Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Chow Tai Fook (CTFE) has made a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0627/2023062700091.pdf" target="_blank" rel="noopener">voluntary cash Offer</a> for <a href="https://www.smartkarma.com/entities/new-world-development" target="_blank" data-smartkarma-citation="entities:7037:1" rel="noopener"><strong>New World Development (17 HK</strong>)</a>'s (NWD) 60.88%-held <strong><a href="https://www.smartkarma.com/entities/nws-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3350:1" rel="noopener">NWS Holdings (659 HK)</a></strong> at HK$9.15/share, a 22.2% premium to undisturbed. </li>
<li>CTFE and connected parties hold 45.24% of NWD, therefore the parent is effectively injecting ~US$2.75bn of cash into NWD for its NWS stake.</li>
<li>The Offer is subject to regulatory approvals in Hong Kong and Bermuda. These will not be an issue given CTFE is NWD's ultimate shareholder. </li>
</ul>


Chow Tai Fook (CTFE) has made a voluntary cash Offer for New World Development (17 HK)'s (NWD) 60.88%-held NWS Holdings (659 HK) at HK$9.15/share, a 22.2% premium to undisturbed. 
CTFE and connected parties hold 45.24% of NWD, therefore the parent is effectively injecting ~US$2.75bn of cash into NWD for its NWS stake.
The Offer is subject to regulatory approvals in Hong Kong and Bermuda. These will not be an issue given CTFE is NWD's ultimate shareholder. 


Chow Tai Fooks' Offer For NWS (659 HK). Buy NWD (17 HK)

Listed Real Estate Asia, KT Capital Group

Jacob Cheng

Listed Real Estate Asia

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Thematic (Sector/Industry)

<ul>
<li>The US paused the rate hike, but delivered a hawkish surprise to the market that showed a median projection of 2 additional rate hikes instead of one</li>
<li>In China, PBoC cut 7 day repo rate for 10bps, and then cut MLF by also 10bps from 2.75% to 2.65%</li>
<li>Stock market is always looking forward and trades on expectations of the fundamentals; BUY Chinese names COLI 688 HK,  HLP 101 HK, and HK name NWD 17 HK</li>
</ul>


The US paused the rate hike, but delivered a hawkish surprise to the market that showed a median projection of 2 additional rate hikes instead of one
In China, PBoC cut 7 day repo rate for 10bps, and then cut MLF by also 10bps from 2.75% to 2.65%
Stock market is always looking forward and trades on expectations of the fundamentals; BUY Chinese names COLI 688 HK,  HLP 101 HK, and HK name NWD 17 HK


Short Note: US Rate Pause, China Stimulus, and the HK Rebound

<ul>
<li>HK stock market rebounded strongly due to a few reasons, mostly macro and policy-related.  Macro factors and policies become primary share price drivers</li>
<li>Investors can add more beta names (China Property Developers) and value plays (Hong Kong Developers) if they want to add exposure</li>
<li>Among the listed universe, 688 HK COLI, 17 HK NWD, 101 HK HLP are key names with attractive upside</li>
</ul>


HK stock market rebounded strongly due to a few reasons, mostly macro and policy-related.  Macro factors and policies become primary share price drivers
Investors can add more beta names (China Property Developers) and value plays (Hong Kong Developers) if they want to add exposure
Among the listed universe, 688 HK COLI, 17 HK NWD, 101 HK HLP are key names with attractive upside


Happy Friday & Strong HK Rebound! What to Chase? China Prop (High Beta) And HK Prop (Value Play)

Travis Lundy

<ul>
<li>The <a href="https://www.smartkarma.com/entities/yuexiu-property-co-ltd" target="_blank" data-smartkarma-citation="entities:18097:1" rel="noopener">Yuexiu Property (123 HK)</a> Rights start trading today. Last day is next Monday. There is a general pattern to the flows and it behooves investors to be aware.</li>
<li>There is a pattern to these trades which is worth understanding.</li>
<li>In this case, I expect it is worth going long Yuexiu Rights vs Short peer basket equity earlier in the cycle.</li>
</ul>


The Yuexiu Property (123 HK) Rights start trading today. Last day is next Monday. There is a general pattern to the flows and it behooves investors to be aware.
There is a pattern to these trades which is worth understanding.
In this case, I expect it is worth going long Yuexiu Rights vs Short peer basket equity earlier in the cycle.


Equity Bottom-Up

<ul>
<li>Hong Kong retail sales strongly rebounded 41% yoy in March</li>
<li>During May Day Holiday (Apr 29 – May 3), there was 625k mainland visitors to Hong Kong, around 63% of pre-COVID level</li>
<li>Among all RE sub-sectors, retail and residential will be the first to recover (already seeing recovery), office will be lagging and the last. </li>
</ul>


Hong Kong retail sales strongly rebounded 41% yoy in March
During May Day Holiday (Apr 29 – May 3), there was 625k mainland visitors to Hong Kong, around 63% of pre-COVID level
Among all RE sub-sectors, retail and residential will be the first to recover (already seeing recovery), office will be lagging and the last. 


HK RE: Retail to Benefit from Tourism Recovery.  Buy HLP 101 HK & NWD 17 HK on Attractive Valuation

Hong Kong

New World Development Company Limited, through its subsidiaries, develops and invests in properties, provides contracting services, property management, and transportation services.  The Company also operates infrastructure business, telecommunication services, department stores, hotels and restaurants, and media and technology business.

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New World Development (17 HK)

Chow Tai Fooks' Offer For NWS (659 HK). Buy NWD (17 HK)

Assuming the final divi of HK$0.31/share is added on top of the offer price; and payment around 7 months out, I'd be buying up to $8.95 or so (10%...

David Blennerhassett

Short Note: US Rate Pause, China Stimulus, and the HK Rebound

Over the week, US delivered hawkish surprise while China continued to cut rates. On the back of slowing export and weak domestic demand, we expect...

Jacob Cheng

Happy Friday & Strong HK Rebound! What to Chase? China Prop (High Beta) And HK Prop (Value Play)

HK market strongly rebounded today due to a few macro and policy-related reasons. If investors want to add exposure, we recommend China (high beta...

Jacob Cheng

Yuexiu Rights - The Trading Pattern Fits

Yuexiu Property (123 HK) Rights are trading today. The stock is trading down, as expected, as those who do not wish to re-up sell their rights. I...

Travis Lundy

HK RE: Retail to Benefit from Tourism Recovery. Buy HLP 101 HK & NWD 17 HK on Attractive Valuation

Latest data show that tourism for HK is recovering. Retail sales also show strong yoy growth. After HK's reopening, retail and residential are...

Jacob Cheng

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