Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Back on 14 July 2024, <a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a> (WHG) announced it had submitted a plan to spin-off its Smithfield US and Mexican ops on the NYSE or NASDAQ</li>
<li>WHG the world's largest pork producer, has now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1117/2024111700031.pdf" target="_blank" rel="noopener">confirmed</a> it will sell up to 20% of Smithfield's shares on a fully diluted basis, in an initial public offering.</li>
<li>WHG has also proposed an assured entitlement for existing shareholders by way of a distribution in specie of existing shares of Smithfield, or a cash alternative.</li>
</ul>


Back on 14 July 2024, WH Group (288 HK) (WHG) announced it had submitted a plan to spin-off its Smithfield US and Mexican ops on the NYSE or NASDAQ
WHG the world's largest pork producer, has now confirmed it will sell up to 20% of Smithfield's shares on a fully diluted basis, in an initial public offering.
WHG has also proposed an assured entitlement for existing shareholders by way of a distribution in specie of existing shares of Smithfield, or a cash alternative.


Travis Lundy

<ul>
<li>SOUTHBOUND was a net buyer the last five trading days (from before GW to 14 Oct). HUGE gross flows. Decent net flows. Very big in few names (BABA included).</li>
<li>The Guotai Junnan/Haitong merger pushed H-share brokers hard, but SB wasn't buying. They bought <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-international-corp-smic" target="_blank" data-smartkarma-citation="entities:14231:1" rel="noopener">Semiconductor Manufacturing International Corp (SMIC) (981 HK)</a>, <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>. </li>
<li>Things may settle down a little bit as the fiscal policy announcements are out of the way, but I expect the trend is still your friend (until it bends). </li>
</ul>


SOUTHBOUND was a net buyer the last five trading days (from before GW to 14 Oct). HUGE gross flows. Decent net flows. Very big in few names (BABA included).
The Guotai Junnan/Haitong merger pushed H-share brokers hard, but SB wasn't buying. They bought Alibaba Group Holding (9988 HK), Semiconductor Manufacturing International Corp (SMIC) (981 HK), Xiaomi Corp (1810 HK). 
Things may settle down a little bit as the fiscal policy announcements are out of the way, but I expect the trend is still your friend (until it bends). 


HK Connect SOUTHBOUND Flows (To 14 Oct 2024); A HUGE 5td; Net Flows Strong but BABA Dominant

<ul>
<li>Earlier this month, <a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a> announced it had submitted a plan to spin-off its Smithfield US and Mexican ops on the NYSE or NASDAQ,</li>
<li>These ops accounted for 54% of WHG's FY23 revenue and 22.4% of the operating profit; compared to 56% and 44.9% respectively in FY22.</li>
<li>We've been here before. A Smithfield spin-off was touted in 4Q23 (in the media). WHG acquired Smithfield for US$4.7bn in 2013, ahead of its 2014 listing. </li>
</ul>


Earlier this month, WH Group (288 HK) announced it had submitted a plan to spin-off its Smithfield US and Mexican ops on the NYSE or NASDAQ,
These ops accounted for 54% of WHG's FY23 revenue and 22.4% of the operating profit; compared to 56% and 44.9% respectively in FY22.
We've been here before. A Smithfield spin-off was touted in 4Q23 (in the media). WHG acquired Smithfield for US$4.7bn in 2013, ahead of its 2014 listing. 


Reservoir Hogs: WH Group (288 HK) Mulls US/Mexican Spin-Off

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Capital Markets

<ul>
<li>
<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> shares had a breakout relative to the MSCI China index and showing good momentum during the low volume days of summer.  
</li>
<li>
<a href="https://www.smartkarma.com/entities/power-assets-holdings-ltd" target="_blank" data-smartkarma-citation="entities:788:1" rel="noopener">POWER ASSETS HOLDINGS (6 HK)</a> has shown a breakout relative to MSCI Hong Kong with a defensive business and 5%+ dividend yield. 
</li>
<li>
<a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH GROUP (288 HK)</a> has also shown a breakout relative to the MSCI Hong Kong after its announcement of the spinoff of Smithfield Foods in the US. 
</li>
</ul>



BYD (1211 HK) shares had a breakout relative to the MSCI China index and showing good momentum during the low volume days of summer.  


POWER ASSETS HOLDINGS (6 HK) has shown a breakout relative to MSCI Hong Kong with a defensive business and 5%+ dividend yield. 


WH GROUP (288 HK) has also shown a breakout relative to the MSCI Hong Kong after its announcement of the spinoff of Smithfield Foods in the US. 



Technically Speaking, Breakouts and Breakdowns: HONG KONG (July 24)

Analyst

Steve

Equity Bottom-Up

<ul>
<li>Since my previous insight on <a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a> in October 2023, the stock is up 17%, massively outperforming 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>. </li>
<li>The company is still trading at 6x forward PE, compared to an average forward PE of 11x since 2016. </li>
<li>With the US business recovering as well as its potential IPO, and a stable China business, the stock remains a buy with limited downside. </li>
</ul>


Since my previous insight on WH Group (288 HK) in October 2023, the stock is up 17%, massively outperforming the Hang Seng Index (HSI INDEX). 
The company is still trading at 6x forward PE, compared to an average forward PE of 11x since 2016. 
With the US business recovering as well as its potential IPO, and a stable China business, the stock remains a buy with limited downside. 


WH Group (288 HK):  Update On The Bull Case

Hong Kong

WH Group Limited operates as a holdings company. The Company, through its subsidiaries, provides meat processing services, supplies chilled meat, meat products, and other related products.

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WH Group (288 HK)

WH Group (288 HK)'s US/Mexican Spin-Off

Today's muted reaction to the spin-off news probably best sums up the situation. Even applying, a punchy value for Smithfield of US$10bn, I see WHG...

David Blennerhassett

HK Connect SOUTHBOUND Flows (To 14 Oct 2024); A HUGE 5td; Net Flows Strong but BABA Dominant

SOUTHBOUND flows continue to be very strong on a gross basis. But HK-listed tech isn't getting the love unless it is named Alibaba. Strong moves,...

Travis Lundy

Reservoir Hogs: WH Group (288 HK) Mulls US/Mexican Spin-Off

Unless we see a significant (and sustainable) reversal in the US/Mexican ops in the interim results, now hardly appears the opportune time for a...

David Blennerhassett

Technically Speaking, Breakouts and Breakdowns: HONG KONG (July 24)

BYD Company, Power Assets and WH Group all experienced breakouts during the week. WH Group announced a spin off of its Smithfield Foods business...

David Mudd

WH Group (288 HK): Update On The Bull Case

With the US business recovering as well as its potential IPO, and a stable China business, the stock remains a buy with limited downside.

Steve

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