Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/aag-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:501:1" rel="noopener">AAG Energy Holdings (2686 HK)</a> is one of those periodic (and rare) takeover situations that will likely be remembered for what went wrong rather than what went right.  </li>
<li>A low-balled Offer (proxy advisors agree); perfunctory IFA analysis; a large, and silent, shareholder; and the postponement of the Scheme vote due to voting instructions not being "duly processed".</li>
<li>A new Court Meeting has been confirmed for the 2 June. And now we have some odd CCASS movements which raise further questions.</li>
</ul>



AAG Energy Holdings (2686 HK) is one of those periodic (and rare) takeover situations that will likely be remembered for what went wrong rather than what went right.  
A low-balled Offer (proxy advisors agree); perfunctory IFA analysis; a large, and silent, shareholder; and the postponement of the Scheme vote due to voting instructions not being "duly processed".
A new Court Meeting has been confirmed for the 2 June. And now we have some odd CCASS movements which raise further questions.


AAG Energy (2686 HK): Curiouser and Curiouser

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>
<a href="https://www.smartkarma.com/entities/aag-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:501:1" rel="noopener">Aag Energy Holdings (2686 HK)</a>’s disclosed a revised timetable to vote on <a href="https://www.smartkarma.com/entities/xinjiang-xintai-natural-gas-a" target="_blank" data-smartkarma-citation="entities:27036:1" rel="noopener">Xinjiang Xintai Natural Gas (603393 CH)</a>’s HK$1.85 offer. The new scheme meeting is set for 2 June. </li>
<li>Our analysis suggests that in the best case, Xinjiang Xintai would need to further swing NO votes representing 6.52%-8.34% of outstanding shares to YES to get the scheme approved. </li>
<li>AAG’s case is unprecedented. The risk-reward remains unattractive as the upside to a scheme pass (13.5% upside) is equal to the downside to a scheme fail (average 13.5% downside).</li>
</ul>



Aag Energy Holdings (2686 HK)’s disclosed a revised timetable to vote on Xinjiang Xintai Natural Gas (603393 CH)’s HK$1.85 offer. The new scheme meeting is set for 2 June. 
Our analysis suggests that in the best case, Xinjiang Xintai would need to further swing NO votes representing 6.52%-8.34% of outstanding shares to YES to get the scheme approved. 
AAG’s case is unprecedented. The risk-reward remains unattractive as the upside to a scheme pass (13.5% upside) is equal to the downside to a scheme fail (average 13.5% downside).


AAG Energy (2686 HK): New Scheme Vote Date, Different Result?

<ul>
<li>Big picture: <a href="https://www.smartkarma.com/entities/japan-post-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:359:1" rel="noopener">Japan Post (6178 JP)</a> selling 29% of <a href="https://www.smartkarma.com/entities/japan-post-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:838:1" rel="noopener">Japan Post Bank (7182 JP)</a> is a Very Big Offering at ¥1.236trln. 80/20 dom/international. A TOUGH sell. 1.089bn shares is 4x float. </li>
<li>
<a href="https://www.smartkarma.com/entities/downer-edi-ltd" target="_blank" data-smartkarma-citation="entities:12350:1" rel="noopener">Downer EDI (DOW AU)</a>'s CEO resigned ahead of announcing accounting irregularities last December. The CFO resigned this week after Downer announced another profit downgrade. Now the chairman is exiting. </li>
<li>Hong Kong broadband play <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a>said it has been approached by I Squares' HGC. No pricing announced, but talks continue. </li>
</ul>


Big picture: Japan Post (6178 JP) selling 29% of Japan Post Bank (7182 JP) is a Very Big Offering at ¥1.236trln. 80/20 dom/international. A TOUGH sell. 1.089bn shares is 4x float. 

Downer EDI (DOW AU)'s CEO resigned ahead of announcing accounting irregularities last December. The CFO resigned this week after Downer announced another profit downgrade. Now the chairman is exiting. 
Hong Kong broadband play HKBN Ltd (1310 HK)said it has been approached by I Squares' HGC. No pricing announced, but talks continue. 


Last Week in Event SPACE: Japan Post/Japan Post Bank, Downer, HKBN, Golden Energy

<ul>
<li>
Reportedly (Bloomberg) Hong Kong broadband play <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a> has received a takeover offer from  I Square's HGC Global Communications. </li>
<li>HKBN's shares were halted in the late afternoon trading session yesterday after gaining 11.6%. The reason stated for the suspension was "possible inside information", not pursuant to the Takeovers Code. </li>
<li>Last May, Bloomberg reported that KKR, PAG, and Stonepeak - amongst others - were considering bids for HKBN. The market cap at the time was US$1.6bn versus US$934mn now.</li>
</ul>



Reportedly (Bloomberg) Hong Kong broadband play HKBN Ltd (1310 HK) has received a takeover offer from  I Square's HGC Global Communications. 
HKBN's shares were halted in the late afternoon trading session yesterday after gaining 11.6%. The reason stated for the suspension was "possible inside information", not pursuant to the Takeovers Code. 
Last May, Bloomberg reported that KKR, PAG, and Stonepeak - amongst others - were considering bids for HKBN. The market cap at the time was US$1.6bn versus US$934mn now.


HKBN Ltd (1310 HK) Mulls I Square's HGC Offer

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a>'s FY22 revenue, EBITDA, and profit increased by 2%, 6%, and 11% to HK$36.1bn,  HK$12.4bn, and HK$834mn.</li>
<li>
<a href="https://www.smartkarma.com/entities/hkt-ltd" target="_blank" data-smartkarma-citation="entities:874:1" rel="noopener">HKT Ltd (6823 HK)</a>'s revenue, EBITDA, and profit increased by 0.5%, 3%, and 0.4% to HK$34.1bn,  HK$13.1bn, and HK$4.7mn.</li>
<li>The dividend pass-through is 100%. PCCW's current discount to NAV is in line with its 52-week average.</li>
</ul>



PCCW Ltd (8 HK)'s FY22 revenue, EBITDA, and profit increased by 2%, 6%, and 11% to HK$36.1bn,  HK$12.4bn, and HK$834mn.

HKT Ltd (6823 HK)'s revenue, EBITDA, and profit increased by 0.5%, 3%, and 0.4% to HK$34.1bn,  HK$13.1bn, and HK$4.7mn.
The dividend pass-through is 100%. PCCW's current discount to NAV is in line with its 52-week average.


Hong Kong

PCCW Limited, through its subsidiaries, provides telecommunications, Internet access, multimedia services and related equipment.  The Company also offers computer, engineering, and other technical services in Hong Kong.  In addition, PCCW invests in and develops system integration and technology-related business, infrastructure and properties in Hong Kong and China.

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PCCW Ltd (8 HK)

AAG Energy (2686 HK): Curiouser and Curiouser

AAG Energy is cheap. But as one reader pointed out - "I just don't know what's going on". I'd second that. This is an avoid.

David Blennerhassett

AAG Energy (2686 HK): New Scheme Vote Date, Different Result?

Our analysis suggests that in the best case, Xinjiang Xintai would need to further swing NO votes representing 6.52%-8.34% of outstanding shares to...

Arun George

Last Week in Event SPACE: Japan Post/Japan Post Bank, Downer, HKBN, Golden Energy

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

HKBN Ltd (1310 HK) Mulls I Square's HGC Offer

Pricing here is not compelling. This is a steady business and a decent yield. HKBN could attract interest from PRC companies or government-backed...

David Blennerhassett

PCCW And HKT's 2022 Results

Ideally, I would prefer to be aligned with Richard Li - and therefore be Long PCCW, short HKT here. However, right this moment, the discount to...

David Blennerhassett

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