In today’s briefing:
- Viva China: Perennially Inexpensive Li Ning Exposure
- CitiBanamex Legacy Operations – Revisiting Banorte’s Potential M&A Challenge and Opportunity
- Shanghai/Shenzhen Southbound Connect: Weekly Moves (17 June 2022)
- Shanghai/Shenzhen Northbound Connect: Weekly Moves (17 June 2022)
Viva China: Perennially Inexpensive Li Ning Exposure
- Viva China (8032 HK) trades at a large discount to its 10.6% holding in Li Ning (2331 HK).
- Apart from its Li Ning exposure, Viva has a controlling stake in Bossini International Holdings (592 HK), a sports experience segment, and net cash.
- The current NAV discount of ~46% is unlikely to meaningfully narrow near term given management’s reluctance to pay out a large dividend or undertake a corporate restructuring.
CitiBanamex Legacy Operations – Revisiting Banorte’s Potential M&A Challenge and Opportunity
- Citibanamex legacy operations represent a series of challenges for the acquirer, which include its high cost base, bloated branch network and higher credit risk exposure to consumers and SMEs
- The opportunity for an acquirer is access to a rich and stable deposit base with a relatively low loan-to-deposit ratio and Banamex’s fee generating AFORE pension administrator
- Banamex is attracting much interest, which puts pressure on bidders to pay up, especially Banorte; we revisit our potential capital absorption calculations, but still see risk to Banorte’s dividend prospects
Shanghai/Shenzhen Southbound Connect: Weekly Moves (17 June 2022)
- Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry
- Overall, net inflow was ~US$1.9bn, split US$0.7bn for Shanghai and US$1.2bn for Shenzhen.
- The largest inflows were into CNOOC Ltd (883 HK)and Meituan (3690 HK). The largest outflow was in ICBC (H) (1398 HK).
Shanghai/Shenzhen Northbound Connect: Weekly Moves (17 June 2022)
- Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.
- Overall, net inflow over the past week was ~US$3.5bn, split between Shanghai (+US$2.3bn) and Shenzhen (+US$1.2bn).
- The largest inflows were into Inner Mongolia Yili (600887 CH) and Pharmaron Beijing (300759 CH). The largest outflows were in CATL (300750 CH) (300750 CH) and Qinghai Salt (000792 CH).
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