Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On the 11 June, broker <a href="https://www.smartkarma.com/entities/mason-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:17664:1" rel="noopener">Mason Group (273 HK)</a> announced a Scheme at HK$0.0338/share, a 20.7% premium to last close. Terms had not been declared final.</li>
<li>The Offeror is Red Emerald. which holds no shares in Mason. Shareholders with 47.55% of shares out have given irrevocables in support of the Scheme. </li>
<li>The Scheme Doc is now out. The EGM/Court Meeting will be held on the 3 Oct with expected payment around the 21 November. Trading wide to terms.</li>
</ul>


On the 11 June, broker Mason Group (273 HK) announced a Scheme at HK$0.0338/share, a 20.7% premium to last close. Terms had not been declared final.
The Offeror is Red Emerald. which holds no shares in Mason. Shareholders with 47.55% of shares out have given irrevocables in support of the Scheme. 
The Scheme Doc is now out. The EGM/Court Meeting will be held on the 3 Oct with expected payment around the 21 November. Trading wide to terms.


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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>Hang Seng Indexes has started a consultation on the eligibility of Foreign Companies in the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a>, a review of the seven Industry Groups and number of HK constituents.</li>
<li>We agree that foreign companies should be added to the index, no change needed to the Industry Groups, and the cap on the number of HK constituents should be removed.</li>
<li>There are a few potential adds due to the removal of the cap on HK companies, while there are potential foreign company additions later this year or in 2024.</li>
</ul>


Hang Seng Indexes has started a consultation on the eligibility of Foreign Companies in the Hang Seng Index, a review of the seven Industry Groups and number of HK constituents.
We agree that foreign companies should be added to the index, no change needed to the Industry Groups, and the cap on the number of HK constituents should be removed.
There are a few potential adds due to the removal of the cap on HK companies, while there are potential foreign company additions later this year or in 2024.


HSI Market Consultation: Foreign Companies, Industry Groups, HK Companies

<ul>
<li>After broker <a href="https://www.smartkarma.com/entities/mason-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:17664:1" rel="noopener">Mason Group (273 HK)</a> was suspended pursuant to Hong Kong's Takeovers Code on the 31 May, it has now announced a privatisation by way of Scheme at HK$0.0338/share.</li>
<li>The Offer price is only a 20.7% premium to last close, and a 12.7% premium to the three-month average closing price. It has not been declared final.</li>
<li>The Offeror is Red Emerald. Shareholders with 47.55% of shares out have given irrevocables in support of the Scheme. </li>
</ul>


After broker Mason Group (273 HK) was suspended pursuant to Hong Kong's Takeovers Code on the 31 May, it has now announced a privatisation by way of Scheme at HK$0.0338/share.
The Offer price is only a 20.7% premium to last close, and a 12.7% premium to the three-month average closing price. It has not been declared final.
The Offeror is Red Emerald. Shareholders with 47.55% of shares out have given irrevocables in support of the Scheme. 


Equity Bottom-Up

<ul>
<li>Lithium battery maker, <a href="https://www.smartkarma.com/entities/eve-energy-co-ltd" target="_blank" data-smartkarma-citation="entities:14769:1" rel="noopener">EVE Energy (300014 CH)</a>, is expected to invest US$2.3bn in expanding its battery manufacturing capabilities in two new plants. </li>
<li>Both plants are expected to come online within 18-24 months, depending on market conditions and various approvals. </li>
<li>Eve is down 57% from its December 2021 high, and trading around its lowest level since November 2020, excluding a brief dip in April 2022. </li>
</ul>


Lithium battery maker, EVE Energy (300014 CH), is expected to invest US$2.3bn in expanding its battery manufacturing capabilities in two new plants. 
Both plants are expected to come online within 18-24 months, depending on market conditions and various approvals. 
Eve is down 57% from its December 2021 high, and trading around its lowest level since November 2020, excluding a brief dip in April 2022. 


Eve Energy (300014 CH): Hooked On Lithium

Index Rebalance

<ul>
<li>The inclusion of <a href="https://www.smartkarma.com/entities/tingyi-cayman-islands-holding-corp" target="_blank" data-smartkarma-citation="entities:14016:1" rel="noopener">Tingyi Holding (322 HK)</a>, <a href="https://www.smartkarma.com/entities/china-resources-mixc-lifestyle-services" target="_blank" data-smartkarma-citation="entities:29285:1" rel="noopener">China Resources Mixc Lifestyle Services (1209 HK)</a> and <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home Co Ltd (6690 HK)</a> gets us to 76 index constituents.</li>
<li>Changes to the stocks, number of shares, float and capping result in an estimated one-way turnover of 2.01% and will result in a one-way trade of HK$3,845m.</li>
<li>Shorts on <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home Co Ltd (6690 HK)</a> and <a href="https://www.smartkarma.com/entities/tingyi-cayman-islands-holding-corp" target="_blank" data-smartkarma-citation="entities:14016:1" rel="noopener">Tingyi Holding (322 HK)</a> are around 5% of float and covering could take the stocks higher.</li>
</ul>


The inclusion of Tingyi Holding (322 HK), China Resources Mixc Lifestyle Services (1209 HK) and Haier Smart Home Co Ltd (6690 HK) gets us to 76 index constituents.
Changes to the stocks, number of shares, float and capping result in an estimated one-way turnover of 2.01% and will result in a one-way trade of HK$3,845m.
Shorts on Haier Smart Home Co Ltd (6690 HK) and Tingyi Holding (322 HK) are around 5% of float and covering could take the stocks higher.


HSI Index Rebalance: Baby Steps; Double Inclusion for Haier Smart Home

China

Smoore International is a global leader in atomization technology solutions, specializing in the research, design, and manufacturing of vaping devices, components, and heat-not-burn products for corporate clients and under its own brands like Vaporesso and FEELM. The company also develops beauty atomization products. Headquartered in Shenzhen, China, Smoore International was founded in 2009.

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Smoore International (6969 HK)

3rd Oct Scheme Vote For Mason (273 HK)

Trading wide at 9%/53.2% gross/annualised spread. Get involved if illiquid arbs are your thing. Terms may still be bumped. I wouldn't bet on it.

David Blennerhassett

HSI Market Consultation: Foreign Companies, Industry Groups, HK Companies

The conclusions of the market consultation have been announced. Primary-listed foreign companies will be eligible for inclusion in the HSI and...

Brian Freitas

Mason (273 HK): Red Emerald's Scheme

Provided Hsu Yu Yu is supportive - and I assume she is - I can't see this Scheme being blocked. Assuming late September payment, buy up to...

David Blennerhassett

Eve Energy (300014 CH): Hooked On Lithium

One wonders what it will take to reverse this trend (impacting not just Eve) which illustrates a highly competitive market, one with a low moat.

David Blennerhassett

HSI Index Rebalance: Baby Steps; Double Inclusion for Haier Smart Home

There are 3 adds to the HSI to get up to 76 members. Few adds are surprises & there is unlikely to be large positioning. Short interest on some...

Brian Freitas

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