In today’s briefing:
- Another Reason To Like China Mobile (941 HK)
- Yuexiu Property (123 HK) Rights Offering
- Overlooked Trading Angle in K-New Deal Rebalancing Event: Two LONG SHORT Pairs to Watch
- Merger Arb Mondays (24 Apr) – AAG Energy, Jiangnan, HKBN, Healius, Lian Beng, Toyo
- Weekly Deals Digest (23 Apr) – HKBN, Jiangnan, Lian Beng, Yuexiu Property, ZJLD, Mankind, Adicon
- Jiangnan (1366 HK): 15th May Court Meeting. IFA Says Fair
Another Reason To Like China Mobile (941 HK)
- In March, the HK Secretary for Financial Services announced a waiver of stamp duty on dual counter trading market making. In November, the Govt of HK gazetted a bill.
- HKEX launched plans in December. 9 large HK names announced in March they’d apply (Tencent, Kuaishou, Geely, BOC, Anta, AIA, China Resources Beer, Bidu, HKEX). Six more in April.
- All the announcements are similar. But one on 21 April caught my eye because it is a big H/A with strong southbound support. That’s China Mobile (941 HK).
Yuexiu Property (123 HK) Rights Offering
- On Thursday morning, Yuexiu Property (123 HK) halted trading in its shares and then later in the day announced a rights offering. Shares fell hard but gained back a little.
- The rights offering lowers BVPS by about 11.3% so the current price is “about right” for the fundamentals if the price the day before the news was right.
- There are, however, flow dynamics which are of interest. There almost always are.
Overlooked Trading Angle in K-New Deal Rebalancing Event: Two LONG SHORT Pairs to Watch
- Two pairs of constituent changes marked in squares in INTERNET and GAME may offer meaningful trading opportunities: Seojin System IN / Ahnlab OUT and Com2us IN / Doubleugames OUT.
- Along with TIGER ETF, stealth index funds follow these indices. So, constituent changes in INTERNET and GAME create a flow impact of 0.3~0.6x DTV, even not in the Top 3.
- Also, INTERNET and GAME have less passive flow impact degradation risk due to momentum trading flows compared to BATTERY and BIO.
Merger Arb Mondays (24 Apr) – AAG Energy, Jiangnan, HKBN, Healius, Lian Beng, Toyo
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads – 111 Inc (YI US), Estia Health (EHE AU), Aag Energy Holdings (2686 HK), United Malt Group Ltd (UMG AU), Origin Energy (ORG AU), Toshiba Corp (6502 JP).
- Lowest spreads – Healius (HLS AU), Liontown Resources (LTR AU), Lian Beng (LBG SP), Golden Energy & Resources (GER SP), HKBN Ltd (1310 HK), Mincor Resources NL (MCR AU).
Weekly Deals Digest (23 Apr) – HKBN, Jiangnan, Lian Beng, Yuexiu Property, ZJLD, Mankind, Adicon
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – Yuexiu Property (123 HK) rights issue and ADICON Holdings Limited (ADI HK), ZJLD Group (ZJLD HK), Mankind Pharma (6596876Z IN) IPOs.
- Event-Driven developments – HKBN Ltd (1310 HK), Jiangnan (1366 HK), Essential Metals (ESS AU), Healius (HLS AU), Lian Beng (LBG SP), Oishi Group PCL (OISHI TB).
Jiangnan (1366 HK): 15th May Court Meeting. IFA Says Fair
- On the 21st Feb, Chu Hui, Jiangnan (1366 HK)‘s chairman and major shareholder, offered HK$0.40/share by of a Scheme, a 12.68% premium to last close.
- However, shares gained 63% in the morning session of the 16 Feb, before being suspended, therefore the premium was an impressive 83.49% over the last full trading day’s closing price.
- A shareholder with a blocking stake gave his irrevocable on the 22 March. The IFA reckons terms are fair and reasonable. This is done. The Court Meeting is May 15th.
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