In today’s briefing:
- Potential MSCI Upweights in May: Kuaishou, JD Health, Akeso
- Tencent (700 HK): 4Q21, Weak Revenue and Significant “Other Gains”, 30% Downside
- Lendlease Global Offering to Buy the Rest of JEM – Big Deal, Cheap, Cheaper Than Peers
- Samsung Family’s Inheritance Tax Situation & Future Block Deals
- StubWorld: Buoyant Henderson As Hong Kong Eases Covid Rules
Potential MSCI Upweights in May: Kuaishou, JD Health, Akeso
- We see a potential increase in the FIF for Kuaishou Technology (1024 HK), JD Health (6618 HK) and Akeso Biopharma Inc (9926 HK) at the MSCI May SAIR.
- The increase in FIF will require passive funds to buy 79.45m shares of Kuaishou (1024 HK), 57.35m shares of JD Health (6618 HK) and 15.32m shares of Akeso (9926 HK).
- Short interest has started to inch higher on Kuaishou, while short interest is rising sharply on JD Health and Akeso.
Tencent (700 HK): 4Q21, Weak Revenue and Significant “Other Gains”, 30% Downside
- Tencent’s revenue growth continued to slow down to 8% YoY in 4Q21.
- The company used more extraordinary income to bolster EPS in recent years.
- We believe the stock has a downside of 28% within 2022.
Lendlease Global Offering to Buy the Rest of JEM – Big Deal, Cheap, Cheaper Than Peers
- In mid-February, Lendlease Global Commercial REIT (LREIT SP) which owned 31.8% of the Jurong East MRT Station “Jem” complex announced it would buy the rest.
- They announced they would issue new equity to pay for some of it. Predictably, the units fell, and fell vs Office/Retail Mixed-Use SREIT peers.
- Now you can buy units of Singapore asset quality, acceptable leverage, high divi and something well cheap of peer-measured fair.
Samsung Family’s Inheritance Tax Situation & Future Block Deals
- The family is done with selling stakes in Samsung Life Insurance and Samsung SDS. What remains now is the sale of a 0.33% stake in Samsung Electronics by Hong Ra-hee.
- Hong Ra-hee’s 0.33% stake in Samsung Electronics is highly likely to appear soon. The deadline is April 25th. It will likely cause an impact of 1.5x ADTV.
- Additional stake sales are likely. SDS for sure, and probably more Life. But more SamE? This remains unclear due to the substantially lower controlling stake percentage.
StubWorld: Buoyant Henderson As Hong Kong Eases Covid Rules
- Henderson Land Development (12 HK)‘s shares bounced late last week after the Hong Kong government indicated it would ease strict Covid measures. FY21 results were also released yesterday.
- Preceding my comments on Henderson, are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
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