Headlines

l  Last Friday: NKY +0.17%, HSI -0.19%, SHCOMP +1.19%, KOSPI -1.23%

l  Dow +0.12%, SPX -0.02%, Nasdaq -0.21%

l  US: 2m in California affected on Friday in state’s 1st rolling blackouts since the 2001 energy crisis

l  US: California becomes 1st state w/ >600,000 confirmed COVID-19 infections

l  US: Biden Leads Trump, 50% to 41%, in Poll Ahead of Party Conventions (WSJ)

l  US: Judge approves $325m Brooks Brothers sale to Simon, Authentic

l  US: Formalizes F-16 Jet Sale to Taiwan - 66 of the latest model F-16 jets built by Lockheed Martin

l  US: CN postpones W/E Trade Deal talks, but mkt shrugs it off.  Trump extends TikTok sale timeline

l  US: Trump says he cld exert pressure on more CN co’s such as Alibaba a/f move to ban TikTok

l  Israel-US: nearing a deal whereby Israel commits to not use Chinese technology for its 5G networks

l  US: Seizes 4 Iranian Tankers Carrying Fuel to Venezuela

l  EU: Unibail reportedly mulls $3.5bn share sale; URW responds - undecided on deleveraging choice

l  TH: Biggest Thai protest in yrs puts pressure on govt (Reuters)

l  CN: China patents 1st Covid-19 vaccine jointly produced by Cansino  & Military Medical Rsch Institute

l  CN: CBIRC says China must guard against rebound in shadow lending

l  CN: To offer investment mgt firms QDII license in trial areas

l  CH PROP: Evergrande (3333) profit warning 1H RMB14.7B -46% YoY

l  CH PROP: Aoyuan (3383) 1H +6% YoY

l  HK: 2Q GDP -9% YoY, FY GDP f/c revised to -6 to-8% from -4 to -7%

l  HK: HSI deletes Sino Land (83) 

l  HK: Studying extending restaurant hours (Sing Tao) Reporting until 9/10pm rather than 6pm currently

l  HK: ~½ of 74 new cases Sun tied to container terminal cluster. Daily total <100 for 14th day

l  JP: Nishimura: Asks biz’s keep prevention measures; state of emergency possible if infection levels ↑

l  AU: GIC / Charter Hall acquire 49% stake in Ampol Prop Trust for A$682m

l  NZ:  Postpones election amidst virus outbreak

l  SK:  Sth Korea sees biggest virus surge in 5 months

TODAY:  HK virus numbers were encouraging Saturday (46), however jumped to 74 on Sunday with a new cluster at Kwai Tsing Container Terminals a/cing for half the new cases which we’ll need to watch.  Press reported Unibail Rodamco was mulling a $3.5b equity raise – the company responded they were as yet undecided on deleveraging choice, but this may keep the Aussie line & other retail names in Aust weaker today.  In Japan, Nishimura-san flagged a state of emergency was possible if infection levels rise.  I continue to prefer office over retail in Japan.   Curiously, meeting demand for retail names at our Global conference, is higher than logistics – valuations getting interesting I presume.  Was announced Friday that Sino Land wld be deleted from the HSI. 

Finally: An Oxford-based solar technology firm hopes by the end of the yr to begin manufacturing the world’s most efficient solar panels. Typically a silicon solar cell is able to convert up to ~22% of the available solar energy into electricity. But in Jun 2018, Oxford PV’s perovskite-on-silicon solar cell surpassed the best performing silicon-only solar cell by reaching a new world record of 27.3%. The perovskite-coated panels will appear different too. Instead of the blue tint usually associated w/ traditional silicon panels, Oxford PV’s panels will appear black & blend in better w/ rooftop slates. (The Guardian, MSN)

Evergrande Profit Warning: 1H net profit Rmb14.7b ↓46%YoY w/ national sales promotion activities (discounts), ↑ marketing exp, FX losses & invsmt in new energy vehicles è consolidated statement losses.  BofA remains only underweight on the street.  PO HK$15

4 property mgt firms included in HK-SZ stock connect:  Ever Sunshine (1995 HK), Powerlong CM (9909 HK), Times Neighborhood (9928 HK), & CC New Life (9983 HK) - effective Sep 7.

China home purchase LTV stood at 32.2% (sina) According to E-house research, in 2Q20, LTV (loan to value) on home purchase was 32.2%, which was up by 0.4ppt YoY.

HK & Mainland developers compete to buy land next to GBA’s high-speed railway stations (SCMP) In next 3-5 years, 18 stations will be offered for tender, with potential to be developed under the so-called transport-oriented-development (TOD) model. SHKP and NWD are each working on TOD projects in the GBA.

FDI into China ↑ 15.8%YoY to Rmb63.47b in July. (Xinhua)

7M RE Invsmt ↑12%YoY. (The Paper)

New home sales volume +22.9% YoY but ↓12.4% WoW in 17 major cities in the past week (CREIS)

59 of top 70 cities saw primary housing ASP ↑MoM in Jul vs 61 in Jun. BJ ↑0.3%MoM, SH ↑0.4%MoM, Guangzhou ↑0.8%MoM, SZ ↑0.6%MoM. (The Paper)

Authorities set "3 red lines” to control debt gwth. 1) Liability/Asset ratio (excl pre-sale pmt they got from buyers) shldn’t >70%; 2) net debt ratio shldn’t >100%; 3) Cash/short-term liability ratio shldn’t <1x. (QQ)

Chinese online property platform KE, backed by SoftBank & Tencent, ↑87% in its US trading debut a/f raising $2.1b in IPO.

Aoyuan (announcement) announced 1H20 results   Core net profit attributable to owners +21% to Rmb2.45bn for Aoyuan. The gross margins stood at 29.4% which was 0.5ppt lower YoY for Aoyuan.

Country Garden (2007 HK)’s equity invsmt in 2 A-shr co’s terminated (the paper) in Monarch (002798 CH), & Monalisa tiles (002981 CH), announced 1H20 were terminated (toilets fixtures & tiles manufacturing). Country Garden indicated it will continue exploring invsmt along the value chain.  CG had planned to buy 6.5% & 6.2%. Vs the price agreed in 1H20, the 2 stocks are + 80%-100% already.

Tahoe defaulted again with overdue payment of Rmb818m (the paper)  4^th default for Tahoe so far this yr.

Sino Land to leave Hang Seng Index; Alibaba, Xiaomi, WuXi Bio to be incld, effect on Sep 7. (NY Times)

Luxury resi site at Jardine's Lookout changing hands for HK$850m. Plot size 17,094ft², avg priceHK$82,000 based on GFA 10,256/ft². (Standard)

Gaw Capital raises $900m for education, property deals. (Mingtiandi)

Grade A office vacancy in HK’s Central ↑ to 5.6% in Jul from 5% in Jun as weak demand. (Mingtiandi)

There were only 9 new homes sold in Sat as 46 new confirmed covid-19 cases. (HKET)

Kerry Prop sold another unit of Mont Rouge for HK$83m (HK-01) 1,699sqf GFA apt = HK$49k psf. Compares to another unit sold for HK$50k psf last month.

NWD sold 2 units @ Fleur Pavilia, North Point for HK$84m (HK-01)  1,033 sqf GFA unit for HK$43m (HK$41k psf) on a 4yr payment plan + a 4 br unit.  Has sold 99% of the project in total.

Sino sold another unit at St. George Mansion (MingPao)  4br unit for HK$115m / HK$53,738 psf – a record high ASP for apts in Ho Man Tin district. Sino sold 2 units at St. George Mansion so far.

More loss-making secondary market transactions recently (HK-01) per HK-01, at least 16 secondary sales since mid July where seller suffered a loss on the sale (of HK$300k to HK$8m+) after taxes (eg SSD on units sold w/in 3ys of purchase).

HK cuts full year economic outlook (Bloomberg)  HK govt revised 2020 f/c to record low range of -6 to -8% (from -4% to -7%).

CCL Index -0.09%WoW, Mass Index +0.35%WoW, Small & Medium Index +0.11%WoW, & Large Index -1.17%WoW. (Centaline) >>> Large Index the largest ↓in 9wks.  

Mapletree Industrial sells data center at 26A Ayer Rajah Crescent, Singapore to Equinix Singapore for S$125m. (Co)

Eagle Hospitality flags unauthorised loan application, tax delinquency by sponsor. Unauthorised Paycheck Protection Program loan application submitted on behalf of master lessor of Queen Mary hotel. (Biz Times)

Eagle Hospitality Trust 2Q loss US$38.9m, mainly impairment loss on trade receivables from uncertainty on master lessees' ability to make rental payments & fulfil its obligations. Revenue US$15.7m (34.4% below projected), NPI US$13.9m (31.6% below projected). (Biz Times)

JTC to launch an industrial site at 160, Gul Circle site for tender. Govt received a committed bid price of not <S$2m for the Biz 2 site in Tuas. (Biz Times)

Tivoli Lodge condo in Geylang up for collective sale w/ S$17.3m guide price. (Biz Times)

Cromwell E-Reit 1H DPU ↓15%YoY to 1.74 € cents, gross revenue ↑13.7%YoY @ €93.7m, NPI ↑6.6%YoY to €57.7m. (Biz Times)

Aims Apac Reit issued S$125m, 5.65% perpetual securities. (Co)

Mapletree Logistics Trust issues 2.2m units to mngr as payment of base fee for Apr 1-Jun 30, 4m units as payment of performance fee for FY ended 31 Mar 2020. (Co)

Les Smith reveals A$500m redevt plan for Northcote Plaza, Melb. (SMH)

GIC / Charter Hall acquire 49% stake in Ampol Prop Trust which will own 203 convenience retail props in Australia for A$682m.  (Co)

Open House 3Q operating income Y11.41b, ↓9.4%YoY. NI Y23.76b vs. Y8.35b YoY. Net sales Y121.63b, ↓1.7%YoY. Still sees FY operating income Y62b, NI Y59b, net sales Y570b, FY div Y80. (Co)

Embassy Office approves raising up to Rs20b via debentures.  to invest Rs15b nxt 2yrs to add 2.6mft².

Malaysia GDP xpctd to ↓ up to 4%YoY in 2020, exceeding initial project 2.4%, per RAM Ratings. (Star)

Prop devrs in the Philippines are considering novel alternative uses for shopping malls as more people stay h

ome. SM Prime leasing out some of its parking lots for longer-term car storage; Ayala Land plans to convert

areas & lease to e-commerce back-end facilities & medical clinics. (Biz Times)

AREIT listed & closed at 24.9/sh, ↓8% from its IPO price pushing up 2021E yld to 6% in our est. Trading in

the stock appeared to have been slowed by the fact that not all brokers were accredited as yet to trade in

REITs. (Biz World)

Philippine SEC probes complaint AREIT trade orders unexecuted. An initial investigation showed brokers’ online

 systems were not prepared for trading REITs, which led to rejection of retail investor’s buy & sell orders. (BBG)

Asset World 2Q loss Bt876.8m, or Bt0.027/sh. (Co)

* My pa holdings: BAC US, 1 HK, 6 HK, ST SP, TEAM US, GOOGL US, AMZN US