Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Unexpectantly, <a href="https://www.smartkarma.com/entities/great-eagle-holdings-ltd" target="_blank" data-smartkarma-citation="entities:758:1" rel="noopener">Great Eagle Holdings (41 HK)</a> said it would not proceed with an Offer; and Hong Kong hotel-play <a href="https://www.smartkarma.com/entities/langham-hospitality-inv-ss" target="_blank" data-smartkarma-citation="entities:760:1" rel="noopener">Langham Hospitality (1270 HK)</a> promptly cratered. But why the flip flop?</li>
<li>Preceding my comments on GE, Langham and <a href="https://www.smartkarma.com/entities/champion-reit" target="_blank" data-smartkarma-citation="entities:759:1" rel="noopener">Champion REIT (2778 HK)</a>, are the current setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>


Unexpectantly, Great Eagle Holdings (41 HK) said it would not proceed with an Offer; and Hong Kong hotel-play Langham Hospitality (1270 HK) promptly cratered. But why the flip flop?
Preceding my comments on GE, Langham and Champion REIT (2778 HK), are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: What Now With Langham (1270 HK)?

<ul>
<li>For the month of May 2024, 10 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$6.6bn.</li>
<li>The average premium for the new transactions announced (or first discussed) in May was ~60%. The average premium YTD is ~46%. Japan is well up yoy. Hong Kong is down.</li>
<li>This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.</li>
</ul>


For the month of May 2024, 10 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$6.6bn.
The average premium for the new transactions announced (or first discussed) in May was ~60%. The average premium YTD is ~46%. Japan is well up yoy. Hong Kong is down.
This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.


(Mostly) Asia M&A, May 2024: Malaysia Airports, Alps Logistics, Nihon Housing, Great Eastern

<ul>
<li>For the month of April 2024, 7 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$4bn. </li>
<li>The average premium for the new transactions announced (or first discussed) in April was ~55%. The average premium YTD is ~42%. </li>
<li>This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.</li>
</ul>


For the month of April 2024, 7 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$4bn. 
The average premium for the new transactions announced (or first discussed) in April was ~55%. The average premium YTD is ~42%. 
This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.


(Mostly) Asia M&A, April 2024: Austal, L'Occitane, Langham Hosp., Jastec, Mimasu, Best World, Isetan

<ul>
<li>In <a href="https://skr.ma/mqr7w" target="_blank" rel="noopener">RMB Dual Counter Trading Is Coming - This Changes AH Relationships</a>, <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> discussed the forthcoming inclusion of RMB dual counters in the Hong Kong Southbound Connect programs.</li>
<li>This is but one of the five capital market cooperation measures <a href="http://www.csrc.gov.cn/csrc/c100028/c7474875/content.shtml" target="_blank" rel="noopener">announced</a> by the CSRC last Friday. </li>
<li>The other four measures include ETFs, improving mutual recognition of funds, increasing China IPOs in Hong Kong, and the inclusion of REITs. This insight discusses the latter.</li>
</ul>


In RMB Dual Counter Trading Is Coming - This Changes AH Relationships, Travis Lundy discussed the forthcoming inclusion of RMB dual counters in the Hong Kong Southbound Connect programs.
This is but one of the five capital market cooperation measures announced by the CSRC last Friday. 
The other four measures include ETFs, improving mutual recognition of funds, increasing China IPOs in Hong Kong, and the inclusion of REITs. This insight discusses the latter.


<ul>
<li>And eagle-eyed reader spotted <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a>'s scrip dividend option for the FY23 final dividend. That's the first time I've seen HLP provide this alternative. </li>
<li>Over the years, the Chan family and <a href="https://www.smartkarma.com/entities/hang-lung-group-ltd" target="_blank" data-smartkarma-citation="entities:50:1" rel="noopener">Hang Lung (10 HK)</a> have chipped away at HLG's and HLP's minorities. HLP and HLG are currently trading at all-time low P/Bs. </li>
<li>This scrip dividend, which takes a page out of <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson (JM SP)</a>'s playbook, would boost HLG's stake in HLP to ~63% from 61.24% currently; if opting only for scrip.</li>
</ul>


And eagle-eyed reader spotted Hang Lung Properties (101 HK)'s scrip dividend option for the FY23 final dividend. That's the first time I've seen HLP provide this alternative. 
Over the years, the Chan family and Hang Lung (10 HK) have chipped away at HLG's and HLP's minorities. HLP and HLG are currently trading at all-time low P/Bs. 
This scrip dividend, which takes a page out of Jardine Matheson (JM SP)'s playbook, would boost HLG's stake in HLP to ~63% from 61.24% currently; if opting only for scrip.


Hang Lung Group: Thoughts On HLP's Scrip Dividend

Hong Kong

Langham Hospitality Investments and Langham Hospitality Investment Limited is a stapled entity. The Company primarily owns and invests in a portfolio of hotels in Asia.

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Langham Hospitality Inv Ss (1270 HK)

StubWorld: What Now With Langham (1270 HK)?

Nothing will happen to Langham for six months. GE flip flopping is not a great look. Of the three stocks mentioned here, CREIT is my pick. But...

David Blennerhassett

(Mostly) Asia M&A, May 2024: Malaysia Airports, Alps Logistics, Nihon Housing, Great Eastern

For the month of May, 10 new deals were discussed on Smartkarma with an overall deal size of just ~US$7bn. The average premium for the new deals...

David Blennerhassett

(Mostly) Asia M&A, April 2024: Austal, L'Occitane, Langham Hosp., Jastec, Mimasu, Best World, Isetan

For the month of April, 7 new deals were discussed on Smartkarma with an overall deal size of just ~US$4bn. The average premium for the new deals...

David Blennerhassett

HK REITs Re-Rate On Southbound Inclusion

Stick to a basket of Hong Kong-focused REITs. I'd tilt to those HK-REITs which are not 100% exposed to the office-space, such as Link REIT (823...

David Blennerhassett

Hang Lung Group: Thoughts On HLP's Scrip Dividend

At 0.13x and 027x P/B - both all-time lows - HLG and HLP are super cheap. I'd still be cautious jumping into either HLG or HLP in a major way

David Blennerhassett

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