Quam Pulse
INSTITUTIONAL RESEARCH: TRADING PLACES
DATE MONDAY APRIL 14, 2014
EQUITIES HONG KONG STRATEGY
QUAM PULSE Orix to Acquire Prime Credit (Bloomberg) - According to Bloomberg, Orix Corp (8591.JP) is considering the acquisition of Prime Credit Ltd, which is the consumer credit unit of Standard Chartered (2888.HK) in Hong Kong. The deal may be valued up to HK$5.4bn, which is close to three time the book value of Prime Credit Ltd. Net income of Prime Credit Ltd in FY2013 was HK$520mn, having risen by 8.2%YoY. By acquiring Prime Credit Ltd, Orix is in a better position to expand the Hong Kong consumer credit market. Moreover, Orix is already holding a stake of UA Finance Ltd, which is the consumer credit unit of SHK (86.HK). Our take: In our view, the market will revalue the Hong Kong consumer credit companies due to the high valuation of the Prime Credit deal. Moreover, Orix’s consecutive acquisition of local consumer credit companies may spark a new round of M&A trends in the industry. Currently, companies such as Oiwa Credit (1319.HK) and Aeon Credit (900.HK) are trading at a P/B of only 1.9x and 1.1x respectively.
CHINA TAKEAWAYS Citic Securities Acquires Stake in US Brokerage House - According to Bloomberg, Citic Securities is acquiring a stake in BTIG LLC, which is a U.S. brokerage house. The deal will be valued at around US$1bn. BTIG currently has 450 employees. Its main business is block trading for hedge funds and other institutional clients.
HSI TOP MOVERS Leaders Ticker HKEX AIA GROUP LT WHARF HLDG NEW WORLD DE SINO LAND CO
Alibaba Confirmed to Buy AutoNavi – Alibaba Group has confirmed an acquisition agreement with AutoNavi Holdings, that it will buy the portion of the mapping and navigation company AutoNavi Holdings that it does not already own. Alibaba will pay USD25 per share to AutoNavi shareholders, or USD21 of an American depositary receipt(ADR), a 27% premium to the closing price of USD16.54 per ADR on 7 Feb. The deal is expected to complete in the third quarter. Foreign Investment Law to be Revised – Officials are soliciting ideas for building a level playing field for all businesses, domestic and overseas. The National People’s Congress Standing Committee has said that it will speed up research on a new corporate legal framework and will propose a draft when conditions are ripe. The revision aims to unify domestic laws on foreign investments and will focus on the equal treatment of foreign and domestic investments, strengthening security reviews and advancing the reforms of foreign investment regulations.
Ticker TENCENT HOLD CHINA LIFE I PING AN INSU SANDS CHINA GALAXY ENTER
% -6.75 -5.27 -4.95 -3.31 -3.02
Close
1D Chg
1D % Chg
23003.64 10228.42 2270.67 8908.05 1997.44 3198.22 1852.66 22625.64 6775.15 1387.47 4816.58 6596.96 3522.96
-183.32 -192.89 -3.10 -40.05 -11.17 -5.36 -6.86 -89.69 -21.25 -2.09 50.85 -41.93 -47.29
-0.79 -1.85 -0.14 -0.45 -0.56 -0.17 -0.37 -0.39 -0.31 -0.15 1.07 -0.63 -1.32
Close
1D % Chg
YTD % Chg
103.19 107.12 4.66 300.01
-0.20 -0.32 0.04 -0.26
5.31 -2.55 13.72 1.58
306.40 1319.34 20.08 1458.50
0.62 0.03 0.14 0.15
-9.48 9.79 3.11 6.38
Corn Wheat Soybeans Coffee Sugar Cotton
509.50 670.25 1477.25 207.50 17.58 90.56
0.44 0.04 -0.34 -0.43 -0.57 0.30
16.59 8.67 15.68 80.28 5.08 7.84
Baltic Dry
1029.00
-3.02
-54.81
Asia HSI HSCEI SHSZ300 TWSE KOSPI FSSTI KLCI SENSEX NIFTY SET JCI PCOMP ASX
COMMODITIES
Beijing High-end Housing Market Retreats in 1Q14 – The average high-end housing price in Beijing dropped by 5.45% QoQ to 49,287.77 yuan per sqm in 1Q14, but still represented an increase of 13.26% YoY, according to data from DTZ, a global real estate consulting company. This transaction volume had plunged by 23.85% QoQ in 1Q14, reaching 181,904 sqm, a decrease of 17.88% YoY.
Laggers % 11.54 3.12 1.79 1.75 1.34
Energy WTI Brent Natural Gas Gasoline
Metals Copper Gold (Spot) Silver (Spot) Platinum (Spot)
Agriculture
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QUAM INSTITUTIONAL BUSINESS UNIT RESEARCH
SALES
JENNIFER SO
+852 2971 5433
GUY STILLE
+852 2217 2853
ANDY CK WONG
+852 2971 5434
MARTIN CORNETT
+852 2217 2854
CHRISTOPHER HO
+852 2971 5436
STANLEY NG
+852 2217 2857
quam research@quam group.com 18/F Aon China Building, 29 Queen's Road Central, Hong Kong
Disclaimer and Risk Statement This document is published by Quam Securities Company Limited (“Quam Securities”), a licensed corporation (central entity number AAC557) regulated by the Securities and Futures Commission in Hong Kong. This document is for distribution in Hong Kong only to persons who are “Professional Investors” as defined in Part 1 of Schedule 1 of Securities and Futures Ordinance (Cap 571) of Hong Kong and any rules made thereunder. This document is not intended for distribution to or use by, any person or entity who is a citizen or resident of any jurisdiction where such distribution or use would be contrary to applicable law or regulation within such jurisdiction. This document does not constitute an offer or a solicitation of an offer to buy or sell any securities. This document is circulated to addresses solely and may not be reproduced or redistributed to any other person or published, in whole or in part, for any purpose. The research is based on information obtained from sources believed to be reliable, but Quam Securities does not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without prior notice. Any recommendation does not have regard to specific investment objectives, financial situation and particular needs of any specific addressee. Quam Securities accepts no liability whatsoever for any direct or consequential loss arising from any use of this document. Quam Securities and its affiliates as well as persons associated with any of them from time to time may or may not have interests in the securities mentioned in this document. The prices of securities may move up or down, and past performance is not an indication of future performance. Investors shall consider seeking separate legal or financial advice before making investment decisions.
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DATE MONDAY APRIL 14, 2014
EQUITIES HONG KONG STRATEGY
QUAM PULSE Orix to Acquire Prime Credit (Bloomberg) - According to Bloomberg, Orix Corp (8591.JP) is considering the acquisition of Prime Credit Ltd, which is the consumer credit unit of Standard Chartered (2888.HK) in Hong Kong. The deal may be valued up to HK$5.4bn, which is close to three time the book value of Prime Credit Ltd. Net income of Prime Credit Ltd in FY2013 was HK$520mn, having risen by 8.2%YoY. By acquiring Prime Credit Ltd, Orix is in a better position to expand the Hong Kong consumer credit market. Moreover, Orix is already holding a stake of UA Finance Ltd, which is the consumer credit unit of SHK (86.HK). Our take: In our view, the market will revalue the Hong Kong consumer credit companies due to the high valuation of the Prime Credit deal. Moreover, Orix’s consecutive acquisition of local consumer credit companies may spark a new round of M&A trends in the industry. Currently, companies such as Oiwa Credit (1319.HK) and Aeon Credit (900.HK) are trading at a P/B of only 1.9x and 1.1x respectively.
CHINA TAKEAWAYS Citic Securities Acquires Stake in US Brokerage House - According to Bloomberg, Citic Securities is acquiring a stake in BTIG LLC, which is a U.S. brokerage house. The deal will be valued at around US$1bn. BTIG currently has 450 employees. Its main business is block trading for hedge funds and other institutional clients.
HSI TOP MOVERS Leaders Ticker HKEX AIA GROUP LT WHARF HLDG NEW WORLD DE SINO LAND CO
Alibaba Confirmed to Buy AutoNavi – Alibaba Group has confirmed an acquisition agreement with AutoNavi Holdings, that it will buy the portion of the mapping and navigation company AutoNavi Holdings that it does not already own. Alibaba will pay USD25 per share to AutoNavi shareholders, or USD21 of an American depositary receipt(ADR), a 27% premium to the closing price of USD16.54 per ADR on 7 Feb. The deal is expected to complete in the third quarter. Foreign Investment Law to be Revised – Officials are soliciting ideas for building a level playing field for all businesses, domestic and overseas. The National People’s Congress Standing Committee has said that it will speed up research on a new corporate legal framework and will propose a draft when conditions are ripe. The revision aims to unify domestic laws on foreign investments and will focus on the equal treatment of foreign and domestic investments, strengthening security reviews and advancing the reforms of foreign investment regulations.
Ticker TENCENT HOLD CHINA LIFE I PING AN INSU SANDS CHINA GALAXY ENTER
% -6.75 -5.27 -4.95 -3.31 -3.02
Close
1D Chg
1D % Chg
23003.64 10228.42 2270.67 8908.05 1997.44 3198.22 1852.66 22625.64 6775.15 1387.47 4816.58 6596.96 3522.96
-183.32 -192.89 -3.10 -40.05 -11.17 -5.36 -6.86 -89.69 -21.25 -2.09 50.85 -41.93 -47.29
-0.79 -1.85 -0.14 -0.45 -0.56 -0.17 -0.37 -0.39 -0.31 -0.15 1.07 -0.63 -1.32
Close
1D % Chg
YTD % Chg
103.19 107.12 4.66 300.01
-0.20 -0.32 0.04 -0.26
5.31 -2.55 13.72 1.58
306.40 1319.34 20.08 1458.50
0.62 0.03 0.14 0.15
-9.48 9.79 3.11 6.38
Corn Wheat Soybeans Coffee Sugar Cotton
509.50 670.25 1477.25 207.50 17.58 90.56
0.44 0.04 -0.34 -0.43 -0.57 0.30
16.59 8.67 15.68 80.28 5.08 7.84
Baltic Dry
1029.00
-3.02
-54.81
Asia HSI HSCEI SHSZ300 TWSE KOSPI FSSTI KLCI SENSEX NIFTY SET JCI PCOMP ASX
COMMODITIES
Beijing High-end Housing Market Retreats in 1Q14 – The average high-end housing price in Beijing dropped by 5.45% QoQ to 49,287.77 yuan per sqm in 1Q14, but still represented an increase of 13.26% YoY, according to data from DTZ, a global real estate consulting company. This transaction volume had plunged by 23.85% QoQ in 1Q14, reaching 181,904 sqm, a decrease of 17.88% YoY.
Laggers % 11.54 3.12 1.79 1.75 1.34
Energy WTI Brent Natural Gas Gasoline
Metals Copper Gold (Spot) Silver (Spot) Platinum (Spot)
Agriculture
1
2
QUAM INSTITUTIONAL BUSINESS UNIT RESEARCH
SALES
JENNIFER SO
+852 2971 5433
GUY STILLE
+852 2217 2853
ANDY CK WONG
+852 2971 5434
MARTIN CORNETT
+852 2217 2854
CHRISTOPHER HO
+852 2971 5436
STANLEY NG
+852 2217 2857
quam research@quam group.com 18/F Aon China Building, 29 Queen's Road Central, Hong Kong
Disclaimer and Risk Statement This document is published by Quam Securities Company Limited (“Quam Securities”), a licensed corporation (central entity number AAC557) regulated by the Securities and Futures Commission in Hong Kong. This document is for distribution in Hong Kong only to persons who are “Professional Investors” as defined in Part 1 of Schedule 1 of Securities and Futures Ordinance (Cap 571) of Hong Kong and any rules made thereunder. This document is not intended for distribution to or use by, any person or entity who is a citizen or resident of any jurisdiction where such distribution or use would be contrary to applicable law or regulation within such jurisdiction. This document does not constitute an offer or a solicitation of an offer to buy or sell any securities. This document is circulated to addresses solely and may not be reproduced or redistributed to any other person or published, in whole or in part, for any purpose. The research is based on information obtained from sources believed to be reliable, but Quam Securities does not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without prior notice. Any recommendation does not have regard to specific investment objectives, financial situation and particular needs of any specific addressee. Quam Securities accepts no liability whatsoever for any direct or consequential loss arising from any use of this document. Quam Securities and its affiliates as well as persons associated with any of them from time to time may or may not have interests in the securities mentioned in this document. The prices of securities may move up or down, and past performance is not an indication of future performance. Investors shall consider seeking separate legal or financial advice before making investment decisions.
3
