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.

Event-Driven

Beijing Enterprises Urban Resources / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beijing-enterprises-urban-re" target="_blank" data-smartkarma-citation="entities:29131:1" rel="noopener">Beijing Enterprises Urban Resources (3718 HK)</a>/BEUR and <a href="https://www.smartkarma.com/entities/beijing-enterprises-water-group-limited" target="_blank" data-smartkarma-citation="entities:1660:1" rel="noopener">Beijing Enterprises Water Group (371 HK)</a>/BEWG entered trading halts relating to the Code on Takeovers and Mergers and “a proposed notifiable transaction”, respectively. </li>
<li>BEWG, the largest BEUR shareholder, has steadily increased its stake from 26.25% at BEUR’s IPO on 15 January 2020 to 29.45% as of 31 March 2022.</li>
<li>Our best guess is that the trading halts relate to a potential mandatory general offer associated with BEWG acquiring 30%+ of the voting rights. </li>
</ul>



Beijing Enterprises Urban Resources (3718 HK)/BEUR and Beijing Enterprises Water Group (371 HK)/BEWG entered trading halts relating to the Code on Takeovers and Mergers and “a proposed notifiable transaction”, respectively. 
BEWG, the largest BEUR shareholder, has steadily increased its stake from 26.25% at BEUR’s IPO on 15 January 2020 to 29.45% as of 31 March 2022.
Our best guess is that the trading halts relate to a potential mandatory general offer associated with BEWG acquiring 30%+ of the voting rights. 


Beijing Enterprises Urban Resources’ Trading Halt: Is an MGO on the Cards?

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

China Conch Venture Holdings / Equity Bottom-Up

<ul>
<li>Following CCEP spin-off and share price decline, <a href="https://www.smartkarma.com/entities/china-conch-venture-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19943:1" rel="noopener">China Conch Venture (586 HK)</a> is now at more attractive valuations relative to the stub, on sum-of-the-parts and on PER multiple. </li>
<li>Growth profile should improve in next two years and it has an optimistic expectation of of 76% increase in waste treatment and 79% growth in on-grid electricity for FY22.</li>
<li>New business initiatives including anode and cathode materials of lithium iron phosphate and lithium batteries and used lithium batteries treatment may provide potential medium term upside.</li>
</ul>


Following CCEP spin-off and share price decline, China Conch Venture (586 HK) is now at more attractive valuations relative to the stub, on sum-of-the-parts and on PER multiple. 
Growth profile should improve in next two years and it has an optimistic expectation of of 76% increase in waste treatment and 79% growth in on-grid electricity for FY22.
New business initiatives including anode and cathode materials of lithium iron phosphate and lithium batteries and used lithium batteries treatment may provide potential medium term upside.


Conch Venture (586 HK): Improving Risk-Reward Profile

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

China Conch Venture Holdings / Event-Driven

<ul>
<li>In my last note, I thought <a href="https://www.smartkarma.com/entities/china-conch-venture-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19943:1" rel="noopener">China Conch Venture Holdings (586 HK)</a> (CCV) appeared fully-priced. If I had been long CCV, I recommended getting out. </li>
<li>CCV shed HK$11.35/share after going ex- the <a href="https://www.smartkarma.com/entities/china-conch-environment-protection-holdings-ltd" target="_blank" data-smartkarma-citation="entities:4827:1" rel="noopener">China Conch Environment Protection Holdings (587 HK)</a> (CCEP) water treatment in-specie spin-off. CCEP closed at HK$9.77/share on its first day of trading.</li>
<li>CCV is trading back to around levels prior to the announcement of the spin-off. Separately, CCEP appears to be trading rich relative to waste treatment peers.</li>
</ul>


In my last note, I thought China Conch Venture Holdings (586 HK) (CCV) appeared fully-priced. If I had been long CCV, I recommended getting out. 
CCV shed HK$11.35/share after going ex- the China Conch Environment Protection Holdings (587 HK) (CCEP) water treatment in-specie spin-off. CCEP closed at HK$9.77/share on its first day of trading.
CCV is trading back to around levels prior to the announcement of the spin-off. Separately, CCEP appears to be trading rich relative to waste treatment peers.


<ul>
<li>Today (18 March) is the last day of dealing in <a href="https://www.smartkarma.com/entities/china-conch-venture-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19943:1" rel="noopener">China Conch Venture Holdings (586 HK)</a> shares on a cum-entitlement basis for the Conch Environment Protection (CEEP) spin-off.</li>
<li>CEEP is expected to commence trading on the 30 March. The Listing Document is expected to be issued on or around the 22 March.</li>
<li>Separately, I see CCV trading at a 14% premium to its NAV, around its most extreme-ever level. </li>
</ul>


Today (18 March) is the last day of dealing in China Conch Venture Holdings (586 HK) shares on a cum-entitlement basis for the Conch Environment Protection (CEEP) spin-off.
CEEP is expected to commence trading on the 30 March. The Listing Document is expected to be issued on or around the 22 March.
Separately, I see CCV trading at a 14% premium to its NAV, around its most extreme-ever level. 


China Conch Venture (586 HK): Last Day Of Entitlement

China Everbright Environment / Equity Bottom-Up

<ul>
<li>Share price was off 23% in the last two days, yet we think <a href="https://www.smartkarma.com/entities/china-everbright-environment-group-limited" target="_blank" data-smartkarma-citation="entities:15946:1" rel="noopener">China Everbright Environment (257 HK)</a> has posted a set of healthy result, though somewhat behind expectations.</li>
<li>Good new project momentum, further increase in operation revenue and collection of national subsidies are key factors backing earnings growth and improvement in cash flow over the next 2 years.</li>
<li>Longer term, management stays bullish on the industry growth opportunities. Its 14.5% ROE and mid-teens earnings growth both suggest the stock's 3.3x PER, 0.45x P/B and 9.4% yield inexpensive.</li>
</ul>


Share price was off 23% in the last two days, yet we think China Everbright Environment (257 HK) has posted a set of healthy result, though somewhat behind expectations.
Good new project momentum, further increase in operation revenue and collection of national subsidies are key factors backing earnings growth and improvement in cash flow over the next 2 years.
Longer term, management stays bullish on the industry growth opportunities. Its 14.5% ROE and mid-teens earnings growth both suggest the stock's 3.3x PER, 0.45x P/B and 9.4% yield inexpensive.


China Everbright Environment (257 HK): Sell-Down Unwarranted Given Positive Prospects

China

China Conch Venture Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides energy preservation and environmental protection solutions and offers environment-friendly building materials.

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China Conch Venture Holdings (586 HK)

Beijing Enterprises Urban Resources’ Trading Halt: Is an MGO on the Cards?

Our best guess is that the trading halts of BUER and BEWG (the largest shareholder) relate to a potential mandatory general offer associated with...

Arun George

Conch Venture (586 HK): Improving Risk-Reward Profile

Following CCEP spin-off and recent share price decline, Conch Venture is now at more attractive valuation level. In the medium term, upside will...

Osbert Tang, CFA

China Conch (586 HK): Post-Spinoff Blues

CCV looks to be trading where it should be. I suspect it might even drift wider without any specific newsflow. CCEP looks expensive to me. But's...

David Blennerhassett

China Conch Venture (586 HK): Last Day Of Entitlement

Much of the potential value for CEEP is already baked into CCV's price. If you are in CCV, I'd sell here. Or go short $100 of CCV, Long $80 of...

David Blennerhassett

China Everbright Environment (257 HK): Sell-Down Unwarranted Given Positive Prospects

While CEE's FY21 is below expectation, we think that good new project momentum, further increase in operation revenue and collection of national...

Osbert Tang, CFA

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