Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (19 HK)</a> has bought back B/A shares in ratios of 63/37 and 72/28 over two days.  Listing Rules suggest the ratio has to be higher than 76.71/23.29. </li>
<li>Preceding my comments on Swire are the current setup/unwind tables for Asia-Pacific Holdcos. </li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>



Swire Pacific (19 HK) has bought back B/A shares in ratios of 63/37 and 72/28 over two days.  Listing Rules suggest the ratio has to be higher than 76.71/23.29. 
Preceding my comments on Swire are the current setup/unwind tables for Asia-Pacific Holdcos. 
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: Swire's NAV Discount Further Narrows As Buyback Kicks Off

Travis Lundy

<ul>
<li>And on the 6th Day, <a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (A) (19 HK)</a> commenced its buyback. </li>
<li>It took until the 6th day for Swire to start its buyback, and now that it has started, we may have a little better idea of the parameters. And impact. </li>
<li>So far, they appear to be bending the rules a little, but it is still the way it should be. So there is still a trade here to do.</li>
</ul>


And on the 6th Day, Swire Pacific (A) (19 HK) commenced its buyback. 
It took until the 6th day for Swire to start its buyback, and now that it has started, we may have a little better idea of the parameters. And impact. 
So far, they appear to be bending the rules a little, but it is still the way it should be. So there is still a trade here to do.


Swire Buyback Update - It's On, and Regulatorily Constrained

<ul>
<li>BHP launched a bid for <a href="https://www.smartkarma.com/entities/oz-minerals-ltd" target="_blank" data-smartkarma-citation="entities:1138:1" rel="noopener">OZ Minerals (OZL AU)</a>. OZ has rejected it as being too low. BHP said the Offer provides certainty of funding growth. They are both right</li>
<li>This Offer price for <a href="https://www.smartkarma.com/entities/lifestyle-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:112:1" rel="noopener">Lifestyle International Holdings (1212 HK)</a> is probably sufficient to get up. It has been declared final for that reason. Optically $6/share was a more reasonable level.</li>
<li>
<a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a> announced another ¥100bn buyback over three years. However, the buyback is too small to pay back the Kim family inheritance tax obligations. </li>
</ul>


BHP launched a bid for OZ Minerals (OZL AU). OZ has rejected it as being too low. BHP said the Offer provides certainty of funding growth. They are both right
This Offer price for Lifestyle International Holdings (1212 HK) is probably sufficient to get up. It has been declared final for that reason. Optically $6/share was a more reasonable level.

Nexon (3659 JP) announced another ¥100bn buyback over three years. However, the buyback is too small to pay back the Kim family inheritance tax obligations. 


Last Week in Event SPACE: Softbank, OZ Minerals, Lifestyle, Nexon, Magic Empire, Swire Pacific

<ul>
<li>Yesterday <a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (A) (19 HK)</a> (and <a href="https://www.smartkarma.com/entities/swire-pacific-ltd" target="_blank" data-smartkarma-citation="entities:23726:1" rel="noopener">Swire Pacific Ltd-Cl B (87 HK)</a>) announced a buyback of shares according to the 2022 AGM mandates approved in May, limited to HK$4bn. </li>
<li>A reader question prompted me to look more closely at the rules. There are nuances NOT covered in the announcements. So I work through them. </li>
<li>The conclusions are surprising, and lead to one clear trading idea. </li>
</ul>


Yesterday Swire Pacific (A) (19 HK) (and Swire Pacific Ltd-Cl B (87 HK)) announced a buyback of shares according to the 2022 AGM mandates approved in May, limited to HK$4bn. 
A reader question prompted me to look more closely at the rules. There are nuances NOT covered in the announcements. So I work through them. 
The conclusions are surprising, and lead to one clear trading idea. 


Swire A Vs Swire B - Regulatory Nuances REALLY Matter

<ul>
<li>
<a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (19 HK)</a> has <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0811/2022081100273.pdf" target="_blank" rel="noopener">announced</a> a "small" buyback at HK$4bn, but it is a material portion of ADV.  </li>
<li>What remains unknown is how the buyback will be split.  The split will only be known once buyback volumes are announced. </li>
<li>Swire is trading cheap at a look-through forward P/B of 0.28x compared to its five-year average of 0.38x, and the two-year average pre-Covid of 0.48x. </li>
</ul>



Swire Pacific (19 HK) has announced a "small" buyback at HK$4bn, but it is a material portion of ADV.  
What remains unknown is how the buyback will be split.  The split will only be known once buyback volumes are announced. 
Swire is trading cheap at a look-through forward P/B of 0.28x compared to its five-year average of 0.38x, and the two-year average pre-Covid of 0.48x. 


Swire A/​​B (19 HK /​​ 87 HK)'s BIG Buyback Programme

Hong Kong

Swire Pacific is a diversified global conglomerate with core businesses in property, aviation, beverages, healthcare, and trading & industrial. It holds interests in property development and investment through Swire Properties, airline operations via Cathay Pacific, and is a major Coca-Cola bottler. Swire Pacific Limited was incorporated in 1974 and is headquartered in Hong Kong.

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Swire Pacific (87 HK)

StubWorld: Swire's NAV Discount Further Narrows As Buyback Kicks Off

Swire Pacific has bought back B/A shares in ratios of 63/37 and 72/28 over two days. Listing Rules say it has to be higher than 76.71/23.29. Stay...

David Blennerhassett

Swire Buyback Update - It's On, and Regulatorily Constrained

Swire Pacific has started its buyback. The rules suggest they are constrained to buying 77 or Swire B shares for every 23 Swire As bought. They are...

Travis Lundy

Last Week in Event SPACE: Softbank, OZ Minerals, Lifestyle, Nexon, Magic Empire, Swire Pacific

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

Swire A Vs Swire B - Regulatory Nuances REALLY Matter

Swire announced a share buyback. The regulatory nuances described in the Announcement and the Appendix to the 2022 AGM Convocation don't cover...

Travis Lundy

Swire A/B (19 HK / 87 HK)'s BIG Buyback Programme

I continue to tilt bullish on Swire Pac. ~45% discount is unreasonably wide given its tendency to historically trade in the low-to-mid twenties....

David Blennerhassett

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StubWorld: Swire's NAV Discount Further Narrows As Buyback Kicks Off

Swire Pacific has bought back B/A shares in ratios of 63/37 and 72/28 over two days. Listing Rules say it has to be higher than 76.71/23.29. Stay...

David Blennerhassett

Swire Buyback Update - It's On, and Regulatorily Constrained

Swire Pacific has started its buyback. The rules suggest they are constrained to buying 77 or Swire B shares for every 23 Swire As bought. They are...

Travis Lundy

Last Week in Event SPACE: Softbank, OZ Minerals, Lifestyle, Nexon, Magic Empire, Swire Pacific

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

Swire A Vs Swire B - Regulatory Nuances REALLY Matter

Swire announced a share buyback. The regulatory nuances described in the Announcement and the Appendix to the 2022 AGM Convocation don't cover...

Travis Lundy

Swire A/​​B (19 HK /​​ 87 HK)'s BIG Buyback Programme

I continue to tilt bullish on Swire Pac. ~45% discount is unreasonably wide given its tendency to historically trade in the low-to-mid twenties....

David Blennerhassett

Swire A/B (19 HK / 87 HK)'s BIG Buyback Programme