Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<a href="https://www.smartkarma.com/entities/52" target="_blank" data-smartkarma-citation="entities:52:1" rel="noopener">Wheelock &amp; (20 HK)</a> /<a href="https://www.smartkarma.com/entities/51" target="_blank" data-smartkarma-citation="entities:51:1" rel="noopener">Wharf Holdings (4 HK)</a>/<a href="https://www.smartkarma.com/entities/26031" target="_blank" data-smartkarma-citation="entities:26031:1" rel="noopener">Wharf Real Estate Investment (1997 HK)</a>
Inputting the 2019 interim numbers for all three companies backs out a discount to NAV of ~33%, compared to Wheelock's one-year average of 38%.
Net debt at the parent level widened to ~$40bn from ~$28bn as at December 18, which was largely offset by the increase in development property and available for sale assets during the same period. 
With both WREIC and Wharf underperforming in the face of Hong Kong's prevailing political atmosphere, Wheelock's implied negative stub is now at its lowest negative level (i.e. its best level) since WREIC's 2017 listing.

Wheelock &amp; (20 HK) /Wharf Holdings (4 HK)/Wharf Real Estate Investment (1997 HK)
Inputting the 2019 interim numbers for all three companies backs out a discount to NAV of ~33%, compared to Wheelock's one-year average of 38%.
Net debt at the parent level widened to ~$40bn from ~$28bn as at December 18, which was largely offset by the increase in development property and available for sale assets during the same period. 
With both WREIC and Wharf underperforming in the face of Hong Kong's prevailing political atmosphere, Wheelock's implied negative stub is now at its lowest negative level (i.e. its best level) since WREIC's 2017 listing.

StubWorld: Wheelock Stub Gains on Ructions in Retail

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

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Thematic (Sector/Industry)

The Hong Kong government announced a new ad valorem stamp duty, or AVD, late on Nov. 4. Effective Nov. 5, except for first-time homebuyers who are Hong Kong residents, homebuyers are subjected to a new AVD of 15%. Thus, Hong Kong residents who are not first-time homebuyers are subject to an AVD of 15%, replacing a previous AVD scale ranging from 1.5% to 8.5%. Nonresidents are subject to the new AVD of 15% in addition to an existing Buyer’s Stamp Duty, or BSD, of 15%. First-time homebuyers who are Hong Kong residents are subject to an AVD ranging from 0% to 4.25% based on the existing scale, unchanged from before.We believe <a href="https://www.smartkarma.com/entities/111" target="_blank" data-smartkarma-citation="entities:111:1">Sun Hung Kai Properties (16 HK)</a>, or SHKP, is going to be most affected, given its large exposure to residential properties as well as its status as a proxy for the sector. We believe <a href="https://www.smartkarma.com/entities/22650" target="_blank" data-smartkarma-citation="entities:22650:1">Cheung Kong Property Holding (1113 HK)</a>, or CKP, should be less affected, as it has aggressively sold down its residential inventories, while being very selective in land acquisitions in recent years. For both <a href="https://www.smartkarma.com/entities/376" target="_blank" data-smartkarma-citation="entities:376:1">Henderson Land Development (12 HK)</a> and <a href="https://www.smartkarma.com/entities/3320" target="_blank" data-smartkarma-citation="entities:3320:1">Kerry Properties Ltd (683 HK)</a>, the impact on our fair value estimates is expected to be minor.Analyst: Phillip Zhong

The Hong Kong government announced a new ad valorem stamp duty, or AVD, late on Nov. 4. Effective Nov. 5, except for first-time homebuyers who are Hong Kong residents, homebuyers are subjected to a new AVD of 15%. Thus, Hong Kong residents who are not first-time homebuyers are subject to an AVD of 15%, replacing a previous AVD scale ranging from 1.5% to 8.5%. Nonresidents are subject to the new AVD of 15% in addition to an existing Buyer’s Stamp Duty, or BSD, of 15%. First-time homebuyers who are Hong Kong residents are subject to an AVD ranging from 0% to 4.25% based on the existing scale, unchanged from before.We believe Sun Hung Kai Properties (16 HK), or SHKP, is going to be most affected, given its large exposure to residential properties as well as its status as a proxy for the sector. We believe Cheung Kong Property Holding (1113 HK), or CKP, should be less affected, as it has aggressively sold down its residential inventories, while being very selective in land acquisitions in recent years. For both Henderson Land Development (12 HK) and Kerry Properties Ltd (683 HK), the impact on our fair value estimates is expected to be minor.Analyst: Phillip Zhong

New Stamp Duty Negative on Transaction Volume in the NearTerm

Hong Kong

Wang On Group Limited, through its subsidiaries, manages and sub-licenses Chinese wet markets, shopping centers, and car parks.  The Company also produces and sells cough syrup and health care products.  In addition,  Wang On Group invests in properties and retails pork.

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Wang On (1222 HK)

StubWorld: Wheelock Stub Gains on Ructions in Retail

Wheelock & (20 HK) /Wharf Holdings (4 HK)/Wharf Real Estate Investment (1997 HK) Inputting the 2019 interim numbers for all three companies...

David Blennerhassett

New Stamp Duty Negative on Transaction Volume in the NearTerm

The Hong Kong government announced a new ad valorem stamp duty, or AVD, late on Nov. 4. Effective Nov. 5, except for first-time homebuyers who are...

Morningstar, Inc.

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