Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

DSV Improves Bid and Göhner Foundation and Panalpina Agree

Panalpina To Have EGM to Approve One Share One Vote

Quiddity Advisors

Event-Driven

On the day that <a href="https://www.smartkarma.com/entities/22343" target="_blank" data-smartkarma-citation="entities:22343:1">DSV A/S (DSV DC)</a> and <a href="https://www.smartkarma.com/entities/22460" target="_blank" data-smartkarma-citation="entities:22460:1">Panalpina Welttransport Holding (PWTN SW)</a> announced their merger (discussed in <a href="https://www.smartkarma.com/insights/dsv-improves-bid-and-gohner-foundation-and-panalpina-agree" target="_blank" data-smartkarma-citation="insights:28937">DSV Improves Bid and Göhner Foundation and Panalpina Agree</a>), the CEOs of the two companies had meetings in both Copenhagen and Zurich to discuss the agreement and what it meant, and as I wrote while listening to the call (in a discussion point to the insight listed above)...<blockquote>
It is clear from the conference call that the share issuance rather than cash payment is due to the Göhner Foundation wants to keep owning shares. It is also clear that DSV wants to buy back shares and may be more aggressive than in past. "DSV will not change its capital allocation policy nor de-lever." 
The company is unsure whether it can re-start its DSV share buyback in H2, and has been speaking to lawyers, but they are acutely aware of the flowback possible from Panalpina shareholders who decide not to hold DSV shares.
</blockquote>Two weeks after those meetings, Panalpina <a href="https://www.panalpina.com/www/global/en/home/newsroom.html#/pressreleases/panalpina-improves-profitability-by-15-percent-2861696" target="_blank">reported</a> Q1 EBIT and Profits up 15%yoy, a week later DSV <a href="http://investor.dsv.com/news-releases/news-release-details/dsv-742-reduction-dsvs-share-capital" target="_blank">announced</a> it was cancelling 2 million treasury shares, then a week after that DSV <a href="http://investor.dsv.com/news-releases/news-release-details/dsv-744-interim-financial-report-q1-2019" target="_blank">announced</a> 2019Q1 EBIT (before extraordinaries) +25.8%yoy, Profits After Tax + 25.2%yoy, Adjusted FCF +20%yoy, and EPS +27.2%yoy. <h2>The Other Announcement - The Buyback</h2>DSV also <a href="http://investor.dsv.com/news-releases/news-release-details/dsv-745-launch-share-buyback-programme-according-safe-harbour" target="_blank">announced</a> a new buyback program to spend up to DKK 3.5bn to buy up to 10,000,000 shares within the mandate granted at the 15 March 2019 annual meeting. 10,000,000 shares would be 5.38% of the current share capital of DSV. The buyback period was announced as 30 April 2019 through 9 November 2019. This buyback arrived earlier than previously speculated and despite the clear understanding in the call, would not address flowback. Unless something drastic happens, the amount of stock purchased will be far lower than 5.38% of shares out (DKK 3.5bn at DKK 600/share is 5.8mm shares or 3.13% of shares out).  But it helps support the stock price now.

On the day that DSV A/S (DSV DC) and Panalpina Welttransport Holding (PWTN SW) announced their merger (discussed in DSV Improves Bid and Göhner Foundation and Panalpina Agree), the CEOs of the two companies had meetings in both Copenhagen and Zurich to discuss the agreement and what it meant, and as I wrote while listening to the call (in a discussion point to the insight listed above)...
It is clear from the conference call that the share issuance rather than cash payment is due to the Göhner Foundation wants to keep owning shares. It is also clear that DSV wants to buy back shares and may be more aggressive than in past. "DSV will not change its capital allocation policy nor de-lever." 
The company is unsure whether it can re-start its DSV share buyback in H2, and has been speaking to lawyers, but they are acutely aware of the flowback possible from Panalpina shareholders who decide not to hold DSV shares.
Two weeks after those meetings, Panalpina reported Q1 EBIT and Profits up 15%yoy, a week later DSV announced it was cancelling 2 million treasury shares, then a week after that DSV announced 2019Q1 EBIT (before extraordinaries) +25.8%yoy, Profits After Tax + 25.2%yoy, Adjusted FCF +20%yoy, and EPS +27.2%yoy. The Other Announcement - The BuybackDSV also announced a new buyback program to spend up to DKK 3.5bn to buy up to 10,000,000 shares within the mandate granted at the 15 March 2019 annual meeting. 10,000,000 shares would be 5.38% of the current share capital of DSV. The buyback period was announced as 30 April 2019 through 9 November 2019. This buyback arrived earlier than previously speculated and despite the clear understanding in the call, would not address flowback. Unless something drastic happens, the amount of stock purchased will be far lower than 5.38% of shares out (DKK 3.5bn at DKK 600/share is 5.8mm shares or 3.13% of shares out).  But it helps support the stock price now.

Panalpina Welttransport Holding (PWTN SW)

DSV Buyback - Slow and Steady Now, Could Grow Later