Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Conglomerate <strong><a href="https://www.smartkarma.com/entities/guoco-group-ltd" target="_blank" data-smartkarma-citation="entities:5290:1" rel="noopener">Guoco Group (53 HK)</a></strong> has fielded three privatisation Offers from Guoline (the Quek family) over the past twenty years. </li>
<li>Elliott Advisors, then holding 9.72% of shares out, backed the most recent Offer of HK$135/share in November 2018; but it was voted down at a Scheme Meeting. </li>
<li>Elliott has now, surprisingly, exited. This <em>may</em> open the door for a fourth Offer. Shares popped 14% on the news.  </li>
</ul>


Conglomerate Guoco Group (53 HK) has fielded three privatisation Offers from Guoline (the Quek family) over the past twenty years. 
Elliott Advisors, then holding 9.72% of shares out, backed the most recent Offer of HK$135/share in November 2018; but it was voted down at a Scheme Meeting. 
Elliott has now, surprisingly, exited. This may open the door for a fourth Offer. Shares popped 14% on the news.  


Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

Far East Hospitality Trust / Equity Bottom-Up

<ul>
<li>Not all hospitality REITs in Singapore are beneficiaries of the rebound in tourism in Singapore. </li>
<li>Genting, OUE Commercial REIT, and Fraser Hospitality Trust are not exactly beneficiaries to the current tourism rebound. </li>
<li>Only Far East Hospitality Trust has a 100% exposure in hotels in Singapore while CDL Hospitality Trust has 41% of the total contribution from Singapore. </li>
</ul>


Not all hospitality REITs in Singapore are beneficiaries of the rebound in tourism in Singapore. 
Genting, OUE Commercial REIT, and Fraser Hospitality Trust are not exactly beneficiaries to the current tourism rebound. 
Only Far East Hospitality Trust has a 100% exposure in hotels in Singapore while CDL Hospitality Trust has 41% of the total contribution from Singapore. 


Southeast Asia Tourism: Who Are the Beneficiaries

Research from Asian Century Stocks, Asian Century Stocks

Michael Fritzell

Research from Asian Century Stocks

Providing financial journalism in the Asia-Pacific

Asian Century Stocks

Asian Century Stocks is a newsletter providing financial journalism for companies and stocks in the Asia-Pacific. 
The Asian Century Stocks logotype “百” stands for “one hundred” or a “century”. The economic centre of gravity is moving towards Asia. Yet most global investors are missing out.

Thematic (Sector/Industry)

<p>Jefferies strategist Chris Wood made an interesting comment in his 4Q21 Asia Maxima report. He expressed a bullish view on Singaporean residential property developers, quoting a 40% discount to book and rapidly improving fundamentals. Here is a short report on the sector to figure out whether his bullishness is warranted or not.</p>
<ul>
<li>
<p>Supply &amp; demand for residential property is not necessarily out of sync. The 2009-2013 period was a bubble and should not be seen as a baseline.</p>
</li>
<li>
<p>The retail, office and hospitality segments have suffered over the past two years due to cross-border travel restrictions, working from home during the pandemic and the threat from e-commerce. But several of these factors are one-off in nature.</p>
</li>
<li>
<p>I see value in City Developments, given high-quality assets, excellent execution and an upside of almost +60% using reasonable assumptions.</p>
</li>
<li>
<p>I’m also bullish on small-cap Bukit Sembawang, which sit on a valuable land bank and has won awards as one of the best property developers in Singapore.</p>
</li>
</ul>

Jefferies strategist Chris Wood made an interesting comment in his 4Q21 Asia Maxima report. He expressed a bullish view on Singaporean residential property developers, quoting a 40% discount to book and rapidly improving fundamentals. Here is a short report on the sector to figure out whether his bullishness is warranted or not.


Supply &amp; demand for residential property is not necessarily out of sync. The 2009-2013 period was a bubble and should not be seen as a baseline.


The retail, office and hospitality segments have suffered over the past two years due to cross-border travel restrictions, working from home during the pandemic and the threat from e-commerce. But several of these factors are one-off in nature.


I see value in City Developments, given high-quality assets, excellent execution and an upside of almost +60% using reasonable assumptions.


I’m also bullish on small-cap Bukit Sembawang, which sit on a valuable land bank and has won awards as one of the best property developers in Singapore.



<div>
<p>This week in StubWorld ...</p>
</div>
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<p>Following Yue Xiu's privatization Offer for <a href="https://www.smartkarma.com/entities/chong-hing-bank-ltd" target="_blank" data-smartkarma-citation="entities:344:1" rel="noopener">Chong Hing Bank (1111 HK)</a>, Hong Kong's remaining  "family"-owned banks, such as <a href="https://www.smartkarma.com/entities/bank-of-east-asia-ltd" target="_blank" data-smartkarma-citation="entities:341:1" rel="noopener">Bank of East Asia (23 HK)</a> (BEA), are back in focus. <a href="https://www.smartkarma.com/entities/guoco-group-ltd" target="_blank" data-smartkarma-citation="entities:5290:1" rel="noopener">Guoco Group Ltd (53 HK)</a> is trading cheap to its historical NAV discount range, and the 14.94% holding in BEA accounts for 15% of its NAV.</p>
</div>
</div>
<div>
<p>Preceding my comments on Guoco are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
</div>
<div>
<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
</div>


This week in StubWorld ...



Following Yue Xiu's privatization Offer for Chong Hing Bank (1111 HK), Hong Kong's remaining  "family"-owned banks, such as Bank of East Asia (23 HK) (BEA), are back in focus. Guoco Group Ltd (53 HK) is trading cheap to its historical NAV discount range, and the 14.94% holding in BEA accounts for 15% of its NAV.



Preceding my comments on Guoco are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


StubWorld: Guoco/BEA Into Focus Post Chong Hing Bank Bid

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<div>
<p>Back on the 15 January, <a href="https://www.smartkarma.com/entities/guoco-group-ltd" target="_blank" data-smartkarma-citation="entities:5290:1" rel="noopener">Guoco Group Ltd (53 HK)</a> made a <a href="https://links.sgx.com/FileOpen/Offer%20Announcement.ashx?App=Announcement&amp;FileID=645181" target="_blank" rel="noopener">voluntary conditional cash Offer</a> for 70.84%-held <a href="https://www.smartkarma.com/entities/gl-ltd" target="_blank" data-smartkarma-citation="entities:2540:1" rel="noopener">GL Ltd (GLL SP)</a>. The Offer Price of S$0.70/share was a 25% premium to last close and 0.73x P/NAV. The Offer carried an acceptance condition of 90%, including Guoco's stake, which could be reduced to 50%. </p>
<p>It was a lacklustre Offer. The IFA agreed in the <a href="https://links.sgx.com/FileOpen/Revised_Offeree_Circular.ashx?App=Announcement&amp;FileID=648639" target="_blank" rel="noopener">Circular</a>, and said the Offer was not fair; but still opined it was reasonable. The Securities Investors Association (Singapore) (SIAS) <a href="https://sias.org.sg/latest-updates/letter-to-guocoleisure-holdings-limited-appeal-on-behalf-of-minority-shareholders-of-gl-limited/" target="_blank" rel="noopener">chimed in</a>, saying it thought the Offer was low-balled.</p>
</div>
<p>Historically, Guoco have had a tendency to be frugal in their privatisation Offers. In its 2005 attempt to take GLL private back in 2005, it <em>did</em> bump its Offer to $1.25/share from S$1.20.</p>
<h3>The New News</h3>
<p>Guoco has now <a href="https://links.sgx.com/FileOpen/Dealings%20Disclosure%20and%20Revision%20of%20Offer%20Price%20Announcement.ashx?App=Announcement&amp;FileID=651983" target="_blank" rel="noopener">bumped the Offer</a> by 14.3% to S$0.80/share. The Offer consideration is final and the Offer declared unconditional in all respects.</p>
<p>Guoco has 83.4% in the bag, including its own 72.96% stake. The revised Offer terms fall outside the fair value range from the IFA, but there's probably enough here to test the 90% acceptance level, and afford Guoco the right to compulsory acquire shares. </p>
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<p>As always, more below the fold.</p>
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<p></p>
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Back on the 15 January, Guoco Group Ltd (53 HK) made a voluntary conditional cash Offer for 70.84%-held GL Ltd (GLL SP). The Offer Price of S$0.70/share was a 25% premium to last close and 0.73x P/NAV. The Offer carried an acceptance condition of 90%, including Guoco's stake, which could be reduced to 50%. 
It was a lacklustre Offer. The IFA agreed in the Circular, and said the Offer was not fair; but still opined it was reasonable. The Securities Investors Association (Singapore) (SIAS) chimed in, saying it thought the Offer was low-balled.

Historically, Guoco have had a tendency to be frugal in their privatisation Offers. In its 2005 attempt to take GLL private back in 2005, it did bump its Offer to $1.25/share from S$1.20.
The New News
Guoco has now bumped the Offer by 14.3% to S$0.80/share. The Offer consideration is final and the Offer declared unconditional in all respects.
Guoco has 83.4% in the bag, including its own 72.96% stake. The revised Offer terms fall outside the fair value range from the IFA, but there's probably enough here to test the 90% acceptance level, and afford Guoco the right to compulsory acquire shares. 

As always, more below the fold.














GL Limited: Guoco Bumps & Declares Offer Unconditional

Singapore

Ascendas India Trust is a business trust that invests in real estate. The trust acquires, owns, and develops land for business use.

Ho Bee Land Limited develops and invests in real estate properties in Singapore and United Kingdom.  The Company also operates hotels.

First Sponsor Group Limited, an investment holding company, is engaged in the property development and investment activities primarily in the People's Republic of China. Its properties include residential and commercial properties.

Wing Tai Holdings Limited is an investment holding company whose subsidiaries invest in and develop properties, manufacture woven labels, and trade garments and architectural products and accessories.  The Company also provides management services and operates restaurants.

Bukit Sembawang Estates Limited, through its subsidiaries, operates in property development, property mortgage financing, and the holding of properties and investments. The Company provides residential property development throughout Singapore.

Singapore Land Group Limited operates as a real estate company. The Company develops and invests in properties, and provides property management, information technology, development management and consultancy services, as well as trades in computers and related products, and invests in hotels and retail centers. Singapore Land Group serves clients in Singapore.

Yanlord Land Group Ltd is a real estate development company. The Company develops high-end residential property projects in the Peoples Republic of China.

Sinarmas Land Ltd. invests in, develops and manages real estate.  The Company owns commercial buildings, hotels and resorts in China, Indonesia, Malaysia and Singapore.

Hong Fok Corporation Limited is an investment holding company whose principal activities consist of property investment, property development, property management, and investment trading.

Far East Orchard Limited operates a diversified portfolio focusing on property development, hospitality real estate development and management and healthcare real estate. The Company operates a hospitality portfolio spanning Australia, China, Denmark, Germany, Hungary, Malaysia, New Zealand, and Singapore and owns purpose-built medical suites in Singapore.

China Jinmao Holdings Group Limited invests in and develops real estate projects in the Peoples Republic of China.

Sunac China Holdings Limited is a real estate development company.

Great Eagle Holdings Limited, through its subsidiaries, develops and invests in properties, operates hotels and restaurants, and trades building materials.  The Company also invests in securities and provides management, maintenance, and insurance agency services.  In addition, Great Eagle operates sports clubs.

Sunteck Realty Ltd. develops real estate.

Hainan Haide Industry Co., Ltd. develops residential properties and operates a hotel.

Cinda Real Estate Co., Ltd. is a residential property development company.

Cathay Real Estate Development Co., Ltd. develops, sells, and leases residential and commercial buildings which are constructed by independent contractors.

Eco World Development Group Berhad is an investment holding company which operates property investment and development.  Through its subsidiaries, the Company develops properties and provides project management services.

Mahindra Lifespace Developers Limited specializes in the construction and operation of commercial and residential property complexes, projects management services and business centers.

Mahindra Lifespace Developers Ltd (MLIFE IN)

Macrolink Culturaltainment Development Co., Ltd. develops real estate projects; sells construction materials, daily necessities and hardware; manages investments; and leases office and commercial properties.

Macrolink Culturaltainment Development Co., Ltd. (000620 CH)

Macrolink Culturaltainment Development Co., Ltd.

GuocoLand Limited is a regional property company with operations in Singapore, China, Malaysia and Vietnam. Headquartered in Singapore, the principal business activities of GuocoLand and its subsidiaries (“the Group”) are property development, property investment, hotel operations and property management.

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GuocoLand (GUOL SP)

Guoco (53 HK): Fourth Time's A Charm?

I like Guoco Group (53 HK) here either as a potential privatisation play from the Quek family or simply as a deep value play.

David Blennerhassett

Southeast Asia Tourism: Who Are the Beneficiaries

the real beneficiaries of the Singapore rebound in tourism (ex-China) are limited to a few names only. Far East Hospitality Trust and CDL...

Henry Soediarko

Singapore Residential Property

Jefferies strategist Chris Wood made an interesting comment in his 4Q21 Asia Maxima report. He expressed a bullish view on Singaporean residential...

Asian Century Stocks

StubWorld: Guoco/BEA Into Focus Post Chong Hing Bank Bid

Following the privatization Offer for Chong Hing, Bank of East Asia is back in focus. Guoco is trading cheap to its historical NAV discount range,...

David Blennerhassett

GL Limited: Guoco Bumps & Declares Offer Unconditional

This will trade tight to, if not to terms. This is a done deal. If this trades a spread or two below terms, get involved. I still like Guoco here,...

David Blennerhassett

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