In this briefing:
- M1 Ltd (M1 SG): A Clever Ploy to Put the Ball Firmly in Axiata’s Court
- Maoyan Entertainment (猫眼娱乐) IPO: Turning Profitable, Thoughts on Valuation
- Samsung Electronics Share Class: Close Prev Position & Initiate New One Reversely
- HK Connect Discovery Weekly: Tencent, Kingsoft, and Yichang HEC (2019-01-18)
- The GER Weekly EVENTS Wrap: Softbank, Xiaomi, Capitaland and Navitas
1. M1 Ltd (M1 SG): A Clever Ploy to Put the Ball Firmly in Axiata’s Court
M1 Ltd (M1 SP), the third largest telecom operator in Singapore, is subject to a voluntary conditional offer (VGO) at S$2.06 cash per share from Keppel Corp Ltd (KEP SP) and Singapore Press Holdings (SPH SP) (KCL-SPH). KCL-SPH said on Tuesday that they wouldn’t increase their S$2.06 offer price “under any circumstances whatsoever.”
KCL-SPH’s stance not to increase their S$2.06 offer price is a clever ploy to the put the ball in Axiata Group (AXIATA MK)’s court. Axiata has three options, in our view. We believe that the probability of a material bid to KCL-SPH’s offer is low with Axiata most likely to retain its stake as a minority shareholder.
2. Maoyan Entertainment (猫眼娱乐) IPO: Turning Profitable, Thoughts on Valuation
Maoyan Entertainment (formerly Entertainment Plus) launched its institutional book building last Friday. We covered the company’s background, industry backdrop, financials, shareholders and the regulatory overhang in our previous two notes.
In this note, we will look at the recent development of the company, based on the data from the prospectus and our channel checks. We will also discuss the valuation of the company.
Our Previous Insight on Maoyan Entertainment:
- Entertainment Plus (猫眼娱乐) IPO: The Engineered Movie Ticketing Leader that Runs Out of Steam (Part 1)
- Entertainment Plus (猫眼娱乐) IPO: The Coming Regulatory Bang Isn’t That Bad (Part 2)
3. Samsung Electronics Share Class: Close Prev Position & Initiate New One Reversely
- SamE Common/1P are now below -2σ on a 20D MA. This is almost 120D low. 1P discount to Common is 16.61%. This is the lowest since mid November last year. Div yield difference is also on the decline. It is now 0.7%p on FY19 local street consensus.
- It is possible to see short-term price correction on both after the recent mini rally. This’d complicate predictability on price pairing. But we are moving into March OGM cycle. This should put harsher pressure on 1P.
- I’d close the previous position. I’d initiate another round of pair trade. This time go long Common and short 1P with a short term horizon.
4. HK Connect Discovery Weekly: Tencent, Kingsoft, and Yichang HEC (2019-01-18)
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 mainland investors in the past seven days.
We split the stocks eligible for the Hong Kong Connect trade into three groups: component stocks in the HSCEI index, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.
In this week’s HK Connect Discovery, we highlight that Tencent topped the weekly inflow by quantum and its shares held by mainland investors via Stock Connect is at one year low. Stocks exposed to mobile game sector experienced inflow too. In addition, we continue to observe that the mainland investors holding on Yichang HEC continue to rise.
5. The GER Weekly EVENTS Wrap: Softbank, Xiaomi, Capitaland and Navitas
Have nascent bull cases developed for maligned Softbank Group (9984 JP) and Xiaomi Corp (1810 HK)? In this version of the GER weekly events wrap, we asses an interesting debt tender for Softbank Group (9984 JP) which could portend action for the equity. Secondly, we review our long-standing negative stance on Xiaomi Corp (1810 HK) after a very poor recent run. Finally, we are hesitant on the Capitaland Ltd (CAPL SP) acquisition and think a bump is possible for Navitas Ltd (NVT AU)
The rest of our event-driven research can be found below.
Best of luck for the new week – Rickin, Venkat and Arun
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