In today’s briefing:
- (Mostly) Asia-Pac M&A:Ansarada, Southern Cross Gold, A8 New Media, CPMC, Mandala Multifinance, Fancl
- HK Connect SOUTHBOUND Flows (To 2 Aug 2024); ETFs Get Sold; Tencent, SOEs, Utilities Bought
- A/H Premium Tracker (To 2 Aug 2024): Policy Commentary Supports Consumers, AH Premia Drifting Wider
- Asia Cement China (743 HK): Scheme Vote on 26 August Has a High Deal Break Risk
- Asia Cement (743 HK): 26th August Vote. Shareholders Should Reject Terms
- Last Week in Event SPACE: Rio Tinto, Ryohin Keikaku/Fast Retailing, WH Group, ThaiBev/F&N, PCCW
- Mainland Connect NORTHBOUND Flows (To 2 Aug 2024): Small Net Positive Week But…
(Mostly) Asia-Pac M&A:Ansarada, Southern Cross Gold, A8 New Media, CPMC, Mandala Multifinance, Fancl
- I tally 45 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Quite week – no new deals were discussed this week on Smartkarma ….
- Key updates took place on Ansarada Group (AND AU), Southern Cross Gold (SXG AU), A8 New Media (800 HK), CPMC Holdings (906 HK), Mandala Multifinance (MFIN IJ), and Fancl (4921 JP).
HK Connect SOUTHBOUND Flows (To 2 Aug 2024); ETFs Get Sold; Tencent, SOEs, Utilities Bought
- SOUTHBOUND was again a net buyer, for HK$9.2bn this week (now 26wks in a row of net buying), on smallish two-way volumes.
- I’ve thought national team was buying banks for months. They were gone for a couple of weeks. Feels like they are back.
- There were three ETFs in the top five SOUTHBOUND sells this past week, reversing last week. Energy, Utilities, Telecoms bought.
A/H Premium Tracker (To 2 Aug 2024): Policy Commentary Supports Consumers, AH Premia Drifting Wider
- 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 inflow strong. SOEs, Tencent, and Xiaomi leading. NORTHBOUND down four of five days this week, but net inflows on the week. Consumer discretionary bad.
- Hs underperformed As again. 20d AH Premia performance is at the top of its multi-year range. I’d expect AH Premia to decline the next couple of weeks.
Asia Cement China (743 HK): Scheme Vote on 26 August Has a High Deal Break Risk
- Asia Cement China (743 HK)’s IFA opines that Asia Cement (1102 TT)’s HK$3.22 privatisation offer is fair and reasonable. The scheme vote is on 26 August.
- The IFA valiantly justifies that an offer materially below net cash is fair and reasonable. The crux of the justification lies in the fortuitous disclosure of material capex requirements.
- While no shareholder holds the 10% blocking stake, the high AGM minority participation rates, retail opposition and unconvincing IFA report suggest a high chance of a deal break.
Asia Cement (743 HK): 26th August Vote. Shareholders Should Reject Terms
- Back on the 5th June, Chinese cement play Asia Cement China (743 HK) announced a rubbish HK$3.22/share Offer from its parent Asia Cement (1102 TT).
- This best & final cash Offer was a ~ 45% premium to undisturbed, and a 37% discount to FY23’s net cash. It’s a 39% discount to 1H24’s net cash.
- The Scheme Doc is now out, with a 26th August independent shareholder vote. And payment (if it were to occur) on 20th September. The IFA (unsurprisingly) says fair and reasonable.
Last Week in Event SPACE: Rio Tinto, Ryohin Keikaku/Fast Retailing, WH Group, ThaiBev/F&N, PCCW
- At a time when the LSE has dumbed down the checks and balances for listed companies, now may be the right time to consider collapsing Rio Tinto (RIO AU)‘s DLC.
- Re: Sep24 Nikkei 225 Rebal, long Ryohin Keikaku (7453 JP) vs. Fast Retailing (9983 JP), but this may not last. It has worked very well.
- Unless we see a significant (and sustainable) reversal in WH Group (288 HK)‘s US/Mexican ops in the interim results, now hardly appears the opportune time for a Smithfield IPO.
Mainland Connect NORTHBOUND Flows (To 2 Aug 2024): Small Net Positive Week But…
- 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 BUY RMB 3.2bn of A-shares. Wednesday was a BIG buy day. Every other day was a net sell.
- HK and Mainland large caps generally performed equally, down but much better than the rest of the world, but Hs in H/A pairs underperformed.
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