Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Shinko Electric Industries / Event-Driven

<ul>
<li>If <a href="https://www.smartkarma.com/entities/descente-ltd" target="_blank" data-smartkarma-citation="entities:8225:1" rel="noopener">Descente Ltd (8114 JP)</a> earnings disappoints, buy the dip. <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> is buying for the long-term.</li>
<li>
<a href="https://www.smartkarma.com/entities/mgm-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:472:1" rel="noopener">MGM China Holdings (2282 HK)</a> has gained market share in mass table market, VIP, and total revenue. Yet MGM's FY24E EV/EBITDA is ~40% below its two-year forward average EV/EBITDA pre-Covid.</li>
<li>If you had a J-REIT portfolio, <a href="https://www.smartkarma.com/entities/sankei-real-estate-inc" target="_blank" data-smartkarma-citation="entities:35239:1" rel="noopener">Sankei Real Estate (2972 JP)</a> would go in and push something else out or smaller. I think one gets beta-plus, which is usually called alpha.</li>
</ul>


If Descente Ltd (8114 JP) earnings disappoints, buy the dip. Itochu Corp (8001 JP) is buying for the long-term.

MGM China Holdings (2282 HK) has gained market share in mass table market, VIP, and total revenue. Yet MGM's FY24E EV/EBITDA is ~40% below its two-year forward average EV/EBITDA pre-Covid.
If you had a J-REIT portfolio, Sankei Real Estate (2972 JP) would go in and push something else out or smaller. I think one gets beta-plus, which is usually called alpha.


Last Week In Event SPACE: Shinko Electric Industries, MGM China, Decente, Sankei Real Estate,

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>On 17 October, <a href="https://www.smartkarma.com/entities/autonation-inc" target="_blank" data-smartkarma-citation="entities:16548:1" rel="noopener">Autonation Inc (AN US)</a> also withdrew its proposal for <a href="https://www.smartkarma.com/entities/pendragon-plc" target="_blank" data-smartkarma-citation="entities:22080:1" rel="noopener">Pendragon PLC (PDG LN)</a>. Lithia's deal is likely to obtain shareholder's approval, for lack of a better offer.</li>
<li>Holding on would mean receiving 24.5p and staying in a small cap SaaS, whose shares are implicitly valued at 6.5p, instead of the 10.9p that Pendragon claims it is worth.</li>
<li>Readacross: Hedin, AutoNation, or someone else, could take a closer look at <a href="https://www.smartkarma.com/entities/vertu-motors-plc" target="_blank" data-smartkarma-citation="entities:23247:1" rel="noopener">Vertu Motors (VTU LN)</a>.</li>
</ul>


On 17 October, Autonation Inc (AN US) also withdrew its proposal for Pendragon PLC (PDG LN). Lithia's deal is likely to obtain shareholder's approval, for lack of a better offer.
Holding on would mean receiving 24.5p and staying in a small cap SaaS, whose shares are implicitly valued at 6.5p, instead of the 10.9p that Pendragon claims it is worth.
Readacross: Hedin, AutoNation, or someone else, could take a closer look at Vertu Motors (VTU LN).


Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

<ul>
<li>In this insight, we take a look at the potential index changes for F100 and F250 in the run-up to the December 2023 Rebalance.</li>
<li>
<a href="https://www.smartkarma.com/entities/dechra-pharmaceuticals-plc" target="_blank" data-smartkarma-citation="entities:21908:1" rel="noopener">Dechra Pharmaceuticals (DPH LN)</a> and <a href="https://www.smartkarma.com/entities/network-international-holdings-plc" target="_blank" data-smartkarma-citation="entities:28918:1" rel="noopener">Network International Holdings (NETW LN)</a> are currently involved in takeover situations. When those deals close, intra-review changes can be triggered.</li>
<li>Including these changes, there could be up to one F100 change and seven F250 changes between now and the end of the year.</li>
</ul>


In this insight, we take a look at the potential index changes for F100 and F250 in the run-up to the December 2023 Rebalance.

Dechra Pharmaceuticals (DPH LN) and Network International Holdings (NETW LN) are currently involved in takeover situations. When those deals close, intra-review changes can be triggered.
Including these changes, there could be up to one F100 change and seven F250 changes between now and the end of the year.


Quiddity Leaderboard F100/​​​250 Dec 23: ~7 Changes Possible; LONG Playtech SHORT 888 Interesting

<ul>
<li>The game is on with the sweetened offer from Lithia, valued at 35.4p/share (24.5p divi + stake in Pinewood). <a href="https://www.smartkarma.com/entities/pendragon-plc" target="_blank" data-smartkarma-citation="entities:22080:1" rel="noopener">Pendragon PLC (PDG LN)</a>'s shares are trading just below, at 35.2p.</li>
<li>It is now the turn of either Hedin or AutoNation to raise their offers. 32p/share seems a fair value for the standalone business. Synergies could be worth up to 10.54p/share.</li>
<li>Assuming a bidder distributes 60% of synergies to Pendragon shareholders, a potential offer price of 38.3p/share, in cash, 8% above Lithia's offer, could still be value enhancing.</li>
</ul>


The game is on with the sweetened offer from Lithia, valued at 35.4p/share (24.5p divi + stake in Pinewood). Pendragon PLC (PDG LN)'s shares are trading just below, at 35.2p.
It is now the turn of either Hedin or AutoNation to raise their offers. 32p/share seems a fair value for the standalone business. Synergies could be worth up to 10.54p/share.
Assuming a bidder distributes 60% of synergies to Pendragon shareholders, a potential offer price of 38.3p/share, in cash, 8% above Lithia's offer, could still be value enhancing.


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

Consumer Discretionary Select / Technical Analysis

<ul>
<li>We continue to believe that the bear market lows have already been established.</li>
<li>It remains to be seen whether the indexes will experience a meaningful pullback first, or whether we are already experiencing the initial leg of a new bull market.</li>
<li>Thus far, market indexes have ignored overbought conditions, which is historically a sign of strength during the initial leg of new bull markets.</li>
</ul>


We continue to believe that the bear market lows have already been established.
It remains to be seen whether the indexes will experience a meaningful pullback first, or whether we are already experiencing the initial leg of a new bull market.
Thus far, market indexes have ignored overbought conditions, which is historically a sign of strength during the initial leg of new bull markets.


Upgrading Discretionary to Overweight, Downgrading Energy & Health Care to Market Weight

United States

AutoNation, Inc. retails, finances, and services new and used vehicles.  The Company also provides other related services and products, such as the sale of parts and accessories, extended service contracts, aftermarket automotive products, and collision repair services.  AutoNation operates throughout the United States.

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Autonation Inc (AN US)

Last Week In Event SPACE: Shinko Electric Industries, MGM China, Decente, Sankei Real Estate,

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

AutoNation Drops from the Race

On 17 October, Autonation Inc (AN US) also withdrew its proposal for Pendragon PLC (PDG LN). Lithia's deal is likely to obtain shareholder's...

Jesus Rodriguez Aguilar

Quiddity Leaderboard F100/250 Dec 23: ~7 Changes Possible; LONG Playtech SHORT 888 Interesting

The top 7 F250 Potential ADDs currently have ~10 days of volume to buy and up to a couple of these names could be added on an intra-review basis...

Janaghan Jeyakumar, CFA

Proposals, Sweetened Offers & Synergies

The game is on with the sweetened offer from Lithia, valued at 35.4p/share (24.5p divi + stake in Pinewood). Pendragon's shares are trading just...

Jesus Rodriguez Aguilar

Upgrading Discretionary to Overweight, Downgrading Energy & Health Care to Market Weight

Upgrading Discretionary $XLY to Overweight, Downgrading Energy $XLE & Health Care $XLV to Market Weight; Many indexes with major bullish...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Last Week In Event SPACE: Shinko Electric Industries, MGM China, Decente, Sankei Real Estate,

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

AutoNation Drops from the Race

On 17 October, Autonation Inc (AN US) also withdrew its proposal for Pendragon PLC (PDG LN). Lithia's deal is likely to obtain shareholder's...

Jesus Rodriguez Aguilar

Quiddity Leaderboard F100/​​​250 Dec 23: ~7 Changes Possible; LONG Playtech SHORT 888 Interesting

The top 7 F250 Potential ADDs currently have ~10 days of volume to buy and up to a couple of these names could be added on an intra-review basis...

Janaghan Jeyakumar, CFA

Proposals, Sweetened Offers & Synergies

The game is on with the sweetened offer from Lithia, valued at 35.4p/share (24.5p divi + stake in Pinewood). Pendragon's shares are trading just...

Jesus Rodriguez Aguilar

Upgrading Discretionary to Overweight, Downgrading Energy & Health Care to Market Weight

Upgrading Discretionary $XLY to Overweight, Downgrading Energy $XLE & Health Care $XLV to Market Weight; Many indexes with major bullish...

Vermilion Research

Quiddity Leaderboard F100/250 Dec 23: ~7 Changes Possible; LONG Playtech SHORT 888 Interesting