Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Less than a week after <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande (3333 HK)</a> and <a href="https://www.smartkarma.com/entities/kaisa-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:169:1" rel="noopener">Kaisa (1638 HK)</a> were officially declared defaulters,  <a href="https://www.smartkarma.com/entities/shimao-property-holdings-limited" target="_blank" data-smartkarma-citation="entities:8375:1" rel="noopener">Shimao Property (813 HK)</a>'s bonds and shares plunged, as did <a href="https://www.smartkarma.com/entities/shimao-services-holdings-limited" target="_blank" data-smartkarma-citation="entities:29199:1" rel="noopener">Shimao Services (873 HK)</a>'s shares. </li>
<li>
<a href="https://www.smartkarma.com/entities/sunac-services-holdings" target="_blank" data-smartkarma-citation="entities:29239:1" rel="noopener">Sunac Services (1516 HK)</a> is the second-worst worst performing property services play over the past week/month.  Separately, parent <a href="https://www.smartkarma.com/entities/sunac-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:240:1" rel="noopener">Sunac (1918 HK)</a> recently sold &gt;US$1bn of <a href="https://www.smartkarma.com/entities/xinjiang-beiken-energy-eng-a" target="_blank" data-smartkarma-citation="entities:29381:1" rel="noopener">Beiken Energy (002828 CH)</a> shares. </li>
<li>
<a href="https://www.smartkarma.com/entities/first-service-holding-ltd" target="_blank" data-smartkarma-citation="entities:34884:1" rel="noopener">First Service (2107 HK)</a>'s long stop date for the share transfer agreements expire at month-end. This may not be the ideal time to second-guess whether Sunac agrees to an extension. </li>
</ul>


Less than a week after Evergrande (3333 HK) and Kaisa (1638 HK) were officially declared defaulters,  Shimao Property (813 HK)'s bonds and shares plunged, as did Shimao Services (873 HK)'s shares. 

Sunac Services (1516 HK) is the second-worst worst performing property services play over the past week/month.  Separately, parent Sunac (1918 HK) recently sold &gt;US$1bn of Beiken Energy (002828 CH) shares. 

First Service (2107 HK)'s long stop date for the share transfer agreements expire at month-end. This may not be the ideal time to second-guess whether Sunac agrees to an extension. 


First Service (2107 HK): Too Hot To Handle

<ul>
<li>
<a href="https://www.smartkarma.com/entities/genting-bhd" target="_blank" data-smartkarma-citation="entities:14210:1" rel="noopener">Genting Bhd (GENT MK)</a> is attractive amid solid US and UK footfall numbers, easing border restrictions, and pent-up demand for international travel.</li>
<li>Preceding my comments on Genting - and <a href="https://www.smartkarma.com/entities/sunac-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:240:1" rel="noopener">Sunac China Holdings (1918 HK)</a> - are the weekly setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market cap - &gt;20%.</li>
</ul>



Genting Bhd (GENT MK) is attractive amid solid US and UK footfall numbers, easing border restrictions, and pent-up demand for international travel.
Preceding my comments on Genting - and Sunac China Holdings (1918 HK) - are the weekly setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market cap - &gt;20%.


StubWorld: Betting On Genting's Recovery; Sunac China Trading "Rich"

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Cisarua Mountain Dairy / Equity Capital Markets

<ul>
<li>Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs. </li>
<li>Hong Kong IPO pipeline looks strong with Weilong Delicious Global, CANbridge Pharmaceuticals,  Asymchem Laboratories, and China Tourism Group either close to approval or seeking approval with HKEX soon.</li>
<li>Indonesia ECM is looking busier than ever this year with the launch of Cisarua Mountain Dairy (Cimory) and PT Avia Avian IPO bookbuilds this week.</li>
</ul>


Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs. 
Hong Kong IPO pipeline looks strong with Weilong Delicious Global, CANbridge Pharmaceuticals,  Asymchem Laboratories, and China Tourism Group either close to approval or seeking approval with HKEX soon.
Indonesia ECM is looking busier than ever this year with the launch of Cisarua Mountain Dairy (Cimory) and PT Avia Avian IPO bookbuilds this week.


ECM Weekly (14th November 2021) - Cimory, Infervision, Daiwa House REIT, Weilong Delicious

Sunac China Holdings / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sunac-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:240:1" rel="noopener">Sunac China Holdings (1918 HK)</a> is looking to raise US$561m from its top-up placement to repay loans and for general corporate purposes.</li>
<li>On top of that, the company will raise another US$269m from a selldown of 138m shares in <a href="https://www.smartkarma.com/entities/sunac-services-holdings" target="_blank" data-smartkarma-citation="entities:29239:1" rel="noopener">Sunac Services Holdings (1516 HK)</a>. </li>
<li>This marks the start of Sunac China's deleveraging effort but it also means there will be more to come for Sunac Services.</li>
</ul>



Sunac China Holdings (1918 HK) is looking to raise US$561m from its top-up placement to repay loans and for general corporate purposes.
On top of that, the company will raise another US$269m from a selldown of 138m shares in Sunac Services Holdings (1516 HK). 
This marks the start of Sunac China's deleveraging effort but it also means there will be more to come for Sunac Services.


Sunac Blocks - Just the Start for Sunac China and It Won't Be the Last for Sunac Services

Late last month, <a href="https://www.smartkarma.com/entities/modern-land-china-co-ltd" target="_blank" data-smartkarma-citation="entities:16899:1" rel="noopener">Modern Land China (1107 HK)</a> became the latest Chinese developer to miss a payment on a dollar bond. In an HKEx filing on the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/1026/2021102600163.pdf" target="_blank" rel="noopener">26 October</a>, Modern Land said that principal and interest payments on a US$250mn bond were “not met” by the 25 October deadline.
Modern Land had previously sought a three-month extension to the maturity on the bond, but later withdrew the proposal.  The company blamed the missed payment on “unexpected liquidity issues arising from the adverse impact of a number of factors including the macroeconomic environment, the real estate industry environment and the Covid-19 pandemic”.
Shares in Modern Land have been <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/1021/2021102100209.pdf" target="_blank" rel="noopener">suspended</a> since the 21 October. 
<h3>The New News</h3>
<a href="https://www.smartkarma.com/entities/sunac-services-holdings" target="_blank" data-smartkarma-citation="entities:29239:1" rel="noopener">Sunac Services Holdings (1516 HK)</a> intends to acquire a 32.22% stake in <a href="https://www.smartkarma.com/entities/first-service-holding-limited" target="_blank" data-smartkarma-citation="entities:34884:1" rel="noopener">First Service Holding (2107 HK)</a>, the completion of which will trigger an unconditional mandatory cash offer.
The Offer Price is HK$2.6167/share,  a 91% premium to the closing price of First Service prior to the trading halt on October 8.
Zhang Lei is currently the major shareholder of First Service with 51.39%. He is also the major shareholder and chairman of Modern Land with 65.38%. His holding in First Service will decline to 30% upon the completion of the agreements with Sunac Services. Proceeds from the sale of HK$843mn, which may be subject to revision, are expected to be used to repay Modern Land's debt.
This appears a knock-out Offer for First Service. It is Sunac Services' intention to delist the company, should 90% of disinterested shareholders tender.
Timing is the key issue. 
More below the fold.

Late last month, Modern Land China (1107 HK) became the latest Chinese developer to miss a payment on a dollar bond. In an HKEx filing on the 26 October, Modern Land said that principal and interest payments on a US$250mn bond were “not met” by the 25 October deadline.
Modern Land had previously sought a three-month extension to the maturity on the bond, but later withdrew the proposal.  The company blamed the missed payment on “unexpected liquidity issues arising from the adverse impact of a number of factors including the macroeconomic environment, the real estate industry environment and the Covid-19 pandemic”.
Shares in Modern Land have been suspended since the 21 October. 
The New News
Sunac Services Holdings (1516 HK) intends to acquire a 32.22% stake in First Service Holding (2107 HK), the completion of which will trigger an unconditional mandatory cash offer.
The Offer Price is HK$2.6167/share,  a 91% premium to the closing price of First Service prior to the trading halt on October 8.
Zhang Lei is currently the major shareholder of First Service with 51.39%. He is also the major shareholder and chairman of Modern Land with 65.38%. His holding in First Service will decline to 30% upon the completion of the agreements with Sunac Services. Proceeds from the sale of HK$843mn, which may be subject to revision, are expected to be used to repay Modern Land's debt.
This appears a knock-out Offer for First Service. It is Sunac Services' intention to delist the company, should 90% of disinterested shareholders tender.
Timing is the key issue. 
More below the fold.

Sunac Services' Offer For First Service (2107 HK) May Support Modern Land

China

Sunac Services Holdings Limited provides property management service. The Company offers property management services including security, cleaning, greening, gardening, and repair and maintenance services for the operation of common area facilities. Sunac Services Holdings also offers real estate brokerage, property interior decoration, and community living services.

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Sunac Services Holdings (1516 HK)

First Service (2107 HK): Too Hot To Handle

I expect these share transfer agreements to be extended, if need be, and the spread to tighten once completed. But that outcome is by no means...

David Blennerhassett

StubWorld: Betting On Genting's Recovery; Sunac China Trading "Rich"

Genting Bhd (GENT MK) is attractive amid solid US and UK numbers, easing border restrictions, and pent-up demand for international travel.

David Blennerhassett

ECM Weekly (14th November 2021) - Cimory, Infervision, Daiwa House REIT, Weilong Delicious

Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs.

Sumeet Singh

Sunac Blocks - Just the Start for Sunac China and It Won't Be the Last for Sunac Services

Sunac China Holdings (1918 HK) is looking to raise US$561m from its top-up placement to repay loans and for general corporate purposes. It will...

Sumeet Singh

Sunac Services' Offer For First Service (2107 HK) May Support Modern Land

At HK$2.14/share, First Service is currently trading at a gross/annualised spread of 22.2%/128.1%, assuming late January completion. Or 39.6%...

David Blennerhassett

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