IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tian-an-china-investment" target="_blank" data-smartkarma-citation="entities:13665:1" rel="noopener">Tian An China Investment (28 HK)</a> and <a href="https://www.smartkarma.com/entities/allied-group-ltd" target="_blank" data-smartkarma-citation="entities:4387:1" rel="noopener">Allied (373 HK)</a> entered a trading halt “<em>pursuant to The Hong Kong Code on Takeovers and Mergers.</em>” Allied owns 55.72% of Tian An.</li>
<li>It is likely that Allied Group is seeking to privatise its subsidiary Tian An. Tian An's other substantial shareholders have a history of sell-downs which facilitate an offer.</li>
<li>
<a href="https://www.smartkarma.com/entities/allied-properties-h-k-limited" target="_blank" data-smartkarma-citation="entities:19953:1" rel="noopener">Allied Properties (H.K.) (56 HK)</a>/APL's partial offer for Tian An in 2011 and Allied's privatisation of APL in 2020 point to a 20.8%-34.3% premium or HK$5.01-5.57 per share offer.</li>
</ul>



Tian An China Investment (28 HK) and Allied (373 HK) entered a trading halt “pursuant to The Hong Kong Code on Takeovers and Mergers.” Allied owns 55.72% of Tian An.
It is likely that Allied Group is seeking to privatise its subsidiary Tian An. Tian An's other substantial shareholders have a history of sell-downs which facilitate an offer.

Allied Properties (H.K.) (56 HK)/APL's partial offer for Tian An in 2011 and Allied's privatisation of APL in 2020 point to a 20.8%-34.3% premium or HK$5.01-5.57 per share offer.


Tian An China Investments (28 HK): Trading Halt, Privatisation by Allied Group?

Stock research on global mid-cap companies, Evaluate Research

Evaluate Research

Stock research on global mid-cap companies

Evaluate Research provides institutional quality stock research on small-cap and  mid-cap companies on a global basis, thus helping connect investors with the company.

At Evaluate Research, we provide free of cost to all investors a 20-25 page Initiation Report which evaluates in great detail all aspects of the company:  growth opportunities, catalysts, business description, competitive positioning, SWOT analysis, risks, etc.  In addition, we determine specific price targets for the company based on detailed 5-year complete forecasts of financial statements including IS, BS, CF, ratios, etc.  Finally, whereas many sell-side brokers offer sketchy and irregular ongoing maintenance research of companies, if not outright dropped or termination of coverage, at Evaluate Research we systematically monitor and regularly publish Update Notes covering quarterly earnings, major corporate events, etc.

All of the research reports are broadly and freely disseminated globally to leading Fund Managers and analysts who invest specifically in mid-size equities, and also on leading investment information platforms including: Bloomberg, Thomson Reuters, FactSet etc.

Equity Bottom-Up

<ul>
<li>For FY2022–Total Buyback of 5.9 million shares (HK$18.3 million) at average price of $3.10</li>
<li>Funds Management Business – Extended Platform to provide Family Office Solutions</li>
<li>Funds Management Unit – Total AUM increased 21% to US$975 million in 2022 with external capital accounting for 46.5%</li>
</ul>


For FY2022–Total Buyback of 5.9 million shares (HK$18.3 million) at average price of $3.10
Funds Management Business – Extended Platform to provide Family Office Solutions
Funds Management Unit – Total AUM increased 21% to US$975 million in 2022 with external capital accounting for 46.5%


SHK 86_HK: Dividend Yield 8%, P/E 2.0x, P/B 0.27x

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

<ul>
<li>There are 35 adds and 28 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents up to 527.</li>
<li>We expect 29 of the 35 inclusions to the HSCI will be added to Stock Connect, while 20 of the 28 HSCI deletions will be removed from Southbound Stock Connect.</li>
<li>19 stocks could be deleted from Stock Connect only since their average market cap has dropped below HK$5bn- unless the new threshold of HK$4bn is approved in the next week.</li>
</ul>


There are 35 adds and 28 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents up to 527.
We expect 29 of the 35 inclusions to the HSCI will be added to Stock Connect, while 20 of the 28 HSCI deletions will be removed from Southbound Stock Connect.
19 stocks could be deleted from Stock Connect only since their average market cap has dropped below HK$5bn- unless the new threshold of HK$4bn is approved in the next week.


HSCI Index Rebalance: 35 Adds, 28 Deletes & Changes to Southbound Stock Connect

Brilliance China Automotive / Event-Driven

<ul>
<li>We see 44 potential adds (including plenty of new listings) and 19 potential deletes (on market cap, liquidity and suspension) for the Hang Seng Composite Index in March.</li>
<li>We expect 37 stocks to be added to Southbound Stock Connect following the rebalance while 37 stocks could be deleted from the trading link and become Sell-only. </li>
<li>There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.</li>
</ul>


We see 44 potential adds (including plenty of new listings) and 19 potential deletes (on market cap, liquidity and suspension) for the Hang Seng Composite Index in March.
We expect 37 stocks to be added to Southbound Stock Connect following the rebalance while 37 stocks could be deleted from the trading link and become Sell-only. 
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.


HSCI Index Rebalance Preview and Stock Connect: A Lot of Change

<p><a target="_blank">Sun Hung Kai &amp; Co.</a><a target="_blank"></a>&nbsp;[86_HK; HK$5,490 million/ US$714 million market cap; HK$6.45 million total average daily value traded]&nbsp;recently announced that the unaudited consolidated loss for the ten months ended 31st&nbsp;October 2022 is expected to be approximately HK$1.38 billion, as compared to a profit of approximately HK$2.92 billion for the ten months ended 31st&nbsp;October 2021. The primary reason for the loss for the ten months ended 31st&nbsp;October is the marked-to-market losses on the financial instruments in the company’s investment management business. The losses on the financial instruments are on account of a challenging and volatile economic and investment environment with interest rates being increased rapidly by central banks globally and China’s zero-COVID policy.&nbsp;Hong Kong’s Hang Seng index had declined 37% to 14,687 in the first ten months of 2022, its lowest levels since April 2009.</p>

Sun Hung Kai &amp; Co.&nbsp;[86_HK; HK$5,490 million/ US$714 million market cap; HK$6.45 million total average daily value traded]&nbsp;recently announced that the unaudited consolidated loss for the ten months ended 31st&nbsp;October 2022 is expected to be approximately HK$1.38 billion, as compared to a profit of approximately HK$2.92 billion for the ten months ended 31st&nbsp;October 2021. The primary reason for the loss for the ten months ended 31st&nbsp;October is the marked-to-market losses on the financial instruments in the company’s investment management business. The losses on the financial instruments are on account of a challenging and volatile economic and investment environment with interest rates being increased rapidly by central banks globally and China’s zero-COVID policy.&nbsp;Hong Kong’s Hang Seng index had declined 37% to 14,687 in the first ten months of 2022, its lowest levels since April 2009.

SHK 86_HK: Dividend Yield 10%, P/E 1.6x, P/B 0.23x

Hong Kong

Sun Hung Kai & Company Limited is an investment holding company. The Company, through its subsidiaries, focuses on providing tailor-made financing solutions to corporations, small businesses, and individuals.

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Sun Hung Kai (86 HK)

Tian An China Investments (28 HK): Trading Halt, Privatisation by Allied Group?

It is likely that Allied Group is seeking to privatise its subsidiary Tian An. An analysis of past transactions suggests an offer of HK$5.01-5.57...

Arun George

SHK 86_HK: Dividend Yield 8%, P/E 2.0x, P/B 0.27x

SHK is currently trading at only 0.27x tangible P/B on our FY2024 estimates. Similarly, the stock is cheap even on P/E basis.

Evaluate Research

HSCI Index Rebalance: 35 Adds, 28 Deletes & Changes to Southbound Stock Connect

There are 35 adds & 28 deletes for the HSCI in March leading to 29 adds & 20 deletes for Stock Connect. 19 index constituents could be dropped from...

Brian Freitas

HSCI Index Rebalance Preview and Stock Connect: A Lot of Change

We forecast 44 adds/19 deletes for the HSCI in March leading to 37 adds/deletes for Southbound Stock Connect. There could be more Connect changes...

Brian Freitas

SHK 86_HK: Dividend Yield 10%, P/E 1.6x, P/B 0.23x

Sun Hung Kai & Co. [86_HK; HK$5,490 million/ US$714 million market cap; HK$6.45 million total average daily value traded] recently announced...

Evaluate Research

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