Singapore

• The MNACT/MCT deal has weird parameters which make it complicated as a risk arb situation, and as a way to think about relative value of MCT and MNACT vs Peers
• Relative buying and selling pressure changes between the two names and their peer baskets depending on a) the May vote, b) index provider discretion, and c) MCT’s price in July. 
• Then it may depend on relative price movement before then too. It’s complicated. 

• There are 40 – mostly firm – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal. 
• One new deal this week: INFRONEER Holdings (5076 JP) taking over the rest of a boring, old construction company Toyo Construction (1890 JP).
• Key updates took place for: Link (LNK AU), Uniti  (UWL AU), Mapletree Commercial (MCT SP) /Mapletree North (MAGIC SP), Singapore Press (SPH SP),  DTAC TB / TRUE TB

• Olam Group (OLG SP) issued an update regarding its reorganization process today to announce the sale of a 35.4% stake in Olam Agri to the Saudi Agricultural and Livestock Investment Company.
• The transaction assigns a valuation (equity) of S$4.7bn for the Olam Agri-Business, which is around 69% of Olam Group’s current market cap.
• This is almost 2.0x the implied equity value of the Olam Agri-Business at the current share price of Olam Group, and suggests an upside of 33.8%.

For our next Corporate Webinar with Meta Health Limited (MCOM SP), we are glad to welcome Dr. Vas Metupalle, Chief Medical Officer and Dr. Bernard Ng, Executive Director at 5Digital, Meta Health’s fully-owned healthcare platform company.

In the upcoming Webinar, Dr Vas and Dr Bernard will share a short company presentation, after which they will engage in a fireside chat with Smartkarma Analyst, Sameer Taneja. A live Q&A session will follow.

The Corporate Webinar will be hosted on Tuesday, 5 April 2022, 17:00 SGT.

Meta Health was previously known as Metal Component Engineering and was founded in 1987 in Singapore. With consistent focus on quality and engineering innovation, the company has expanded its customer base by serving MNC, EMS, and SME globally. Meta Health recently diversified into the healthcare technology and services industry with investment into GainHealth Pte. Ltd., a direct-to-consumer and high-growth omni-channel health and wellness platform. The Company is vertically integrated with licensed clinics with pharmacy, online self-branded ecommerce portals, and product placements on regional ecommerce portals.

Corporate Webinars by Smartkarma Corporate Solutions feature discussions with IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.

• The latest announcement by the SG Multi-Task Force to further relax COVID-19 restrictions is a major positive catalyst.
• Its hybrid taxi accounted for more than 50% of its entire fleet as of end-December 2020. It remains on track to replace all diesel taxis with hybrid models by 2023.
• Investors will be paying a discounted valuation for the cash flow if they own Comfortdelgro Corp (CD SP) compared to its peers which trades at a much higher EV/EBITDA.

• In mid-February, Lendlease Global Commercial REIT (LREIT SP) which owned 31.8% of the Jurong East MRT Station “Jem” complex announced it would buy the rest. 
• They announced they would issue new equity to pay for some of it. Predictably, the units fell, and fell vs Office/Retail Mixed-Use SREIT peers. 
• Now you can buy units of Singapore asset quality, acceptable leverage, high divi and something well cheap of peer-measured fair. 

• Lendlease REIT is looking to raise up to US$427m via a private placement and a preferential offering.
• The deal is very well flagged as the acquisition was announced in Feb 2022 and the EGM approval for the same was received earlier this month.
• In this note, we will run the deal through our ECM framework and talk about the recent updates.

• Mapletree Commercial Trust (MCT SP) has introduced a new cash-only consideration of S$1.1949 per MNACT unit. The scheme meeting is at the end-May with an effective date of end-August. 
• Mapletree North Asia Commercial Trust (MAGIC SP)/MNACT will continue to be able to pay permitted distributions – consensus 2HFY21/22 DPU of 3.57 cents to be paid in June.
• Quarz Capital now supports the merger. Including potential permitted 2H MNACT DPU and at last close, the gross spread to the cash-only consideration is 0.9%. 

• Topday, Singapore Press Holdings (SPH SP) shareholders met in an EGM and a Scheme Meeting to approve the takeover of SPH and distribution of SPH REIT (SPHREIT SP) units.
• Shareholders passed resolutions at both meetings, meaning the Cuscaden Peak Pte acquisition is approved. 
• This means we move to next steps, which is choosing the Consideration, and possible MGO Chain Offer on SPH REIT (SPHREIT SP). 

• UMS Holdings’ stock price has been oversold in the past several weeks. It posted excellent results in 4Q 2021 and its valuations have become more attractive. 
• If the global semiconductor cycle undergoes a major downtrend, UMS Holdings would not be immune from such downturn and the company is likely to experience lower sales and profit growth.
• We believe that UMS Holdings has 20% to 40%+ upside from current levels over the next one year, based on historical valuation multiples in the past three years. 

For our next Webinar, Analyst Kyle Rudden continues his series on ESG, in collaboration with SGX (SGX SP). Typically, ESG conversations are “long-only equity”. Historically, that was the only context for ESG. But ESG is making its way into other asset classes and non-traditional (for ESG) situations. Sovereign ESG is a hot topic lately (Russia/Ukraine). So, too, is ESG and private equity, venture capital, and M&A. And short-selling… that looming (supposedly) “Big Short” as hedge funds short-sell their way to carbon-neutral portfolios (a debated strategy). This Webinar, part 6 in the series, will cover ESG from alt-angles. 

The webinar will be hosted on Wednesday, 30 March 2022, 17:00 SGT/HKT.

• Mapletree Commercial Trust (MCT SP) have added a cash-only option for Mapletree North Asia Commercial Trust (MAGIC SP) unitholders in addition to the scrip-only and cash-and-scrip options. 
• At current prices, Mapletree North Asia Commercial Trust (MAGIC SP) unitholders will take the cash-only option. That means no passive flows following the implementation of the scheme.
• At current prices, the entire preferential offering is likely to be taken up by MIPL. The increase in shares will be offset by a lower FIF/investability weight – no inflows.

• Quarz and MNACT holders “win” to get a Cash-Only Consideration bump to 1.0x Price/Sep2021 NAV at S$1.1949/unit. This gets them out at NAV. 
• However there is a catch they want to stay invested in the assets, they have to buy MCT in the market or accept that the scrip ratio was correct. 
• To fund the Cash-Only Consideration option, there will be a Preferential Offering at S$2.0039/unit, and MIPL has offered to underwrite the entire deal. MNACT holders get a free option now.

• Quarz Capital objects to the proposed Mapletree Commercial Trust (MCT SP) / Mapletree North Asia Commercial Trust (MAGIC SP) as they claim it is damaging to MNACT unitholder interests.
• Now they have written a letter to the Monetary Authority of Singapore asking them to Do Something to force MNACT directors to Do Something Different.
• I doubt it comes to anything, but activist-ish letter commentary is my bag so…

• Singapore Press Holdings (SPH SP)‘s comments and answers about the SPH REIT Chain Offer may be misleading. 
• China Mengniu (2319 HK) is in discussions regarding its holdings in Yashili (1230 HK) which may result in a number of “Potential Transactions”, and may include a pre-conditional privatisation offer.
• WH Group (288 HK) is two businesses – a US pork processor and a Chinese one – and both businesses are suffering lower margins than they’d like.

• There are currently 44 – mostly firm – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal. 
• One new deal this week: Morrison & Co’s indicative Offer for Uniti Group (UWL AU); and China Mengniu Dairy (2319 HK)‘s pre-conditional privatisation offer for Yashili International Holdings (1230 HK).
• Key updates took place for: Singapore Press Holdings (SPH SP), Z Energy Ltd (ZEL NZ), Mapletree Commercial Trust (MCT SP), Virtus Health (VRT AU), and Western Areas (WSA AU).

• Perhaps, misled by the Chinese tech rally due to the change in stance from the Chinese Government, Sea’s shares rose by 33% compared to the broader market’s 8.3%.
• With fundamentals deteriorating and the Federal Reserve signalling an aggressive rate hike outlook, Sea Ltd (SE US)’s 33% move seems unwarranted.
• Meanwhile, the downside potential is quite significant as Sea trades at a significant FY+2 EV/Sales premium to regional peers whose cyclical bottoms are unknown.