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

WH Group Partial Buyback Offer Now Unconditional

WH Group - Stock Plummets as Ousted Son Drags Pigs Into The Mud

WH Group Post-Tender Outlook - Index Selldown and Back-End Trading/Valuations

WH Group - Long-Only Fundamental Investors Can Take Advantage Too

WH Group Vs Peers - Too Many Piggies Going to Market?

Quiddity Advisors

Event-Driven

<p>On 6 June 2021, <a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a> announced a proposal for a Voluntary Buyback Offer. The company decided it had enough cash and excess capital given its investment requirements and decided to return the excess to shareholders by buying up to 13% of shares outstanding. The Controlling Group would not tender, so they would see their stake increase and the minimum pro-ration would reach nearly 20%. </p><p>The shares popped, then fell. Then they kept on falling. Yesterday and today they hit the level which has been a low point in the oscillator cycle for the last few years at HK$6.00/share.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/221/069/original/Screenshot+2021-07-29+at+9.16.53+PM.png?1627564718" class="editor-image img-responsive" data-smartkarma-image-id="221069"></figure></section><p>I wrote about the situation that very day in <em><a href="https://www.smartkarma.com/insights/wh-group-buyback-offer-announced-strong-accretion-creates-accretion-risk" target="_blank" data-smartkarma-citation="insights:52613" rel="noopener">WH Group Buyback Offer Announced - Strong Accretion Creates Accretion Risk</a></em>. I wrote that based on then-current pricing, expectations, and the trading levels of its peers, it would not be considered expensive at prices higher than the previous close (which had, to be fair, seen a nice pop on news). </p><p>But markets gonna market. </p><p>The peers fell. DRAMATICALLY. The 7 names in a HK- or China-listed basket of peers have fallen 23% as live hog prices have fallen and the hog/feed ratio has also fallen, indicating hog producers are making even less than before (or, according to the NDRC, losing more than before).</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/221/072/original/Screenshot+2021-07-29+at+10.16.15+PM.png?1627568193" class="editor-image img-responsive" data-smartkarma-image-id="221072"></figure></section><hr><h2>The NEW News - The Offer Doc is Out</h2><p>Last night, late-ish, <a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a> released its <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0729/2021072901515.pdf" target="_blank" rel="noopener">Offer Document</a> whereby it launches the Conditional Voluntary Cash Offer for 13% of its own shares at HK$7.80/share. </p><ul>
<li>This will need to be approved by Shareholders - both the Offer and the Whitewash Waiver (the Executive has indicated its intention to approve the WW subject to 50+% of Independent Shareholder votes cast supporting the Offer and 75% of Independent Shareholder votes). </li>
<li>The Record Date for the EGM is 19 August 2021, the EGM is 16 August, and if approved, the Offer will become Unconditional on 16 August and will close on 30 August.</li>
<li>Cheques will be sent no later than 8 Sep. Shares not bought back will be returned no later than 9 Sep. </li>
<li>Minimum pro-ration is 19.7%. </li>
</ul><div class="content-highlight">
<p>There are things to do here for hedge funds and arbitrageurs.</p>
<p>There are things to do here for long-only funds who love the stock. </p>
</div><p>This remains an interesting situation. </p><p>Read on below.</p>

On 6 June 2021, WH Group (288 HK) announced a proposal for a Voluntary Buyback Offer. The company decided it had enough cash and excess capital given its investment requirements and decided to return the excess to shareholders by buying up to 13% of shares outstanding. The Controlling Group would not tender, so they would see their stake increase and the minimum pro-ration would reach nearly 20%. The shares popped, then fell. Then they kept on falling. Yesterday and today they hit the level which has been a low point in the oscillator cycle for the last few years at HK$6.00/share.I wrote about the situation that very day in WH Group Buyback Offer Announced - Strong Accretion Creates Accretion Risk. I wrote that based on then-current pricing, expectations, and the trading levels of its peers, it would not be considered expensive at prices higher than the previous close (which had, to be fair, seen a nice pop on news). But markets gonna market. The peers fell. DRAMATICALLY. The 7 names in a HK- or China-listed basket of peers have fallen 23% as live hog prices have fallen and the hog/feed ratio has also fallen, indicating hog producers are making even less than before (or, according to the NDRC, losing more than before).The NEW News - The Offer Doc is OutLast night, late-ish, WH Group (288 HK) released its Offer Document whereby it launches the Conditional Voluntary Cash Offer for 13% of its own shares at HK$7.80/share. 
This will need to be approved by Shareholders - both the Offer and the Whitewash Waiver (the Executive has indicated its intention to approve the WW subject to 50+% of Independent Shareholder votes cast supporting the Offer and 75% of Independent Shareholder votes). 
The Record Date for the EGM is 19 August 2021, the EGM is 16 August, and if approved, the Offer will become Unconditional on 16 August and will close on 30 August.
Cheques will be sent no later than 8 Sep. Shares not bought back will be returned no later than 9 Sep. 
Minimum pro-ration is 19.7%. 

There are things to do here for hedge funds and arbitrageurs.
There are things to do here for long-only funds who love the stock. 
This remains an interesting situation. Read on below.

WH Group Offer Doc Out - This Little Piggy Went To Market