Daily Brief Energy/Materials: Zijin Mining Group Co Ltd H, GS Holdings, JSR Corp, Empire Energy, Sealed Air Corp, Tredegar Corp and more

• SenseTime Group (20 HK) is a potential deletion in June while Zijin Mining Group Co Ltd H (2899 HK) is a potential inclusion.
• For yet another review, BeiGene (6160 HK) is a close add with the Velocity Test determining if the stock will be added to the index or not.
• Estimated one-way turnover at the rebalance is 2.95% resulting in a one-way trade of HK$1.6bn. Official capping will be based off the close of trading on 4 June.

• Opposition’s probable win in the election sparks concerns about Value-up initiative’s momentum. However, market sentiment doesn’t universally echo these worries.
• Value-Up stocks’ recent corrections likely stem from Q4 dividend arbitrage liquidation, rather than election result concerns.
• Post-Election, even if the opposition wins, the left-leaning Value-up program might continue, limiting the opposition’s influence, as seen in recent National Pension Service flows.

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads: Jastec Co Ltd (9717 JP), Qantm Intellectual Property (QIP AU), Southern Cross Media (SXL AU), Genex Power Ltd (GNX AU), QV Equities Ltd (QVE AU), China TCM.  
• Lowest spreads: Roland DG Corp (6789 JP), Tietto Minerals Ltd (TIE AU), Newmark Property REIT (NPR AU), Mma Offshore (MRM AU), CPMC Holdings (906 HK), Pact Group Holdings (PGH AU). 

• Discussion on progress of Beetaloo project and update on FID, discussion on outlook for gas supply in east coast Australia, comments on recent substantial shareholder notice from Sheffield Resources.

• Sealed Air (SEE) is a disaster in motion: its entire business is facing extinction as customers move away from the thin-film plastics the company makes.
• Sealed Air’s e-Commerce business has collapsed as Amazon has moved away from the single-use plastics, formerly ever present in its packaging. 
• California just passed two recycling and labeling bills that we think will make Sealed Air’s products unlikely to be used in the State and possibly in the US as a whole.

• Tredegar Corporation has been selling off businesses, annuitizing pension plans, and seeing key executives retire in recent years
• With only two remaining businesses, the company is estimated to be worth $11-13 after accounting for debt, before tax implications
• These actions indicate a significant shift in Tredegar’s strategy and possible future liquidation piece by piece

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.