In today’s briefing:
- Where Does Melco’s Discount To NAV Go From Here?
- Nippon Prologis REIT (3283 JP): Offering Could Be a Catalyst for Outperformance Vs Peers
- HSCEI Index Rebalance Preview: Shenhua Energy (1088) Could Replace China Feihe (6186)
- KOSPI 200 Passive Flow Breakdown, Feat. NPS Size & Trade Window Pattern
- Star Health IPO Lockup – Owned by Financial Investors, US$3.0bn Worth Shares Are Well in the Money
Where Does Melco’s Discount To NAV Go From Here?
- On the 26 November, Macau’s government renewed the concession periods of the city’s six incumbent gambling concessionaires for another 10 years.
- Genting Malaysia (GENM MK), a last-minute interloper, failed in its bid to secure a license. It scored lowest under the government’s bidding review. MGM China (2282 HK) topped the scoresheets.
- As with all incumbents, Melco International (200 HK) and Melco Resorts & Entertainment (MLCO US) eked out strong gains following the renewal. Melco’s current discount to NAV is currently 20%.
Nippon Prologis REIT (3283 JP): Offering Could Be a Catalyst for Outperformance Vs Peers
- Japan’s largest logistics REIT Nippon Prologis Reit (3283 JP) (“NPR”) announced a US$170mn follow-on equity offering to fund their recent acquisition of three logistics facilities.
- The primary offer quantity will be 76,570 units out of which 44,410 units and 32,160 units are expected to be allocated for domestic and international investors, respectively.
- Below is a closer look at the details of this offering and the potential of this offering to trigger strong secondary market performance in the following weeks.
HSCEI Index Rebalance Preview: Shenhua Energy (1088) Could Replace China Feihe (6186)
- Nearing the end of the review period for the March rebalance, we see China Shenhua Energy Co H (1088 HK) replacing China Feihe (6186 HK) in the HSCEI INDEX.
- Estimated one-way turnover is 1.64% resulting in a one-way trade of HK$1.02bn with passives needing to buy 1x ADV on China Shenhua Energy and selling 1.7x ADV on China Feihe.
- The change will lead to an increase in the fair value of the HSCEI 2023 dividend futures by over 3 DIPS. Could be more if China Shenhua pays a special.
KOSPI 200 Passive Flow Breakdown, Feat. NPS Size & Trade Window Pattern
- We should set the minimum level of the target size to estimate the flow impact on T-1 Effective at ₩15T from ETFs.
- We then need to pay attention to the recent trend that an additional flow from NPS appears post-Effective, with a significant portion on T+1~3.
- We should revise down our expected rate of return on our early-phase setup aiming at the preemptive trading (T-6W Effective) by NPS.
Star Health IPO Lockup – Owned by Financial Investors, US$3.0bn Worth Shares Are Well in the Money
- In Dec 2021, Star Health (STARHEAL IN) (SHAI), the largest private health and retail health insurance company in India, raised around US$851m in its India IPO.
- SHAI insured 20.5m people in FY21. SHAI primarily offers retail health insurance which accounted for 87.9% of its FY21 GWP. Individual agents accounted for 97% of its FY21 GWP.
- In this note, we will talk about the upcoming lockup expiry.
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