Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Aussie poles and wires company <a href="https://www.smartkarma.com/entities/spark-infrastructure-group" target="_blank" data-smartkarma-citation="entities:595:1" rel="noopener">Spark Infrastructure (SKI AU)</a> has <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02395702-2A1310049?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">rejected</a> two take-private proposals from PR outfit firm KKR and Ontario Teachers’ Pension Plan Board (OTPPB).
KKR/OTPPB's first proposal was A$2.70/share, by way of a Scheme, which would be reduced by the 1H21 dividend of A$0.0625/share. KKR/OTPPB subsequently reloaded with A$2.80/share - paltry 12.9% to last close - which was also summarily rejected on the grounds it undervalued Spark.
Spark added:
<blockquote>
Whilst not granting access to due diligence, in order to be constructive, the board of Spark Infrastructure informed the consortium that it was prepared to provide limited information on Spark Infrastructure’s business and its prospects.
</blockquote>
More below the fold.

Aussie poles and wires company Spark Infrastructure (SKI AU) has rejected two take-private proposals from PR outfit firm KKR and Ontario Teachers’ Pension Plan Board (OTPPB).
KKR/OTPPB's first proposal was A$2.70/share, by way of a Scheme, which would be reduced by the 1H21 dividend of A$0.0625/share. KKR/OTPPB subsequently reloaded with A$2.80/share - paltry 12.9% to last close - which was also summarily rejected on the grounds it undervalued Spark.
Spark added:

Whilst not granting access to due diligence, in order to be constructive, the board of Spark Infrastructure informed the consortium that it was prepared to provide limited information on Spark Infrastructure’s business and its prospects.

More below the fold.

Spark Infra (SKI AU): KKR & OTPPB's Tilts Falls Short

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Quantitative Analysis

Subsequent to our earlier update a quarter ago, below we publish updated results from our dividend forecasting models. Our models take into account most recent reported fiscal year-end financials to provide updated results. We also discuss notable changes within our top 10 conviction list.

Subsequent to our earlier update a quarter ago, below we publish updated results from our dividend forecasting models. Our models take into account most recent reported fiscal year-end financials to provide updated results. We also discuss notable changes within our top 10 conviction list.

Asia Dividend Forecasting | Quarterly Update 2.0

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Despite a much more mixed market environment, our weight-of-the-evidence approach continues to support a constructive intermediate-term outlook. The bottom line: there is little evidence that suggests a pullback would be anything more than a buying opportunity.

Despite a much more mixed market environment, our weight-of-the-evidence approach continues to support a constructive intermediate-term outlook. The bottom line: there is little evidence that suggests a pullback would be anything more than a buying opportunity.

Defensives Are Worth A Look; Hang Seng, Shanghai Comp, Nikkei 225, STOXX 50 Support Levels Holding

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Haidilao International Holding / Event-Driven

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 26 February. The constituent changes will be effective after the close of trading on 12 March.For the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a>, there are 3 inclusions - <a href="https://www.smartkarma.com/entities/alibaba-health-information-technology-ltd" target="_blank" data-smartkarma-citation="entities:453:1" rel="noopener">Alibaba Health Information Technology (241 HK)</a>, <a href="https://www.smartkarma.com/entities/longfor-properties" target="_blank" data-smartkarma-citation="entities:8149:1" rel="noopener">Longfor Properties (960 HK)</a> and <a href="https://www.smartkarma.com/entities/haidilao-international-holding-ltd" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao (6862 HK)</a>. This takes the number of index constituents to 55 and sets the stage for a further increase in the number of stocks as a part of the market consultation, the conclusions of which are to be announced on 1 March.One-way turnover is estimated at 2.65% and will result in a one-way trade of HK$6.08bn. The highest impact is on <a href="https://www.smartkarma.com/entities/longfor-properties" target="_blank" data-smartkarma-citation="entities:8149:1" rel="noopener">Longfor Properties (960 HK)</a> while the impact on <a href="https://www.smartkarma.com/entities/alibaba-health-information-technology-ltd" target="_blank" data-smartkarma-citation="entities:453:1" rel="noopener">Alibaba Health Information Technology (241 HK)</a> and <a href="https://www.smartkarma.com/entities/haidilao-international-holding-ltd" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao (6862 HK)</a> is lower, though still substantial.There are only 10 trading days to implementation of the changes, so the three stocks should move up on Monday and outperform their peers till implementation date.Hang Seng Indexes is scheduled to announce the conclusions of the market consultation on Monday, 1 March and there will be a lot more changes to the index. These changes should commence at the June 2021 review and will most likely be implemented in 4 tranches, concluding at the March 2022 review.

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 26 February. The constituent changes will be effective after the close of trading on 12 March.For the Hong Kong Hang Seng Index (HSI INDEX), there are 3 inclusions - Alibaba Health Information Technology (241 HK), Longfor Properties (960 HK) and Haidilao (6862 HK). This takes the number of index constituents to 55 and sets the stage for a further increase in the number of stocks as a part of the market consultation, the conclusions of which are to be announced on 1 March.One-way turnover is estimated at 2.65% and will result in a one-way trade of HK$6.08bn. The highest impact is on Longfor Properties (960 HK) while the impact on Alibaba Health Information Technology (241 HK) and Haidilao (6862 HK) is lower, though still substantial.There are only 10 trading days to implementation of the changes, so the three stocks should move up on Monday and outperform their peers till implementation date.Hang Seng Indexes is scheduled to announce the conclusions of the market consultation on Monday, 1 March and there will be a lot more changes to the index. These changes should commence at the June 2021 review and will most likely be implemented in 4 tranches, concluding at the March 2022 review.

Hang Seng Index Rebalance: Three Adds; Market Consultation Conclusions on 1 March

After the sanctioning of <a href="https://www.smartkarma.com/entities/allied-properties-h-k-limited" target="_blank" data-smartkarma-citation="entities:19953:1" rel="noopener">Allied Properties (H.K.) (56 HK)</a>'s (<a href="https://skr.ma/vN7NF" target="_blank" rel="noopener">APH) Scheme (Allied Prop (56 HK): Scheme Done. AGL Next?</a>) was thrice delayed by the High Court and further updates from the company shed no light on the issues faced, what was inconceivably feared became apparent last Friday night when the Court <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1005/2020100502577.pdf" target="_blank" rel="noopener">declined to sanction</a> the Scheme.
This afternoon, the High Court<a href="https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=131280&amp;currpage=T" target="_blank" rel="noopener"> judgment</a> appeared on the Hong Kong Judiciary website. 
It is ultimately a frustrating read, one in which some of the Offeror's (<a href="https://www.smartkarma.com/entities/allied-group-ltd" target="_blank" data-smartkarma-citation="entities:4387:1" rel="noopener">Allied (373 HK)</a>) preparatory work was sloppy or poorly prepared.
But the great double-take in this ruling is a large portion of the judgment devoted to the headcount test at the Scheme vote.
APH is incorporated in Hong Kong. S674(c) of the <a href="https://www.hklii.hk/eng/hk/legis/ord/622/s674.html" target="_blank" rel="noopener">Hong Kong Ordinance</a> says “subject to subsection 2(a)…”.  Subsection 2(a) replaced the headcount rule with the 10%-of-float veto. The headcount test was abolished in 2012 after a decision was reached on a <a href="https://www.legco.gov.hk/yr10-11/english/bc/bc03/papers/bc030530cb1-2019-2-e.pdf" target="_blank" rel="noopener">Companies Bill</a>.
It is not clear why Allied's counsel did not raise this abolishment; but instead, butchered an attempt to show a majority in number had occurred, and as a result of this off-piste analysis, negatively influenced the court on sanctioning the Scheme.
I expect Allied to appeal. I do not expect shares to resume trading during an appeal. 
Unfortunately for shareholders who approved the Scheme, payment under the offer appears some way off.

After the sanctioning of Allied Properties (H.K.) (56 HK)'s (APH) Scheme (Allied Prop (56 HK): Scheme Done. AGL Next?) was thrice delayed by the High Court and further updates from the company shed no light on the issues faced, what was inconceivably feared became apparent last Friday night when the Court declined to sanction the Scheme.
This afternoon, the High Court judgment appeared on the Hong Kong Judiciary website. 
It is ultimately a frustrating read, one in which some of the Offeror's (Allied (373 HK)) preparatory work was sloppy or poorly prepared.
But the great double-take in this ruling is a large portion of the judgment devoted to the headcount test at the Scheme vote.
APH is incorporated in Hong Kong. S674(c) of the Hong Kong Ordinance says “subject to subsection 2(a)…”.  Subsection 2(a) replaced the headcount rule with the 10%-of-float veto. The headcount test was abolished in 2012 after a decision was reached on a Companies Bill.
It is not clear why Allied's counsel did not raise this abolishment; but instead, butchered an attempt to show a majority in number had occurred, and as a result of this off-piste analysis, negatively influenced the court on sanctioning the Scheme.
I expect Allied to appeal. I do not expect shares to resume trading during an appeal. 
Unfortunately for shareholders who approved the Scheme, payment under the offer appears some way off.

Hong Kong

Power Assets Holdings Limited invests in power generation, transmission and distribution as well as gas distribution. The Company has investments in Hong Kong, Australia, Canada, China, New Zealand and Thailand.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Power Assets Holdings (6 HK)

Spark Infra (SKI AU): KKR & OTPPB's Tilts Falls Short

This appears a full offer for Spark, especially noting greater regulatory oversight on expected returns. KKR/OTTB have deep pockets. But I'm...

David Blennerhassett

Asia Dividend Forecasting | Quarterly Update 2.0

Subsequent to our Dividend Forecasting Original in Sep 2020, this is our second quarterly update. Our models take into account latest reported...

Ankit Agrawal, CFA

Defensives Are Worth A Look; Hang Seng, Shanghai Comp, Nikkei 225, STOXX 50 Support Levels Holding

A review of major global indexes reveals an absence of major breakdowns. We highlight opportunities within defensive Sectors (Real Estate, Consumer...

Vermilion Research

Hang Seng Index Rebalance: Three Adds; Market Consultation Conclusions on 1 March

There are 3 inclusions to the HSI - Ali Health, Longfor Prop and Haidilao. With 10 days to implementation, the stocks should outperform....

Brian Freitas

Allied Properties (56 HK): Amateur Hour

Amateur hour by Company Counsel leads to a frustrated judge torpedoing the Allied Properties (56 HK) Scheme. Expect an Appeal.

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)