Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Melco International Development / Event-Driven

<ul>
<li>Both <a href="https://www.smartkarma.com/entities/melco-international-development-ltd" target="_blank" data-smartkarma-citation="entities:809:1" rel="noopener">Melco International Development (200 HK)</a> and <a href="https://www.smartkarma.com/entities/melco-crown-entertainme-adr" target="_blank" data-smartkarma-citation="entities:810:1" rel="noopener">Melco Resorts &amp; Entertainment (MLCO US)</a> have underperformed peers. But Melco is unjustifiably "outperforming" MLCO.</li>
<li>Preceding my comments on Melco, are the current setup/unwind tables for Asia-Pacific Holdcos. </li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>


Both Melco International Development (200 HK) and Melco Resorts &amp; Entertainment (MLCO US) have underperformed peers. But Melco is unjustifiably "outperforming" MLCO.
Preceding my comments on Melco, are the current setup/unwind tables for Asia-Pacific Holdcos. 
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: Melco Trading Rich As Lawrence Adds To His Position

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>Unsurprisingly, the independent expert (IE) considers <a href="https://www.smartkarma.com/entities/crown-resorts-ltd" target="_blank" data-smartkarma-citation="entities:808:1" rel="noopener">Crown Resorts (CWN AU)</a>'s A$13.10 offer from <a href="https://www.smartkarma.com/entities/blackstone-group-inc" target="_blank" data-smartkarma-citation="entities:27166:1" rel="noopener">Blackstone Group (BX US)</a> to be fair and reasonable. We think that IE’s valuation approach is sound.  </li>
<li>The key condition is approval from shareholders and gaming regulatory authorities. The scheme meeting is scheduled for 29 April. </li>
<li>We continue to think that offer is attractive. At the last close price and for the 12 May implementation date, the gross and annualised spread is 2.7% and 27.1%, respectively.</li>
</ul>


Unsurprisingly, the independent expert (IE) considers Crown Resorts (CWN AU)'s A$13.10 offer from Blackstone Group (BX US) to be fair and reasonable. We think that IE’s valuation approach is sound.  
The key condition is approval from shareholders and gaming regulatory authorities. The scheme meeting is scheduled for 29 April. 
We continue to think that offer is attractive. At the last close price and for the 12 May implementation date, the gross and annualised spread is 2.7% and 27.1%, respectively.


Crown Resorts Scheme Meeting on 29 April, IE Opinion

<ul>
<li>The <a href="https://www.parliament.wa.gov.au/publications/tabledpapers.nsf/displaypaper/4111048a8d7a626ef0a339594825880f00079102/%24file/pcrc+final+report+digital.pdf" target="_blank" rel="noopener">Perth commission report</a> found <a href="https://www.smartkarma.com/entities/crown-resorts-ltd" target="_blank" data-smartkarma-citation="entities:808:1" rel="noopener">Crown Resorts (CWN AU)</a> not suitable to operate Crown Perth but did not call for the gaming licence to be revoked.</li>
<li>The key conditions precedent for the Blackstone deal are shareholder, gaming regulatory and FIRB approval. The scheme meeting is targeted to be held before the end of June 2022.</li>
<li>At the last close price of A$12.58, the gross and annualised spread for a 30 June implementation is 4.1% and 16.94%, respectively. </li>
</ul>


The Perth commission report found Crown Resorts (CWN AU) not suitable to operate Crown Perth but did not call for the gaming licence to be revoked.
The key conditions precedent for the Blackstone deal are shareholder, gaming regulatory and FIRB approval. The scheme meeting is targeted to be held before the end of June 2022.
At the last close price of A$12.58, the gross and annualised spread for a 30 June implementation is 4.1% and 16.94%, respectively. 


Crown Resorts' Offer Spread Risk/Reward - The Perth Commission Report

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

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SJM Holdings' FY 2021 results remained weak, in a continuation from the soft H1 numbers. The company continued to report sizeable negative EBITDA in contrast to peers (which are all likely to report small positive EBITDA for the year). Moreover, operating cash burn has persisted in the two months YTD. Liquidity is weak, given SJM's low cash balance and lack of RCF availability. Moreover, the company would need to refinance its loans due February 2023. SJM's delay in obtaining new long-term facilities is disappointing in our view, and reflects negatively on management's execution. Still, we believe the company would not face issues seeking extensions or an eventual refinancing of its loan facilities, especially since the loans are secured against SJM's assets.

 SJM Holdings' FY 2021 results remained weak, in a continuation from the soft H1 numbers. The company continued to report sizeable negative EBITDA in contrast to peers (which are all likely to report small positive EBITDA for the year). Moreover, operating cash burn has persisted in the two months YTD.  Liquidity is weak, given SJM's low cash balance and lack of RCF availability. Moreover, the company would need to refinance its loans due February 2023. SJM's delay in obtaining new long-term facilities is disappointing in our view, and reflects negatively on management's execution. Still, we believe the company would not face issues seeking extensions or an eventual refinancing of its loan facilities, especially since the loans are secured against SJM's assets.

SJM Holdings - Earnings Flash - FY 2021 Results - Lucror Analytics

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.
<ul>
<li><a href="#lucror-entity-805" target="_blank" rel="noopener">SJM Holdings</a></li>
<li><a href="#lucror-entity-16122" target="_blank" rel="noopener">O-Net Technologies (Group) </a></li>
<li><a href="#lucror-entity-26178" target="_blank" rel="noopener">Zhenro Properties</a></li>
</ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

SJM Holdings
O-Net Technologies (Group) 
Zhenro Properties


Morning Views Asia: SJM Holdings, O-Net Technologies (Group) , Zhenro Properties

Hong Kong

SJM Holdings Limited offers amusement and recreation services.  The Company operates casinos, hotels, and other tourism-related facilities in Macau.

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SJM Holdings (880 HK)

StubWorld: Melco Trading Rich As Lawrence Adds To His Position

I'd be inclined to reverse the stub here - Short Melco International and Long Melco Resorts. The current level appears unsustainable.

David Blennerhassett

Crown Resorts Scheme Meeting on 29 April, IE Opinion

The key condition is approval from shareholders and gaming regulatory authorities. Scheme meeting is on 29 April. At the last close and for the 12...

Arun George

Crown Resorts' Offer Spread Risk/Reward - The Perth Commission Report

We believe that the Perth commission Report is a positive outcome for the Blackstone offer. At the last close, the gross and annualised spread for...

Arun George

SJM Holdings - Earnings Flash - FY 2021 Results - Lucror Analytics

SJM Holdings' FY 2021 results remained weak, in a continuation from the soft H1 numbers. The company continued to report sizeable negative EBITDA...

Lucror Analytics

Morning Views Asia: SJM Holdings, O-Net Technologies (Group) , Zhenro Properties

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

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