In today’s briefing:
- Hongkong Land: Exchange Square Sale Would Be BIG News. (If True)
- Metro Pacific Investments (MPI PM): Risk/Reward as Uncertainty Hangs on the Delisting Threshold
- SMFG – Least Achieved of FY24 Forecast, With Lowest ROE of Mega’s & Less JPY Bond Leverage
- Primary Health Properties – Sustaining dividend growth
- Bakkt Holdings, Inc. – 2Q23 Revenues Jump on Apex Crypto Acquisition Closing
Hongkong Land: Exchange Square Sale Would Be BIG News. (If True)
- According to Sing Tao, two PRC firms and a mainland bank have formed a consortium to acquire Hongkong Land (HKL SP)‘s 33-storey Three Exchange Square.
- This “news” is straight out of left field. For its part, HKL said the market rumour is pure speculation.
- HKL’s P/B of 0.24x is closing in on its all-time low of 0.21x during the depths of Covid.
Metro Pacific Investments (MPI PM): Risk/Reward as Uncertainty Hangs on the Delisting Threshold
- Metro Pacific Investments Co (MPI PM)‘s voluntary delisting tender offer from a consortium at PHP5.20 (net price of PHP5.1677 per share) will run from 9 August to 7 September.
- The delisting proposal was approved on 8 August. Excluding the consortium’s votes, only 37.4% of minorities (representing 13.73% of outstanding shares) voted YES for the delisting proposal.
- A key risk is satisfying the 95% delisting threshold, which would require a minorities acceptance rate of 86.4%. The risk/reward is unattractive at the current spread of 4.4% (net 3.8%).
SMFG – Least Achieved of FY24 Forecast, With Lowest ROE of Mega’s & Less JPY Bond Leverage
- SMFG achieved less of its FY24 profit forecast than peer megabanks; less upgrades
- SMFG reported a far lower ROE than peer megabanks & some worse financial metrics
- SMFG’s JPY bonds are only 0.88x of total equity; it is less leveraged than peer megabanks
Primary Health Properties – Sustaining dividend growth
Interim results showed Primary Health Properties (PHP) to be well on track to meet its fully covered 6.7p DPS target, the 27th consecutive year of growth. Organic rent growth continues to increase, borrowing costs are nearly all fixed/hedged and the cost ratio is among the lowest in the sector. Despite this, the prospective dividend yield is now c 7%.
Bakkt Holdings, Inc. – 2Q23 Revenues Jump on Apex Crypto Acquisition Closing
2Q23 revenue of $347.6 million now includes the Apex Crypto acquisition (rebranded as Bakkt Crypto Solutions).
Net loyalty revenues of $12.3 million were down 8% Y/Y, driven by a reduction in volume-based service revenues.
Adjusted EBITDA loss was down 17% Y/Y (from a $29.6 million loss to a $24.5 million loss) as the company has taken expense management steps.
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