HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<ul>
<li>SAINT BELLA’s revenue growth fluctuated because the pandemic led to the delay in the pregnancy plan of many families and an increase in the rate of abortion or miscarriage. </li>
<li>The increasing contract liabilities indicate that short-term performance growth of SAINT BELLA is guaranteed, but the declining fertility rates in China will bring challenges to SAINT BELLA’s long-term growth momentum.</li>
<li>After Series B round financing in 2020, post-investment valuation was already about US$100 million. Valuation of SAINT BELLA should be higher than <a href="https://www.smartkarma.com/entities/aidigong-maternal-child-health-limited" target="_blank" data-smartkarma-citation="entities:6880:1" rel="noopener">Aidigong Maternal &amp; Child Health Limited (286 HK)</a>.</li>
</ul>


SAINT BELLA’s revenue growth fluctuated because the pandemic led to the delay in the pregnancy plan of many families and an increase in the rate of abortion or miscarriage. 
The increasing contract liabilities indicate that short-term performance growth of SAINT BELLA is guaranteed, but the declining fertility rates in China will bring challenges to SAINT BELLA’s long-term growth momentum.
After Series B round financing in 2020, post-investment valuation was already about US$100 million. Valuation of SAINT BELLA should be higher than Aidigong Maternal &amp; Child Health Limited (286 HK).


Pre-IPO Saint Bella - The Outlook for Future Performance Growth Is Highly Uncertain

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Canvest Environmental Protection Group / Event-Driven

Canvest Environment Protection Group Company Limited focuses on the development, management, and operation of waste-to-energy plants. The Company's plants are located in China.

Canvest Environmental Protection Group (1381 HK)

<ul>
<li>Since waste-to-energy play <a href="https://www.smartkarma.com/entities/canvest-environmental-protection-group-co-ltd" target="_blank" data-smartkarma-citation="entities:100:1" rel="noopener">Canvest Environmental Protection (1381 HK)</a> announced a possible privatisation from <a href="https://www.smartkarma.com/entities/grandblue-environment-co-a" target="_blank" data-smartkarma-citation="entities:17887:1" rel="noopener">Grandblue Environment (600323 CH)</a> at $4.90/share (a 20.7% premium to undisturbed), shares are up just 6.4%. </li>
<li>There's a lot to pack in here, not the least being this is an indicative Pre-Conditional Offer.</li>
<li>But the fact the announcement mentions rolling over a specific number of shares of the controlling shareholders (7.23%), suggests negotiations are well advanced. So we explore.</li>
</ul>


Since waste-to-energy play Canvest Environmental Protection (1381 HK) announced a possible privatisation from Grandblue Environment (600323 CH) at $4.90/share (a 20.7% premium to undisturbed), shares are up just 6.4%. 
There's a lot to pack in here, not the least being this is an indicative Pre-Conditional Offer.
But the fact the announcement mentions rolling over a specific number of shares of the controlling shareholders (7.23%), suggests negotiations are well advanced. So we explore.


Canvest (1381 HK): Evaluating A Privatisation

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

TK Group (Holdings) Limited manufactures plastic products and components. The Company engages in the design and fabrication of plastic injection molds and the mechanical design and manufacturing of plastic components.

<ul><li>TK Group announced a positive profit alert for 1H24 with 40%+ YoY earnings growth.</li><li>After speaking with TK’s mgmt., we reiterate our positive view on TK’s 2H24 outlook, driven by strong order pipelines, new client wins, and revenue/margin recovery across most segments.</li><li>Following challenging business environment in 2022 and 2023, we believe TK is on track to deliver 38%/19% YoY earnings growth in FY24/25E, backed by client demand recovery (e.g. Jabra, Polycom), new order ramp-up (e.g. Meta, SONOS, Dyson), utilization improvement and operating leverage. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

TK Group announced a positive profit alert for 1H24 with 40%+ YoY earnings growth.After speaking with TK’s mgmt., we reiterate our positive view on TK’s 2H24 outlook, driven by strong order pipelines, new client wins, and revenue/margin recovery across most segments.Following challenging business environment in 2022 and 2023, we believe TK is on track to deliver 38%/19% YoY earnings growth in FY24/25E, backed by client demand recovery (e.g. Jabra, Polycom), new order ramp-up (e.g. Meta, SONOS, Dyson), utilization improvement and operating leverage. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

TK Group (2283 HK) - Positive Profit Alert in 1H24E

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/canvest-environmental-protection-group-co-ltd" target="_blank" data-smartkarma-citation="entities:100:1" rel="noopener">Canvest Environmental Protection Group (1381 HK)</a> disclosed a pre-conditional Cayman scheme privatisation from <a href="https://www.smartkarma.com/entities/grandblue-environment-co-a" target="_blank" data-smartkarma-citation="entities:17887:1" rel="noopener">Grandblue Environment Co A (600323 CH)</a> at HK$4.90 per share, an 11.6% premium to the last close price.</li>
<li>The precondition relates to the completion of capital injection into the offeror, Grandblue shareholder, and regulatory approvals. The heavy presence of SOE entities makes this a formality.</li>
<li>While not a knockout bid, the offer (which is final) is reasonable. Shareholders with blocking stakes will be supportive. Timing is the key risk as the offer is long-dated.</li>
</ul>



Canvest Environmental Protection Group (1381 HK) disclosed a pre-conditional Cayman scheme privatisation from Grandblue Environment Co A (600323 CH) at HK$4.90 per share, an 11.6% premium to the last close price.
The precondition relates to the completion of capital injection into the offeror, Grandblue shareholder, and regulatory approvals. The heavy presence of SOE entities makes this a formality.
While not a knockout bid, the offer (which is final) is reasonable. Shareholders with blocking stakes will be supportive. Timing is the key risk as the offer is long-dated.


Canvest Environmental (1381 HK): Grandblue’s Pre-Condition Privatisation at HK$4.90

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Sunny Optical Technology Group / Equity Bottom-Up

Sunny Optical Technology Group Co., Limited designs and manufactures optical and optical related products. The Company's products include glass/plastic lenses, prisms, mobile phone camera modules, microscopes, surveying instruments, and other analytical instruments.

<ul>
<li>The Hong Kong market trades about 30% below analysts' estimated 12 month target price.</li>
<li>Analysts are raising forecasts for<a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> as it meets success with new phone rollouts and its EV business.  </li>
<li>
<a href="https://www.smartkarma.com/entities/sunny-optical-technology-group" target="_blank" data-smartkarma-citation="entities:13363:1" rel="noopener">Sunny Optical Technology Group (2382 HK)</a> had a positive profit alert and <a href="https://www.smartkarma.com/entities/minth-group-ltd" target="_blank" data-smartkarma-citation="entities:9232:1" rel="noopener">Minth Group Ltd (425 HK)</a> is showing growth in its international business. Both are rated BUY from analysts.</li>
</ul>


The Hong Kong market trades about 30% below analysts' estimated 12 month target price.
Analysts are raising forecasts forXiaomi Corp (1810 HK) as it meets success with new phone rollouts and its EV business.  

Sunny Optical Technology Group (2382 HK) had a positive profit alert and Minth Group Ltd (425 HK) is showing growth in its international business. Both are rated BUY from analysts.


BUY/SELL/HOLD: Hong Kong Stock Updates (July 22)