In today’s briefing:
- (Mostly) Asia-Pac M&A: Huafa Prop, Asia Cement, QV Equities, Sciclone, Chilled & Frozen Logistics
- Weekly Deals Digest (02 Jun) – Infocom, CF Logistics, Asia Cement, GA Pack, Huafa, Shift Up
- Last Week in Event SPACE: Mitsui Matsushima, China Merchants,Kansai Paint, Teijin, Sciclone Pharma
- Mainland Connect NORTHBOUND Flows (To 31 May 2024): Net Sell Flows on Weak Gross Volumes
- HK Connect SOUTHBOUND Flows (To 31 May 2024); Private Tech, Energy/Financial SOEs See BIG Net Buys
- KWEB Index Rebalance: ZX (9890 HK) In; Fenbi (2469 HK) Out
- (Mostly) Asia M&A, May 2024: Malaysia Airports, Alps Logistics, Nihon Housing, Great Eastern
- Helios Techno Holding (6927) – Small TOB, Fat Premium (74%), Still Too Cheap
- A/H Premium Tracker (To 31 May 2024): HK Stocks Have an Ugly Week; AH Premium in Liquid Pairs Rises
(Mostly) Asia-Pac M&A: Huafa Prop, Asia Cement, QV Equities, Sciclone, Chilled & Frozen Logistics
- I tally 51 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- One new deal was discussed on Smartkarma this week:Huafa Property Services Group (982 HK)‘s Scheme. Asia Cement China (743 HK) also suspended pursuant to the Takeovers Code.
- Key updates took place on: QV Equities (QVE AU), Boral (BLD AU), Greatview Aseptic Packaging (468 HK), Sciclone Pharmaceuticals (6600 HK), and Chilled & Frozen Logistics Holdings (9099 JP).
Weekly Deals Digest (02 Jun) – Infocom, CF Logistics, Asia Cement, GA Pack, Huafa, Shift Up
- 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: Shift Up (462870 KS) seeks to raise up to US$320 million.
- Event-Driven developments: Asia Cement China (743 HK), Greatview Aseptic Packaging (468 HK), Huafa Property Services Group (982 HK), Chilled & Frozen Logistics Holdings (9099 JP), Infocom Corp (4348 JP).
Last Week in Event SPACE: Mitsui Matsushima, China Merchants,Kansai Paint, Teijin, Sciclone Pharma
- Colour me perplexed. Murakami Group ran up Mitsui Matsushima (1518 JP)‘s share price in acquiring 29%. The pattern was clear, but one assumes everyone in-group was on the same page.
- Two activist shareholders. And long only upping its stake. Heavily discounted China Merchants China Direct Investments (133 HK) is in play.
- A HUGE new buyback for Kansai Paint (4613 JP). Really big. Buy Kansai Paint vs Nippon Paint. One can buy the pop. One can buy any dips after the pop.
Mainland Connect NORTHBOUND Flows (To 31 May 2024): Net Sell Flows on Weak Gross Volumes
- The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
- Last week saw NORTHBOUND net SELL RMB 5.7bn of A-shares on lower gross volumes. NORTHBOUND bought Zijin, Yangtze Power, and renewables and sold SOEs.
- Ongoing questions as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected from earlier announcements.
HK Connect SOUTHBOUND Flows (To 31 May 2024); Private Tech, Energy/Financial SOEs See BIG Net Buys
- SOUTHBOUND was again a net buyer for HK$29.7bn on small two-way volumes. Bank Of China Ltd (H) (3988 HK) dropped to #4 this week but SOE buying dominated.
- It is not clear how much of this is H/A discounts, expected dividend tax removal, and the KPIs for SOE CEOs to raise prices and payout ratios, but it continues.
- Valuations are acceptable. Flows are good. Policy changes are afoot. SOUTHBOUND may continue to see inflows – national team and otherwise.
KWEB Index Rebalance: ZX (9890 HK) In; Fenbi (2469 HK) Out
- ZX (9890 HK) will replace Fenbi Ltd (2469 HK) in the KraneShares CSI China Internet ETF (KWEB US) at the close on 14 June.
- There will be over 6 days of ADV to sell in Fenbi Ltd (2469 HK) and we estimate over 2 days of ADV to buy in ZX (9890 HK).
- There are other ETFs that track very similar indices and there could be a lot more to trade in the stocks at the close on 14 June.
(Mostly) Asia M&A, May 2024: Malaysia Airports, Alps Logistics, Nihon Housing, Great Eastern
- For the month of May 2024, 10 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$6.6bn.
- The average premium for the new transactions announced (or first discussed) in May was ~60%. The average premium YTD is ~46%. Japan is well up yoy. Hong Kong is down.
- This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.
Helios Techno Holding (6927) – Small TOB, Fat Premium (74%), Still Too Cheap
- On Friday, acquisitive wafer technology firm Rs Technologies (3445 JP) announced it would buy lamp and printing equipment maker Helios Techno Holding (6927 JP) at a 74% premium.
- The premium is big, but Helios is a steal at the price. Granted, it is a small potatoes steal.
- The register is not controlled by any one party or group of investors other than retail. That makes this interesting.
A/H Premium Tracker (To 31 May 2024): HK Stocks Have an Ugly Week; AH Premium in Liquid Pairs Rises
- The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
- SOUTHBOUND’s renewed buy streak continued this past week; every day net positive. Strong net buying. NORTHBOUND saw net selling. Gross volumes on both were light.
- AH Premia rebounded off multi-year lows, on average, this past week as Hang Seng/other HK indices fell and A-shares did not do much. Liquid Hs underperformed As by 2%.
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