Aug 14, 2023Liked by Continuous Compounding - Alan
I am into the Haier D-Shares since 2 years. The main problem IS the catalyst. There is no sign of a catalyst ( except the acquisitions maybe ). De-Listing without converting the share classes could also be one risk. I am not 100% sure about the rules but that could lead to investors getting paid in cash at an average stock price of the last 6-12 months.
"I might have a 30% position in my portfolio."
If stock again drops to unreasonable prices i agree with this. Currently this is an 8% position to me, but with the div as downside protection, when discount would get further irrational i might double down easily.
This seems still one of the weirdest , insanest market situations ever. Where all information is layed out for years, yet most investors ( every day )still bying the expensive H-Shares. Even in germany...
Aug 14, 2023Liked by Continuous Compounding - Alan
Ah one importing thing i forgot. This is the ONLY listing from what i know of, that is NO ADR. We have a real ownership , if i am aware correctly in a chinese stock. I dont think anyone recognizes this enough. No caiman stuff etc..
Thanks for sharing, and glad to chat with a fellow shareholder. Is there any legal precedence where you can delist and simply use average share price as payment? Many investors would be pissed. Plus, they stated fungibility. Probably need puppyeh (Jeremy Raper) or some famous investor to go activist for us if that happens.
Aug 14, 2023Liked by Continuous Compounding - Alan
True, from my understanding there would be a legal precedence. But i would hope the impact / image of the company would suffer in Europe. But hey the consumers of their product are not the same as the stock owners obvouisly.
The only reason ( i think ) the d-shares still exist are the stubbornes of german AND chinese people , not having a failed project ( CEINEX). I still am very dissapointed that this unique construct is not more used. Imagine a true ownership in an company like Alibaba.
Yeah, they don't wanna set a bad example for future chinese-german listings. Then I guess a hidden catalyst, which will take a very long time to realize is successful chinese german listings. But as it stands now, if any chinese company wants to list in Germany, they will see the D shares and be like WTF, not worth the headache. Key thing is to enter at an attractive div yield, and the rest is gravy.
Aug 31, 2023Liked by Continuous Compounding - Alan
Hi there & thanks for the write-up.
Been a shareholder for <1 y. I think the probability of delisting is very low because of what you lay out here. The only reason why they don't buy back in the first place is because the political points they score by remaining listed. If they want to clean up for economics, they will buy back for share in my opinion. Small fry & profitable for them. Nobody will benefit from delisting. This is a blue chip.
Exactly, there are even new listings in Swiss from china, so they chose against CEINIX. The main problem here is still the catalyst. Of course over time the dividend will grow insane. But Haier could simply cut it or something else. It's the main risk in here , that even after 5 years it remains unchanged.
Aug 14, 2023Liked by Continuous Compounding - Alan
I remember hearing about Haier Smart Home during the roona, some video on youtube. Its hilarious to me that the the D listing is still even higher discounted 2 years later. I guess patience is a virtue.
Hey everyone, there is a very special situation on this stock. I am drafting up a post right now. Hoping to release it today. The ex-dividend date for D shares is August 25th. While the ex-dividend date for H shares was July 24th. If you simply long the D shares from now until Aug 25th, you will get a EUR 0.0652699 (includes 10% withholding tax in China). This is approximately 5.7% dividend yield to hold the stock at the price of EUR 1.14 per D share for 3/4 days. Please stay tuned!
Hey I saw a comment here earlier today and now it disappeared likely cuz the user deleted it afterwards. It was a great comment. I was simply too busy today to acknowledge it. Pls feel free to comment as you wish. Good or bad.
Haier Smart Home Full Equity Research Report out now for Paid Subscribers! Want paid membership for free? See end of this post to see how to refer your friends to gain 1-6 months of paid membership completely for free! The top 5 people on the referral leaderboard by the end of August will get an annual subscription for free!
D-Shares are uninvestable. Why? Company authorised a share buyback - but guess what - not for the D-shares. They are actively burning money with buying back the much more expensive A- and H-Shares. There is no rational justification for this. Dunno if they are just idiots or fraudsters. Sooner or later there will be a delisting at the average price of the last 6 months and this clown show will finally be over.
Well, if they delist at the average price of the last 6 months, given they have declined in price over the last 6 months, this would actually provide us with capital appreciation. In addition, this would be downside protection because if the stock drops we get the average of the last 6 months. Meanwhile you just collect the ever increasing dividend. I don't see how you couldn't just have a small position as a cash alternative. There is also a special situation where you can take advantage of the dividend discrepancy over a 1 week investment period. Definitely not something I concentrate massively in, unless the dividend yield gets ludicrous.
Not dumb at all. They would close the gap because it benefits the A and H shareholders. Removing shares at 60% discount, increases the dividend for the remainder shareholders.
I believe the correct regression to make, based on your comments, is to correlate NAV discount with H or A share prices. NAV discount & (part of) D share price moves are co-linear (D price = f( NAV discount, A share price), so you are not analyzing the separate variables you wish to correlate (general price movements in Haier vs NAV discount)
Great write up! Haier has caught my attention after reading the HBR piece (https://hbr.org/2018/11/the-end-of-bureaucracy) on its shift from a centralized business model to one of microenterprises
Yes, when I was doing research on the stock, what really interested me was their Rendanheyi management system. I read "Reinventing Giants" to understand Haier's history and the evolution in their management system. Their management system is a competitive edge imo. I discuss this all in my full equity research report.
Very good question Eric, I am Canadian. I only use Wealthsimple, Questrade and Interactive Brokers so I can only comment on these platforms. From my understanding, since it's an Euro stock, it is available at Interactive Brokers in a taxable account only. I use interactive brokers because it has some of the lowest fees. Major banks charge like $5-10 per trade or screw you over in FX conversion. Most trades I make on IBKR are $0.33-$1.00 and their FX conversion rates are very close to market. *Not investment advice, dydd on what trading platforms to use.
If anyone on here uses another platform please do share, if 690D is available on their platform.
I am into the Haier D-Shares since 2 years. The main problem IS the catalyst. There is no sign of a catalyst ( except the acquisitions maybe ). De-Listing without converting the share classes could also be one risk. I am not 100% sure about the rules but that could lead to investors getting paid in cash at an average stock price of the last 6-12 months.
"I might have a 30% position in my portfolio."
If stock again drops to unreasonable prices i agree with this. Currently this is an 8% position to me, but with the div as downside protection, when discount would get further irrational i might double down easily.
This seems still one of the weirdest , insanest market situations ever. Where all information is layed out for years, yet most investors ( every day )still bying the expensive H-Shares. Even in germany...
Ah one importing thing i forgot. This is the ONLY listing from what i know of, that is NO ADR. We have a real ownership , if i am aware correctly in a chinese stock. I dont think anyone recognizes this enough. No caiman stuff etc..
Yes and BABA trades inline with HK line.
Thanks for sharing, and glad to chat with a fellow shareholder. Is there any legal precedence where you can delist and simply use average share price as payment? Many investors would be pissed. Plus, they stated fungibility. Probably need puppyeh (Jeremy Raper) or some famous investor to go activist for us if that happens.
True, from my understanding there would be a legal precedence. But i would hope the impact / image of the company would suffer in Europe. But hey the consumers of their product are not the same as the stock owners obvouisly.
The only reason ( i think ) the d-shares still exist are the stubbornes of german AND chinese people , not having a failed project ( CEINEX). I still am very dissapointed that this unique construct is not more used. Imagine a true ownership in an company like Alibaba.
Yeah, they don't wanna set a bad example for future chinese-german listings. Then I guess a hidden catalyst, which will take a very long time to realize is successful chinese german listings. But as it stands now, if any chinese company wants to list in Germany, they will see the D shares and be like WTF, not worth the headache. Key thing is to enter at an attractive div yield, and the rest is gravy.
Hi there & thanks for the write-up.
Been a shareholder for <1 y. I think the probability of delisting is very low because of what you lay out here. The only reason why they don't buy back in the first place is because the political points they score by remaining listed. If they want to clean up for economics, they will buy back for share in my opinion. Small fry & profitable for them. Nobody will benefit from delisting. This is a blue chip.
Exactly, there are even new listings in Swiss from china, so they chose against CEINIX. The main problem here is still the catalyst. Of course over time the dividend will grow insane. But Haier could simply cut it or something else. It's the main risk in here , that even after 5 years it remains unchanged.
I remember hearing about Haier Smart Home during the roona, some video on youtube. Its hilarious to me that the the D listing is still even higher discounted 2 years later. I guess patience is a virtue.
Yes, the key is to wait until Mr.Market offers us a steep discount and high div yield
Hey everyone, there is a very special situation on this stock. I am drafting up a post right now. Hoping to release it today. The ex-dividend date for D shares is August 25th. While the ex-dividend date for H shares was July 24th. If you simply long the D shares from now until Aug 25th, you will get a EUR 0.0652699 (includes 10% withholding tax in China). This is approximately 5.7% dividend yield to hold the stock at the price of EUR 1.14 per D share for 3/4 days. Please stay tuned!
Hey I saw a comment here earlier today and now it disappeared likely cuz the user deleted it afterwards. It was a great comment. I was simply too busy today to acknowledge it. Pls feel free to comment as you wish. Good or bad.
Haier Smart Home Full Equity Research Report out now for Paid Subscribers! Want paid membership for free? See end of this post to see how to refer your friends to gain 1-6 months of paid membership completely for free! The top 5 people on the referral leaderboard by the end of August will get an annual subscription for free!
D-Shares are uninvestable. Why? Company authorised a share buyback - but guess what - not for the D-shares. They are actively burning money with buying back the much more expensive A- and H-Shares. There is no rational justification for this. Dunno if they are just idiots or fraudsters. Sooner or later there will be a delisting at the average price of the last 6 months and this clown show will finally be over.
Well, if they delist at the average price of the last 6 months, given they have declined in price over the last 6 months, this would actually provide us with capital appreciation. In addition, this would be downside protection because if the stock drops we get the average of the last 6 months. Meanwhile you just collect the ever increasing dividend. I don't see how you couldn't just have a small position as a cash alternative. There is also a special situation where you can take advantage of the dividend discrepancy over a 1 week investment period. Definitely not something I concentrate massively in, unless the dividend yield gets ludicrous.
Dumb (but serious) Q: why would they close the gap? What's the benefit for them as this is only 1% of the company?
Not dumb at all. They would close the gap because it benefits the A and H shareholders. Removing shares at 60% discount, increases the dividend for the remainder shareholders.
I believe the correct regression to make, based on your comments, is to correlate NAV discount with H or A share prices. NAV discount & (part of) D share price moves are co-linear (D price = f( NAV discount, A share price), so you are not analyzing the separate variables you wish to correlate (general price movements in Haier vs NAV discount)
That makes sense, will revise this for when I update this write-up. Thanks for pointing that out.
Great write up! Haier has caught my attention after reading the HBR piece (https://hbr.org/2018/11/the-end-of-bureaucracy) on its shift from a centralized business model to one of microenterprises
Yes, when I was doing research on the stock, what really interested me was their Rendanheyi management system. I read "Reinventing Giants" to understand Haier's history and the evolution in their management system. Their management system is a competitive edge imo. I discuss this all in my full equity research report.
How do I purchase this stock, I can't seem to find it in my brokerage
Very good question Eric, I am Canadian. I only use Wealthsimple, Questrade and Interactive Brokers so I can only comment on these platforms. From my understanding, since it's an Euro stock, it is available at Interactive Brokers in a taxable account only. I use interactive brokers because it has some of the lowest fees. Major banks charge like $5-10 per trade or screw you over in FX conversion. Most trades I make on IBKR are $0.33-$1.00 and their FX conversion rates are very close to market. *Not investment advice, dydd on what trading platforms to use.
If anyone on here uses another platform please do share, if 690D is available on their platform.