Smartkarma Daily Briefs

• Mason Group Holdings (273 HK) announced a privatisation offer from Red Emerald Capital at HK$0.0338 per share, a 20.7% premium to the undisturbed price of HK$0.0280 per share (30 May). 
• The key conditions are SFC approval and the scheme being approved by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). The offer price has not been declared final.
• Four shareholders hold a blocking stake – three have provided irrevocables while the other will accept due to the attractive ROI. Therefore, there is a clear pathway to completion.

• Macro charts for US 10yr yield, Nikkei (bull), Kospi 200 (bear), HSI (bear) and Nifty (bull) featured. Taiwan falls into the bull camp.
• Cycle: Bullish above SPX 4,200 (rally failure if back below this pivot level). NDX trendline buy  support at 13,950. Risk that tech is stretched near term.
• Asia is well positioned for gains once we get through some overbought readings. HK and Korea the weak links.

• We explored the primary share price drivers for HKL, the prime office landlord in Hong Kong, including share buybacks, HK office recovery and as a reopening/ESG thematic play. 
• HKL has been constantly evaluating its capital management strategy.  Despite interest rate environment has changed substantially, HKL still sees buyback (7% earnings yield) as a good option
• Valuation remains attractive.  Part of the risks is priced in.  Although it can remain as a value trap, it can unlock its value and re-rate over the long term.

• 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. 

• Edelweiss reported a decent Q4FY23. Across businesses, Edelweiss reported strong growth. The credit business is also now scaling up with Q4FY23 disbursements at INR 400cr in housing finance.
• The demerger of Nuvama Wealth Management is now complete with record date as Jun 2 2023. Nuvama is on track to list on the exchanges by the end of July.
• Based on our sum-of-the-parts valuation, Edelweiss can be valued at INR 15000cr+. At the current market cap of INR 4400cr, it is trading at a huge discount of 70%+.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Central China Securities
• Powerlong Commercial Management Holdings
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