In today’s briefing:
- KOSDAQ150 Index Rebalance Preview (June): Potential Inclusions Starting to Outperform
- Merger Arb Mondays – Yashili, Razer, 51job, Sezzle, Link, Uniti, Guodian, Jin Jiang
- Shangri-La Asia (69 HK): On a Clear Recovery Path
- JD.com (9618) Re Test of Low Sets up a Very Bullish 2H 2022
KOSDAQ150 Index Rebalance Preview (June): Potential Inclusions Starting to Outperform
- With over 80% of the averaging in the review period complete, we see 15 potential changes to the KOSDAQ 150 Index (KOSDQ150 INDEX) at the June rebalance.
- 11 of the 15 changes are high/medium probability and it will take large moves over the rest of the review period for these stocks to drop out of the list.
- Four potential inclusions have more than 3 days of ADV to buy from passives, while nine potential deletions have more than 3 days of ADV to sell from passives.
Merger Arb Mondays – Yashili, Razer, 51job, Sezzle, Link, Uniti, Guodian, Jin Jiang
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore and the US (Chinese ADRs only).
- This week, the highest gross spreads are Yashili International Holdings (1230 HK), Razer Inc (1337 HK), 51 Job Inc Adr (JOBS US), Sezzle Inc (SZL AU)
- Lowest gross spreads CIMIC Group Ltd (CIM AU), Z Energy Ltd (ZEL NZ), China Logistics Property Holdings (1589 HK), Virtus Health (VRT AU), Mapletree North Asia Commercial Trust (MAGIC SP)
Shangri-La Asia (69 HK): On a Clear Recovery Path
- There is a strong recovery in Shangri-La Asia (69 HK) in 2H21 as its losses narrowed 36.4% HoH and by 57.5% YoY – hotels and investment properties are primary drivers.
- 1Q22 momentum is solid with occupancy outside of Hong Kong and mainland China saw good YoY rebound. In FY21, room rates in France, Australia and UK have surpassed 2018 levels.
- Refinancing for FY22 has almost completed, implying minimal liquidity risks. Trading at 76% discount to adjusted NAV of HK$25.44, the stock is way too cheap.
JD.com (9618) Re Test of Low Sets up a Very Bullish 2H 2022
- JD.com (9618) HK denotes formidable resistance at 260 that will induce a downside re test toward the low zone.
- High sell volumes on the decline followed by weak buy volumes on the recent rise makes for a vulnerable rise with risk of a hard giveback.
- Low re test/new low sets up a buy for a rally to 310/350 in Q3/Q4. Bullish macro A-B-C pullback sequence stands out.
Before it’s here, it’s on Smartkarma
