StubWorld: Legend's Bifurcation To Lenovo Is Unsustainable
A double dose of StubWorld this week: Legend Holdings (3396 HK)‘s implied stub and simple ratio (Legend/Lenovo (992 HK)) are both around multi-year lows.
Preceding my comments on Legend and Lenovo are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
The Trade:
Even factoring in a typical holdco discount, this bifurcation is totally out of whack.
Either look to go Long Legend, Short Lenovo (& hedge out the rump with a Euro bank + large fruit supply-chain companies); or dollar for dollar; or just outright long Legend.
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