Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Despite the topline growth of 20%, <strong><a href="https://www.smartkarma.com/entities/kingsoft-corp-ltd" target="_blank" data-smartkarma-citation="entities:492:1" rel="noopener">Kingsoft Corp (3888 HK)</a></strong> recorded a loss in FY22 after a large impairment for its holding in <strong><a href="https://www.smartkarma.com/entities/kingsoft-cloud" target="_blank" data-smartkarma-citation="entities:28835:1" rel="noopener">Kingsoft Cloud (KC US)</a></strong>.</li>
<li>Preceding my comments on Kingsoft are the weekly 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>


Despite the topline growth of 20%, Kingsoft Corp (3888 HK) recorded a loss in FY22 after a large impairment for its holding in Kingsoft Cloud (KC US).
Preceding my comments on Kingsoft are the weekly setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: Impairments Weigh Down Kingsoft Solid Results

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 analyze the weekly Hong Kong Connect flows with our data engine for holding position as of February 17th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We estimate the total inflows to be USD 960m and  highlight flows for Meituan, Xiaomi, Tencent.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of February 17th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We estimate the total inflows to be USD 960m and  highlight flows for Meituan, Xiaomi, Tencent.


Hong Kong Connect Flows (Feb 17th): Meituan, Xiaomi, Tencent

<ul>
<li>In January 2021, <strong><a href="https://www.smartkarma.com/entities/tianneng-power-international-ltd" target="_blank" data-smartkarma-citation="entities:18978:1" rel="noopener">Tianneng Power (819 HK)</a></strong>'s (TPI) battery unit <strong><a href="https://www.smartkarma.com/entities/tianneng-battery-group-co-ltd" target="_blank" data-smartkarma-citation="entities:33458:1" rel="noopener">Tianneng Battery (688819 CH)</a></strong> (TBG) was listed on China's Star Market, as discussed in <a href="https://skr.ma/TcCjv" target="_blank" rel="noopener"><em>Tianneng: Star Market Battery Spin-Off Priced</em>. </a>
</li>
<li>TBG is now proposing the issuance of GDRs, accounting for 10% of existing shares out, to be listed on the SIX Swiss Exchange.  </li>
<li>A circular has been issued and TPI shareholders go to the vote on the 31 January. TPI currently holds 86.53% in TBG worth &gt;300% of its market cap.</li>
</ul>


In January 2021, Tianneng Power (819 HK)'s (TPI) battery unit Tianneng Battery (688819 CH) (TBG) was listed on China's Star Market, as discussed in Tianneng: Star Market Battery Spin-Off Priced. 

TBG is now proposing the issuance of GDRs, accounting for 10% of existing shares out, to be listed on the SIX Swiss Exchange.  
A circular has been issued and TPI shareholders go to the vote on the 31 January. TPI currently holds 86.53% in TBG worth &gt;300% of its market cap.


Tianneng (819 HK): EV Battery Play Seeks Swiss Listing

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<p>Following the <a href="https://www.smartkarma.com/entities/gamestop-corp-class-a" target="_blank" data-smartkarma-citation="entities:13790:1" rel="noopener">GameStop Corp Class A (GME US)</a> saga that has been all over the financial press (and is now spreading into the mainstream press), we have been getting questions on names in Hong Kong that could be prone to a squeeze.</p><p>We do not believe that retail players in Hong Kong have the heft that retail investors in the US do, nor are single stock options frequently used (though there is a lot of retail activity in warrants on large cap names), but the pain that is being felt in global portfolios could lead to unwinding in Hong Kong shorts too.</p><p>Some highly shorted stocks in Hong Kong that have seen prices jump today along with volume surge are <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology Company Limited (1833 HK)</a>, <a href="https://www.smartkarma.com/entities/hang-seng-bank-ltd" target="_blank" data-smartkarma-citation="entities:24:1" rel="noopener">Hang Seng Bank (11 HK)</a>, <a href="https://www.smartkarma.com/entities/vitasoy-intl-holdings-ltd" target="_blank" data-smartkarma-citation="entities:2807:1" rel="noopener">Vitasoy Intl Holdings (345 HK)</a>, <a href="https://www.smartkarma.com/entities/china-literature-ltd" target="_blank" data-smartkarma-citation="entities:24388:1" rel="noopener">China Literature (772 HK)</a>, <a href="https://www.smartkarma.com/entities/bank-of-east-asia-ltd" target="_blank" data-smartkarma-citation="entities:341:1" rel="noopener">Bank of East Asia (23 HK)</a>, <a href="https://www.smartkarma.com/entities/mtr-corp" target="_blank" data-smartkarma-citation="entities:13289:1" rel="noopener">MTR Corp (66 HK)</a>, <a href="https://www.smartkarma.com/entities/want-want-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:355:1" rel="noopener">Want Want (151 HK)</a>, <a href="https://www.smartkarma.com/entities/samsonite-international-sa" target="_blank" data-smartkarma-citation="entities:12790:1" rel="noopener">Samsonite (1910 HK)</a> and <a href="https://www.smartkarma.com/entities/wharf-real-estate-investment" target="_blank" data-smartkarma-citation="entities:26031:1" rel="noopener">Wharf Real Estate Investment (1997 HK)</a>.</p><p>We identify more stocks that could be prone to short covering based on short interest as a percentage of issued shares, free float and in terms of days of ADV to cover.</p>

Following the GameStop Corp Class A (GME US) saga that has been all over the financial press (and is now spreading into the mainstream press), we have been getting questions on names in Hong Kong that could be prone to a squeeze.We do not believe that retail players in Hong Kong have the heft that retail investors in the US do, nor are single stock options frequently used (though there is a lot of retail activity in warrants on large cap names), but the pain that is being felt in global portfolios could lead to unwinding in Hong Kong shorts too.Some highly shorted stocks in Hong Kong that have seen prices jump today along with volume surge are Ping An Healthcare and Technology Company Limited (1833 HK), Hang Seng Bank (11 HK), Vitasoy Intl Holdings (345 HK), China Literature (772 HK), Bank of East Asia (23 HK), MTR Corp (66 HK), Want Want (151 HK), Samsonite (1910 HK) and Wharf Real Estate Investment (1997 HK).We identify more stocks that could be prone to short covering based on short interest as a percentage of issued shares, free float and in terms of days of ADV to cover.

<div>
<p><em>This week in StubWorld ...</em></p>
</div>
<div>
<p><a href="https://www.smartkarma.com/entities/wilmar-international-ltd" target="_blank" data-smartkarma-citation="entities:172:1" rel="noopener">Wilmar International (WIL SP)</a> continues to outperform <a href="https://www.smartkarma.com/entities/ppb-group-berhad" target="_blank" data-smartkarma-citation="entities:793:1" rel="noopener">Ppb Group (PEP MK)</a> after the <a href="https://www.smartkarma.com/entities/yihai-kerry-arawana-holdin-a" target="_blank" data-smartkarma-citation="entities:29184:1" rel="noopener">Yihai Kerry Arawana Holdings Co Ltd (300999 CH)</a> spin-off; <a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550 KS)</a> is cheap, and there are catalysts in the pipeline apart from the recently announced demerger; and <a href="https://www.smartkarma.com/entities/china-motor-corp" target="_blank" data-smartkarma-citation="entities:6315:1" rel="noopener">China Motor (2204 TT)</a> is trading cheap to <a href="https://www.smartkarma.com/entities/yulon-motor-company" target="_blank" data-smartkarma-citation="entities:18249:1" rel="noopener">Yulon Motor Company (2201 TT)</a>, which in turn is trading rich to <a href="https://www.smartkarma.com/entities/taiwan-acceptance-corp" target="_blank" data-smartkarma-citation="entities:13398:1" rel="noopener">Yulon Finance Corp (9941 TT)</a>. </p>
</div>
<hr>
<div>
<p>Preceding my comments on these holdcos are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
</div>
<div>
<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>
</div>


This week in StubWorld ...


Wilmar International (WIL SP) continues to outperform Ppb Group (PEP MK) after the Yihai Kerry Arawana Holdings Co Ltd (300999 CH) spin-off; LG Corp (003550 KS) is cheap, and there are catalysts in the pipeline apart from the recently announced demerger; and China Motor (2204 TT) is trading cheap to Yulon Motor Company (2201 TT), which in turn is trading rich to Yulon Finance Corp (9941 TT). 



Preceding my comments on these holdcos 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%.


StubWorld: PPB/Wilmar, LG Corp, China Motor/Yulon Motor

Hong Kong

Tianneng Power is a leading new energy group focused on the manufacturing and services of motive batteries for light electric vehicles, as well as the research, development, production, and sale of various other battery types, including start-stop and energy storage batteries. The company also engages in the recycling of waste batteries and renewable resources. Founded in 1986, its headquarters are located in Hong Kong.

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Tianneng Power (819 HK)

StubWorld: Impairments Weigh Down Kingsoft Solid Results

The market is assigning HK$28bn less to Kingsoft's stub ops over the past year - however, deconsolidated stub EBITDA is up. As is (~HK$21/share)...

David Blennerhassett

Hong Kong Connect Flows (Feb 17th): Meituan, Xiaomi, Tencent

We analyzed the Hong Kong Connect Scheme for last week and highlight inflows for Meituan, Xiaomi and outflows from Tencent.

Ke Yan, CFA, FRM

Tianneng (819 HK): EV Battery Play Seeks Swiss Listing

TBG is seeking a GDR listing in Zurich. The holding in TBG accounts for 307% of TPI's market cap. TPI is mispriced. But it may simply remain...

David Blennerhassett

HK Shorts: Squeeze-O-Meter

Following the GameStop saga, we try to identify stocks in HK that could be susceptible to a short squeeze based on short interest vs issued shares...

Brian Freitas

StubWorld: PPB/Wilmar, LG Corp, China Motor/Yulon Motor

Wilmar continues to outperform PPB after the Yihai Kerry spin-off; and LG Corp (003550 KS) is cheap, and there are catalysts in the pipeline apart...

David Blennerhassett

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