In this briefing:
- Hitachi (6501 JP): A Bold but Risky Acquisition of ABB’s Power Grids
- Discovery Management Will Likely Soon Be Helping Narrow the Share Class Spread
- Satellite Companies Securing Agreements to Sell C-Band Spectrum
- Discover HK Connect: Mainlanders Are Buying Shandong Gold, and Pharmaceuticals (2018-12-17)
- The GER Weekly EVENTS Wrap: Anta/Amer, Trade Me, Hengan and API/Sigma
1. Hitachi (6501 JP): A Bold but Risky Acquisition of ABB’s Power Grids
Hitachi Ltd (6501 JP) announced the acquisition of an 80.1% stake in ABB Ltd (ABBN VX)’s power grids business for $6.4 billion. ABB will retain the remaining stake in the divested unit, which is valued at an EV of $11 billion. ABB’s power grids is a global #1 player and makes transformers, long distance electricity-transmission systems and energy storage units.
Setting aside the huge cultural and integration challenges, we believe that Hitachi’s acquisition of ABB’s power grids is a bold but a risky move.
2. Discovery Management Will Likely Soon Be Helping Narrow the Share Class Spread
As share class trades go, Discovery has presented several opportunities over the years to take advantage of index changes, corporate events, and a management that has aggressively repurchased nonvoting DISCK shares versus voting DISCA shares.
3. Satellite Companies Securing Agreements to Sell C-Band Spectrum
Satellite companies attempting to convince the Federal Communications Commission to allow them to sell C-band spectrum they license from the U.S. have begun talks to secure customers, sources told CTFN.
4. Discover HK Connect: Mainlanders Are Buying Shandong Gold, and Pharmaceuticals (2018-12-17)
In our Discover HK Connect series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as analyzed by our proprietary data engine. We will discuss the stocks that experienced the most inflow and outflow by mainlanders in the past seven days.
We split the stocks eligible for the Hong Kong Connect trade into three groups: those with a market capitalization of above USD 5 billion, those with a market capitalization between USD 1 billion and USD 5 billion, and those with a market capitalization between USD 500 million and USD 1 billion.
5. The GER Weekly EVENTS Wrap: Anta/Amer, Trade Me, Hengan and API/Sigma
Below is a recap of the key event-driven research produced by the Global Equity Research team. This week Arun develops a differentiated view on the deal between Anta Sports Products (2020 HK) and Amer Sports Oyj (AMEAS FH) which he thinks is worse for the former and better for the latter. In addition, we check the bump possibilities for Trade Me (TME AU) which we think is limited by valuation. Further, we find some validity in the short-seller case on Hengan Intl Group (1044 HK) and believe a bump is needed for Australian Pharma Industries (API AU) to close the deal on Sigma Healthcare (SIG AU)
The rest of our event-driven research can be found below
Best of luck for the new week – Arun, Venkat and Rickin
