Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

HK Type 4 license through Ballingal Investment Advisors Ltd. 

I'm a highly experienced sell-side analyst with in excess of 22 years of covering Asia Pacific equities, the past 19 years immersed in event strategies encompassing M&A risk arbitrage, directional long/short, stub trades and restructuring.  

My background also includes accountancy (liquidation/bankruptcy/receivership) earlier in my career and as a chief financial officer of a global commodity company based in the US and Mexico.

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Local media are <a href="https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3042303/hong-kongs-biggest-broadcaster-tvb-lay-350" target="_blank" rel="noopener">reporting</a> <a href="https://www.smartkarma.com/entities/television-broadcasts-ltd-tvb" target="_blank" data-smartkarma-citation="entities:19341:1" rel="noopener">Television Broadcasts (511 HK)</a> will lay off 350 employees - around 10% of staff. The media is also reporting that Charles Chan, who joined TVB in 2011 and the chairman since January 2015, intends to sell his stake in the company and step down. That stake, forming part of the 26% held by Young Lion in TVB, was acquired from Run Run Shaw, TVB's founder, for HK$55/share back in <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2011/0331/ltn20110331646.pdf" target="_blank" rel="noopener">2011</a>.
Earlier this month, non-Executive Director Raymond Or Ching-fai resigned and Executive Director Cheong Shin-keong, a 20-year veteran, also <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2019/1202/2019120203390.pdf" target="_blank" rel="noopener">resigned</a>. At the AGM earlier this year, 28% of votes counted were <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0522/ltn20190522667.pdf" target="_blank" rel="noopener">against</a> Raymond's reappointment.
Shares are down 19% YTD, bouncing around an all-time low, and down ~60% from where they traded at the time of the announcement of the (failed) 2017 buyback.
Earnings continue to trend lower, despite the removal of key free-to-air competitor ATV in 2016.
This latest round of lay-offs - following the removal of 150 staff in the arts and production department last October - is (allegedly) in response to the impact from ongoing protests in Hong Kong affecting the tourism, catering, and retail segments, together with related advertising.
However, TVB's problems are not isolated to exterior forces.
Management dubiously attempted a buyback in 2017 - using proceeds from the issuance of Notes, the proceeds of which were ostensibly to fund business expansion. That buyback attempt led to the uncovering of a murky shareholder agreement as to who really controlled a 26% interest in TVB (via Young Lion), and it took the Communication Authority (CA) over two years to formulate a decision about how to treat that ownership. 
Subsequent to that failed buyback, in a move devoid of good stewardship and fiduciary duty to shareholders, funds from the Notes were directed into debt notes issued by companies such as <a href="https://www.smartkarma.com/entities/smi-holdings-group-ltd" target="_blank" data-smartkarma-citation="entities:19375:1" rel="noopener">Smi Holdings (198 HK)</a> and China Energy Reserve and Chemicals Group, later resulting in losses and significant write-offs.
The media is reporting Charles Chan and Cher Wang will potentially sell their 6% and 14.99% stakes in TVB. This is not correct, Chan and Wang own 6% and 14.99% respectively in Young Lion, which owns 26% of TVB. However, that creates the need for another round of approvals, or onward sale.
This creates another ownership situation which has to be resolved.
That makes things interesting.

Local media are reporting Television Broadcasts (511 HK) will lay off 350 employees - around 10% of staff. The media is also reporting that Charles Chan, who joined TVB in 2011 and the chairman since January 2015, intends to sell his stake in the company and step down. That stake, forming part of the 26% held by Young Lion in TVB, was acquired from Run Run Shaw, TVB's founder, for HK$55/share back in 2011.
Earlier this month, non-Executive Director Raymond Or Ching-fai resigned and Executive Director Cheong Shin-keong, a 20-year veteran, also resigned. At the AGM earlier this year, 28% of votes counted were against Raymond's reappointment.
Shares are down 19% YTD, bouncing around an all-time low, and down ~60% from where they traded at the time of the announcement of the (failed) 2017 buyback.
Earnings continue to trend lower, despite the removal of key free-to-air competitor ATV in 2016.
This latest round of lay-offs - following the removal of 150 staff in the arts and production department last October - is (allegedly) in response to the impact from ongoing protests in Hong Kong affecting the tourism, catering, and retail segments, together with related advertising.
However, TVB's problems are not isolated to exterior forces.
Management dubiously attempted a buyback in 2017 - using proceeds from the issuance of Notes, the proceeds of which were ostensibly to fund business expansion. That buyback attempt led to the uncovering of a murky shareholder agreement as to who really controlled a 26% interest in TVB (via Young Lion), and it took the Communication Authority (CA) over two years to formulate a decision about how to treat that ownership. 
Subsequent to that failed buyback, in a move devoid of good stewardship and fiduciary duty to shareholders, funds from the Notes were directed into debt notes issued by companies such as Smi Holdings (198 HK) and China Energy Reserve and Chemicals Group, later resulting in losses and significant write-offs.
The media is reporting Charles Chan and Cher Wang will potentially sell their 6% and 14.99% stakes in TVB. This is not correct, Chan and Wang own 6% and 14.99% respectively in Young Lion, which owns 26% of TVB. However, that creates the need for another round of approvals, or onward sale.
This creates another ownership situation which has to be resolved.
That makes things interesting.

Asia Satellite Telecom Holdings Ltd (1135 HK)

Television Broadcasts

TVB: In-House Drama