Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Huge volumes continue to be traded on the mainland share markets. SOUTHBOUND volumes bounced, and net buying was both large and broad-based.</li>
<li>It was an odd week. Strangely, HK stocks sharply underperformed mainland indices but AH premia fell on average, more so for liquid names, but wider spreads narrowed, narrow spreads widened.</li>
<li>This week's confabs did NOT deliver stimulus plans, but with Donald Trump's election, I expect any major fiscal plans get pushed back to next spring to adapt on the fly.</li>
</ul>


Huge volumes continue to be traded on the mainland share markets. SOUTHBOUND volumes bounced, and net buying was both large and broad-based.
It was an odd week. Strangely, HK stocks sharply underperformed mainland indices but AH premia fell on average, more so for liquid names, but wider spreads narrowed, narrow spreads widened.
This week's confabs did NOT deliver stimulus plans, but with Donald Trump's election, I expect any major fiscal plans get pushed back to next spring to adapt on the fly.


A/H Premium Tracker (To 8 Nov 2024): AH Premia Lower Despite A-Share Outperformance

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li>Hong Kong markets continue to outperform this year with the HSCEI up 30% year to date.  Market breadth continues to be healthy with 80% of stocks over &gt; 200 DMA.</li>
<li>
<a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a> announced its new hybrid technology which gives vehicles a range of more than 870 miles (1400 Kms).  The company has delivered more than 120k vehicles YTD.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-merchants-securities-co-4f5d644c-0051-426f-9706-eaa74b0ba280" target="_blank" data-smartkarma-citation="entities:22738:1" rel="noopener">China Merchants Securities Co Ltd (H) (6099 HK)</a> benefits from increased market turnover.   <a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings (9987 HK)</a> beat consensus for 3Q24 earnings and will continue its buyback program.</li>
</ul>


Hong Kong markets continue to outperform this year with the HSCEI up 30% year to date.  Market breadth continues to be healthy with 80% of stocks over &gt; 200 DMA.

XPeng (9868 HK) announced its new hybrid technology which gives vehicles a range of more than 870 miles (1400 Kms).  The company has delivered more than 120k vehicles YTD.

China Merchants Securities Co Ltd (H) (6099 HK) benefits from increased market turnover.   Yum China Holdings (9987 HK) beat consensus for 3Q24 earnings and will continue its buyback program.


The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (November 7)

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.

Haitong Securities Co Ltd (H) / Event-Driven

<ul>
<li>The gross spreads of large HK merger arb situations have increased since 18 October. The widening spread is due to the unfortunate fallout from the China TCM deal break. </li>
<li>We assess the widening spreads of HK's merger arb situations on several factors. Deal risk of the HK merger arb situations is evaluated by allocating 15 points across each factor.</li>
<li>In descending order, the companies with the lowest deal risk are <a href="https://www.smartkarma.com/entities/haitong-securities-co-ltd-h" target="_blank" rel="noopener">Haitong Securities Co Ltd (H) (6837 HK)</a>, <a href="https://www.smartkarma.com/entities/cpmc-holdings-ltd" target="_blank" rel="noopener">CPMC Holdings (906 HK)</a>, <a href="https://www.smartkarma.com/entities/greatview-aseptic-packaging" target="_blank" rel="noopener">Greatview Aseptic Packaging (468 HK)</a>, <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a>, and Canvest.</li>
</ul>


The gross spreads of large HK merger arb situations have increased since 18 October. The widening spread is due to the unfortunate fallout from the China TCM deal break. 
We assess the widening spreads of HK's merger arb situations on several factors. Deal risk of the HK merger arb situations is evaluated by allocating 15 points across each factor.
In descending order, the companies with the lowest deal risk are Haitong Securities Co Ltd (H) (6837 HK), CPMC Holdings (906 HK), Greatview Aseptic Packaging (468 HK), Shanghai Henlius Biotech (2696 HK), and Canvest.


HK Merger Arb: Evaluating the Post China TCM Widening Spreads

<ul>
<li>We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.</li>
<li>Highest spreads: <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a>, <a href="https://www.smartkarma.com/entities/beijing-capital-grand-ltd" target="_blank" data-smartkarma-citation="entities:18241:1" rel="noopener">Beijing Capital Grand (1329 HK)</a>, <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a>, <a href="https://www.smartkarma.com/entities/canvest-environmental-protection-group-co-ltd" target="_blank" data-smartkarma-citation="entities:100:1" rel="noopener">Canvest Environmental Protection Group (1381 HK)</a>, <a href="https://www.smartkarma.com/entities/greatview-aseptic-packaging" target="_blank" data-smartkarma-citation="entities:10802:1" rel="noopener">Greatview Aseptic Packaging (468 HK)</a>. 
</li>
<li>Lowest spreads: <a href="https://www.smartkarma.com/entities/platinum-asset-management" target="_blank" data-smartkarma-citation="entities:914:1" rel="noopener">Platinum Asset Management (PTM AU)</a>, <a href="https://www.smartkarma.com/entities/silverlake-axis-ltd" target="_blank" data-smartkarma-citation="entities:14150:1" rel="noopener">Silverlake Axis (SILV SP)</a>, <a href="https://www.smartkarma.com/entities/nec-networks-system-integr" target="_blank" data-smartkarma-citation="entities:16396:1" rel="noopener">Nec Networks &amp; System Integr (1973 JP)</a>, <a href="https://www.smartkarma.com/entities/t-gaia-corp" target="_blank" data-smartkarma-citation="entities:8339:1" rel="noopener">T Gaia Corp (3738 JP)</a>, <a href="https://www.smartkarma.com/entities/elematec-corp" target="_blank" data-smartkarma-citation="entities:2866:1" rel="noopener">Elematec Corp (2715 JP)</a>. </li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Seven &amp; I Holdings (3382 JP), Beijing Capital Grand (1329 HK), Shanghai Henlius Biotech (2696 HK), Canvest Environmental Protection Group (1381 HK), Greatview Aseptic Packaging (468 HK). 

Lowest spreads: Platinum Asset Management (PTM AU), Silverlake Axis (SILV SP), Nec Networks &amp; System Integr (1973 JP), T Gaia Corp (3738 JP), Elematec Corp (2715 JP). 


Merger Arb Mondays (04 Nov) - Haitong, Canvest, Capital Grand, Capitol, Fuji Soft, NESIC, Elematec

<ul>
<li>Huge volumes continue to be traded on the mainland share markets. SOUTHBOUND volumes are dropping fast (down 28%wow, down 60-65% vs peak a few weeks ago).</li>
<li>AH premia expanded on average. Liquid H/A pairs saw the H underperform the A in the pair by 1.52% last week. </li>
<li>Continuing differences in opinion between onshore and offshore opinion regarding the vibe of Chinese stimulus will continue to lead to interesting dispersion. Identify the trend and jump in.</li>
</ul>


Huge volumes continue to be traded on the mainland share markets. SOUTHBOUND volumes are dropping fast (down 28%wow, down 60-65% vs peak a few weeks ago).
AH premia expanded on average. Liquid H/A pairs saw the H underperform the A in the pair by 1.52% last week. 
Continuing differences in opinion between onshore and offshore opinion regarding the vibe of Chinese stimulus will continue to lead to interesting dispersion. Identify the trend and jump in.


A/H Premium Tracker (To 1 Nov 2024): AH Premia Higher as A-Share Tech Underperforms

China

Guotai Junan Securities Co.,Ltd. provides financial services. The Company offers corporate finance, fixed income securities, asset management, risk management, and other services. Guotai Junan Securities Company serves clients throughout China.

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Guotai Junan Securities (2611 HK)

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (November 7)

Hong Kong markets are among the top performers this year. Short selling has declined as Southbound buying increases. Xpeng introduced a new hybrid...

David Mudd

HK Merger Arb: Evaluating the Post China TCM Widening Spreads

The gross spreads of large HK merger arb situations have increased since 18 October, the China TCM deal break date. We assess the spreads of HK's...

Arun George

Merger Arb Mondays (04 Nov) - Haitong, Canvest, Capital Grand, Capitol, Fuji Soft, NESIC, Elematec

This week, the highest gross spreads are Seven & I (28.8%), Capital Grand (18.1%), Henlius (13.1%), Canvest (12.4%), GA Pack (10.0%), Shinko...

Arun George

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A/H Premium Tracker (To 8 Nov 2024): AH Premia Lower Despite A-Share Outperformance

SOUTHBOUND was a big buyer last week of H shares. AH Premia fell slightly. Wide spreads saw Hs outperform. Narrow spreads underperformed. I expect...

Travis Lundy

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (November 7)

Hong Kong markets are among the top performers this year. Short selling has declined as Southbound buying increases. Xpeng introduced a new hybrid...

David Mudd

HK Merger Arb: Evaluating the Post China TCM Widening Spreads

The gross spreads of large HK merger arb situations have increased since 18 October, the China TCM deal break date. We assess the spreads of HK's...

Arun George

Merger Arb Mondays (04 Nov) - Haitong, Canvest, Capital Grand, Capitol, Fuji Soft, NESIC, Elematec

This week, the highest gross spreads are Seven & I (28.8%), Capital Grand (18.1%), Henlius (13.1%), Canvest (12.4%), GA Pack (10.0%), Shinko...

Arun George

A/H Premium Tracker (To 1 Nov 2024): AH Premia Higher as A-Share Tech Underperforms

AH premia widened this week with liquid spreads widening more than average spreads. The premium curve was inconsistent. Opportunistic reversion...

Travis Lundy