Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>It's just a question of when, not if, the bubble bursts for <a href="https://www.smartkarma.com/entities/pt-barito-renewables-energy-tbk" target="_blank" data-smartkarma-citation="entities:40150:1" rel="noopener">Barito Renewables Energy (BREN IJ)</a>, which is up 1,200% since it October 2023 IPO. </li>
<li>A Reuters article suggests a ¥500bn secondary offering for <a href="https://www.smartkarma.com/entities/honda-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:154:1" rel="noopener">Honda Motor (7267 JP)</a>. Honda has since said there is smoke. And we can assume there is fire.</li>
<li>Loo Choon Yong, <a href="https://www.smartkarma.com/entities/raffles-medical-group-ltd" target="_blank" data-smartkarma-citation="entities:879:1" rel="noopener">Raffles Medical Group (RFMD SP)</a>'s founder and major shareholder, continues to chip away at minorities, and now holds 54.944%,</li>
</ul>


It's just a question of when, not if, the bubble bursts for Barito Renewables Energy (BREN IJ), which is up 1,200% since it October 2023 IPO. 
A Reuters article suggests a ¥500bn secondary offering for Honda Motor (7267 JP). Honda has since said there is smoke. And we can assume there is fire.
Loo Choon Yong, Raffles Medical Group (RFMD SP)'s founder and major shareholder, continues to chip away at minorities, and now holds 54.944%,


Last Week in Event SPACE: Barito Renewables, Honda, Raffles Medical, Daidoh, Hanwha Corp

<ul>
<li>I tally 49 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.</li>
<li>Just one new deal was discussed this week on Smartkarma: <a href="https://www.smartkarma.com/entities/sermsuk-pcl" target="_blank" data-smartkarma-citation="entities:15918:1" rel="noopener">Sermsuk PCL (SSC TB)</a>'s Delisting Offer. There are also rumours of an Offer for <a href="https://www.smartkarma.com/entities/raffles-medical-group-ltd" target="_blank" data-smartkarma-citation="entities:879:1" rel="noopener">Raffles Medical Group (RFMD SP)</a>.</li>
<li>Key updates took place on: <a href="https://www.smartkarma.com/entities/l-occitane-international-sa" target="_blank" data-smartkarma-citation="entities:6772:1" rel="noopener">L'Occitane (973 HK)</a>, <a href="https://www.smartkarma.com/entities/shinko-electric-industries" target="_blank" data-smartkarma-citation="entities:15066:1" rel="noopener">Shinko Electric Industries (6967 JP)</a>, <a href="https://www.smartkarma.com/entities/mma-offshore-ltd" target="_blank" data-smartkarma-citation="entities:594:1" rel="noopener">MMA Offshore (MRM AU)</a>, and <a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation Technologies (HOLI US)</a>.</li>
</ul>


I tally 49 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Just one new deal was discussed this week on Smartkarma: Sermsuk PCL (SSC TB)'s Delisting Offer. There are also rumours of an Offer for Raffles Medical Group (RFMD SP).
Key updates took place on: L'Occitane (973 HK), Shinko Electric Industries (6967 JP), MMA Offshore (MRM AU), and Hollysys Automation Technologies (HOLI US).


(Mostly) Asia-Pac M&A: Sermsuk, L'Occitane, Shinko Electric, MMA Offshore, Hollysys

Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

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

<ul><li><a href="https://www.smartkarma.com/entities/19950" target="_blank" data-smartkarma-citation="entities:19950:1">Oriental Watch Holdings (398 HK)</a> is a HK/China watch retailer listed in HK since 1993</li><li>Rental prices in HK have dropped sharply and consumer sentiment in HK is improving</li><li>Oriental reached peak valuation of 6.2 HKD in July 2011</li><li>Oriental bottomed at 0.9 HKD in July 2016</li><li>With shares recently around 1.75 HKD they have doubled from last year but are still very cheap</li><li>Market cap is 1B HKD (128M USD) but EV only 221M HKD (28M USD)</li><li>First Half results showed turnaround, Second Half to be even better</li><li>Management moving to 90% payout as expansion plans are on hold: potential 10% yield in 2018</li><li>Fair Value: should trade at least at 0.75x book (2.9 HKD), or 65% upside </li></ul>

Oriental Watch Holdings (398 HK) is a HK/China watch retailer listed in HK since 1993Rental prices in HK have dropped sharply and consumer sentiment in HK is improvingOriental reached peak valuation of 6.2 HKD in July 2011Oriental bottomed at 0.9 HKD in July 2016With shares recently around 1.75 HKD they have doubled from last year but are still very cheapMarket cap is 1B HKD (128M USD) but EV only 221M HKD (28M USD)First Half results showed turnaround, Second Half to be even betterManagement moving to 90% payout as expansion plans are on hold: potential 10% yield in 2018Fair Value: should trade at least at 0.75x book (2.9 HKD), or 65% upside 

Oriental Watch: 0.45x Book, 2x 2018 Ex-Cash P/E, 78% of Mkt Cap Is Cash; 10% Dividend Likely in 2018

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Thematic (Sector/Industry)

Eighteen sales and marketing executives at Crown Resorts were reported as being detained in China, likely due to illegally soliciting Chinese to gamble in overseas casinos. Our contacts in the industry have already seen immediate termination of marketing efforts in mainland China by Macau casinos, which imply lower near-term gaming revenue in our view. A loss of higher-margin direct VIP business could also mean lower overall VIP margin for the Macau casinos, as junket VIP margins are one to two percentage points lower compared with direct VIP margins. Near-term sentiment will be unfavorable for the Macau gaming stocks. However, we gauge that marketing activities in mainland China will resurface as the dust settles, though casinos will take a lower-profile approach.To reflect the short-term impact, if we reduced 2016 full-year VIP, mass and slot revenue by 7.5% for our Macau gaming coverage, there would still be no impact on fair value estimates. Therefore, we maintain our long-term forecast and long-term-based, DCF-generated fair value estimates. Our narrow moat ratings also remain unchanged.Analyst: Chelsey Tam

Eighteen sales and marketing executives at Crown Resorts were reported as being detained in China, likely due to illegally soliciting Chinese to gamble in overseas casinos. Our contacts in the industry have already seen immediate termination of marketing efforts in mainland China by Macau casinos, which imply lower near-term gaming revenue in our view. A loss of higher-margin direct VIP business could also mean lower overall VIP margin for the Macau casinos, as junket VIP margins are one to two percentage points lower compared with direct VIP margins. Near-term sentiment will be unfavorable for the Macau gaming stocks. However, we gauge that marketing activities in mainland China will resurface as the dust settles, though casinos will take a lower-profile approach.To reflect the short-term impact, if we reduced 2016 full-year VIP, mass and slot revenue by 7.5% for our Macau gaming coverage, there would still be no impact on fair value estimates. Therefore, we maintain our long-term forecast and long-term-based, DCF-generated fair value estimates. Our narrow moat ratings also remain unchanged.Analyst: Chelsey Tam

Negative Near-Term Read-Throughs from the Detainment of Crown Resorts' Marketing Executives in China

Hong Kong

Hengdeli Holdings Limited, through its subsidiaries, retails and wholesales international brand watches in China.

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Hengdeli Holdings (3389 HK)

Last Week in Event SPACE: Barito Renewables, Honda, Raffles Medical, Daidoh, Hanwha Corp

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

(Mostly) Asia-Pac M&A: Sermsuk, L'Occitane, Shinko Electric, MMA Offshore, Hollysys

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

Oriental Watch: 0.45x Book, 2x 2018 Ex-Cash P/E, 78% of Mkt Cap Is Cash; 10% Dividend Likely in 2018

Oriental Watch Holdings (398 HK) is a HK/China watch retailer listed in HK since 1993 Rental prices in HK have dropped sharply and consumer...

Nicolas Van Broekhoven

Negative Near-Term Read-Throughs from the Detainment of Crown Resorts' Marketing Executives in China

Eighteen sales and marketing executives at Crown Resorts were reported as being detained in China, likely due to illegally soliciting Chinese to...

Morningstar, Inc.

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