Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Scheme Document for <a href="https://www.smartkarma.com/entities/cp-pokphand-co-ltd" target="_blank" data-smartkarma-citation="entities:10135:1" rel="noopener">Cp Pokphand (43 HK)</a> (CPP) has been dispatched. The Scheme Meeting will take place on the 15 December. </li>
<li>
<a href="https://www.smartkarma.com/entities/charoen-pokphand-foods-public-company-limited" target="_blank" data-smartkarma-citation="entities:16131:1" rel="noopener">CP FOODS (CPF TB)</a> and <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> with 49.74% and 25% of shares out respectively are offering HK$1.15/share for CPP, a leading agri-food conglomerate in China and Vietnam. </li>
<li>The Independent Financial Adviser (Ballas Capital) considers the Scheme to be fair and reasonable. Assuming the Scheme gets up, payment is the 25 January, on or before.</li>
</ul>


The Scheme Document for Cp Pokphand (43 HK) (CPP) has been dispatched. The Scheme Meeting will take place on the 15 December. 

CP FOODS (CPF TB) and Itochu Corp (8001 JP) with 49.74% and 25% of shares out respectively are offering HK$1.15/share for CPP, a leading agri-food conglomerate in China and Vietnam. 
The Independent Financial Adviser (Ballas Capital) considers the Scheme to be fair and reasonable. Assuming the Scheme gets up, payment is the 25 January, on or before.


C.P. Pokphand (43 HK): Scheme Doc Out. Meeting on 15 December

Research on Tech Companies

Evelyn Zhang

Thematic (Sector/Industry)

USTR requested comments on potential exclusions of products of China subject to tariffs.
The largest exemption categories include Electrical equipment, electronic, mechanical equipment.
The household appliances have over 50% dependence on Chinese imports. 
This article combines the four tariff lists and identifies the goods most reliant on China, and consequently, potential beneficiaries of this Sino-US trade relaxation.

USTR requested comments on potential exclusions of products of China subject to tariffs.
The largest exemption categories include Electrical equipment, electronic, mechanical equipment.
The household appliances have over 50% dependence on Chinese imports. 
This article combines the four tariff lists and identifies the goods most reliant on China, and consequently, potential beneficiaries of this Sino-US trade relaxation.

Travis Lundy

Equity Bottom-Up

Post WH Group Tender Offer buyback, there is a fair bit of good news. <ul>
<li>A month ago, <a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a> was near its cheapest vs peers in years on a forward earnings basis.</li>
<li>Lean hog prices are finally making a rebound in China after a multi-month cull and NDRC intervention</li>
<li>Hog prices in the US remain strong-ish. </li>
<li>Forward earnings estimates are up. </li>
</ul>But since the strength in WH Group shares immediately post-tender, when people sold the overhang, the stock has fallen sharply. HK and China-listed peers are up an average of 15% in the past month while global-listed peers are down 4%. WH Group resembles a mix of those two baskets but is down 12% in the same period vs +5% for an equal-weighted basket.The shares are now scraping on 4-year lows despite recent 15% accretion, and on an accretion-adjusted basis have underperformed by 30% in bit over a month. That is probably overdone.

Post WH Group Tender Offer buyback, there is a fair bit of good news. 
A month ago, WH Group (288 HK) was near its cheapest vs peers in years on a forward earnings basis.
Lean hog prices are finally making a rebound in China after a multi-month cull and NDRC intervention
Hog prices in the US remain strong-ish. 
Forward earnings estimates are up. 
But since the strength in WH Group shares immediately post-tender, when people sold the overhang, the stock has fallen sharply. HK and China-listed peers are up an average of 15% in the past month while global-listed peers are down 4%. WH Group resembles a mix of those two baskets but is down 12% in the same period vs +5% for an equal-weighted basket.The shares are now scraping on 4-year lows despite recent 15% accretion, and on an accretion-adjusted basis have underperformed by 30% in bit over a month. That is probably overdone.

WH Group (288 HK) Now Cheapest Vs Peers in Yonks

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

Hong Kong SFC reported aggregate short position as of Sep 10. The aggregate short value for equities increased by $423m (+0.6%) WoW and increased by $741m (+1.1%) over the preceding four weeks.Most shorted stocks by aggregate short value of positions are Ping An Insurance (Group) Company Of China, Ltd./2318 HK($3,720m, -3.3% WoW), China Merchants Bank Co., Ltd./3968 HK($2,745m, +1.9% WoW), Zhongsheng Group Holdings Limited/881 HK($1,960m, +0.1% WoW), Meituan/3690 HK($1,759m, +6.5% WoW), Anta Sports Products Limited/2020 HK($1,647m, +5.7% WoW).<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/230/549/original/Hong_Kong_Market_Short_Position_Value_%28line%29_and_1W_Changes_%28bar%29_%28%24m%292021-09-18+12_47_11.png?1631948396" class="editor-image img-responsive" data-smartkarma-image-id="230549"></figure></section>

Hong Kong SFC reported aggregate short position as of Sep 10. The aggregate short value for equities increased by $423m (+0.6%) WoW and increased by $741m (+1.1%) over the preceding four weeks.Most shorted stocks by aggregate short value of positions are Ping An Insurance (Group) Company Of China, Ltd./2318 HK($3,720m, -3.3% WoW), China Merchants Bank Co., Ltd./3968 HK($2,745m, +1.9% WoW), Zhongsheng Group Holdings Limited/881 HK($1,960m, +0.1% WoW), Meituan/3690 HK($1,759m, +6.5% WoW), Anta Sports Products Limited/2020 HK($1,647m, +5.7% WoW).

HK Short Interest: Short Cover for Dongyue, WH Group

In our weekly HK Connect Flow series, we aim to highlight key stocks and sectors which the mainland investors traded via the southbound Hong Kong Connect, as analyzed by our proprietary data engine.Since the opening of Hong Kong Connect scheme in 2014, southbound Chinese money started to play an increasingly important role in the Hong Kong stock market. In 2020, Southbound trading accounted for 22% of the equity market ADT. We split the stocks eligible for the Hong Kong Connect trade into three groups: HSCEI component stocks, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.In this insight, we will highlight inflows into Tencent Holdings Limited (700 HK), Wh Group Limited (288 HK), Kuaishou Technology (1024 HK), as well as outflows from Hong Kong Exchanges And Clearing Limited (388 HK), Semiconductor Manufacturing International Corporation (981 HK), Anta Sports Products Limited (2020 HK).

In our weekly HK Connect Flow series, we aim to highlight key stocks and sectors which the mainland investors traded via the southbound Hong Kong Connect, as analyzed by our proprietary data engine.Since the opening of Hong Kong Connect scheme in 2014, southbound Chinese money started to play an increasingly important role in the Hong Kong stock market. In 2020, Southbound trading accounted for 22% of the equity market ADT. We split the stocks eligible for the Hong Kong Connect trade into three groups: HSCEI component stocks, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.In this insight, we will highlight inflows into Tencent Holdings Limited (700 HK), Wh Group Limited (288 HK), Kuaishou Technology (1024 HK), as well as outflows from Hong Kong Exchanges And Clearing Limited (388 HK), Semiconductor Manufacturing International Corporation (981 HK), Anta Sports Products Limited (2020 HK).

Hong Kong Connect Flows: Tencent, WH Group, Kuaishou

Hong Kong

WH Group Limited operates as a holdings company. The Company, through its subsidiaries, provides meat processing services, supplies chilled meat, meat products, and other related products.

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WH Group (288 HK)

C.P. Pokphand (43 HK): Scheme Doc Out. Meeting on 15 December

This still looks a pretty clean deal. I'd be paying up to and around $1.12/share which is ~3.6%/15% gross/annualised spread.

David Blennerhassett

A Truce in Trade War?

USTR requested comments on potential exclusions of products of China subject to tariffs. We analyze the potential beneficiaries of this Sino-US...

Evelyn Zhang

WH Group (288 HK) Now Cheapest Vs Peers in Yonks

WH Group has not fared well after the end of the 15% accretive buyback offer. Shares are down 30% since the day before the announcement and 40% on...

Travis Lundy

HK Short Interest: Short Cover for Dongyue, WH Group

We highlight week-on-week short covers for Dongyue (189 HK) and WH Group (288 HK) based on the latest HK SFC short aggregate position report.

Ke Yan, CFA, FRM

Hong Kong Connect Flows: Tencent, WH Group, Kuaishou

We highlight Hong Kong Connect Southbound inflows into Tencent (700 HK), WH Group (288 HK), Kuaishou (1024 HK), and outflows from HKEx (388 HK),...

Ke Yan, CFA, FRM

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