Daily BriefsEvent-Driven

Event-Driven: Viva China Holdings, Grupo Financiero Banorte, Koolearn, Pharmaron Beijing Co., Ltd. (A) and more

In today’s briefing:

  • Viva China: Perennially Inexpensive Li Ning Exposure
  • CitiBanamex Legacy Operations – Revisiting Banorte’s Potential M&A Challenge and Opportunity
  • Shanghai/​​​​Shenzhen Southbound Connect: Weekly Moves (17 June 2022)
  • Shanghai/​​​​Shenzhen Northbound Connect: Weekly Moves (17 June 2022)

Viva China: Perennially Inexpensive Li Ning Exposure

By David Blennerhassett

  • Viva China (8032 HK) trades at a large discount to its 10.6% holding in Li Ning (2331 HK)
  • Apart from its Li Ning exposure, Viva has a controlling stake in Bossini International Holdings (592 HK), a sports experience segment, and net cash.
  • The current NAV discount of ~46% is unlikely to meaningfully narrow near term given management’s reluctance to pay out a large dividend or undertake a corporate restructuring. 

CitiBanamex Legacy Operations – Revisiting Banorte’s Potential M&A Challenge and Opportunity

By Victor Galliano

  • Citibanamex legacy operations represent a series of challenges for the acquirer, which include its high cost base, bloated branch network and higher credit risk exposure to consumers and SMEs
  • The opportunity for an acquirer is access to a rich and stable deposit base with a relatively low loan-to-deposit ratio and Banamex’s fee generating AFORE pension administrator
  • Banamex is attracting much interest, which puts pressure on bidders to pay up, especially Banorte; we revisit our potential capital absorption calculations, but still see risk to Banorte’s dividend prospects

Shanghai/​​​​Shenzhen Southbound Connect: Weekly Moves (17 June 2022)

By David Blennerhassett

  • Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry
  • Overall, net inflow was ~US$1.9bn, split US$0.7bn for Shanghai and US$1.2bn for Shenzhen.
  • The largest inflows were into CNOOC Ltd (883 HK)and Meituan (3690 HK). The largest outflow was in ICBC (H) (1398 HK).

Shanghai/​​​​Shenzhen Northbound Connect: Weekly Moves (17 June 2022)

By David Blennerhassett


Before it’s here, it’s on Smartkarma