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/hang-lung-group-ltd" target="_blank" data-smartkarma-citation="entities:50:1" rel="noopener"><strong>Hang Lung (10 HK</strong>)</a> is coming up "expensive" on my monitor, yet remains one of the cheapest property plays in Hong Kong on a P/B metric.</li>
<li>Preceding my comments on Hang Lung 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 threshold - the $ value of the holding/opco held, over the parent’s market cap - &gt;20%.</li>
</ul>



Hang Lung (10 HK) is coming up "expensive" on my monitor, yet remains one of the cheapest property plays in Hong Kong on a P/B metric.
Preceding my comments on Hang Lung are the weekly setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market cap - &gt;20%.


StubWorld: Scion Adriel Likes Hang Lung Group Shares

<div>
<div class="content-highlight">
<p><em><strong>Corrigenda: There is an error in this Insight. Please note the correction.</strong></em></p>
<p><em><strong>Correction: [Under the section “On the Evergrande holding”], that (unrealised &amp; realised) loss on the investment in Evergrande (3333 HK) of HK$10.4bn almost certainly includes the HK$3.99bn loss on investment included in the 2021 interims.</strong></em></p>
<p><em><strong>Therefore the additional (unrealised &amp; realised) loss on investment, using the $2.95/share price for Evergrande as provided in the announcement, is ~HK$6.4bn, or HK$3.37/share, giving an adjusted NAV of HK$9.61/share (ignoring forward earnings), implying a P/B under the Offer of ~0.42x compared to a three-year average of 0.31x.</strong></em></p>
</div>
<p>After being <a href="chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/viewer.html?pdfurl=https%3A%2F%2Fwww1.hkexnews.hk%2Flistedco%2Flistconews%2Fsehk%2F2021%2F0929%2F2021092900219.pdf&amp;clen=26125&amp;chunk=true" target="_blank" rel="noopener">suspended</a> on the 29 September pursuant to the Hong Kong Code on Takeovers and Mergers, <a href="https://www.smartkarma.com/entities/chinese-estates-holdings-limited" target="_blank" data-smartkarma-citation="entities:20954:1" rel="noopener">Chinese Estates Holdings (127 HK)</a>, a leading property developer in Hong Kong, has now <a href="chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/viewer.html?pdfurl=https%3A%2F%2Fwww1.hkexnews.hk%2Flistedco%2Flistconews%2Fsehk%2F2021%2F1006%2F2021100601285.pdf&amp;clen=203491&amp;chunk=true" target="_blank" rel="noopener">announced</a> an Offer, by way of a Scheme, from its founder, Joseph Lau, and his wife Chan Hoi Wan.</p>
</div>
<div>
<p>The consideration is $4.00/share, a 37.9% premium to last close, but an impressive 83.5% premium to the close on the last full trading day. The Offer price will NOT be increased.</p>
</div>
<div>
<p>Lau and Chan control <a href="https://di.hkex.com.hk/di/NSAllSSList.aspx?sa2=as&amp;sid=206&amp;corpn=Chinese+Estates+Holdings+Ltd.&amp;sd=29/09/2013&amp;ed=29/09/2021&amp;cid=0&amp;sa1=cl&amp;scsd=29%2f09%2f2013&amp;sced=29%2f09%2f2021&amp;sc=127&amp;src=MAIN&amp;lang=EN&amp;g_lang=en&amp;" target="_blank" rel="noopener">74.99%</a> of the company. Disinterested shareholders comprise 21.41% of shares out, therefore the blocking stake at the forthcoming Court Meeting is 2.141% of shares out. </p>
<p>The headcount test applies.</p>
</div>
<div>
<p>In <em><a href="https://skr.ma/1HQM2" target="_blank" rel="noopener">Chinese Estates (127 HK): Potential Privatisation?</a></em>, I expected a punchy premium (to the "undisturbed price") upwards of up 75%, or $3.82/share, to get this over the line. This has been exceeded. </p>
<p>Optically, Lau and Chan appear to be getting Chinese Estates at a bargain. But the current realised plus unrealised losses on the <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande (3333 HK)</a> holding is HK$10.4bn, which dramatically alters what is deemed to be book value, and therefore the implied valuation metric under the Offer.</p>
<p>This looks like a done deal and should trade tight to terms.</p>
</div>
<div>
<div>
<p></p>
</div>
</div>



Corrigenda: There is an error in this Insight. Please note the correction.
Correction: [Under the section “On the Evergrande holding”], that (unrealised &amp; realised) loss on the investment in Evergrande (3333 HK) of HK$10.4bn almost certainly includes the HK$3.99bn loss on investment included in the 2021 interims.
Therefore the additional (unrealised &amp; realised) loss on investment, using the $2.95/share price for Evergrande as provided in the announcement, is ~HK$6.4bn, or HK$3.37/share, giving an adjusted NAV of HK$9.61/share (ignoring forward earnings), implying a P/B under the Offer of ~0.42x compared to a three-year average of 0.31x.

After being suspended on the 29 September pursuant to the Hong Kong Code on Takeovers and Mergers, Chinese Estates Holdings (127 HK), a leading property developer in Hong Kong, has now announced an Offer, by way of a Scheme, from its founder, Joseph Lau, and his wife Chan Hoi Wan.


The consideration is $4.00/share, a 37.9% premium to last close, but an impressive 83.5% premium to the close on the last full trading day. The Offer price will NOT be increased.


Lau and Chan control 74.99% of the company. Disinterested shareholders comprise 21.41% of shares out, therefore the blocking stake at the forthcoming Court Meeting is 2.141% of shares out. 
The headcount test applies.


In Chinese Estates (127 HK): Potential Privatisation?, I expected a punchy premium (to the "undisturbed price") upwards of up 75%, or $3.82/share, to get this over the line. This has been exceeded. 
Optically, Lau and Chan appear to be getting Chinese Estates at a bargain. But the current realised plus unrealised losses on the Evergrande (3333 HK) holding is HK$10.4bn, which dramatically alters what is deemed to be book value, and therefore the implied valuation metric under the Offer.
This looks like a done deal and should trade tight to terms.







Chinese Estates (127 HK): $4.00/Share Offer

<div>
<p><a href="https://www.smartkarma.com/entities/chinese-estates-holdings-limited" target="_blank" data-smartkarma-citation="entities:20954:1" rel="noopener">Chinese Estates Holdings (127 HK)</a>,  a leading property developer in Hong Kong - and avid securities investor - is currently <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0929/2021092900219.pdf" target="_blank" rel="noopener">suspended</a> pursuant to the Hong Kong Code on Takeovers and Mergers. There are, as yet, no further details, although shares did gain 33% before being halted at 11.10am today. </p>
</div>
<div>
<p><a href="https://www.smartkarma.com/entities/charoen-pokphand-foods-public-company-limited" target="_blank" data-smartkarma-citation="entities:16131:1" rel="noopener"></a>Joseph Lau and his wife Chan Hoi Wan control <a href="https://di.hkex.com.hk/di/NSAllSSList.aspx?sa2=as&amp;sid=206&amp;corpn=Chinese+Estates+Holdings+Ltd.&amp;sd=29/09/2013&amp;ed=29/09/2021&amp;cid=0&amp;sa1=cl&amp;scsd=29%2f09%2f2013&amp;sced=29%2f09%2f2021&amp;sc=127&amp;src=MAIN&amp;lang=EN&amp;g_lang=en&amp;" target="_blank" rel="noopener">74.99%</a> of the company.</p>
</div>
<div>
<p>This insight provides some brief background on Chinese Estates, plus speculates on a fair price should a firm Offer unfold. </p>
</div>


Chinese Estates Holdings (127 HK),  a leading property developer in Hong Kong - and avid securities investor - is currently suspended pursuant to the Hong Kong Code on Takeovers and Mergers. There are, as yet, no further details, although shares did gain 33% before being halted at 11.10am today. 


Joseph Lau and his wife Chan Hoi Wan control 74.99% of the company.


This insight provides some brief background on Chinese Estates, plus speculates on a fair price should a firm Offer unfold. 


Chinese Estates (127 HK): Potential Privatisation?

Last Week in Event SPACE: Toshiba, MMC Corp, Japan Post, China Logistics, Pershing Square, Hang Lung

<div>
<p>A double-dose of StubWorld this week ...</p>
</div>
<div>
<div class="content-highlight">
<p><a href="https://www.smartkarma.com/entities/hang-lung-group-ltd" target="_blank" data-smartkarma-citation="entities:50:1" rel="noopener">Hang Lung (10 HK)</a>'s is coming up expensive on my monitor,  yet at 0.3x P/B, against 0.47x for a basket of peers, HLG is one of the cheapest property plays in Hong Kong.</p>
</div>
<p>Preceding my comments on Hang Lung are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
</div>
<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>
</div>


A double-dose of StubWorld this week ...



Hang Lung (10 HK)'s is coming up expensive on my monitor,  yet at 0.3x P/B, against 0.47x for a basket of peers, HLG is one of the cheapest property plays in Hong Kong.

Preceding my comments on Hang Lung 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: Hang Lung Group Is Still Cheap

Hong Kong

Wheelock and Company is a Hong Kong-headquartered property group primarily engaged in property investment, development, and asset management. The company focuses on high-quality residential and commercial properties across Hong Kong, Mainland China, and Singapore. Founded in 1857, it was privatized in 2020.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Wheelock and Company (1947529D HK)

StubWorld: Scion Adriel Likes Hang Lung Group Shares

HLG remains very cheap here on a look-through basis. You're looking at 30-40% upside to HLG here to get back to a simple ratio of 1.45x, the ten...

David Blennerhassett

Chinese Estates (127 HK): Potential Privatisation?

To get this Offer the line, I reckon Lau would have to pay a significant premium to the undisturbed price. Potentially upwards of 75% or $3.82...

David Blennerhassett

Last Week in Event SPACE: Toshiba, MMC Corp, Japan Post, China Logistics, Pershing Square, Hang Lung

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

StubWorld: Hang Lung Group Is Still Cheap

I cannot envisage HLG privatising HLP given the pricing (P/B) disparity. I think Ronnie Chan should follow the Woo/Wheelock (20 HK) template, and...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

StubWorld: Scion Adriel Likes Hang Lung Group Shares

HLG remains very cheap here on a look-through basis. You're looking at 30-40% upside to HLG here to get back to a simple ratio of 1.45x, the ten...

David Blennerhassett

Chinese Estates (127 HK): $4.00/Share Offer

There may be some pushback on pricing, but factoring in the Evergrande loss (real & unrealised), the Offer Price appears fair.

David Blennerhassett

Chinese Estates (127 HK): Potential Privatisation?

To get this Offer the line, I reckon Lau would have to pay a significant premium to the undisturbed price. Potentially upwards of 75% or $3.82...

David Blennerhassett

Last Week in Event SPACE: Toshiba, MMC Corp, Japan Post, China Logistics, Pershing Square, Hang Lung

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

StubWorld: Hang Lung Group Is Still Cheap

I cannot envisage HLG privatising HLP given the pricing (P/B) disparity. I think Ronnie Chan should follow the Woo/Wheelock (20 HK) template, and...

David Blennerhassett