Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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<li>Shortly after <strong><a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel (KEP SP)</a></strong> revised their Offer to ~S$2.35 and FINAL, Cuscaden has come over the top. This complicates things because of the <strong><a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press (SPH SP)</a></strong>/Keppel Agreement timing.</li>
<li>
<a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener"><strong>Swire Pacific (19 HK)</strong></a>'s discount to NAV of ~50% is bang in line with its 12-month average, as <a href="https://www.smartkarma.com/entities/cathay-pacific-airways-ltd" target="_blank" data-smartkarma-citation="entities:243:1" rel="noopener">Cathay Pacific (293 HK)</a> is close to operating cash breakeven.</li>
<li>Blackstone and affiliates are offering shareholders of <strong><a href="https://www.smartkarma.com/entities/crown-resorts-ltd" target="_blank" data-smartkarma-citation="entities:808:1" rel="noopener">Crown Resorts (CWN AU)</a></strong> A$12.50/share in cash, a 26.2% premium to last close.</li>
</ul>


Shortly after Keppel (KEP SP) revised their Offer to ~S$2.35 and FINAL, Cuscaden has come over the top. This complicates things because of the Singapore Press (SPH SP)/Keppel Agreement timing.

Swire Pacific (19 HK)'s discount to NAV of ~50% is bang in line with its 12-month average, as Cathay Pacific (293 HK) is close to operating cash breakeven.
Blackstone and affiliates are offering shareholders of Crown Resorts (CWN AU) A$12.50/share in cash, a 26.2% premium to last close.


Last Week in Event SPACE: Singapore Press, Swire, Crown Resorts, Royal Dutch, Toshiba, Hollysys

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hang-lung-group-ltd" target="_blank" data-smartkarma-citation="entities:50:1" rel="noopener"><strong>Hang Lung (10 HK</strong>)</a> is coming up "expensive" on my monitor, yet remains one of the cheapest property plays in Hong Kong on a P/B metric.</li>
<li>Preceding my comments on Hang Lung 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>



Hang Lung (10 HK) is coming up "expensive" on my monitor, yet remains one of the cheapest property plays in Hong Kong on a P/B metric.
Preceding my comments on Hang Lung 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: Scion Adriel Likes Hang Lung Group Shares

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<p><em><strong>Corrigenda: There is an error in this Insight. Please note the correction.</strong></em></p>
<p><em><strong>Correction: [Under the section “On the Evergrande holding”], that (unrealised &amp; realised) loss on the investment in Evergrande (3333 HK) of HK$10.4bn almost certainly includes the HK$3.99bn loss on investment included in the 2021 interims.</strong></em></p>
<p><em><strong>Therefore the additional (unrealised &amp; realised) loss on investment, using the $2.95/share price for Evergrande as provided in the announcement, is ~HK$6.4bn, or HK$3.37/share, giving an adjusted NAV of HK$9.61/share (ignoring forward earnings), implying a P/B under the Offer of ~0.42x compared to a three-year average of 0.31x.</strong></em></p>
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<p>After being <a href="chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/viewer.html?pdfurl=https%3A%2F%2Fwww1.hkexnews.hk%2Flistedco%2Flistconews%2Fsehk%2F2021%2F0929%2F2021092900219.pdf&amp;clen=26125&amp;chunk=true" target="_blank" rel="noopener">suspended</a> on the 29 September pursuant to the Hong Kong Code on Takeovers and Mergers, <a href="https://www.smartkarma.com/entities/chinese-estates-holdings-limited" target="_blank" data-smartkarma-citation="entities:20954:1" rel="noopener">Chinese Estates Holdings (127 HK)</a>, a leading property developer in Hong Kong, has now <a href="chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/viewer.html?pdfurl=https%3A%2F%2Fwww1.hkexnews.hk%2Flistedco%2Flistconews%2Fsehk%2F2021%2F1006%2F2021100601285.pdf&amp;clen=203491&amp;chunk=true" target="_blank" rel="noopener">announced</a> an Offer, by way of a Scheme, from its founder, Joseph Lau, and his wife Chan Hoi Wan.</p>
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<p>The consideration is $4.00/share, a 37.9% premium to last close, but an impressive 83.5% premium to the close on the last full trading day. The Offer price will NOT be increased.</p>
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<p>Lau and Chan control <a href="https://di.hkex.com.hk/di/NSAllSSList.aspx?sa2=as&amp;sid=206&amp;corpn=Chinese+Estates+Holdings+Ltd.&amp;sd=29/09/2013&amp;ed=29/09/2021&amp;cid=0&amp;sa1=cl&amp;scsd=29%2f09%2f2013&amp;sced=29%2f09%2f2021&amp;sc=127&amp;src=MAIN&amp;lang=EN&amp;g_lang=en&amp;" target="_blank" rel="noopener">74.99%</a> of the company. Disinterested shareholders comprise 21.41% of shares out, therefore the blocking stake at the forthcoming Court Meeting is 2.141% of shares out. </p>
<p>The headcount test applies.</p>
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<p>In <em><a href="https://skr.ma/1HQM2" target="_blank" rel="noopener">Chinese Estates (127 HK): Potential Privatisation?</a></em>, I expected a punchy premium (to the "undisturbed price") upwards of up 75%, or $3.82/share, to get this over the line. This has been exceeded. </p>
<p>Optically, Lau and Chan appear to be getting Chinese Estates at a bargain. But the current realised plus unrealised losses on the <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande (3333 HK)</a> holding is HK$10.4bn, which dramatically alters what is deemed to be book value, and therefore the implied valuation metric under the Offer.</p>
<p>This looks like a done deal and should trade tight to terms.</p>
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Corrigenda: There is an error in this Insight. Please note the correction.
Correction: [Under the section “On the Evergrande holding”], that (unrealised &amp; realised) loss on the investment in Evergrande (3333 HK) of HK$10.4bn almost certainly includes the HK$3.99bn loss on investment included in the 2021 interims.
Therefore the additional (unrealised &amp; realised) loss on investment, using the $2.95/share price for Evergrande as provided in the announcement, is ~HK$6.4bn, or HK$3.37/share, giving an adjusted NAV of HK$9.61/share (ignoring forward earnings), implying a P/B under the Offer of ~0.42x compared to a three-year average of 0.31x.

After being suspended on the 29 September pursuant to the Hong Kong Code on Takeovers and Mergers, Chinese Estates Holdings (127 HK), a leading property developer in Hong Kong, has now announced an Offer, by way of a Scheme, from its founder, Joseph Lau, and his wife Chan Hoi Wan.


The consideration is $4.00/share, a 37.9% premium to last close, but an impressive 83.5% premium to the close on the last full trading day. The Offer price will NOT be increased.


Lau and Chan control 74.99% of the company. Disinterested shareholders comprise 21.41% of shares out, therefore the blocking stake at the forthcoming Court Meeting is 2.141% of shares out. 
The headcount test applies.


In Chinese Estates (127 HK): Potential Privatisation?, I expected a punchy premium (to the "undisturbed price") upwards of up 75%, or $3.82/share, to get this over the line. This has been exceeded. 
Optically, Lau and Chan appear to be getting Chinese Estates at a bargain. But the current realised plus unrealised losses on the Evergrande (3333 HK) holding is HK$10.4bn, which dramatically alters what is deemed to be book value, and therefore the implied valuation metric under the Offer.
This looks like a done deal and should trade tight to terms.







Chinese Estates (127 HK): $4.00/Share Offer

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<p><a href="https://www.smartkarma.com/entities/chinese-estates-holdings-limited" target="_blank" data-smartkarma-citation="entities:20954:1" rel="noopener">Chinese Estates Holdings (127 HK)</a>,  a leading property developer in Hong Kong - and avid securities investor - is currently <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0929/2021092900219.pdf" target="_blank" rel="noopener">suspended</a> pursuant to the Hong Kong Code on Takeovers and Mergers. There are, as yet, no further details, although shares did gain 33% before being halted at 11.10am today. </p>
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<p><a href="https://www.smartkarma.com/entities/charoen-pokphand-foods-public-company-limited" target="_blank" data-smartkarma-citation="entities:16131:1" rel="noopener"></a>Joseph Lau and his wife Chan Hoi Wan control <a href="https://di.hkex.com.hk/di/NSAllSSList.aspx?sa2=as&amp;sid=206&amp;corpn=Chinese+Estates+Holdings+Ltd.&amp;sd=29/09/2013&amp;ed=29/09/2021&amp;cid=0&amp;sa1=cl&amp;scsd=29%2f09%2f2013&amp;sced=29%2f09%2f2021&amp;sc=127&amp;src=MAIN&amp;lang=EN&amp;g_lang=en&amp;" target="_blank" rel="noopener">74.99%</a> of the company.</p>
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<p>This insight provides some brief background on Chinese Estates, plus speculates on a fair price should a firm Offer unfold. </p>
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Chinese Estates Holdings (127 HK),  a leading property developer in Hong Kong - and avid securities investor - is currently suspended pursuant to the Hong Kong Code on Takeovers and Mergers. There are, as yet, no further details, although shares did gain 33% before being halted at 11.10am today. 


Joseph Lau and his wife Chan Hoi Wan control 74.99% of the company.


This insight provides some brief background on Chinese Estates, plus speculates on a fair price should a firm Offer unfold. 


Chinese Estates (127 HK): Potential Privatisation?

Last Week in Event SPACE: Toshiba, MMC Corp, Japan Post, China Logistics, Pershing Square, Hang Lung

Hong Kong

Wheelock And Company Limited, through its subsidiaries, develops and invests in properties, operates retail and distribution business, provides treasury management, and renders financial and commercial services.

Price Gauge
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Wheelock (1947529D HK)

Last Week in Event SPACE: Singapore Press, Swire, Crown Resorts, Royal Dutch, Toshiba, Hollysys

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

StubWorld: Scion Adriel Likes Hang Lung Group Shares

HLG remains very cheap here on a look-through basis. You're looking at 30-40% upside to HLG here to get back to a simple ratio of 1.45x, the ten...

David Blennerhassett

Chinese Estates (127 HK): Potential Privatisation?

To get this Offer the line, I reckon Lau would have to pay a significant premium to the undisturbed price. Potentially upwards of 75% or $3.82...

David Blennerhassett

Last Week in Event SPACE: Toshiba, MMC Corp, Japan Post, China Logistics, Pershing Square, Hang Lung

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Last Week in Event SPACE: Singapore Press, Swire, Crown Resorts, Royal Dutch, Toshiba, Hollysys

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

StubWorld: Scion Adriel Likes Hang Lung Group Shares

HLG remains very cheap here on a look-through basis. You're looking at 30-40% upside to HLG here to get back to a simple ratio of 1.45x, the ten...

David Blennerhassett

Chinese Estates (127 HK): $4.00/Share Offer

There may be some pushback on pricing, but factoring in the Evergrande loss (real & unrealised), the Offer Price appears fair.

David Blennerhassett

Chinese Estates (127 HK): Potential Privatisation?

To get this Offer the line, I reckon Lau would have to pay a significant premium to the undisturbed price. Potentially upwards of 75% or $3.82...

David Blennerhassett

Last Week in Event SPACE: Toshiba, MMC Corp, Japan Post, China Logistics, Pershing Square, Hang Lung

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett