Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>In this insight, we take a look at the potential index changes for F100 and F250 in the run up to the September 2023 Rebalance.</li>
<li>I currently expect two changes for the F100 index and three changes for the F250 index.</li>
<li>As always, there are several names lurking just outside the borders and could be involved in index changes in September 2023 if there are sharp price changes.</li>
</ul>


In this insight, we take a look at the potential index changes for F100 and F250 in the run up to the September 2023 Rebalance.
I currently expect two changes for the F100 index and three changes for the F250 index.
As always, there are several names lurking just outside the borders and could be involved in index changes in September 2023 if there are sharp price changes.


Quiddity Leaderboard F100/​​250 Sep 23: Two F100 Change and Three F250 Changes Likely

<ul>
<li>In this insight, we take a look at the potential index changes for F100 and F250 in the run up to the September 2023 Rebalance.</li>
<li>I currently see one change for the F100 index and two separate changes for the F250 index.</li>
<li>There are several names lurking just outside the borders and could be involved in index changes in September 2023 if there are sharp price changes.</li>
</ul>


In this insight, we take a look at the potential index changes for F100 and F250 in the run up to the September 2023 Rebalance.
I currently see one change for the F100 index and two separate changes for the F250 index.
There are several names lurking just outside the borders and could be involved in index changes in September 2023 if there are sharp price changes.


Quiddity Leaderboard for F100/​​250 Sep 2023: One F100 Change and Two F250 Changes Likely

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

<ul>
<li>
Australian tax-loss selling is a thing. Retail investors will take gains on things that run up in price, or get taken over, then look for losses.</li>
<li>The <a href="https://www.smartkarma.com/entities/china-conch-venture-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19943:1" rel="noopener">China Conch Venture Holdings (586 HK)</a> / <a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd-094855ab-abec-4b71-956b-5bfc85e22fdd" target="_blank" data-smartkarma-citation="entities:389:1" rel="noopener">Anhui Conch Cement (600585 CH)</a> ratio is at an all-time low. The implied stub is re-testing its all-time low.</li>
<li>Historically, <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon (7751 JP)</a>'s buybacks are aggressive. It may pay to observe market data to see when they are done. It may also pay to look at peer outperformance cycles. </li>
</ul>



Australian tax-loss selling is a thing. Retail investors will take gains on things that run up in price, or get taken over, then look for losses.
The China Conch Venture Holdings (586 HK) / Anhui Conch Cement (600585 CH) ratio is at an all-time low. The implied stub is re-testing its all-time low.
Historically, Canon (7751 JP)'s buybacks are aggressive. It may pay to observe market data to see when they are done. It may also pay to look at peer outperformance cycles. 


Last Week in Event SPACE:Tax-Loss Selling In Australia, China Conch/Anhui Conch, Canon, Rakuten

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>At the end of PUSU deadline, EQT and Dechra have agreed a 3,875p/share offer (44% premium, 21.4x EV/Fwd EBITDA, 30.2x Fwd P/E, vs. market leader Zoetis at 20.5x and 28.9x respectively).</li>
<li>Other private equity companies may not be able to match the deal's disintermediation benefits. Considering the short-term issues, I believe investors will accept the offer.</li>
<li>My base-case DCF fair-value estimate is 3,568p/share, 7.9% below the offer price. Therefore I set my TP at 3,875p. Spread is 5.8%/8.8% (gross/annualised), I feel the risk/reward is balanced. Long.</li>
</ul>


At the end of PUSU deadline, EQT and Dechra have agreed a 3,875p/share offer (44% premium, 21.4x EV/Fwd EBITDA, 30.2x Fwd P/E, vs. market leader Zoetis at 20.5x and 28.9x respectively).
Other private equity companies may not be able to match the deal's disintermediation benefits. Considering the short-term issues, I believe investors will accept the offer.
My base-case DCF fair-value estimate is 3,568p/share, 7.9% below the offer price. Therefore I set my TP at 3,875p. Spread is 5.8%/8.8% (gross/annualised), I feel the risk/reward is balanced. Long.


EQT/​Dechra Pharmaceuticals: Recommended Offer

<ul>
<li>Dechra is in discussions with EQT and ADIA about a 4,070 cash possible offer (46.6% premium, 22.6x EV/NTM Fwd EBITDA and 32x Fwd P/E). PUSU deadline is 11 May. </li>
<li>With the deal multiple at a slight premium (on both EV/Fwd EBITDA and Fwd P/E) over Zoetis, the market leader in animal health, the offer appears to be reasonably priced.</li>
<li>My base case fair value estimate is 3,568p/share (DCF-based), 12.3% below the offer price. My TP is thus 4,070p. Gross spread is 9.1%, therefore I feel the risk/reward is balanced.</li>
</ul>


Dechra is in discussions with EQT and ADIA about a 4,070 cash possible offer (46.6% premium, 22.6x EV/NTM Fwd EBITDA and 32x Fwd P/E). PUSU deadline is 11 May. 
With the deal multiple at a slight premium (on both EV/Fwd EBITDA and Fwd P/E) over Zoetis, the market leader in animal health, the offer appears to be reasonably priced.
My base case fair value estimate is 3,568p/share (DCF-based), 12.3% below the offer price. My TP is thus 4,070p. Gross spread is 9.1%, therefore I feel the risk/reward is balanced.


EQT/Dechra Pharmaceuticals: Generous Possible Offer

United Kingdom

Dechra Pharmaceuticals PLC is an international pharmaceutical business focused on the veterinary market, with its key area of specialisation being the development and marketing of companion animal products.  The Company Operates under four segments: European Pharmaceuticals; US Pharmaceuticals; Product Development and Services.

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Dechra Pharmaceuticals (DPH LN)

Quiddity Leaderboard F100/250 Sep 23: Two F100 Change and Three F250 Changes Likely

Newly-listed cross-border payment services provider Cab Payments Holdings Plc (CABP LN) could be added to the F250 index in September 2023 unless...

Janaghan Jeyakumar, CFA

Quiddity Leaderboard for F100/250 Sep 2023: One F100 Change and Two F250 Changes Likely

Hikma Pharmaceuticals and Johnson Matthey could be F100 ADD and DEL respectively. Alfa Financial Software and 888 holdings could be F250 ADDs while...

Janaghan Jeyakumar, CFA

Last Week in Event SPACE:Tax-Loss Selling In Australia, China Conch/Anhui Conch, Canon, Rakuten

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

EQT/Dechra Pharmaceuticals: Recommended Offer

In spite of negative trading updated, EQT has followed in its pursuit of Dechra and today both have agreed a fair, in my view, 3,875p/share offer...

Jesus Rodriguez Aguilar

EQT/Dechra Pharmaceuticals: Generous Possible Offer

Dechrais in discussions with EQT and ADIA regarding a possible 4,070p/share cash offer. Gross spread is 9.1%, therefore I feel the risk/reward is...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Quiddity Leaderboard F100/​​250 Sep 23: Two F100 Change and Three F250 Changes Likely

Newly-listed cross-border payment services provider Cab Payments Holdings Plc (CABP LN) could be added to the F250 index in September 2023 unless...

Janaghan Jeyakumar, CFA

Quiddity Leaderboard for F100/​​250 Sep 2023: One F100 Change and Two F250 Changes Likely

Hikma Pharmaceuticals and Johnson Matthey could be F100 ADD and DEL respectively. Alfa Financial Software and 888 holdings could be F250 ADDs while...

Janaghan Jeyakumar, CFA

Last Week in Event SPACE:Tax-Loss Selling In Australia, China Conch/Anhui Conch, Canon, Rakuten

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

EQT/​Dechra Pharmaceuticals: Recommended Offer

In spite of negative trading updated, EQT has followed in its pursuit of Dechra and today both have agreed a fair, in my view, 3,875p/share offer...

Jesus Rodriguez Aguilar

EQT/Dechra Pharmaceuticals: Generous Possible Offer

Dechrais in discussions with EQT and ADIA regarding a possible 4,070p/share cash offer. Gross spread is 9.1%, therefore I feel the risk/reward is...

Jesus Rodriguez Aguilar

Quiddity Leaderboard F100/250 Sep 23: Two F100 Change and Three F250 Changes Likely

Quiddity Leaderboard for F100/250 Sep 2023: One F100 Change and Two F250 Changes Likely

EQT/Dechra Pharmaceuticals: Recommended Offer