Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>The pointy end of this deal gets pointier.</p>
<p>On the 25 November,  Ghanaian firm Engineers &amp; Planners Company formally <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02312766-6A1008633?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">launched</a> a A$1.05/share all-cash offer. <a href="https://www.smartkarma.com/entities/shandong-gold-mining-co-ltd-61153493-5437-47ee-a8d3-aec41fb7f1da" target="_blank" data-smartkarma-citation="entities:27455:1" rel="noopener">Shandong Gold Mining Co., Ltd. (1787 HK)</a> immediately <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02312766-6A1008633?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">bumped</a> its Offer to A$1.05/share. On the 11 December, Nordgold raised its Offer to <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02321283-6A1012105?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">A$1.05/share</a>.</p>
<h3>The Newest News</h3>
<p>Shandong has now <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02325410-6A1013747?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it will increase its Offer to A$1.075/share <em>provided</em> it holds at least 30% of Cardinal shares by the 31 December AND Nordgold's on-market Offer is not extended beyond the 23 December.</p>
<p>This transaction continues to drill down into the nuances and minutiae of the takeover rules under the Corporations Act.</p>
<div>
<p>More below the fold.</p>
</div>
<div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/179/910/original/image_7949790241608693879122.png?1608693879" class="editor-image img-responsive" data-smartkarma-image-id="179910"></figure>
</div>
<hr>
<div>
<h3>Past insights on Cardinal:</h3>
</div>
<section>
<div id="ember7847">
<div>
<div>
<div>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 218.75px;">
<h3>Date</h3>
</td>
<td style="width: 484.782px;">
<h3>Insight</h3>
</td>
</tr>
<tr>
<td style="width: 218.75px;">22-Jun-20</td>
<td style="width: 484.782px;"><em><a href="https://skr.ma/sVxVB" target="_blank" rel="noopener">Shandong's Competing Offer For Cardinal</a></em></td>
</tr>
<tr>
<td style="width: 218.75px;">15-Jul-20</td>
<td style="width: 484.782px;"><em><a href="https://skr.ma/E1Wgv" target="_blank" rel="noopener">Cardinal Resource (CDV AU): Nordgold Reloads</a></em></td>
</tr>
<tr>
<td style="width: 218.75px;">23-Jul-20</td>
<td style="width: 484.782px;"><em><a href="https://skr.ma/tVkqj" target="_blank" rel="noopener">Cardinal Resource (CDV AU): Shandong Reloads, But Not A Knockout Offer</a></em></td>
</tr>
<tr>
<td style="width: 218.75px;">2-Sep-20</td>
<td style="width: 484.782px;"><em><a href="https://skr.ma/eGXfx" target="_blank" rel="noopener">Cardinal Resources (CDV AU): Nordgold's Knockout Offer. Read more:</a></em></td>
</tr>
<tr>
<td style="width: 218.75px;">7-Sep-20</td>
<td style="width: 484.782px;"><em><a href="https://skr.ma/4gYtj" target="_blank" rel="noopener">Cardinal Resources (CDV AU): Shandong Trumps Nordgold’s Knockout Offer</a></em></td>
</tr>
<tr>
<td style="width: 218.75px;">22-Oct-20</td>
<td style="width: 484.782px;"><em><a href="https://skr.ma/3cYHs" target="_blank" rel="noopener">Cardinal Resources: Nordgold's "Competing Offer"</a></em></td>
</tr>
<tr>
<td style="width: 218.75px;">25-Nov-20</td>
<td style="width: 484.782px;"><em><a href="https://skr.ma/o176q" target="_blank" rel="noopener">Cardinal Resources: Three's A Crowd</a></em></td>
</tr>
</tbody>
</table>
</div>
</div>
</div>
</div>
</section>

The pointy end of this deal gets pointier.
On the 25 November,  Ghanaian firm Engineers &amp; Planners Company formally launched a A$1.05/share all-cash offer. Shandong Gold Mining Co., Ltd. (1787 HK) immediately bumped its Offer to A$1.05/share. On the 11 December, Nordgold raised its Offer to A$1.05/share.
The Newest News
Shandong has now announced it will increase its Offer to A$1.075/share provided it holds at least 30% of Cardinal shares by the 31 December AND Nordgold's on-market Offer is not extended beyond the 23 December.
This transaction continues to drill down into the nuances and minutiae of the takeover rules under the Corporations Act.

More below the fold.






Past insights on Cardinal:










Date


Insight



22-Jun-20
Shandong's Competing Offer For Cardinal


15-Jul-20
Cardinal Resource (CDV AU): Nordgold Reloads


23-Jul-20
Cardinal Resource (CDV AU): Shandong Reloads, But Not A Knockout Offer


2-Sep-20
Cardinal Resources (CDV AU): Nordgold's Knockout Offer. Read more:


7-Sep-20
Cardinal Resources (CDV AU): Shandong Trumps Nordgold’s Knockout Offer


22-Oct-20
Cardinal Resources: Nordgold's "Competing Offer"


25-Nov-20
Cardinal Resources: Three's A Crowd









Cardinal Resources: Shandong's Indicative Bump

Travis Lundy

Quantitative Analysis

<div>
<p>The H-Share/A-Share monitor is published every weekend for the data ending the last trading day of the previous week. It includes all H-Share/A-Share pairs where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>H/A Discount,</li>
<li>movement in H/A Discount over 5 and 20 days,</li>
<li>a 52-week Z-score for the spread,</li>
<li>A chart showing evolution of the H/A spread over the last 20 days,</li>
<li>Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, </li>
<li>There is also a chart showing the average sector spread and the individual spreads within each sector over the last three years. </li>
</ul>
</div>
<div>
<p>A recent addition is the possible status of H/A-share companies in the monitor which are subject to the Trump Executive Order on Chinese Military Companies. They are separated into three types (Possible Direct Qualifying Entity, Possible Indirect Qualifying Entity, and 20+%-owned by Qualifying Entity). They are color-coded as below.</p>
</div>
<section>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/174/784/original/image?1606541170" class="editor-image img-responsive" data-smartkarma-image-id="174784"></figure>
</section>
<div>
<p>For more on the list of names, please see <a href="https://www.smartkarma.com/insights/trump-s-executive-order-on-chinese-military-companies" target="_blank" data-smartkarma-citation="insights:45259" rel="noopener">Trump's Executive Order on Chinese Military Companies</a>. </p>
</div>
<hr>
<div class="content-highlight">
<p>This past week saw mixed movement in H/A spreads but on average they were narrower.</p>
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/174/829/original/Screenshot%202020-11-28%20at%206.25.16%20PM.png?1606559131" class="editor-image img-responsive" data-smartkarma-image-id="174829"></figure>
<p></p>
</section>
<p>Average performance of the 39 recommendations (long 27, short 12) from last week was for a profit of 0.67% per trade.</p>
<p>There are 43 recommendations for the upcoming week.</p>
</div>
<hr>
<div>
<p>The first sector discussed is <strong>Consumer</strong>, where liquid H/A spreads narrowed on average 0.6% this past week after narrowing 2.7% the week before. Spreads are now tighter by 2.1% on average over a four-week period. Four of six liquid Hs outperformed their As.</p>
<p>Southbound accounts were large-ish net buyers on the week. There were three net buys and three net sells but the net buying ended up being all <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a>, again. <a href="https://www.smartkarma.com/entities/guangzhou-automobile-group-co-ltd" target="_blank" data-smartkarma-citation="entities:11082:1" rel="noopener">Guangzhou Automobile Group (2238 HK)</a> saw significant net selling. </p>
</div>
<div>
<div>
<div class="content-highlight">
<p>Last week I recommended staying long the H vs A on <a href="https://www.smartkarma.com/entities/great-wall-motor-co-ltd-cb302af9-398c-4d2d-ba39-023e43287eef" target="_blank" data-smartkarma-citation="entities:128:1" rel="noopener">Great Wall Motor (2333 HK)</a> and that spread gained 1.6% for the week (after gaining 4.7% the week before when it was also recommended). This past week I put out the Weekly late on Monday (after 2pm), when BYD in Hong Kong had gained 3.7% vs the As on the day, and so recommended implementing a short BYD (1211 HK) H vs A share trade and from that point or even from the end of the day or the next, the Hs actually underperformed the As by 0.4%. </p>
<p>See below the fold for this week's recommendations.</p>
</div>
</div>
</div>
<section class="figure">
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/174/809/original/Screenshot%202020-11-28%20at%205.32.56%20PM.png?1606556000" class="editor-image img-responsive" data-smartkarma-image-id="174809"></figure>
</section>
<p></p>
</section>
<section class="figure"></section>
<section>
<section class="figure">For Energy, Financials &amp; Real Estate, Health Care, Tech, Industrials, Materials, and Utilities, please read on.</section>
</section>


The H-Share/A-Share monitor is published every weekend for the data ending the last trading day of the previous week. It includes all H-Share/A-Share pairs where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...



H/A Discount,
movement in H/A Discount over 5 and 20 days,
a 52-week Z-score for the spread,
A chart showing evolution of the H/A spread over the last 20 days,
Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, 
There is also a chart showing the average sector spread and the individual spreads within each sector over the last three years. 



A recent addition is the possible status of H/A-share companies in the monitor which are subject to the Trump Executive Order on Chinese Military Companies. They are separated into three types (Possible Direct Qualifying Entity, Possible Indirect Qualifying Entity, and 20+%-owned by Qualifying Entity). They are color-coded as below.





For more on the list of names, please see Trump's Executive Order on Chinese Military Companies. 



This past week saw mixed movement in H/A spreads but on average they were narrower.




Average performance of the 39 recommendations (long 27, short 12) from last week was for a profit of 0.67% per trade.
There are 43 recommendations for the upcoming week.



The first sector discussed is Consumer, where liquid H/A spreads narrowed on average 0.6% this past week after narrowing 2.7% the week before. Spreads are now tighter by 2.1% on average over a four-week period. Four of six liquid Hs outperformed their As.
Southbound accounts were large-ish net buyers on the week. There were three net buys and three net sells but the net buying ended up being all BYD (1211 HK), again. Guangzhou Automobile Group (2238 HK) saw significant net selling. 




Last week I recommended staying long the H vs A on Great Wall Motor (2333 HK) and that spread gained 1.6% for the week (after gaining 4.7% the week before when it was also recommended). This past week I put out the Weekly late on Monday (after 2pm), when BYD in Hong Kong had gained 3.7% vs the As on the day, and so recommended implementing a short BYD (1211 HK) H vs A share trade and from that point or even from the end of the day or the next, the Hs actually underperformed the As by 0.4%. 
See below the fold for this week's recommendations.











For Energy, Financials &amp; Real Estate, Health Care, Tech, Industrials, Materials, and Utilities, please read on.


Quiddity Weekly H/​​A: Share Spread Monitor as of 27 Nov 2020

<section>
<div id="ember3989">
<div>
<p>On the 21 October, Nordgold increased its Offer price to <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02296571-6A1002232?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">A$1.00/share</a>, matching <a href="https://www.smartkarma.com/entities/shandong-gold-mining-co-ltd-61153493-5437-47ee-a8d3-aec41fb7f1da" target="_blank" data-smartkarma-citation="entities:27455:1" rel="noopener">Shandong Gold Mining Co., Ltd. (1787 HK)</a>'s $1.00/share bid on the 7 September. But matters shortly turned sour: did Nordgold's improved Offer constitute a higher competing offer? Shandong says <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02297278-6A1002505?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">yes</a>. Nordgold says no. </p>
<p>The crux of the issues centred on Shandong's Second Supplementary Bidder's Statement on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02295721-6A1001904?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">19 October</a>, in which Shandong stated that its $1.00/share offer price is "<em>best and final in the absence of a higher competing offer</em>." </p>
<p>Cardinal added on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02296161-6A1002062?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">20 October</a> that "<em>unless there is a higher competing offer to the Shandong Gold Offer (whether from Nordgold or a third party), Shandong Gold cannot increase its offer price</em>". </p>
<p>After Nordgold's matching bid, Cardinal <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02296759-6A1002302?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> that "<em>Nordgold has made a higher competing offer by increasing the Offer Price of the Nordgold Takeover Bid to A$1.00 cash per share (previously A$0.90 can per share)"</em>. </p>
<p>In its submission to the Takeovers Panel (TP) on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02297975_PS-6A1002769?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">23 October</a>, Nordgold considered Cardinal's statement to be misleading and/or deceptive, and sought a correction. </p>
<p>A number of takeover applications ensued, so much so, Cardinal resorted to an <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02304400-6A1005622?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announcement</a> on the 4 November summarising these applications. There was no definitive conclusion at this juncture. And so it has dragged on, with at least another four TP updates from the summary announcement. </p>
<h3>The New News</h3>
<p>This morning Ghanaian firm Engineers &amp; Planners Company formally <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02312766-6A1008633?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">launched</a> a A$1.05/share all-cash offer.</p>
<p>At 4.24pm, Nordgold released a <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02313088-6A1008768?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">statement</a> that E&amp;P's Offer is not an "offer" nor a "competing offer", therefore it does not free either Nordgold or Shandong from their Best and Final Statements. </p>
<p>Unfazed, Shandong <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02312766-6A1008633?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">bumped</a> its Offer to A$1.05/share 43 minutes later.</p>
<p>More below the fold.</p>
</div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/173/736/original/image_63795557821606227977871.png?1606227979" class="editor-image img-responsive" data-smartkarma-image-id="173736"></figure>
<div>
<div>
<hr>
<p>Past insights on Cardinal:</p>
</div>
<div>
<div>
<div>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 218.75px;">
<h3>Date</h3>
</td>
<td style="width: 484.782px;">
<h3>Insight</h3>
</td>
</tr>
<tr>
<td style="width: 218.75px;">22-Jun-20</td>
<td style="width: 484.782px;"><a href="https://skr.ma/sVxVB" target="_blank" rel="noopener">Shandong's Competing Offer For Cardinal</a></td>
</tr>
<tr>
<td style="width: 218.75px;">15-Jul-20</td>
<td style="width: 484.782px;"><a href="https://skr.ma/E1Wgv" target="_blank" rel="noopener">Cardinal Resource (CDV AU): Nordgold Reloads</a></td>
</tr>
<tr>
<td style="width: 218.75px;">23-Jul-20</td>
<td style="width: 484.782px;"><a href="https://skr.ma/tVkqj" target="_blank" rel="noopener">Cardinal Resource (CDV AU): Shandong Reloads, But Not A Knockout Offer</a></td>
</tr>
<tr>
<td style="width: 218.75px;">2-Sep-20</td>
<td style="width: 484.782px;"><a href="https://skr.ma/eGXfx" target="_blank" rel="noopener">Cardinal Resources (CDV AU): Nordgold's Knockout Offer. Read more:</a></td>
</tr>
<tr>
<td style="width: 218.75px;">7-Sep-20</td>
<td style="width: 484.782px;"><a href="https://skr.ma/4gYtj" target="_blank" rel="noopener">Cardinal Resources (CDV AU): Shandong Trumps Nordgold’s Knockout Offer</a></td>
</tr>
<tr>
<td style="width: 218.75px;">22-Oct-20</td>
<td style="width: 484.782px;"><a href="https://skr.ma/3cYHs" target="_blank" rel="noopener">Cardinal Resources: Nordgold's "Competing Offer"</a></td>
</tr>
</tbody>
</table>
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</div>
</div>
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</section>




On the 21 October, Nordgold increased its Offer price to A$1.00/share, matching Shandong Gold Mining Co., Ltd. (1787 HK)'s $1.00/share bid on the 7 September. But matters shortly turned sour: did Nordgold's improved Offer constitute a higher competing offer? Shandong says yes. Nordgold says no. 
The crux of the issues centred on Shandong's Second Supplementary Bidder's Statement on the 19 October, in which Shandong stated that its $1.00/share offer price is "best and final in the absence of a higher competing offer." 
Cardinal added on the 20 October that "unless there is a higher competing offer to the Shandong Gold Offer (whether from Nordgold or a third party), Shandong Gold cannot increase its offer price". 
After Nordgold's matching bid, Cardinal announced that "Nordgold has made a higher competing offer by increasing the Offer Price of the Nordgold Takeover Bid to A$1.00 cash per share (previously A$0.90 can per share)". 
In its submission to the Takeovers Panel (TP) on the 23 October, Nordgold considered Cardinal's statement to be misleading and/or deceptive, and sought a correction. 
A number of takeover applications ensued, so much so, Cardinal resorted to an announcement on the 4 November summarising these applications. There was no definitive conclusion at this juncture. And so it has dragged on, with at least another four TP updates from the summary announcement. 
The New News
This morning Ghanaian firm Engineers &amp; Planners Company formally launched a A$1.05/share all-cash offer.
At 4.24pm, Nordgold released a statement that E&amp;P's Offer is not an "offer" nor a "competing offer", therefore it does not free either Nordgold or Shandong from their Best and Final Statements. 
Unfazed, Shandong bumped its Offer to A$1.05/share 43 minutes later.
More below the fold.





Past insights on Cardinal:








Date


Insight



22-Jun-20
Shandong's Competing Offer For Cardinal


15-Jul-20
Cardinal Resource (CDV AU): Nordgold Reloads


23-Jul-20
Cardinal Resource (CDV AU): Shandong Reloads, But Not A Knockout Offer


2-Sep-20
Cardinal Resources (CDV AU): Nordgold's Knockout Offer. Read more:


7-Sep-20
Cardinal Resources (CDV AU): Shandong Trumps Nordgold’s Knockout Offer


22-Oct-20
Cardinal Resources: Nordgold's "Competing Offer"









































<div>
<p>The H-Share/A-Share monitor is published every weekend for the data ending the last trading day of the previous week. It includes all H-Share/A-Share pairs where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>H/A Discount,</li>
<li>movement in H/A Discount over 5 and 20 days,</li>
<li>a 52-week Z-score for the spread,</li>
<li>A chart showing evolution of the H/A spread over the last 20 days,</li>
<li>Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, </li>
<li>There is also a chart showing the average sector spread and the individual spreads within each sector over the last three years. </li>
</ul>
</div>
<div>
<p>A recent addition is the possible status of H/A-share companies in the monitor which are subject to the Trump Executive Order on Chinese Military Companies. They are separated into three types (Possible Direct Qualifying Entity, Possible Indirect Qualifying Entity, and 20+%-owned by Qualifying Entity). They are color-coded as below.</p>
</div>
<section>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/173/235/original/image?1606106816" class="editor-image img-responsive" data-smartkarma-image-id="173235"></figure>
</section>
<div>
<p>For more on the list of names, please see <a href="https://www.smartkarma.com/insights/trump-s-executive-order-on-chinese-military-companies" target="_blank" data-smartkarma-citation="insights:45259" rel="noopener">Trump's Executive Order on Chinese Military Companies</a>. </p>
</div>
<hr>
<div>
<p>The first sector discussed is <strong>Consumer</strong>, where H/A spreads narrowed on average 2.7% for the week after narrowing 1.4% last week. Spreads are now just about flat over a four-week period. Every liquid H outperformed their A except for <a href="https://www.smartkarma.com/entities/guangzhou-automobile-group-co-ltd" target="_blank" data-smartkarma-citation="entities:11082:1" rel="noopener">Guangzhou Automobile Group (2238 HK)</a> despite significant net selling of the Hs by Southbound accounts (selling on <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> accounted for most of the net selling. The average H in the sector was up 10% on the week, which is remarkable. On average the liquid Hs in the cluster are up 27% in 4 weeks (none up less than 17%) and 35% since the start of the Golden Week holiday. </p>
</div>
<div>
<p>Southbound investors through the Shenzhen-HK and Shanghai-HK Connect were heavy net sellers on the week and have now sold HK$3bn+ over four weeks, with most of the net selling in the sector coming from Southbound selling of BYD.  <a href="https://www.smartkarma.com/entities/hisense-home-appliances-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20107:1" rel="noopener">Hisense Home Appliances Group Co., Ltd. H (921 HK)</a> still saw some selling but it did not dominate flows like last week. </p>
</div>
<div>
<div class="content-highlight">
<p>Last week I recommended going long the H vs A on <a href="https://www.smartkarma.com/entities/great-wall-motor-co-ltd-cb302af9-398c-4d2d-ba39-023e43287eef" target="_blank" data-smartkarma-citation="entities:128:1" rel="noopener">Great Wall Motor (2333 HK)</a> and that spread gained 4.7% for the week. This week I recommend maintaining that trade and implementing a short BYD (1211 HK) H vs A share trade.</p>
</div>
</div>
<div>
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/173/244/original/Screenshot%202020-11-23%20at%2012.49.10%20PM.png?1606106963" class="editor-image img-responsive" data-smartkarma-image-id="173244"></figure>
</section>
<p></p>
</div>
<p></p>
<div>
<p>For Energy, Financials &amp; Real Estate, Health Care, Tech, Industrials, Materials, and Utilities, please read on.</p>
</div>


The H-Share/A-Share monitor is published every weekend for the data ending the last trading day of the previous week. It includes all H-Share/A-Share pairs where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...



H/A Discount,
movement in H/A Discount over 5 and 20 days,
a 52-week Z-score for the spread,
A chart showing evolution of the H/A spread over the last 20 days,
Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, 
There is also a chart showing the average sector spread and the individual spreads within each sector over the last three years. 



A recent addition is the possible status of H/A-share companies in the monitor which are subject to the Trump Executive Order on Chinese Military Companies. They are separated into three types (Possible Direct Qualifying Entity, Possible Indirect Qualifying Entity, and 20+%-owned by Qualifying Entity). They are color-coded as below.





For more on the list of names, please see Trump's Executive Order on Chinese Military Companies. 



The first sector discussed is Consumer, where H/A spreads narrowed on average 2.7% for the week after narrowing 1.4% last week. Spreads are now just about flat over a four-week period. Every liquid H outperformed their A except for Guangzhou Automobile Group (2238 HK) despite significant net selling of the Hs by Southbound accounts (selling on BYD (1211 HK) accounted for most of the net selling. The average H in the sector was up 10% on the week, which is remarkable. On average the liquid Hs in the cluster are up 27% in 4 weeks (none up less than 17%) and 35% since the start of the Golden Week holiday. 


Southbound investors through the Shenzhen-HK and Shanghai-HK Connect were heavy net sellers on the week and have now sold HK$3bn+ over four weeks, with most of the net selling in the sector coming from Southbound selling of BYD.  Hisense Home Appliances Group Co., Ltd. H (921 HK) still saw some selling but it did not dominate flows like last week. 



Last week I recommended going long the H vs A on Great Wall Motor (2333 HK) and that spread gained 4.7% for the week. This week I recommend maintaining that trade and implementing a short BYD (1211 HK) H vs A share trade.










For Energy, Financials &amp; Real Estate, Health Care, Tech, Industrials, Materials, and Utilities, please read on.


Quiddity Weekly H/A: Share Spread Monitor as of 20 Nov 2020

<div>
<p>The H-Share/A-Share monitor is published every weekend for the data ending the last trading day of the previous week. It includes all H-Share/A-Share pairs where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>H/A Discount,</li>
<li>movement in H/A Discount over 5 and 20 days,</li>
<li>a 52-week Z-score for the spread,</li>
<li>A chart showing evolution of the H/A spread over the last 20 days,</li>
<li>Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, </li>
<li>There is also a chart showing the average sector spread and the individual spreads within each sector over the last three years. </li>
</ul>
<p>New this week is a label on the name which shows the possible status of H/A-share companies in the monitor which are subject to the Trump Executive Order on Chinese Military Companies. They are separated into three types (Possible Direct Qualifying Entity, Possible Indirect Qualifying Entity, and 20+%-owned by Qualifying Entity). They are color-coded as below.</p>
</div>
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/171/435/original/Screenshot%202020-11-14%20at%204.23.22%20PM.png?1605342376" class="editor-image img-responsive" data-smartkarma-image-id="171435"></figure>
</section>
<p>For more on the list of names, please see <a href="https://www.smartkarma.com/insights/trump-s-executive-order-on-chinese-military-companies" target="_blank" data-smartkarma-citation="insights:45259" rel="noopener">Trump's Executive Order on Chinese Military Companies</a>. </p>
<p>Changed this week is that I have removed the spreads from the sector charts when the H-shares have low ADV</p>
<hr>
<div>
<p>The first sector discussed is <strong>Consumer</strong>, where H/A spreads narrowed on average 1.4% for the week, after running 0.6% wider the previous week. Individual stock movement in the sector was striking. <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a>, <a href="https://www.smartkarma.com/entities/great-wall-motor-co-ltd-cb302af9-398c-4d2d-ba39-023e43287eef" target="_blank" data-smartkarma-citation="entities:128:1" rel="noopener">Great Wall Motor (2333 HK)</a>, and <a href="https://www.smartkarma.com/entities/guangzhou-automobile-group-co-ltd" target="_blank" data-smartkarma-citation="entities:11082:1" rel="noopener">Guangzhou Automobile Group (2238 HK)</a> narrowed again on very weak A-share performance in the week, and <a href="https://www.smartkarma.com/entities/tsingtao-brewery-co-ltd-h" target="_blank" data-smartkarma-citation="entities:1296:1" rel="noopener">Tsingtao Brewery Co Ltd H (168 HK)</a> narrowed despite strong performance on the week. The Tsingtao spread remains 4% wider through four weeks but is now at 33%. Performance was volatile in the cluster on the week, but on average the liquid Hs in the cluster are up 19% in 4 weeks and 27% since the start of the Golden Week holiday. </p>
</div>
<div>
<p>Southbound investors through the Shenzhen-HK and Shanghai-HK Connect were heavy net sellers on the week with most of the net selling in the sector coming from Southbound selling of BYD.  <a href="https://www.smartkarma.com/entities/hisense-home-appliances-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20107:1" rel="noopener">Hisense Home Appliances Group Co., Ltd. H (921 HK)</a> is substantially less liquid, but net southbound selling on the week accounted for a remarkable 65% of volume.</p>
</div>
<div>
<p><a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> remains at the overbought end of the 52-week range. <a href="https://www.smartkarma.com/entities/great-wall-motor-co-ltd-cb302af9-398c-4d2d-ba39-023e43287eef" target="_blank" data-smartkarma-citation="entities:128:1" rel="noopener">Great Wall Motor (2333 HK)</a>, and <a href="https://www.smartkarma.com/entities/tsingtao-brewery-co-ltd-h" target="_blank" data-smartkarma-citation="entities:1296:1" rel="noopener">Tsingtao Brewery Co Ltd H (168 HK)</a> are at or near 52-week wides.</p>
</div>
<div>
<p>There were no sector spread recommendations last week in this sector, for the second week in a row. This week I recommend going long the H vs A on Great Wall Motor (2333 HK).</p>
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/171/448/original/Screenshot%202020-11-14%20at%205.22.52%20PM.png?1605345797" class="editor-image img-responsive" data-smartkarma-image-id="171448"></figure>
<p></p>
</section>
<p>For Energy, Financials &amp; Real Estate, Health Care, Tech, Industrials, Materials, and Utilities, please read on.</p>
</div>


The H-Share/A-Share monitor is published every weekend for the data ending the last trading day of the previous week. It includes all H-Share/A-Share pairs where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...



H/A Discount,
movement in H/A Discount over 5 and 20 days,
a 52-week Z-score for the spread,
A chart showing evolution of the H/A spread over the last 20 days,
Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, 
There is also a chart showing the average sector spread and the individual spreads within each sector over the last three years. 

New this week is a label on the name which shows the possible status of H/A-share companies in the monitor which are subject to the Trump Executive Order on Chinese Military Companies. They are separated into three types (Possible Direct Qualifying Entity, Possible Indirect Qualifying Entity, and 20+%-owned by Qualifying Entity). They are color-coded as below.




For more on the list of names, please see Trump's Executive Order on Chinese Military Companies. 
Changed this week is that I have removed the spreads from the sector charts when the H-shares have low ADV


The first sector discussed is Consumer, where H/A spreads narrowed on average 1.4% for the week, after running 0.6% wider the previous week. Individual stock movement in the sector was striking. BYD (1211 HK), Great Wall Motor (2333 HK), and Guangzhou Automobile Group (2238 HK) narrowed again on very weak A-share performance in the week, and Tsingtao Brewery Co Ltd H (168 HK) narrowed despite strong performance on the week. The Tsingtao spread remains 4% wider through four weeks but is now at 33%. Performance was volatile in the cluster on the week, but on average the liquid Hs in the cluster are up 19% in 4 weeks and 27% since the start of the Golden Week holiday. 


Southbound investors through the Shenzhen-HK and Shanghai-HK Connect were heavy net sellers on the week with most of the net selling in the sector coming from Southbound selling of BYD.  Hisense Home Appliances Group Co., Ltd. H (921 HK) is substantially less liquid, but net southbound selling on the week accounted for a remarkable 65% of volume.


BYD (1211 HK) remains at the overbought end of the 52-week range. Great Wall Motor (2333 HK), and Tsingtao Brewery Co Ltd H (168 HK) are at or near 52-week wides.


There were no sector spread recommendations last week in this sector, for the second week in a row. This week I recommend going long the H vs A on Great Wall Motor (2333 HK).




For Energy, Financials &amp; Real Estate, Health Care, Tech, Industrials, Materials, and Utilities, please read on.


Quiddity Weekly H/A: Share Spread Monitor 13 Nov 2020

China

Shandong Gold Mining Co., Ltd. mines, produces, and processes gold, silver, and sulphur.

Shandong Gold Mining Co., Ltd (600547 CH)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Shandong Gold Mining Co., Ltd (600547 CH)

Cardinal Resources: Shandong's Indicative Bump

As before, if you are already in, then continue to ride out the end game. Otherwise, buy around terms on the expectation one of the competing...

David Blennerhassett

Cardinal Resources: Three's A Crowd

If you are already in, then continue to ride out the end game as this competitive bidding situation just became even more competitive.

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Cardinal Resources: Shandong's Indicative Bump

As before, if you are already in, then continue to ride out the end game. Otherwise, buy around terms on the expectation one of the competing...

David Blennerhassett

Quiddity Weekly H/​​A: Share Spread Monitor as of 27 Nov 2020

The weekly H/A Share Monitor and Trade Recommendations. Spreads narrower on the week. Last week's 39 trade recommendations gained 0.67% on average....

Travis Lundy

Cardinal Resources: Three's A Crowd

If you are already in, then continue to ride out the end game as this competitive bidding situation just became even more competitive.

David Blennerhassett

Quiddity Weekly H/A: Share Spread Monitor as of 20 Nov 2020

The H-Share/A-Share monitor is published every weekend for the data ending the last trading day of the previous week. It includes all H-Share/A...

Travis Lundy

Quiddity Weekly H/A: Share Spread Monitor 13 Nov 2020

The Quiddity H/A-Share Spread Monitor for the week ending 13 November 2020. Momentum on a spread basis continues, but momentum on a sector basis...

Travis Lundy

Quiddity Weekly H/A: Share Spread Monitor as of 27 Nov 2020