Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Was on the buyside for 15 years, most recently at a medium-sized boutique asset management firm. I grew up in Europe, went to university in the US and have been living in Singapore for the last 7 years which has given me a broad scope on the world and investing in general.

Consider myself a generalist investor with a preference for small and mid-cap companies and special situations. However, a large cap that has gone temporarily out of favor might also pique my interest. 

My style of investing could be categorized as more of value investor, rather than growth at any cost. Learning from Charlie Munger on the importance of quality of a company has been of tremendous value over the years.I like businesses with real earnings, cash flows, dividends, book value and insider ownership.

Insight Provider

Smartkarma North Asia Weekly: Kuaishou IPO, Haier Smart Home D Shares, RLX IPO, & Big Selling by NPS

Haier Smart Homes (6690 HK): H-Shares Trading Tight To A-Shares

StubWorld: Last Roll Of The Dice For Haier

Haier Electric (1169 HK): The "H-Share" Guessing Game

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

Germany's chancellor Angela Merkel is on the way out. After 16 years she will resign as Chancellor later this year. Her likely successor, Mr. Laschet, has just been elected as CDU party leader.During Merkel's reign, her commitment to China was clear. She paid at least 12 official state visits to China to promote German interests. In hindsight, this led to debacles such as the promotion of <a href="https://www.smartkarma.com/entities/wirecard-ag" target="_blank" data-smartkarma-citation="entities:21743:1" rel="noopener">Wirecard AG (WDI GR)</a> to Chinese authorities.Another <a href="http://smart-home.haier.com/en/gsgg/P020200604563919508265.pdf" target="_blank" rel="noopener">interesting development was the 2018 announcement</a> between the Shanghai and German stock exchanges to list Chinese companies in Germany. They would be called "D Shares", D standing for Deutschland. The poster boy would be <a href="http://smart-home.haier.com/en/gsgg/P020200604563919508265.pdf" target="_blank" rel="noopener">Qingdao Haier</a>.Fast forward to 2021 and it is a late 2020 announcement by Haier that caught our attention. The company has announced in an official filing it will be aggressively buying D shares going forward.Why? After the recent Haier restructuring exercise, the D shares are now pari-passu with the H shares which are freely trading in HK. The D share experiment was clearly a flop and there is no logical reason for these D shares existing anymore. Outcome? Haier will buy 66 million EUR worth of D shares. It makes financial sense. Shareholders, in theory, should also be able to exchange D shares for H shares. Although, in practice, there is just one D share in the world and it has never been done before.Arbitrage Opportunity: <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home Co Ltd (6690 HK) closed at 35.20 HKD</a>Haier Smart Home D shares were recently trading at +/-2.48 EURAs a shareholder, you have the same rights (including dividends) when you are a D shareholder as an H shareholder. If this is true, the disconnect makes no sense, and once arbitrage funds find out it will disappear. ADTV for D shares is above 10M USD/day. This trade can be put on in size.The fair value of at today's FX is 3.74 EUR, which equates to +/-50% upside. The trade has more upside if the HK list-co does well, but has no downside unless the HK listing collapses significantly.

Germany's chancellor Angela Merkel is on the way out. After 16 years she will resign as Chancellor later this year. Her likely successor, Mr. Laschet, has just been elected as CDU party leader.During Merkel's reign, her commitment to China was clear. She paid at least 12 official state visits to China to promote German interests. In hindsight, this led to debacles such as the promotion of Wirecard AG (WDI GR) to Chinese authorities.Another interesting development was the 2018 announcement between the Shanghai and German stock exchanges to list Chinese companies in Germany. They would be called "D Shares", D standing for Deutschland. The poster boy would be Qingdao Haier.Fast forward to 2021 and it is a late 2020 announcement by Haier that caught our attention. The company has announced in an official filing it will be aggressively buying D shares going forward.Why? After the recent Haier restructuring exercise, the D shares are now pari-passu with the H shares which are freely trading in HK. The D share experiment was clearly a flop and there is no logical reason for these D shares existing anymore. Outcome? Haier will buy 66 million EUR worth of D shares. It makes financial sense. Shareholders, in theory, should also be able to exchange D shares for H shares. Although, in practice, there is just one D share in the world and it has never been done before.Arbitrage Opportunity: Haier Smart Home Co Ltd (6690 HK) closed at 35.20 HKDHaier Smart Home D shares were recently trading at +/-2.48 EURAs a shareholder, you have the same rights (including dividends) when you are a D shareholder as an H shareholder. If this is true, the disconnect makes no sense, and once arbitrage funds find out it will disappear. ADTV for D shares is above 10M USD/day. This trade can be put on in size.The fair value of at today's FX is 3.74 EUR, which equates to +/-50% upside. The trade has more upside if the HK list-co does well, but has no downside unless the HK listing collapses significantly.

Haier Smart Home: Forgotten D Shares = Equal to H Shares. Creates a Minimum 50% Return Opportunity