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Singapore

Singapore: Sembcorp Marine and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Last Week in Event SPACE: Sembcorp Marine, AusNet, Shinsei Bank, MMC Corp

Last Week in Event SPACE: Sembcorp Marine, AusNet, Shinsei Bank, MMC Corp

By David Blennerhassett

Last Week in Event SPACE …

  • There was still a potential risk of MGO non-completion for Sembcorp Marine (SMM SP), and the results of the Rights Issue seemed to suggest there was still a potential risk of MGO non-completion. But as expected, Temasek announced its MGO for SMM.   
  • It appears APA Group (APA AU) dawdled in its negotiations with Ausnet Services (AST AU), and now must bide its time as Brookfield’s exclusivity period expires. 
  • SBI Holdings (8473 JP) have a quite powerful position here. They have a bid for Shinsei Bank (8303 JP) at ¥2,000/share and nobody else does. The trade skew is, at this moment, to be long.
  • MMC Corp Bhd (MMC MK) continues to trade wide to terms ahead of next week’s shareholder vote due to a combination of timing, PNB (potentially but unlikely) blocking, and the large downside to the undisturbed price. 
  • Plus, other events, CCASS movements (flagging possible Offers and  IPO lock-ups), and Mood Spins.

(This insight covers specific insights & comments involving Stubs, Pairs, Arbitrage, share Classifications, and Events – or SPACE – in the past week)

M&A – ASIA

Sembcorp Marine (SMM SP)  (Mkt Cap: $1bn; Liquidity: $11mn)

The Sembcorp Rights Offering is complete, and allocations are out as of Friday night.  and it turns out, the MGO Option as discussed in One More Day To Trade Sembcorp Marine Rights, Harvest the Spread, or Buy The MGO Option as rights trading was coming to a close, was the right way to think about it.  Only 84.2% of the Offering was covered by shareholders exercising their rights. Temasek took 42.6%, which means that only 72% of the other shareholders took up their rights. That meant that based on the Offering Circular and the Temasek Undertakings therein, Temasek was going to end up increasing its stake by more than 1%, thereby triggering an MGO Option (it required 98.33% minority takeup to avoid going over the MGO trigger).

  • Travis Lundy would wait for S$0.081 or S$0.08/share to buy. One could put a GTC order in at those prices or even S$0.079/share even now (just remember to take it out once the MGO completes). There could be a couple of very quiet days before settlement. If he were long SMM shares, Travis would probably sell a pop and wait for the overhang to clear a bit (or buy back in the selldown of excess rights overhang.
  • Fundamentally… VERY long term, the stock is probably cheap. But that could be years, and Travis expect if you follow the stock, it will be a better buy later at a higher price. It may even be cheap in a merger with Keppel, but that has to be the subject of a different tweet. Its main problem now is people don’t expect it to make money for a few years.  Tactically, Travis expects some overhang, and expects the presence of the Compliance Offer MGO to act as a place where those long might sell just above, and buy at or around terms, and we stay stuck in a muddle for a little while.  At S$0.081 it might be good to own. Once the Compliance MGO is over, it might be good to own at a higher price. 
  • As expected, on 22 September 2021, Temasek announced its Mandatory General Offer for shares of SMM. Temasek ended up at 46.6% which triggers an offer to remain in compliance with Rule 14.1 of the Takeover Code. For each Offer Share: S$0.08 in cash (the “Offer Price”).  The Offer Price is final and the Offeror will not revise the Offer Price or any other terms of the MGO. There will not be any extension of the Closing Date and Shareholders who do not accept the MGO by the Closing Date will not be able to do so after the Closing Date. Now is the time to put in the GTC bids at S$0.079, S$0.08 and possibly S$0.081/share.

Link to Travis’ insights:
Sembcorp Marine Rights Done – The MGO Option It Is
Sembcorp Marine MGO – The Implied Option Tells You About the Market, And It’s The Wrong Price

Ausnet Services (AST AU) (Mkt Cap: $6.6bn; Liquidity: $7mn)

This past Monday, Victorian electricity operator AusNet announced it would open its books to Brookfield after receiving a revised non-binding Offer of A$2.50/share in cash. It is understood Brookfield made a A$2.35/share Offer on the 30 August, followed by $2.45/share, before all parties settled on $2.50/share. As it turns out, according to APA Group (APA AU), APA had approached AusNet with a non-binding proposal of A$2.32 on the 1 September, and that APA had made AusNet aware last Thursday (16 September) it intended to make a revised proposal. APA sounded out AusNet’s major shareholders prior to its initial approach, and that APA understood Singapore Power was supportive of APA and AusNet engaging in discussions. APA had also discussed the initial proposal directly with State Grid. Not surprisingly, APA is miffed AusNet entered into a period of exclusivity with Brookfield.

  • Under APA’s proposal, AusNet shareholders would receive $1.820 in cash and 0.0878 stapled securities in the Australian Pipeline Trust and APT Investment Trust, with a mix and match facility enabling shareholders to elect more cash or more securities, subject to caps in each. Apart from the higher price, APA’s Offer enables AusNet shareholders to participate in the back-end via APA scrip, plus there is no FIRB conditionality. In addition, APA would only require 4 weeks of due diligence, compared to seven to eight weeks for Brookfield.
  • No word from China’s State Grid. However, I doubt either Singapore Power or State Grid would publicly comment until either proposal passes due diligence and a firm Offer is made. AusNet has nine directors, with Singapore Power having two members, and State Grid one. Given AusNet’s board “unanimously recommend shareholders vote in favour of (Brookfield’s) proposal”, in the absence of a superior offer, suggests both key shareholders are supportive of an Offer. Still, only recently was China’s running a ruler over Aussie assets. At a time of heightened tensions between Australia and China, it is not clear whether China is ready and willing to cash in.
  • FIRB is a non-negligible issue for Brookfield. The Critical Infrastructure Center, which facilitates FIRB’s decision-making, designates electricity assets as critical assets. Yet AusNet is already majority-owned by foreign investors. But 100% of Victoria’s electricity distribution and transmission could fall into foreign hands if both Brookfield prevails and KKR takes out Spark Infrastructure (SKI AU). If that is not a desirable outcome to FIRB, potentially Spark is more at risk of FIRB rejection.
  • UPDATE: After AusNet rejected its Offer – deeming it “inferior in respect of price, form of consideration, structure and certainty” –  APA has now made an application to the Takeovers Panel such that the circumstances (including the entry into the confidentiality deed with Brookfield) “hinder, or are likely to hinder, the acquisition of control of [AusNet] taking place in an efficient, competitive and informed market .. and deny, or are likely to deny, [AusNet] shareholders an opportunity to participate in the benefits of a proposal”. I’d be surprised if the TO backs APA’s submission. 

Link to my insights:
AusNet (AST AU): APA Elevates Tussle With Brookfield And Taps Takeover Panel
AusNet Services (AST AU): Spurned APA Trumps Brookfield’s Proposal
AusNet Services (AST AU) Opens Its Books to Brookfield

Shinsei Bank (8303 JP) (Mkt Cap: $bn; Liquidity: $17mn)

On 9 September, SBI Holdings (8473 JP) announced they would launch a Tender Offer at ¥2,000/share to acquire 27.68% of Shinsei to take them to 48.00%. This was discussed in SBI (8473) Launches a HOSTILE Tender Offer on Shinsei Bank (8303)! After the weekend had passed, there was news that Shinsei was looking for a white knight, and the Board would meet this past week to discuss a poison pill warrant issuance. On the 17th September, Shinsei announced that it “reserved” its Target Opinion on the SBI Tender Offer based on having sent SBI questions but having not received answers yet.  Shinsei also announced the introduction of Takeover Defense Measures via Poison Pill Shareholder Rights to be introduced at an EGM, also announcing that the Record Date would be 13 October (and an official announcement would be made 28 September.

  • SBI would have two other choices:  It could extend the Tender Offer and plead its case to shareholders, saying “if the EGM approves such a measure, SBI will withdraw its Tender Offer, and it might be forced to sell its shares in the market, and that might hurt the share price“, or … SBI could simply withdraw the Tender Offer.
  • Travis expects SBI to extend.  That may change, but I think SBI have a quite powerful position here. They have a bid at ¥2,000/share and nobody else does. Shinsei having more time may not get them a white knight overbid, and if it goes to EGM without an overbid in place, getting free shares but having the total be worth 30% less seems like a bad trade for Shinsei shareholders. If SBI withdraws before the EGM vote, it doesn’t get the optionality of having the shareholders reject the poison pill.
  • Separately, if Shinsei comes up with a white knight to buy 48% or buy up to 48% then get Shinsei to issue treasury shares to get them to 48%, as long as that Tender Offer closes after SBI’s and SBI’s fails, SBI could tender its shares into a tender offer by Sony or 7&i or someone else. If we think 67% is an appropriate effective minimum pro-ration for SBI’s Tender Offer, if someone needs to go from 0% to 48%, and SBI decides to participate with all 20.32%, the effective minimum pro-ration would be about 77.9%. This would still be a decent outcome for minorities. 

MMC Corp Bhd (MMC MK)  (Mkt Cap: $1.2bn; Liquidity: $3mn)

On the 3 June, Seaport Terminal (Johore) Sdn Bhd, a wholly-owned entity of Tan Sri Syed Mokhtar Albukhary, announced an Offer for port operator and utility play  MMC at RM2.00/share, a 70.94% premium to last close. Seaport Terminal owns 51.76% of MMC.  The Offer is being done via a selective capital reduction and repayment (SCR) exercise.  On the 4 August RHB announced, on behalf MMC’s board, the SCR will be tabled to shareholders at a forthcoming EGM. The circular was dispatched on the 8 September with the EGM scheduled for the 30 September. Payment under the offer is expected towards the end of December. The independent adviser, Alliance Investment Bank, deemed the Offer not fair, but reasonable.

  • This still looks done. But this is trading wide, with a largish downward move on decent volume earlier this week. The key risk is how PNB (with 20.9%) will vote.  Presumably, they were sounded out prior to the Offer announcement. 
  • The other risk is one of timing. Dec-end for payment is in line with SCR precedents. There may well be some High Court hearing disruption as Malaysia faces significant daily cases of Covid – >15k. 

(link to my insight: MMC Corp (MMC MK): This Is A Buy)

Ale Property (LEP AU) (Mkt Cap: $0.8bn; Liquidity: $1mn)

In July 2021, Australia’s largest freehold pub properties owner ALE received an “unsolicited, confidential, conditional, non-binding indicative proposal” from the Charter Hall Consortium (a consortium managed by Charter Hall (CHC AU). A couple of months later, on 20th September 2021, ALE announced they had entered into a Scheme Implementation Deed. Based on this agreement, ALE securityholders will have the default option of accepting 0.4080 CLW securities and cash of A$3.673 as consideration per ALE security or they can choose between an all-scrip consideration of 1.1546 CLW securities/ALE Security and an all-cash consideration of A$5.681 cash/ALE security. On top of that, ALE securityholders will also be entitled to receive ALE’s September quarter distribution of A$0.055/ALE security. 

  • The Deal is conditional on ALE security-holder approval. Top security-holder Caledonia who controls 33.6% of total votes has agreed to vote in favour of the transaction.  Woolworths’ spin-off Endeavour Group controls 8.9%. They are ALE’s sole tenant and they also rent some pubs that belong to the Charter Hall consortium. They should be friendly to this transaction too. Together with the above-mentioned security-holders, Janaghan Jeyakumar expects friendly security-holders to collectively hold around 47.7% including individuals and insiders. 
  • The acquisition of ALE will make the Charter Hall the largest owner of freehold pubs in Australia. This can be seen as a bet by Charter Hall on the post-lockdown rebound anticipated in the retail and hospitality sectors following the easing of COVID-19 lockdown measures. This is a friendly transaction. ALE Directors unanimously recommend that ALE security-holders vote in favour of the Schemes, in the absence of a superior proposal and subject to the Independent Expert concluding that the Schemes are in the best interests of ALE security-holders.
  • The gross/annualized spreads for the max-scrip and max-cash considerations were 3.5%/13.9% and 1.5%/6.1% respectively (not including CLW borrow costs in the scrip portions) as at the time of Janaghan’s insight. NOTE: The ex-date for the A$0.055/security distribution is 29th Sep 2021. The CLW distribution of (estimated (A$0.074/unit) for CLW should be the same time.

(link to Janaghan’s insight: ALE-Charter Hall: A Post-Lockdown Bet on Australian Pubs)


Roxy Pacific Holdings (ROXY SP), a small-sized property developer focusing on the Asia-Pacific region, has announced a pre-conditional Offer at S$0.485/share, a 19.8% premium to last close. The offer price will not be increased. No dividends are expected to be declared. The Offeror consortium is led by Teo Hong Lim, chairman, and CEO of Roxy-Pacific. The pre-condition pertains to all necessary consents under the Overseas Investment Act of New Zealand. Roxy holds an interest in two commercial properties in Auckland. The Offer, assuming it proceeds, is conditional on the Offeror holding not less than 90% of shares out.  Irrevocables total 76.44% of shares out. This is done. It is the Offeror’s intention to delist the company. Link to my insight: Roxy-Pacific (ROXY SP): Pre-Conditional Offer Led By Founder

India-based data management and analytics firm eClerx Services (ECLX IN) released their public announcement document for their latest buyback after market close on 20th September 2021. The buyback was initially proposed in a board meeting on 13th August 2021 and later approved by shareholders (postal ballot) on 16th September 2021.  The buyback price has been set at INR2,850/share and eClerx expects to buy up to 1,063,157 shares through a Tender Offer. The total size of the buyback will be approximately INR3bn (~US$41mn). Link to Janaghan’s insight: EClerx Buyback: Adding Fuel to Momentum

Back in June, Sanshin Electronics (8150 JP) announced a buyback for 28.8% of the company. It came after a long buying campaign by one specific investor. Normally this would be “good news.” Those who want to get out could sell a significant portion of their holding without friction and others could look at the situation and see significant improvement to capital allocation and huge accretion. Travis’ piece was called Sanshin Electronics (8150 JP) BIG Buyback Tender – Not Designed For You . Now Nishimatsu Construction Co (1820 JP) has announced a similar transaction in that it will buy up to 15,000,000 shares for up to ¥54.447bn. That is 26.98% of shares outstanding. The share buyback transaction will be undertaken as a Tender Offer, running from 22 September to 20 October, with the buyback price ¥3,626/share, which is a small premium to the close – Yay! And once again……it is not for you. Link to Travis’ insight: Nishimatsu Construction (1820) About to Do Its Last Buyback for a While, and You Can’t Participate!

Back on the 19 July, systems integrator Empired Ltd (EPD AU) entered into a Scheme with Capgemini SE (CGEMY US) at a price of A$1.35/share, a 64.6% premium to last close, and an all-time high. The Offer had the unanimous backing of Empired’s board. CEO Russell Baskerville, with 5.8% of Empired’s outstanding shares, intended to vote in favour of the Scheme. The Scheme Booklet is now out. The Scheme Meeting will take place on the 25 October, with expected implementation on the 16 November. The Independent Expert concluded that the Scheme is fair and reasonable. This looks done. Trading tight at a 1.5%/11.3% gross/annualised spread. That’s reasonable, but this is not a super liquid arb situation. Link to my insight: Empired (EPD AU): Scheme Booklet Out. Meeting On The 25 October

STUBS

First Pacific Co (142 HK) 

I see the discount to NAV at 61%, down from ~71% last year, but off its recent low of 52%.  From a long-term view, the current discount to NAV is around levels only exceeded in the wake of Covid. The implied stub has been lower. First Pac is essentially a passive holding company, with a chunk of net debt.

  • There are clear signs of reduced losses at the parent level. Buybacks continue and provide a degree of long-term support. The current NAV discount is around pre-Covid levels. Since the interim results, the market has assigned HK$2.34bn (~US$300mn) less for First Pac’s stub ops. That appears unjustified. However in the short term, absent a major catalyst, I’d like to see the share price settle a bit here before getting involved. Longer-term, this appears a decent entry point, with a long-term average discount to NAV of 50%. Shares, however, remain thinly traded. 
  • For the trade, keep it market neutral and hedge out the three largest NAV contributors  Indofood Sukses Makmur Tbk P (INDF IJ)PLDT (TEL PM), and Metro Pacific Investments Co (MPI PM), which together account for 121%/100% of NAV/GAV.

EVENTS

Bank Rakyat Indonesia Persero (BBRI IJ) (Mkt Cap: $30.8bn; Liquidity: $34mn)

13 days ago Travis wrote Bank Rakyat Indonesia (BBRI)’s Mega Rights Issue – Plenty of Opportunity Short-Term and Long-Term suggesting that the stock could fall as it entered its rights trading period. It has. At one point on 20 September the stock was down 7% from time of writing. The time for people to buy and exercise is done, except for professional investors who can turn around their corporate action in a day or less. 

  • The markets being upset about Evergrande will not likely roil Indonesia. Indonesia will be more in the news with upcoming IPOs.  BBRI is expected to regain the earnings it lost recently, and more, and the expansion of micro-lending is expected to pave the way for years of growth as micro-lending customers eventually move up the curve. Long-term, this looks like a decent long to own.
  • And short-term, selling pressure related to the rights offering will abate temporarily after Wednesday and will abate more generally after shares are delivered, especially after the Excess Rights Shares are delivered in a week or so. Big picture, Travis’d cover shorts here. 

(link to Travis’ insight: Bank Rakyat Indonesia (BBRI) Rights-Related Selldown Basically Done)

M&A – US

Sohu.com Inc (SOHU US)  (Mkt Cap: $0.9bn; Liquidity: $11mn)

Around 9.5 months after Tencent (700 HK) and Chinese search-engine Sogou Inc (SOGO US) entered into a definitive agreement for a Going-Private Transaction, the Offer was granted unconditional approval by the State Administration for Market Regulation (SAMR) on the 12 July.  Apparently, that wasn’t the final approval as the regulators continued to overhaul and tweak China’s tech sector. On the 23 September, Sogou announced the completion of the merger and shares have been suspended. Payment will be made “as soon as practical”. So that’s done. This is a short-form merger – there was no vote. Dissension rights are now afforded for short-form mergers and I would expect some investors to take up those rights. 

  • Separately, Sohu pockets ~US$1.2bn from the merger via its 33.8% equity stake in Sogou – or net cash of ~US$1bn – versus its current market cap of US$857mn. This is before taking into account the US$579mn privatisation value of Changyou.com (CYOU US).
  • Charles Zhang is Sohu’s largest shareholder with a 26.09% equity stake. Unlike Sogou, Sohu only has one share class.  If  Zhang intends to take Sohu private, this would require a long-form merger, involving the approval by a special resolution of Sohu’s shareholders, requiring two-thirds of the voting rights of the shares present and voting in person at an EGM.
  • Also, keep in mind the Holding Foreign Companies Accountable Act, which was signed into law in December 2020, technically implies Chinese companies may be delisted as early as 2024 if they do not comply and share audits. That might seem a long way off, but the Tencent/Sogue merger took 15 months to complete.  A secondary listing on the HKEx will also take time – especially if the vast majority of US-listed Chinese companies are thinking along the same lines. 

M&A – EUROPE

Grifols SA (GRF SM) entered into a share purchase agreement to acquire a 45.48% stake in Biotest AG (BIO GR) from Tiancheng International Investment Limited for €1.1 bn on 17 September 2021. In a related transaction, Grifols will launch a voluntary tender offer to acquire the remaining ordinary and preference shares in Biotest at same terms (€43/ordinary share and €37/preference share). Both will be paid in cash and represents a premium of 23% and 4% over the closing price of 16 September for each type of share. The deal values the equity of Biotest at €1.6 bn (13% of Grifols’s market cap pre-announcement) and EV of €2 bn. Link to Jesus Rodriguez Aguilar‘s insight: Grifols/Biotest: Preference Shareholders at Disadvantage & Grifols’s Leverage.
Regulatory changes would suggest holding shares in Naturgy Energy Group SA (NTGY SM) until the end of the acceptance period is not desirable. Link to Jesus’ insight: IFM/Naturgy: Board Opinion And Bid Scenarios.
Asterion bumps its Offer for Retelit SpA (LIT IM) from €2.85/share to €3/share, and a reduction in the threshold from 66.67% to 50% of the share capital. Link to Jesus’ insight: Asterion/Retelit: Sweetened Offer Means Transaction Will Go Ahead.

Entain (ENT LN) confirmed that it had received a proposal from DraftKings Inc (DKNG US). On 22 September, the Board said that following an earlier approach at 2,500p/share (mix of DraftKings shares and cash) which was rejected, a further proposal was received on 19 September 2021. DraftKings Inc. revised the offer price to 2,800p/share (630p in cash and the balance payable in new DraftKings Class A common shares). The consideration represents a premium of 46.2% to Entain’s closing share price on 20 September 2021, 4.5x EV/NTM Sales, 19.2x EV/NTM EBITDA and 39.2x Fwd P/E (source: Capital IQ consensus). The PUSU deadline is 19 October. Link to Jesus’ insight: DraftKings/Entain: Cash and Shares Approach.

M&A RISK ARB WEEKLY ROUND-UP

  • This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks. I number 38, mostly firm, deals around the region.

INDEX REBALS

OTHER M&A & EVENT UPDATES

CCASS

My ongoing series flags large moves (~10%) in CCASS holdings over the past week or so, moves which are often outside normal market transactions.  These may be indicative of share pledges.  Or potential takeovers. Or simply help understand volume swings. 

Often these moves can easily be explained – the placement of new shares, rights issue, movements subsequent to a takeover, lock-up expiry, amongst others. For those mentioned below, I could not find an obvious reason for the CCASS move.   

Name

% chg

Into

Out of

China Lng (931 HK) 17.72%UBSHang Seng
Amuse (8545 HK)10.16%St ChartNumerous
Jinshang Bank Co Ltd (2558 HK) 16.55%SinopacCiti
Source: HKEx
The following large movement(s) concern recently listed companies, and therefore are (likely) lock-up related.

Name

% chg

Into

Out of

Helen’s International Holdings (9869 HK) 79.55%CICCOutside CCASS
Source: HKEx

I listen to a bunch of music when writing insights. Here are a handful of tunes, old & new, that piqued my interest during the week: Chambers Brothers’ Uptown, Brendan Benson’s House In Virginia, Little Simz’ Point & Kill, Portico Quartet’s Terrain: II.

What are you listening to? 

Enjoy your Sunday!


Before it’s here, it’s on Smartkarma

Singapore: Sembcorp Marine and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Sembcorp Marine MGO – The Implied Option Tells You About the Market, And It’s The Wrong Price.

Sembcorp Marine MGO – The Implied Option Tells You About the Market, And It’s The Wrong Price.

By Travis Lundy

As expected, on 22 September 2021, Temasek announced its Mandatory General Offer for shares of Sembcorp Marine (SMM SP)

As suggested in Sembcorp Marine Rights Done – The MGO Option It Is, Temasek ended up at 46.6% which triggers an offer to remain in compliance with Rule 14.1 of the Takeover Code.  

For each Offer Share: S$0.08 in cash (the “Offer Price”).  The Offer Price is final and the Offeror will not revise the Offer Price or any other terms of the MGO.

There are conditions of which one must take note.

Pursuant to Rule 14.2 of the Code, if the Offeror Concert Party Group does not hold more than 50% of the issued Shares when the MGO is made, the MGO is required to be made conditional upon the Offeror Concert Party Group receiving such number of acceptances which would result in the Offeror Concert Party Group holding more than 50% of the voting rights attributable to the share capital of the Company.

IF the Offer garners shares which would take it above 50%, then it would become Unconditional. Until then, the offer is not unconditional, or complete, if it does not get to 50%. 

Importantly, the Offer will last 28 days and “if the MGO becomes unconditional as to acceptances before the Closing Date or even if the MGO becomes unconditional as to acceptances on the Closing Date itself, there will not be any extension of the Closing Date and Shareholders who do not accept the MGO by the Closing Date will not be able to do so after the Closing Date.

No extension. At all. 

The proposal I made on the 19th when the shares were S$0.084 the previous close was that the stock would probably fall once shares were delivered, but that once fallen, the shares would have much better upside vs downside skew if they reached S$0.079-0.081. The shares actually popped on delivery, but a day later we still closed S$0.081. 

This situation leaves us with an interesting profile. 

More details below. 


Before it’s here, it’s on Smartkarma

Singapore: Sembcorp Marine and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Sembcorp Marine Rights Done – The MGO Option It Is

Sembcorp Marine Rights Done – The MGO Option It Is

By Travis Lundy

The Sembcorp Marine (SMM SP) Rights Offering is complete, and allocations are out as of Friday night.  and it turns out, the MGO Option as discussed in One More Day To Trade Sembcorp Marine Rights, Harvest the Spread, or Buy The MGO Optionas rights trading was coming to a close, was the right way to think about it. 

Only 84.2% of the Offering was covered by shareholders exercising their rights. Temasek took 42.6%, which means that only 72% of the other shareholders took up their rights. That meant that based on the Offering Circular and the Temasek Undertakings therein, Temasek was going to end up increasing its stake by more than 1%, thereby triggering an MGO Option (it required 98.33% minority takeup to avoid going over the MGO trigger).

As I described it, there was still potential risk of MGO non-completion, and the results of the Rights Issue seems to suggest there is still potential risk of MGO non-completion.

More below the fold.


Before it’s here, it’s on Smartkarma

Singapore: City Developments and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Smartkarma Webinar | Incorporating Forensic Accounting into Investing

Smartkarma Webinar | Incorporating Forensic Accounting into Investing

By Smartkarma Research

For our next Webinar, we are excited to welcome Insight Provider Jason Yap, CFA who will share his insights on Forensic Accounting and how to apply it to the investment process. He will go over how to bridge existing knowledge gaps of traditional fundamental analysis, with the ultimate aim of maximising portfolio returns. 

The webinar will be hosted on Wednesday, 22 September 2021, 17:00 SGT/HKT.

Jason Yap is an independent Forensic Analyst with 11 years of experience. He was previously a Senior Forensic Analyst at a Singapore- and Shanghai-based fund with approximately US$2.5 billion in AUM, with an investment focus on China A/H shares and ADRs. Prior to that, he worked at leading Asia-based restructuring and forensic accounting firms, Borrelli Walsh Limited and nTan Corporate Advisory Pte Ltd.


Before it’s here, it’s on Smartkarma

Singapore: Grab, TDCX, China Sunsine Chemical Holdings Ltd and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Grab – Greater Mobility Toward Profitability
  • TDCX IPO: Not a Typical Unprofitable Tech Services Company
  • China Sunsine Chemicals (CSSC SP): Strong fundamentals to buffer upcoming price tailwinds

Grab – Greater Mobility Toward Profitability

By Angus Mackintosh

Grab just announced a strong set of 2Q2021 results in its results call this week, with GMV (Gross Merchandise Value) increasing by +62% YoY to a record high of US$3.9bn, whilst adjusted net sales reached a new quarterly high of US$550m, an increase of +92% YoY.

The company’s revenue increased by +132% to US$180m, with adjusted EBITDA for 2Q2021 was (US$214m), down by US$8m YoY. 

Grab booked a net loss of (US$815m) versus (US$718m) in 2Q2020 loss but of this number US$608m related to non-cash items related to interest accrued on the company convertible redeemable preference shares, stock-based compensation, depreciation, and amortisation. 

Looking at a number of measures of profitability as % of GMV, Grab is moving in the right direction towards making a profit.

The company’s delivery business continued to be a strong performer, with +68% YoY growth in adjusted net sales, whilst mobility was impacted by various lockdowns in the South-East Asia region but still performed very well versus last year. Take rates have improved for both deliveries and mobility segments.

Grab saw GMV per transacting user increase by +27% YoY in 2Q2021, with GrabFood’s merchant base nearly doubling, and merchants using GrabPay nearly increasing three times. 

Grab also highlighted the strong performance of GrabMart and its PayLater businesses in Singapore and Malaysia. It has also launched GrabSupermarket in three markets, which has seen a strong reception, according to management.

The company’s financial services segment achieved another record quarter in terms of total payments, with a total payment volume of US$2.9bn in 2Q2021, a +66% increase from last year, although revenues remain quite small.

Grab announced a strategic alliance with Emtek (EMTK IJ) in July, which has interests spanning technology. telecoms, media, and healthcare.  This gives grab access to e-commerce and SMEs through Bukalapak (BUKA IJ)

The company highlighted that it sees encouraging trends for the rest of the year, as vaccination rates pick up but also flagged a note of caution given recent movement restrictions in South-East Asia, especially in Vietnam where even food deliveries are restricted currently.

Grab remains optimistic about the prospects for recovery as the region recovers over the next year, and it should benefit from this given its strong regional footprint but its competitors have been building war chests for their own expansion, which points towards rising competitive pressures

The company expects its merger with Altimeter Growth and listing to go ahead in 4Q2021 and has just filed its F4 prospectus today with the SEC in the US. 


TDCX IPO: Not a Typical Unprofitable Tech Services Company

By Shifara Samsudeen, ACMA, CGMA

TDCX (TDCX US) TDCX provides digital customer experience solutions for innovative technology and other blue-chip companies. The company’s solutions include omnichannel CX solutions, sales and digital marketing services, content monitoring and moderation services to a global client base that includes Facebook and Airbnb.

The company has filed for an IPO to list its shares in the US and plans to raise proceeds of about US$400m. The company plans to use about US$180m of the net IPO proceeds for repaying its debt (obtained under the Credit Suisse Facility) while the remainder will be used for business expansion including into new markets.

In this insight, we examine the company’s business model, segments, revenues, margins and the outlook on the company.


China Sunsine Chemicals (CSSC SP): Strong fundamentals to buffer upcoming price tailwinds

By KGI Securities

  • Sunsine’s improving profit margins were in line with the buoyant rubber chemicals sector.
  • Average selling price (ASP) could fall in 2H21 as macro conditions will not be as favourable as in 1H21. 
  • Capacity ramp-up in insoluble sulphur and anti-oxidant with a respective 30,000 tonnes each will offset the selling price correction.
  • We maintain OUTPERFORM with an unchanged TP of $0.68 as we expect the increase in sales volume in FY22 and FY23 to offset the downswing in ASPs.
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Before it’s here, it’s on Smartkarma

Singapore: Singapore Press Holdings and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Keppel Corp / SPH: One Step Closer to Privatisation

Keppel Corp / SPH: One Step Closer to Privatisation

By Brian Freitas

On 30 March, Singapore Press Holdings (SPH SP) announced that it was undergoing a strategic review to consider options for its various businesses. On 6 May, the company announced that it would be transferring its media business to a not-for-profit entity.

Then, on 2 August, Keppel Corp (KEP SP) announced that it was proposing to acquire Singapore Press Holdings (SPH SP) ex the media business and then delist and privatise SPH. Under the terms of the Scheme, for each share of Singapore Press Holdings (SPH SP) held, shareholders will receive cash of S$0.668, 0.596 units of Keppel REIT (KREIT SP) and 0.782 units of SPH REIT (SPHREIT SP).

The offer valued Singapore Press Holdings (SPH SP) at S$2.0987/share (a 11.63% premium to the close of S$1.88/share for SPH) using the closing prices for Keppel REIT (KREIT SP) and SPH REIT (SPHREIT SP). Since then, the offer value has dropped to S$2.0507/share while Singapore Press Holdings (SPH SP) has moved higher to S$1.94/share.

On 10 September, Singapore Press Holdings (SPH SP) shareholders voted in favour of the spin-off of the media business. This paves the way for the next EGM and Scheme Meeting where Singapore Press Holdings (SPH SP) shareholders will vote on the proposed privatisation by Keppel Corp (KEP SP).

Singapore Press Holdings (SPH SP) still trades at a 5.4% discount to the offer value and is lower from the 3.1% discount at the close on 31 August. With around 3 months to go before the privatisation is complete (if voted through), there is good value is arbitraging the spread.


Before it’s here, it’s on Smartkarma

Singapore: Singapore Press Holdings, City Developments, Sea Ltd and more

By | Daily Briefs, Singapore

In today’s briefing:

  • SPH Shareholders Approve Spinoff – There’s Still a Spread To Earn
  • City Developments – Clinical Exit from Sincere Property Investment
  • ECM Weekly (12th September 2021) – Sea, Simplex, PHC Holdings, Kakaopay, Novotech, Airdoc, K Car

SPH Shareholders Approve Spinoff – There’s Still a Spread To Earn

By Travis Lundy

On Friday 9 September, Singapore Press Holdings (SPH SP) shareholders voted to approve the Media Business Spinoff and the Proposed Restructuring which will allow SPH to spin off the various media assets and some supporting assets it has heretofore controlled into a new non-profit Company Limited by Guarantee.

The idea is that the “lifting” of the restrictions of the Newspaper Printing and Presses Act (“NPPA”) would then provide SPH “with greater financial flexibility to tailor its capital and shareholding structure to unlock and maximise value for all shareholders.”

As discussed first in Singapore Press Own Time Own Target Restructuring Lor… (Come I Clap For You), the upside did not seem huge. A few months later SPH decided that the rest of the business would be taken over by Keppel Corp (KEP SP) in return for a basket of cash, units of SPH REIT (SPHREIT SP) and units in Keppel REIT (KREIT SP). This was discussed in Alamak! SPH Restructuring Restructured as Keppel Bo Jios SPH Holders, and at that, the upside did not seem huge. The price jumped from a div-adjusted S$1.88/share before the Keppel news to S$1.92/unit to close some of the gap. The remaining spread is now quite small at a bit less than 10cts on a forward div-adjusted basis, or about 5%.

From the day before the Keppel announcement until now, the value of the non-cash portion of the Consideration (i.e. the 0.596 units of KREIT and the 0.782 units of SPH REIT) have fallen 2.55% in value while the value of an equal weighted Peer Basket of REITs has fallen 2.45%. That tells you that despite the first-day drop in the value of SPH REIT and Keppel REIT resulting from market participants’ expectation that hedging pressure on those two REITs would cause them to underperform the market, the underperformance has been minimal. I expect the high cost of borrow and relative illiquidity of S-REITs has limited the appeal of the arb to arbitrageurs.

Now we wait for the EGM to approve the distribution of SPH REIT units and the Scheme Meeting to dispose of the SPH business in return for KREIT units and cash. That should happen in the October/November timeframe.

In the meantime, we check progress of the arb, and what the value of the Consideration is compared to a comparable Peer Basket.


City Developments – Clinical Exit from Sincere Property Investment

By Jason Yap, CFA

On 10 September 2021, City Developments (CIT SP) announced plans to exit Sincere Property (“SP”) through a series of transactions including, amongst others, divesting its remaining stake in Sincere Property, exiting director and officer appointments, and continuing to protect its creditor rights under the mainland entity’s possible PRC bankruptcy proceedings. 

In CDL – Remedies for a Beleaguered Chinese Investment and Belligerent JV Partner, we discussed CDL’s investment in SP and potential remedies that may be considered.  In its subsequent H1 2021 earnings release, CDL disclosed that financial exposure to SP stood at SGD117 million. The latest set of moves mark a clinical and decisive exit from the SP debacle. This article discusses the key terms of transactions and the outlook ahead.


ECM Weekly (12th September 2021) – Sea, Simplex, PHC Holdings, Kakaopay, Novotech, Airdoc, K Car

By Zhen Zhou, Toh

Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs.

Events next week:

We kicked off the publication of tearsheets to keep investors apprised of the basic information of new IPO filings. The effort will be led by our new analyst, Clarence Chu , who joined us this month. Feel free to drop us a message if there are any things that you would like to be included in the tearsheet.

MREIT and Simplex launched their IPOs this week. The former raised US$272m at the bottom end of its IPO price range after books closed on Thursday while the latter’s shareholders will be selling US$304m worth of shares. Simplex’s books closed on Friday and it was simply reported that books were covered. MREIT and Simplex will debut on 30th and 22nd September, respectively.

Similarly, K Car will open books on Friday and look to debut on 13th October. We covered peer comparison and valuation in this week’s note.

On the other hand, Kakaopay’s IPO hit a bump when FSC and FSS put out a press release stating that online financial platforms, namely Naver Pay and Kakao Pay, aren’t acting as simple advertising agencies and have violated regulations. We discussed the likely impact on the company and our expectations heading into bookbuild which was stipulated to open on 23rd September.

In Japan, Phc Holdings (6523 JP) is looking to raise about US$1.6bn from selling a mix of primary and secondary shares. The company is backed by KKR, Mistui, Life Science Institute, and Panasonic.

Back in Hong Kong, Helen’s closed 23% above its IPO price on debut, exceeding our expectations. We also revisited Novotech’s IPO as the company will likely launch its books soon, following its approval from HKEX.

We initiated on Beijing Airdoc, an AI-based medical device company with a focus on AI-empowered retina-based early detection, diagnosis and health risk assessment solutions. The company was earlier reported to be seeking approval this month. 

Last, but not least, it was a fairly active week in the placement space. Sea Ltd tested limits with its jumbo US$6bn equity combo. The deal was priced at a decent 7.3% discount from undisturbed price and it was reported to have drawn strong demand from investors. 

Accuracy Rate:

Our overall accuracy rate is 74% for IPOs and 67.8% for Placements 

(Performance measurement criteria is explained at the end of the note)

New IPO filings this week

  • TDCX Inc. (US, US$400m)
  • Healthium Medtech (India, US$491m)
  • Tamilnad Mercantile Bank (India, US$137m) 

News on Upcoming IPOs

Hong Kong/China

US/China ADRs

India

Japan/Korea

Others

Analysis on Upcoming IPOs

NameInsight
Hong Kong
APM Monaco

APM Monaco Pre-IPO – China’s Resilience Shines 

Airdoc

Beijing Airdoc (北京鹰瞳科技) Pre-IPO – A Niche Field with Merits but Can It Sell? 

Anjuke

Anjuke Pre-IPO – Mixed (Positive and Negative) Developments 

Ambio

AmbioPharm (昂博制药) Pre-IPO: Peptide CDMO Leader Turning Licensor 

Biel Crystal

Biel Crystal (伯恩光学) Pre-IPO – Cash Flow Generative Business but Underlying Trend Is Worrying 

Broncus

Broncus (堃博医疗) Pre-IPO: Big Potential to Be Tested 

ByteDance

ByteDance (字节跳动) IPO: How Jinri Toutiao Paves The Way for a Bigger Empire (Part 1)

ByteDance

ByteDance (字节跳动) Pre-IPO: Why Facebook Should Worry About TikTok 

ByteDance

ByteDance (字节跳动) IPO: Tiktok the No.1 Short Video App for a Good Reason (Part 2)

ByteDance

ByteDance (字节跳动) Pre-IPO: How Has It Done in 1H? 

ByteDance

ByteDance: The Unlisted Company’s Video Apps Leading the Market and Threatening Internet Giants 

ByteDance

ByteDance (字节跳动) Pre-IPO: Why Facebook Should Worry About TikTok 

ByteDance

ByteDance (字节跳动) Pre-IPO – Globally the Most Downloaded App for Jan 2020 Driven by India 

ByteDance

ByteDance (字节跳动) Pre-IPO: Global Ambition Meets Regulatory Challenges 

Cloud Village

Cloud Village (NetEase Music) Pre-IPO – Mixed PHIP Update, Updated Thoughts on Valuation 

Cloud Village

Cloud Village (NetEase Music) Pre-IPO – Initial Thoughts on Valuation 

Cloud Village

Cloud Village (NetEase Music) Pre-IPO – Tencent Music Peer Comp, Regulatory Impact 

Cloud Village

Cloud Village (NetEase Music) Pre-IPO – Was in the Slow Stream, Playing Catch-Up 

Edda 

EDDA Healthcare Pre-IPO – RoboDoc – Has Been Around for a While but Is Just Getting the Robo Going 

Dingdang

Dingdang Health Tech (叮当健康) Pre-IPO – Impressive Growth but Not Without Concerns 

Intco Med

Intco Medical (英科医疗) A+H: From China No.1 to Global No. 1 

Imeik

Imeik Tech (爱美客) A/H Pre-IPO – Dermal Filler Leader Capitalizing on Its Valuation 

Jenscare

Jenscare (宁波健世科技) Pre-IPO: Differentiated Heart Valve Portfolio 

MicroPort Medbot

MicroPort MedBot Pre-IPO – RoboDoc – Pre-Revenue, Has a Large Competitor but a Large Market as Well 

NewMed

NewMed (纽脉医疗) Pre-IPO: Uphill Battle for TAVR but Leads the TMVR 

Neusoft Xikang

Neusoft Xikang (东软熙康) Pre-IPO: A Long Way to Profit 

Neusoft Med

Neusoft Medical Systems (东软医疗系统) Pre-IPO: Unattractive Fundamentals 

Novotech

Novotech Pre-IPO: Biotech Focused CRO at Hefty Pre-IPO Valuation 

WeDoctor WeDoctor (微医) Pre-IPO -App Walk Through – The Online Medical Directory and More 
WeDoctor WeDoctor (微医) Pre-IPO – A More Focused Online Medical Svc Provider than Ping An Good Doctor 
WeDoctor We Doctor (微医) Pre-IPO – Peer Comparison – Picking Its Battles Wisely 
WeDoctor We Doctor (微医) Pre-IPO – Forecasts, Early Thoughts on Valuation, and Acquisition Gripes 
Weilong Weilong Delicious Global Pre-IPO – The Positives – Fast Growth, Strong Backers 
Weilong Weilong Delicious Global Pre-IPO – The Negatives – Spicy Valuation 
WM Tech WM Tech Pre-IPO – Peer Comparison and Pre-IPO Valuation – Some Signs of Advantage 
WM Tech WM Tech Pre-IPO – Digitalization Efforts Coming Through but Not Well Substantiated 
India
Aadhar Housing Aadhar Housing Finance Pre-IPO – Decent past Growth but Comes with Weird Disclosures 
Aditya AMC Aditya Birla Sun Life AMC Pre-IPO – Strong Profit Growth but It’s Losing Market Share 
Anmol IndAnmol Industries Pre-IPO Quick Take – No Growth, Generous Payments to Founders
Bharat Hotel

Bharat Hotels Pre-IPO – Catching up with Peers 

Bajaj En

Bajaj Energy Pre-IPO – Supposed to Deliver Steady Performance if Only Its Sole Client Would Let It 

Crystal CropCrystal Crop Protection Pre-IPO – DRHP Raises More Questions than in Answers
ESAF SFB ESAF Small Finance Bank Pre-IPO – Growing Fast but Remains Highly Dependant on a Related Party 
Flemingo Flemingo Travel Retail Pre-IPO – Its a Different Business in Every Country
Emami Cem Emami Cement Pre-IPO – Still in Ramp Up Phase but Shares Pledge Might Lead to an Early IPO 
NSENSE IPO Preview- Not Only Fast..its Risky and Expensive
NSENational Stock Exchange Pre-IPO Review – Bigger, Better, Stronger but a Little Too Fast for Some

LIC

Life Insurance Corporation of India Pre-IPO – Early Take on India’s Largest IPO 
Penna Cem Penna Cement – Aggressive Expansion Plans Even Though Past Performance Has Been Tepid 
PNB MetPNB Metlife Pre-IPO Quick Take – Doesn’t Stack up Well Versus Its Larger Peers
Malaysia
QSRQSR Brands Pre-IPO – As Healthy as Fast Food
Philippines
MREIT MREIT Pre-IPO – Mediocre Performance, Convoluted Lease, Low Asset Yield 

Before it’s here, it’s on Smartkarma

Singapore: Sea Ltd, TDCX and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Sea Ltd (SE US) – The Runway Just Got Longer
  • SEA Ltd Placement -Momentum Is Very Strong but Last Deal Didn’t Do Well and It Doesn’t Need the Cash
  • Sea Ltd Follow-On Offering: Asking Permission From Investors to Burn $4.0bn Per Year
  • TDCX IPO Initiation: Good Service

Sea Ltd (SE US) – The Runway Just Got Longer

By Angus Mackintosh

Sea Ltd (SE US), South-East Asia’s largest market cap company, has announced that it aims to raise US$6.3bn in the largest equity offering of 2021. The deal will allow the company to accelerate its global expansion and give the company the financial firepower for potential acquisitions.

The company will offer 11m shares or a stake worth about US$3.8bn at the close on 8th September plus it intends to issue US$2.5bn in equity-linked debt to bring the total funds raised to circa US$6.8bn. 

Apart from continuing to grow its business in South-East Asia, the company is now expanding its e-commerce presence in South America, with a focus on Brazil, Mexico, Chile, and Colombia. 

According to local press reports, Shopee may also look to enter Eastern Europe, with Poland as its first target market.  Shopee has also launched a recruitment campaign for vendors to sell on what it called “Shopee India” and is ramping up hiring in the country. It has also been looking for office space in the country.

Sea Ltd (SE US) continues to grow its ShopeeFood business both in Indonesia and Vietnam and has seen a very strong performance and positive reception from users as well as driver communities in both markets. There has also been some talk of the company expanding food delivery into Malaysia, as it has already been advertising for drivers.

Assuming the completion of this fundraising goes smoothly Sea Ltd (SE US) will have a war chest of around US$13bn at its disposal to finance its ongoing expansion, though it is not yet clear what it needs this money for.

This may be seen as opportunistic fundraising in some camps but given its aspiration to expand globally into other emerging markets plus growing its digital finance and food delivery arms quite aggressively, this will certainly give the company the financial firepower to do so. 

We continue to take a positive view on Sea Ltd (SE US) which currently trades on 16x FY21E EV/Sales, 10.4x FY22E EV/Sales, and 7.8x FY23E EV/Sales, justified by sales growth of +105% YoY in FY2021, +47% YoY in FY22E, and +32.8% YoY growth in FY2023. 


SEA Ltd Placement -Momentum Is Very Strong but Last Deal Didn’t Do Well and It Doesn’t Need the Cash

By Sumeet Singh

Sea Ltd (SE US) plans to raise around US$3.5bn via an equity offering, along with another US$2.5bn via a convertible offering. The company last raised US$2.5bn in Dec 2020, which we covered in SEA Ltd Placement – New Business Needs New Money.

While the stock’s momentum and earnings growth is very strong, the last deal didn’t do particularly well in the near term.

In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Links to our prior SEA coverage:


Sea Ltd Follow-On Offering: Asking Permission From Investors to Burn $4.0bn Per Year

By Oshadhi Kumarasiri

  • Singapore-based Internet company Sea Ltd (SE US), announced today that the company would offer 11.0m new ADSs (1.65m overallotment option) and convertible notes for a principal sum of $2.5bn ($375.0m overallotment option) via an underwritten public offering in New York.
  • Sea’s unprofitable businesses are growing at breakneck speeds. This puts immense pressure on the Gaming business to generate sufficient cash flows to facilitate the geographic expansion of Shopee and fintech growth in South East Asia.
  • Even though the Gaming business cash flows were somewhat enough to support Shopee’s growth in South East Asia, it is insufficient to maintain Sea’s unprofitable business growth in multiple businesses and multiple geographies.
  • This is Sea’s second follow-on equity offering in just 10 months and we think this is unlikely to be the last of such offers.

TDCX IPO Initiation: Good Service

By Arun George

TDCX (TDCX US), which is headquartered in Singapore, is a digital customer experience (CX) solutions provider for innovative technology and other blue-chip companies. TDCX has filed for an NYSE IPO to raise proceeds of $400 million, according to press reports. The IPO proceeds will be used to repay US$188.0 million of the Credit Suisse facility (related to the acquisition of the founder’s interests in TDCX KY) and to expand into new markets.

The business Support Services (BSS) industry has moved from a focus on cost arbitrage solutions to driving business outcomes and creating value for customers. There remains a significant portion of higher value-added workstreams that remain reliant on human expertise as businesses continue to deal with customers who request more engaging experiences. CX services, which is a subset of the BSS industry, is forecasted to grow 6.6% CAGR from 2021 to 2025 to reach US$100.4 billion in 2025, according to Frost & Sullivan. 

In a competitive market, TDCX’s differentiated value-added services are reflected in market share gains, high growth and sector-leading margin. The key risk is the high dependence on two customers, Facebook Inc A (FB US) and Airbnb Inc (ABNB US). This customer risk is partly mitigated by long-standing relationships. Overall, we believe that TDCX’s fundamentals are attractive.


Before it’s here, it’s on Smartkarma

Singapore: Sembcorp Marine, Jardine Cycle & Carriage, Manulife US REIT (MUST) and more

By | Daily Briefs, Singapore

In today’s briefing:

  • One More Day To Trade Sembcorp Marine Rights, Harvest the Spread, or Buy The MGO Option
  • StubWorld: JCNC Is A Set-Up Here
  • Manulife US REIT (MUST SP)

One More Day To Trade Sembcorp Marine Rights, Harvest the Spread, or Buy The MGO Option

By Travis Lundy

The Rights of Sembcorp Marine (SMM SP) started trading on 31 August, trading rich the first day, as expected, then falling. After closing at half a cent on the first day of trading, they are now trading at 0.001-0.002 despite Sembcorp Marine shares trading at 8.5-8.6 cts. 

If there were borrow on SMM left, it would be a great arb.

As it is, every long-only holder who is UP money in their portfolio should, if they can, sell the SMM shares and replace with SMM Rights. It will give them a 5% spread on their SMM shares. 

They have the rest of today and tomorrow to trade. 

There is also an “MGO Option.” And this bit is interesting.


StubWorld: JCNC Is A Set-Up Here

By David Blennerhassett

This week in StubWorld …

Jardine Cycle & Carriage (JCNC SP), relative to Astra International (ASII IJ), is around record-lows outside the Covid-affect low last year. This is occurring amid recent corporate developments within the Jardine stable of companies.

Preceding my comments on JCNC 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%.


Manulife US REIT (MUST SP)

By KGI Securities

  • Upgrade to Outperform. US office properties are likely to see improving demand as more employees return, even if it is on a part time basis. Improving fundamentals may finally lift investor confidence in the sector.
  • MUST provides an excellent proxy to ride on the “return to office” theme in the US, while offering an attractive 7.4% forward dividend yield.
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Before it’s here, it’s on Smartkarma

Singapore: Singtel and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Last Week in Event SPACE: SingTel, Bharti Airtel, Kerry Logistics, Milton, Jardine Matheson

Last Week in Event SPACE: SingTel, Bharti Airtel, Kerry Logistics, Milton, Jardine Matheson

By David Blennerhassett

Last Week in Event SPACE …

  • Singtel (ST SP)‘s implied stub, net of all listcos, is currently around the lowest level outside of the GFC. 
  • Bharti Airtel (BHARTI IN)‘s Rights Entitlements are funkier than people think. And while they are going to be a tiny portion of one’s portfolio, at receipt, there are some really cool aspects.
  • If assuming the Irrevocable Agreement signors intend to tender only what they put in their Irrevocable Agreement, then owning Kerry Logistics Network (636 HK) around $24.00 looks the right place. Share are currently trading comfortably through that level. 
  • Milton Corp Ltd (MLT AU) is now a straightforward short-dated scrip merger arb trade PLUS an index inclusion trade with high impact.
  • Jardine Matheson Holdings (JM SP) still looks rather rich compared to history and other conglomerates. Plus the buybacks have gone and long onlies have had 4 months to reinvest Jardine Strategic Holdings (JS SP) proceeds into JM.
  • Plus, other events, CCASS movements (flagging possible Offers and  IPO lock-ups), and Mood Spins.

(This insight covers specific insights & comments involving Stubs, Pairs, Arbitrage, share Classifications, and Events – or SPACE – in the past week)

M&A – ASIA

Kerry Logistics Network (636 HK)  (Mkt Cap: $6.0bn; Liquidity: $8mn)

KLN announced on the 24 August a delay in the record date for the Special Dividend. With the Partial expected to close on the 2 September, questions have been asked whether those shareholders who have already tendered – or those investors who tender before the 2 September – whether they are still eligible for the special dividend? My call with KLN was such that the Partial may be declared unconditional on the first close – the 2 Sept – which means the Partial is required to be open for at least another 14 days, or through to the 16 September, which would then encompass the special dividend’s 15 September record date.

  • But it is actually simpler than this. In the circular (page 7) it says: “means the date immediately prior to the Final Closing Date, being the record date for determining Shareholders’ entitlement to the Special Dividend“. So the Special Dividend record date has to be 1 day prior to the Final Closing Date.

  •  This is a partial offer, not a voluntary/mandatory general Offer. This means, even if unconditional, shareholders who tender, sell all rights and benefits attaching to them as at or after the Final Closing Date. “Whether or not a Shareholder tenders any Share for the acceptance of the Partial Offer, conditional on completion of the Warehouses Sale (which is conditional upon, amongst other conditions, the Partial Offer becoming or being declared unconditional in all respects), every Shareholder as at the Record Date will receive the Special Dividend.”

  • At HK$24.10 – at the time of my insight – assuming the Controlling Shareholders and Executive Directors, etc tender only the Irrevocable Quantities, and assuming the back end trades at Undisturbed of HK$16.92 less the Special Dividend of HK$7.28, the fair value back end is HK$9.64, and the Implied Public Shareholder Participation Rate is 100%.  If using PER at the undisturbed price, the six-month prior average, and the price at which the warehouses were sold, then you’re looking at HK$23.80, HK$23.85, and HK$23.65 as an entry-level – assuming 100% participation. The key risk here is that the Irrevocable Agreement signors will tender more.
  • And as anticipated, Kerry Logistics Network (636 HK)‘s partial was declared unconditional on the First Closing Date. The Offer will now remain open until the 16 September – and cannot be extended further. The record date for the special dividend is the 15 September, and 13th Sept for the interim. You’ll get both if you buy today, and then tender – or not tender. Doesn’t look terribly attractive at these levels though. 

(link to my insight: Kerry Logistics (636 HK): Technicalities As Partial Draws To An End)

Milton Corp Ltd (MLT AU)  (Mkt Cap: $3.4bn; Liquidity: $5mn)

On 2 September at 7pm Australia time, the Marvelous Milton Merger Arb ratio was fixed, and just now it was announced.  The ratio of Milton shares to Washington H. Soul Pattinson and Co. Ltd (SOL AU) shares has been decided at 0.1863. Entitlements will be rounded up or down to the nearest share. This is now a straightforward short-dated scrip merger arb trade PLUS an index inclusion trade with high impact.  The risk arb spread is MLT to WHSP where the current price of MLT also includes a special dividend with franking credits. The ratio is 1 share of MLT gets you A$0.37 shares of special divs (plus franking credits) and 0.1863 shares of WHSP.  The index inclusion is one where Travis expects passive trackers in MSCI, FTSE, and S&P/ASX 200 index family funds will have to buy A LOT of shares of  WHSP. 

  • It is not clear when all the index trades will occur. There are rules, and there are overrides. Travis goes into considerable detail in his piece out Friday.

(link to Travis’ insight: Marvelous Milton Merger Mapping Mabbled: Ratio Done, Now For The Hard Part)

China Logistics Property Holdings (1589 HK)  (Mkt Cap: $1.8bn; Liquidity: $7mn)

CLPH has announced its chairman, Li Shifa, has entered into an S&P with JD.com Inc. (9618 HK), to sell his 26.38% stake in CLPH at a price of $4.35/share.  Provided conditions to the S&P are fulfilled, and with JD.com currently holding 10.64%, it would be obligated to make a Mandatory General Offer (MGO) – also at HK$4.35/share. The key S&P condition is approval from China’s AML (Anti-Monopoly Law) Authority, which should not be an issue. The key condition to the MGO becoming unconditional is JD.com holding 50% of the voting rights in CLPH. RRJ Capital, Joy Orient, and Dajia Baoxian have given irrevocables to tender in their 21.94%, 3.3%, and 4.14% respective stakes. This all looks pretty clean.

  • JD.com had the patience, played the long game, which essentially backed CLPH into a corner.
  • But the price is widely viewed as a disappointment, given where it traded back in December last year when a change of control was first floated. This may trade wide at the onset given investors expected a higher price, and may be disinclined to hold all the way to close. But I think this should trade relatively tight to terms. The Offer price will not be increased. And as one reader put it, they’re just happy to get this slow-burning deal off their books.

(link to my insight: China Logistics (1589 HK): JD.com’s Offer Comes Up Short)

Fubon Financial Holding Co (2881 TT) announced many months ago when it took over Jih Sun Financial (5820 TT) that it would do an equity raise to do so. Janaghan Jeyakumar discussed this rights issue in Fubon Financial Holding Co (2881 TT): Rights Issue a week ago.  Pricing was expected to be confirmed in the days ahead, and it has been confirmed. The 548,000,000 common shares will be issued at NT$58.9/share each.  The 333,330,000 C Class Preferred Shares (non-cumulative dividend) will be issued at NT$60/share each. The dividend rate was set at 3.0% (7yr IRS + a fixed spread (7yr IRS 0.6538% + 2.3462% spread)).  By all means exercise the Common Share Rights you are allocated.  The Pref Shares are probably a toss-up. If you do not exercise them in order to sell, you aren’t losing much at all. Link to Travis Lundy‘s insight: Fubon Financial Rights – Common Share Rights Should Be Exercised, Pref Rights Are Worth Near Zero.

China Youzan (8083 HK) announced Youzan Tech has re-filed its application for the listing of shares, which will now be done by way of an offering of new shares, not a listing by introduction. Both the scrip ratio and cash portion remain unchanged under China Youzan’s delisting transaction, by way of Scheme. The estimated value per Youzan Tech shares by an independent valuer is now RMB21.76 (~HK$26.20/share), down 39% from the previous indicative price.  Therefore the proposed consideration for China Youan shareholders is HK$1.4654/share, a 100.7% premium to last close, but a 55.7% discount to last close ahead of the initial announcement in February this year. I would avoid this stock. It is extremely volatile. Plus there are various moving parts leading to the calculation of what is considered “fair”.  Plus there is a question mark over timing, and whether the listing gets Exchange approval.  I do, however, expect the Scheme to get up. Link to my insight: China Youzan (8083 HK): Once Bitten …. .

Small-cap logistics JREIT CRE Logistics REIT (3487 JP) (“CRE”) has launched another follow-on equity offering.  This time, the total offer quantity will be 64,550 units and that means the total offer size would be around ¥13bn (~US$120mn) which is slightly larger than last time (~US$106mn) but still quite small in comparison to some of the other recent JREIT offerings. However, historically such follow-on equity offerings have acted as catalysts for strong secondary market performance in the weeks following the Pricing Date and in his insight CRE Logistics (3487 JP): Can They Do Better Than Last Time?, Janaghan took a look at whether CRE has the potential to perform as well as it did last time. 

Travis took a look at the Showa Denko K.K. (4004 JP) offering. He notes the history to peers, the offering size itself, the Real World Float of Showa Denko and concludes that one could be bullish or bearish depending on one’s horizon. More on his thoughts out this weekend at Showa Denko (4004 JP) Offering – Supply, Passive Demand, and Opportunity

Specialty prescription drug manufacturer Lansen Pharmaceutical Holdings Co, Ltd. (503 HK) has been a terrific little earner since December last year. Lansen has made significant gains from the sale of its stake in Zhejiang Starry Pharmaceut-A (603520 CH). Cash on hand was US$103mn (~HK$800mn) as at 1H21, with a net cash position of US$73.88mn.  Chairman Wu Zhen Tao acquired 66.44mn shares (16.873%) at an average price of HK$1.84/share, outlaying HK$122.5mn. The highest price paid was ~HK$2.197/share.  Buybacks were 11.01mn shares (2.772% of shares out) at an average price of HK$2.71/share, outlaying ~HK$30mn. The highest price paid was probably ~HK$2.85/share.  Lansen is not a large, nor liquid company. But it was a potential privatisation play. Concurrent with its interim results, Lansen announced a special dividend of HK$1.55/share. The record date is the 16 September, with payment on the 28 September.   Shares gained 33% on the news to close at HK$2.97. This is your cue to exit. Link to my insight: Lansen Pharm (503 HK): Here Is Your Exit.

STUBS

Singtel (ST SP) (Mkt Cap: $29bn; Liquidity: $44mn)

SingTel’s 1Q22 (March-June 2021) return to the black, versus last year’s loss, illustrates an improving business environment. EBITDA at the parent level – the unlisted ops – returned a 11% gain yoy.  Amid improving earnings, the market is assigning S$6.3bn less for the unlisted ops since the beginning of the year. 

  • Stripping out its listco holdings, I see the implied stub, trading at <1x forward EV/EBITDA – if extrapolating out 1Q22 number for theFY22E.  Plus you have potential monetisation of non-core assets together with other infrastructure assets up for sale. 
  • The pushback I hear is that SingTel is too “busy” amid a myriad of “distractions”, and that StarHub Ltd (STH SP) is potentially a better 5G bet.
  • Yet SingTel appears to have well overshot to the downside. SingTel is down 39% yoy, compared to +21%, +29%, and +1% for Bharti Airtel (BHARTI IN), Globe Telecom (GLO PM), and STH.  Get involved either as deep value play, and/or an inexpensive entry into Airtel. 

(link to my insight: StubWorld: SingTel Plumbs Multi-Year Low

Jardine Matheson Holdings (JM SP) (Mkt Cap: $20.6bn; Liquidity: $16mn)

In my prior insight Jardine Matheson: Lessons in Dissenton the 29 April, I thought Matheson was unattractive at a 13% discount to NAV, plus near-term news may focus on Jardine Strategic Holdings (JS SP)‘s dissension rights, and Matheson’s potential exposure thereon. Matheson is down ~15% since that note (while the Straits Times Index is down ~4%).  Since that insight, Matheson released its interim results, which not only provided clarity on the net debt at the parent level, which was largely guesswork amid the Matheson/Jardine Strategic Holdings (JS SP) circularity; but also unlisted stub ops – especially Jardine Motors – performed exceptionally in the 1H21. At a ~23% discount to NAV on adjusted historical NAVs, value is emerging, but rich vs. historical levels. 

  • The market cap is down US$3.2bn since my last report. The market is also assigning US$1.2bn less to the stub ops – and those ops have had a stellar 1H21. Plus US$0.9bn in cash has been banked from those ops. My current stub ops are valued at US$2.1bn compared to US$1.2bn back in April.
  • There is still a question mark over the cost of those dissension rights. But as seen in recent Cayman Island appraisal rights cases, the final uplift in “fair value” for dissenters has been modest to non-existent.
  • Collapsing the circularity and removing its complexity should drive interest (from LOs) in Matheson. And holdings like HKL are cheap at 0.3x P/B. The pushback? – the unattractiveness of the UK Standard listing, the absence of buybacks, plus Matheson gained 20% at the time of the Strategic Offer.

(link to my insight: Jardine Matheson: Value Gradually Emerging Four Months On)

EVENTS

Bharti Airtel (BHARTI IN)  (Mkt Cap: $50bn; Liquidity: $6mn)

After the relative success of last year’s Partially Paid Rights Offer conducted by Reliance Industries (RIL IN) discussed in basics in The Reliance Industries [RIL] Rights Offering then in gory detail in Reliance Rights Offer Detailed – Big. $7bn Big. And InterestingBharti Airtel (BHARTI IN) has decided to conduct a Partially Paid Offering of its own.  Bharti Airtel, of course, also raised money in a 19 for 67 rights offering in May 2019 followed by a straight equity raise announced in December 2019 and executed in January 2020.  On 30 August, Bharti Airtel announced that its board had met and approved a Rights Issue to fully-paid up shares which works with a construct called Partially Paid Shares. 

  • There are no details yet for the issue period, trading period, and record date but what we do know is that investors will get 1 Right for every 14 Shares held; will be entitled to purchase 1 Share at Rs 535/share (vs ~Rs 620/share on the 30th of August) for every Right (or Rights Entitlement (“RE”)) that they receive; will only have to put up 25% of the funds in the initial stage (i.e. 25% of Rs 535 or Rs 133.75/share), then there will be subsequent capital calls over the following 36 months (vs 18 months for the Reliance version of the same; and will be able to subscribe for over-allotments to take up the rights of those who let theirs lapse.
  • Investors should look for a chance to buy the Rights and PPS near intrinsic. That put option and the embedded financing are worth a fair bit.
  • Because passive funds will receive the rights and the rights will not go into the various indices immediately. I expect those shares to come out quickly when they start trading as the dummy line is taken out of the index (passive managers receive the rights, but the index provider does not include them and instead assigns a zero value to them.

Link to:
Travis’ insight: Bharti Airtel Partially Paid Rights Situation
Brian Freitas‘ insight: Bharti Airtel’s Large Partly Paid Rights Offering

Hitachi Transport System (9086 JP)  (Mkt Cap: $3.5bn; Liquidity: $11mn)

Hitachi Transport has decided to cancel 19.8% of its shares outstanding, effectively ridding itself of treasury shares. That cancellation occured this week. This will mean a substantial drop in share count. That will mean, unless countered by the TSE in a corporate action treatment to be named later, a large selldown of shares on 29 October based on TOPIX calculation rules. Because the TSE measures Free Float Weight on a different time frame than it measures shares outstanding, and the FFW is updated once a year based on the numbers as of the end of the fiscal year, the fact that Hitachi Transport’s float was very low at end-March using the TSE’s FFW methodology means there is a decent chance that the float rate will be lowered, meaning an even larger selldown in end October (29 October).

  • If the TSE does an ad hoc measurement which takes into account both the increase in float percentage by using 31 March float shares against 29 Sep float shares, it will still be a big selldown at end-October.  The Passive Sell should be 1.2-2.0mm shares or 7-11 days of ADV. There could be a selldown by SG Holdings. They have stock to go to meet their target from a year ago. That could be 3.5mm shares or more. 
  • Travis likes the “HTS is a takeover candidate trade” and it is part of the reason why he liked the stock nearly a year ago. HOWEVER… he had hoped the earnings rebound would move faster, and M&A would move faster, and for the moment he sees nothing to suggest a great deal of urgency. Furthermore,  he is not convinced (and this comes without the benefit of having spoken to management) that HTS really wants to be taken over by a PE Fund. They may be willing to work with one in growing outside Japan, but he doesn’t get the feeling they want to be owned by one. If they did, management and directors would probably own more than 0.1%.

(link to Travis’ insight: Hitachi Transport Uncoupled – TSE Prime, Price Popping, And Supply To Come)

Results are out for the WH Group (288 HK) Partial Offer.  1,916,937,202 Shares to be bought-back against valid acceptances in respect of a total of 8,288,742,088 Shares tells you Pro-Ration was 23.12699782%. Travis has seen a notice passed around which says that the MSCI selldown for the 2 Sept at the close on WH Group  includes no change in FIF (float weight) which stays at 65% but there will be a share count reduction of 1.917bn shares.  I have yet to see a FTSE or Hang Seng announcement. In FTSE, it sits in limbo because it is not specifically a UK/Aus name though the event is specifically like one described, and it is more than large enough to warrant a specific change. Link to Travis’ insight: WH Group Post-Tender Outlook – Index Selldown and Back-End Trading/Valuations.

TAKEOVER RULES – INDIA BUY-BACK GUIDE 2021

A “Buyback” is where (for our purposes) a publicly-listed company repurchases its shares from existing shareholders, sometimes in the market, sometimes in a structured buyback off exchange, and sometimes at a price higher than market price (in this insight, we will use the nouns “Buy-back” and “Buyback” interchangeably; the official regulatory documents in India often use the form with the hyphen).

  • When companies use excess cash to buy back shares, they often not only end up optimising their capital structure but also “achieve” EPS accretion with the aid of a reduction in the total share count of the company. Some companies use buy-backs to support their share prices during sluggish periods and others attempt to use it as a defence mechanism against hostile takeover situations.  Still others in India use it to return capital to their promoters. All that is pretty well-known.
  • In India, such Buy-backs are governed by the SEBI (BUY-BACK OF SECURITIES) REGULATIONS, 2018 (last amended on 17th April 2020) and are principally executed through three main mechanisms – Tender Offers, On-Market Transactions, and Book-building Processes.
  • In this insight Quiddity India Buy-Back Guide 2021: Regulations & Patterns – Travis and Janaghan will look into the regulations that govern each of the buy-back mechanisms to discover the basis for how they get executed.

M&A – US

M&A – EUROPE

  • On 27 August, Castor (the acquisition vehicle of Ion) raised the offer price FOR Cerved Group S.p.A. (CERV IM) to €10.20/share, a ~7.4% increase, for a total consideration of €1,976 mn. The minimum threshold condition was raised to a stake of 80% from 50% plus one share and the tender period was extended until 9 September. In Castor Raises Bid for Cerved Jesus Rodriguez Aguilar‘s fair value is  €11.04/share. 

M&A ROUND-UP IN AUGUST

For the month of August, 10 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$39bn, buoyed by the massive Afterpay Touch (APT AU) transaction.

  • The average premium for the new deals announced (or first discussed) in August was ~28%, with a year-to-date average of ~33% (112 deals & total deal size of US$234bn). This compares to the average premium for all deals in 2020 (158 deals) and 2019 (145 deals) of 31% and 31.5% respectively.

M&A RISK ARB WEEKLY ROUND-UP

  • This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks. I number 36, mostly firm, deals around the region.

INDEX REBALS

  •  FTSE EPRA Nareit Rebalance Decided. The FTSE EPRA Nareit Global Real Estate Index Rebalance for September 2021 has been announced. There are 29 Additions – 28 from Asia – and two deletions.  The original announcement caught investors by surprise, and baskets were hurriedly formed as impact was expected to be large. The inclusion date is 17 September. The impact should still be large (it has been large so far). Link to Travis’ insight: FTSE EPRA Nareit Rebalance Decided; Sub-Baskets Worth Trading Still.

  •  JPX-Nikkei 400 Rebalance 2022. A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review is conducted using the final business day of June as the base date. In JPX-Nikkei 400 Rebalance 2022: Leader Board End-Aug 2021, Janaghan Jeyakumar looks at the lists of potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022. The conventional trade would be to go LONG the Potential Inclusions and go SHORT the potential Removals. However, Janaghan believes it is too early in the timeline to set up this trade. For now, he would add these to a watchlist and track the evolution of these baskets. 

OTHER M&A & EVENT UPDATES

  • As expected, Golden Throat Holdings (6896 HK) has pushed out the dispatch date for the Scheme Document to the 19 October (on or before). 
  • Also expected, Independent Scheme Shareholders of Chong Hing Bank (1111 HK) overwhelmingly (99.97%) approved the Scheme at the Court Meeting yesterday. The effective date is expected to be the 27 September, with payment on or before the 7 October.

  • Central Pattana Pub (CPN TB) has now completed the purchase of shares in Siam Future Development (SF TB)on 30 August 2021 equal to 52.15% of shares out at Bt12.00/share. After the completion of shares purchase, the number of shares held by CPN is 56.26%. Therefore, CPN is required to make a tender offer for the remaining shares in SF.

  • The SPA is now unconditional triggering a mandatory take-over for the remaining shares of Ijm Plantations (IJMP MK) at RM3.10. The Offer Doc is expected to be dispatched within 21 days. Settlement takes place within 10 from valid acceptances. This will trade tight. 

  • Youfoodz Holdings (YFZ AU)announced that the Federal court of Australia has approved the convening of Scheme Meeting and despatch of Scheme Booklet. The Scheme Meeting will be held on the 8th October 2021.

  • Mcdonald’s Corp (MCD US) reported that it had sold 3.5mm shares of Mcdonald’s Holdings Co Japan (2702 JP) at JPY 5290 on 26 August (the closing price of that day). That means there should be another 3.5mm shares sold in the market over the next short while, but that should be the last block. The stake which remains is 35.32% and in July 2020, MCD said they would stop at 35%. 

CCASS

My ongoing series flags large moves (~10%) in CCASS holdings over the past week or so, moves which are often outside normal market transactions.  These may be indicative of share pledges.  Or potential takeovers. Or simply help understand volume swings. 

Often these moves can easily be explained – the placement of new shares, rights issue, movements subsequent to a takeover, lock-up expiry, amongst others. For those mentioned below, I could not find an obvious reason for the CCASS move.   

Name

% chg

Into

Out of

Tibet Water Resources Ltd. (1115 HK) 10.29%Chiw SangChing Hing
Hang Tai Yue Group Holdings (8081 HK) 14.33%Get NiceKingston
TL Natural Gas (8536 HK)32.92%Glory SunSt Chart
Jiangxi Bank Co Ltd (1916 HK) 10.03%CCBChina Industrial
Zioncom (8287 HK)30.00%CNILego
Source: HKEx
The following large movement(s) concern recently listed companies, and therefore are (likely) lock-up related.

Name

% chg

Into

Out of

Hygeia Healthcare Group (6078 HK) 13.19%JPMOutside of CCASS
Source: HKEx

I listen to a bunch of music when writing insights. Here are a handful of tunes, old & new, that piqued my interest during the week: Pynch’s Somebody Else; Let Out on the Loose (Danny Krivit Edit), Christelle Bofale’s Miles, Nick Garbett & Mike Majkowski’s Mid Mountains.

What are you listening to? 

Enjoy your Sunday!


Before it’s here, it’s on Smartkarma