="_blank" data-smartkarma-citation="entities:13036:1" rel="noopener">Hap Seng Consolidated (HAP MK)</a> is a delete on liquidity and there will be over 5 days of ADV to sell. The impact on <a href="https://www.smartkarma.com/entities/westports-holdings-bhd" target="_blank" data-smartkarma-citation="entities:3954:1" rel="noopener">Westports Holdings (WPRTS MK)</a> is smaller.</li>
<li>
<a href="https://www.smartkarma.com/entities/hap-seng-consolidated-bhd" target="_blank" data-smartkarma-citation="entities:13036:1" rel="noopener">Hap Seng Consolidated (HAP MK)</a> could drop in the short term but underperformance vs its peers could provide a buying opportunity, especially close to implementation date.</li>
</ul>



Westports Holdings (WPRTS MK) will replace Hap Seng Consolidated (HAP MK) in the Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX) after the close of trading on 17 December.

Hap Seng Consolidated (HAP MK) is a delete on liquidity and there will be over 5 days of ADV to sell. The impact on Westports Holdings (WPRTS MK) is smaller.

Hap Seng Consolidated (HAP MK) could drop in the short term but underperformance vs its peers could provide a buying opportunity, especially close to implementation date.


KLCI Index Rebalance: Westports Replaces Hap Seng

Research from SooChow CSSD Capital Markets (Asia), SCCM Asia Research

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/capitaland-ltd" target="_blank" data-smartkarma-citation="entities:55" rel="noopener">Capitaland (CAPL SP)</a> shares debut at S$2.95/share; Total RE AUM at S$119bn</h3><p>CLI made its trading debut at S$2.95/share (US$11.4bn market cap) on the Singapore Exchange under the trading name CapitaLandInvest. CLI takes over from CapitaLand Limited, which ceased trading at S$4.00 and will delist from the SGX on 21Sep. For every 100 CapitaLand shares owned, shareholders received 100 shares of CLI, S$95.10 in cash and 15.5 units of CapitaLand Integrated Commercial Trust. The total implied consideration was S$4.102/share, with CLI shares valued at S$2.823 each. CLI's listing comes after CapitaLand Limited restructured business to form two distinct entities – CLI, the listed real estate investment management business; and CapitaLand Development, the privatised property development arm. The former had about S$119bn of RE AUM as at 30Jun21, of which more than 80% are located in Asia. Its real estate funds under management stood at about S$83bn, spanning six listed real estate investment trusts and business trusts and over 20 private funds.</p>

SingaporeCapitaland (CAPL SP) shares debut at S$2.95/share; Total RE AUM at S$119bnCLI made its trading debut at S$2.95/share (US$11.4bn market cap) on the Singapore Exchange under the trading name CapitaLandInvest. CLI takes over from CapitaLand Limited, which ceased trading at S$4.00 and will delist from the SGX on 21Sep. For every 100 CapitaLand shares owned, shareholders received 100 shares of CLI, S$95.10 in cash and 15.5 units of CapitaLand Integrated Commercial Trust. The total implied consideration was S$4.102/share, with CLI shares valued at S$2.823 each. CLI's listing comes after CapitaLand Limited restructured business to form two distinct entities – CLI, the listed real estate investment management business; and CapitaLand Development, the privatised property development arm. The former had about S$119bn of RE AUM as at 30Jun21, of which more than 80% are located in Asia. Its real estate funds under management stood at about S$83bn, spanning six listed real estate investment trusts and business trusts and over 20 private funds.

External broker reports(aggregated public sources), TA Securities Holdings Berhad

TA Securities Holdings Bhd

External broker reports(aggregated public sources)

<div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

<p>Johor Corp, <a href="https://www.smartkarma.com/entities/kpj-healthcare-berhad" target="_blank" data-smartkarma-citation="entities:877:1" rel="noopener">KPJ Healthcare (KPJ MK)</a> 's controlling shareholder, is taking concrete steps to increase the returns on its investment in the company. First, there are a new board of directors and CEO who are placing more emphasis on capital efficiency. Second, Bloomberg reports that Johor Corp is evaluating strategic options, most likely in the form of a minority investment or other transaction that would preserve its controlling stake, as opposed to an outright sale. Either way, the increased focus on returns should drive a re-rating of the shares' EV/EBITDA multiple from 10-12x currently to ~15x.</p>

Johor Corp, KPJ Healthcare (KPJ MK) 's controlling shareholder, is taking concrete steps to increase the returns on its investment in the company. First, there are a new board of directors and CEO who are placing more emphasis on capital efficiency. Second, Bloomberg reports that Johor Corp is evaluating strategic options, most likely in the form of a minority investment or other transaction that would preserve its controlling stake, as opposed to an outright sale. Either way, the increased focus on returns should drive a re-rating of the shares' EV/EBITDA multiple from 10-12x currently to ~15x.

KPJ Healthcare: Re-Energizing the Share Price

Malaysia

Sime Darby Berhad is an investment holding company. The Group's principal activities include plantations, property development, heavy equipment and motor vehicle distribution, and energy and utilities.

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Sime Darby (SIME MK)

CPO Plays Lag Palm Oil Prices As ESG Issues Weigh

KLK's reliance on its downstream operations should help reduce palm product prices. The recent acquisition of IJM also extends the age profile of...

David Blennerhassett

KLCI Index Rebalance: Westports Replaces Hap Seng

Westports Holdings will replace Hap Seng Consolidated in the KLCI at the December rebalance. HAP MK is a liquidity delete and passive trackers will...

Brian Freitas

ASEAN Builder's Scoop (21Sep21)

CLI debuts with S$119bn RE AUM; RLC developing 2 office towers in Bridgetowne; More townships for MEG in Luzon, Palawan; SIME reopens all sales...

SCCM Asia Research

Riding on The Growth of China

Buy Sime Darby Berhad: Riding on The Growth of China. - By: TA Securities Holdings Bhd

TA Securities Holdings Bhd

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CPO Plays Lag Palm Oil Prices As ESG Issues Weigh

KLK's reliance on its downstream operations should help reduce palm product prices. The recent acquisition of IJM also extends the age profile of...

David Blennerhassett

KLCI Index Rebalance: Westports Replaces Hap Seng

Westports Holdings will replace Hap Seng Consolidated in the KLCI at the December rebalance. HAP MK is a liquidity delete and passive trackers will...

Brian Freitas

ASEAN Builder's Scoop (21Sep21)

CLI debuts with S$119bn RE AUM; RLC developing 2 office towers in Bridgetowne; More townships for MEG in Luzon, Palawan; SIME reopens all sales...

SCCM Asia Research

Riding on The Growth of China

Buy Sime Darby Berhad: Riding on The Growth of China. - By: TA Securities Holdings Bhd

TA Securities Holdings Bhd

KPJ Healthcare: Re-Energizing the Share Price

KPJ Healthcare's controlling shareholder is taking steps to drive a re-rating by placing more emphasis on capital efficiency and evaluating some...

Kemp Dolliver, CFA