Discover and read the best of Twitter Threads about #690D
Most recents (2)
Okay I don’t usually do threads. Let alone threads advertising specific trades. But I think this one is too good not to share with up to ~100% return potential and a fantastic risk:return profile.
I’m talking about the spread between Haier D and Haier H shares #690D.GY #6690.HK
I’m talking about the spread between Haier D and Haier H shares #690D.GY #6690.HK
I keep a screen of share class spreads to see if anything gets well out of whack from historic norms and could offer a nice low risk uncorrelated return stream. Plus the VOW spread used to be really fun to trade.
Haier became interesting once the H shares listed at the end of last year. Before that, trading the onshore Chinese A shares was a no-go for most. But now, pretty much anyone can trade the D shares vs the H shares.
1/ Shamelessly stealing this interesting special situation from @AsianCenturyS. Check their slide deck in the link. Haier Smart Home (hereafter 'HSH') is in the process of reorganizing its structure by merging with its 56% owned HK-listed subsidiary Haier Electronics (#1169.HK)
2/ HSH has about 96% of its shares listed in China as A-shares (#600690.SS) and about 4% in Germany as D-shares(#690D.F). The D-shares are currently trading at a discount of 72% to the A-shares, but have the same voting and dividend rights. 
3/ A discount like this can persist for a long time because of the non-exchangeability and China's closed financial system in general. Regardless of the restructuring the D-shares seem interesting, though, because they are trading at a p/e close to 5 and a 6.1% dividend yield.
