External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>Our NDR with Samsonite’s management indicated a rather stable 4Q and hence a maintained full-year 2023 guidance with high-teen sales increase year-overfour-year (Yo4Y), 59%+ gross margins and 19%+ adjusted EBITDA margins.</li><li>Specifically, for the December-quarter, management preliminarily commented that 1) cFX sales growth Yo4Y would be somewhere between mid-to-high teen, excluding Russia &amp; Speck; 2) adj. EBITDA margin will be slightly below 3Q23, but will remain close to 19%, 3) A&amp;P ratio will hover between 6.5-7.0% of sales, and 4) adverse F/X impact will become more apparent, especially that from Turkey and Argentina.</li><li>We believe these should match investors’ expectation and help Samsonite circumvent any de-rating risks entering the March reporting season. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Our NDR with Samsonite’s management indicated a rather stable 4Q and hence a maintained full-year 2023 guidance with high-teen sales increase year-overfour-year (Yo4Y), 59%+ gross margins and 19%+ adjusted EBITDA margins.Specifically, for the December-quarter, management preliminarily commented that 1) cFX sales growth Yo4Y would be somewhere between mid-to-high teen, excluding Russia &amp; Speck; 2) adj. EBITDA margin will be slightly below 3Q23, but will remain close to 19%, 3) A&amp;P ratio will hover between 6.5-7.0% of sales, and 4) adverse F/X impact will become more apparent, especially that from Turkey and Argentina.We believe these should match investors’ expectation and help Samsonite circumvent any de-rating risks entering the March reporting season. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Samsonite (1910 HK) – 4Q Preview: Sales/Adj. EBITDA +18%/+36%

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Hong Kong market quietly broke its downward trend channel last week, however the HSI met strong resistance at 18200 (100 Week Moving Average).</li>
<li>
<a href="https://www.smartkarma.com/entities/picc-property-casualty-h" target="_blank" data-smartkarma-citation="entities:350:1" rel="noopener">PICC Property &amp; Casualty H (2328 HK)</a> and <a href="https://www.smartkarma.com/entities/china-petroleum-chemical-h" target="_blank" data-smartkarma-citation="entities:369:1" rel="noopener">China Petroleum &amp; Chemical (386 HK)</a> broke to new highs relative to MSCI indices.  Sinopec may benefit from stronger RMB in 2H24.
</li>
<li><a href="https://www.smartkarma.com/entities/shenzhou-intl-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10415:1" rel="noopener">Shenzhou Intl Group Holdings (2313 HK)</a> had a short-term turnaround from its downtrend.  The company reported growth in sales and better margins in 2Q24.</li>
</ul>


Hong Kong market quietly broke its downward trend channel last week, however the HSI met strong resistance at 18200 (100 Week Moving Average).

PICC Property &amp; Casualty H (2328 HK) and China Petroleum &amp; Chemical (386 HK) broke to new highs relative to MSCI indices.  Sinopec may benefit from stronger RMB in 2H24.

Shenzhou Intl Group Holdings (2313 HK) had a short-term turnaround from its downtrend.  The company reported growth in sales and better margins in 2Q24.


Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 3)

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>In a surprise, the Hang Seng index committee has decided not to make any constituent changes to the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> at the March rebalance.</li>
<li>We now see the index reaching its 100-member target in 2025 at the earliest, though we would not be surprised to see it spill into 2026 as well.</li>
<li>Free float and capping changes will result in one-way turnover of 1.2% resulting in a round trip trade of HK$4.54bn. <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings (5 HK)</a> is the biggest sell.</li>
</ul>


In a surprise, the Hang Seng index committee has decided not to make any constituent changes to the Hang Seng Index (HSI INDEX) at the March rebalance.
We now see the index reaching its 100-member target in 2025 at the earliest, though we would not be surprised to see it spill into 2026 as well.
Free float and capping changes will result in one-way turnover of 1.2% resulting in a round trip trade of HK$4.54bn. HSBC Holdings (5 HK) is the biggest sell.


Hang Seng Index (HSI) Rebalance: Idling at 82 Members; 100 Members in 2025 at the Earliest

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>In late 2018, there were reports that French beauty retailer <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> had <a href="https://www.ft.com/content/e67c6854-f276-11e8-9623-d7f9881e729f" target="_blank" rel="noopener">drawn interest</a> from Advent International. That rumour came to naught. </li>
<li>Similarly, late last month, L'Occitane <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0727/2023072700083.pdf" target="_blank" rel="noopener">clarified media reports</a> that it had not received any Offer or proposal. </li>
<li>After going into a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0809/2023080900103.pdf" target="_blank" rel="noopener">trading halt</a> this morning, reportedly (<a href="https://www.reuters.com/markets/deals/loccitane-owner-advanced-talks-take-it-private-sources-2023-08-09/" target="_blank" rel="noopener">Reuters</a>) Chairman Reinold Geiger has been discussing a possible offer of ~HK$35 for each L'Occitane share he doesn't already own.</li>
</ul>


In late 2018, there were reports that French beauty retailer L'Occitane (973 HK) had drawn interest from Advent International. That rumour came to naught. 
Similarly, late last month, L'Occitane clarified media reports that it had not received any Offer or proposal. 
After going into a trading halt this morning, reportedly (Reuters) Chairman Reinold Geiger has been discussing a possible offer of ~HK$35 for each L'Occitane share he doesn't already own.


L'Occitane (973 HK): Ripe for a Makeover?

Event-Driven Investment Opportunities, Special Situation Investments

Dalius Tauraitis

Event-Driven Investment Opportunities

Special Situation Investments

Focus on event-driven trades and low risk arbitrage opportunities with short term catalysts

<ul><li>Learning Technologies Group and TI Fluid Systems are engaged in merger arbitrage, with due diligence and PUSU deadlines approaching.</li><li>Embracer Group and Grifols are addressing discounts through spin-offs and potential privatizations, aiming to eliminate share class disparities.</li><li>Litigation cases for Gold Reserve and Finch Therapeutics could result in substantial financial awards, impacting share valuations significantly.</li></ul>

Learning Technologies Group and TI Fluid Systems are engaged in merger arbitrage, with due diligence and PUSU deadlines approaching.Embracer Group and Grifols are addressing discounts through spin-offs and potential privatizations, aiming to eliminate share class disparities.Litigation cases for Gold Reserve and Finch Therapeutics could result in substantial financial awards, impacting share valuations significantly.

Active Merger Arbitrage and Litigation Opportunities: Key Insights on Current Financial Market

United States

Samsonite International SA designs, manufactures, and distributes luggage. The Company's products include suitcases, garment bags, casual bags, business cases, clothing, shoes, and accessories. Samsonite also licenses their trademarks for use on products such as travel accessories, leather goods, handbags, clothing, and furniture.

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Samsonite (1910 HK)