Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Late December 2024, <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba (9988 HK)</a> entered an SPA with DCP Capital to offload its 78.7% stake in <a href="https://www.smartkarma.com/entities/sun-art-retail-group-ltd" target="_blank" data-smartkarma-citation="entities:401:1" rel="noopener">Sun Art (6808 HK)</a> at HK$1.38/share, a 44.4% discount to last close.</li>
<li>The SPA completed on the 27th Feb, triggering an unconditional MGO, also at HK$1.38. FWIW, a deferred payment option raises the Offer Price to a maximum of HK$1.58/share. </li>
<li>
The Composite Document is now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0306/2025030600003.pdf" target="_blank" rel="noopener">out</a>, with a Closing Date for tendering on the 27th March. This won't be extended. The IFA (Somerley) says NOT fair &amp; reasonable.</li>
</ul>


Late December 2024, Alibaba (9988 HK) entered an SPA with DCP Capital to offload its 78.7% stake in Sun Art (6808 HK) at HK$1.38/share, a 44.4% discount to last close.
The SPA completed on the 27th Feb, triggering an unconditional MGO, also at HK$1.38. FWIW, a deferred payment option raises the Offer Price to a maximum of HK$1.58/share. 

The Composite Document is now out, with a Closing Date for tendering on the 27th March. This won't be extended. The IFA (Somerley) says NOT fair &amp; reasonable.


Sun Art (6808 HK): IFA Says MGO Is Not Fair. Rightfully So

<ul>
<li>
HK$1.38/Share. That's the takeaway as <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> enters an SPA to offload its 78.7% stake in <a href="https://www.smartkarma.com/entities/sun-art-retail-group-ltd" target="_blank" data-smartkarma-citation="entities:401:1" rel="noopener">Sun Art (6808 HK)</a> at <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0101/2025010100067.pdf" target="_blank" rel="noopener">HK$1.38/share</a>, a 44.4% discount to last close.</li>
<li>The buyer, Paragon Shine, an entity under Chinese PE outfit DCP Capital, is paying ~HK$12.3bn compared to BABA's HK$28.1bn purchase of a 51% stake in October 2020.</li>
<li>Should the SPA complete, an unconditional MGO is triggered. Minorities tendering can receive up to HK$1.58/share. But the question is: why would BABA be cashing out at this price?</li>
</ul>



HK$1.38/Share. That's the takeaway as Alibaba Group (9988 HK) enters an SPA to offload its 78.7% stake in Sun Art (6808 HK) at HK$1.38/share, a 44.4% discount to last close.
The buyer, Paragon Shine, an entity under Chinese PE outfit DCP Capital, is paying ~HK$12.3bn compared to BABA's HK$28.1bn purchase of a 51% stake in October 2020.
Should the SPA complete, an unconditional MGO is triggered. Minorities tendering can receive up to HK$1.58/share. But the question is: why would BABA be cashing out at this price?


Sun Art Retail (6808 HK): BABA Takes Massive Hit After Inking SPA @ HK$1.38

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li>It's time to revisit the network of Alibaba's ( <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a> ) affiliated listed companies for near term investment opportunities</li>
<li>After investing in an ecosystem of online and offline companies over the last 10 years, Alibaba is rapidly restructuring its businesses to refocus on its most profitable opportunities</li>
<li>
<a href="https://www.smartkarma.com/entities/sun-art-retail-group-ltd" target="_blank" data-smartkarma-citation="entities:401:1" rel="noopener">Sun Art Retail (6808 HK)</a> will benefit from the synergies of Baba's restructuring</li>
</ul>


It's time to revisit the network of Alibaba's ( Alibaba Group Holding (9988 HK) ) affiliated listed companies for near term investment opportunities
After investing in an ecosystem of online and offline companies over the last 10 years, Alibaba is rapidly restructuring its businesses to refocus on its most profitable opportunities

Sun Art Retail (6808 HK) will benefit from the synergies of Baba's restructuring


BABA's Babies: They're All Grown Up Now! Sun Art Retail: A Restructuring Opportunity

<ul>
<li>I tally 51 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.</li>
<li>One new deal was discussed this week: <a href="https://www.smartkarma.com/entities/sun-art-retail-group-ltd" target="_blank" data-smartkarma-citation="entities:401:1" rel="noopener">Sun Art Retail (6808 HK)</a>'s (expected) unconditional MGO. A <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a>/<a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> merger was also discussed. </li>
<li>Key updates/news took place on: <a href="https://www.smartkarma.com/entities/avjennings-ltd" target="_blank" data-smartkarma-citation="entities:12578:1" rel="noopener">AVJennings (AVJ AU)</a>,  <a href="https://www.smartkarma.com/entities/greatview-aseptic-packaging" target="_blank" data-smartkarma-citation="entities:10802:1" rel="noopener">GAPack (468 HK)</a>, <a href="https://www.smartkarma.com/entities/shandong-hi-speed-new-energy-g" target="_blank" data-smartkarma-citation="entities:6927:1" rel="noopener">Shandong Hi-Speed New Energy (1250 HK)</a>, <a href="https://www.smartkarma.com/entities/canvest-environmental-protection-group-co-ltd" target="_blank" data-smartkarma-citation="entities:100:1" rel="noopener">Canvest (1381 HK)</a>, <a href="https://www.smartkarma.com/entities/china-boqi-environmental-hol" target="_blank" data-smartkarma-citation="entities:26771:1" rel="noopener">China Boqi Environmental (2377 HK)</a>, and <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN (1310 HK)</a>.
</li>
</ul>


I tally 51 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
One new deal was discussed this week: Sun Art Retail (6808 HK)'s (expected) unconditional MGO. A Tsuruha Holdings (3391 JP)/Welcia Holdings (3141 JP) merger was also discussed. 
Key updates/news took place on: AVJennings (AVJ AU),  GAPack (468 HK), Shandong Hi-Speed New Energy (1250 HK), Canvest (1381 HK), China Boqi Environmental (2377 HK), and HKBN (1310 HK).



(Mostly) Asia-Pac M&A: Sun Art Retail, AVJennings, Shandong Hi-Speed New Energy, Boqi, Get Nice

<ul>
<li>Hong Kong markets continue to outperform globally this year with short selling declining and mainland buying increasing.  These trends should accelerate going into next year.</li>
<li>
<a href="https://www.smartkarma.com/entities/sun-art-retail-group-ltd" target="_blank" data-smartkarma-citation="entities:401:1" rel="noopener">Sun Art Retail (6808 HK)</a>resumed trading after announcing that the company is entertaining one or more potential acquisition plans for the company.  The company also announced strong 1H25 earnings.
</li>
<li>
<a href="https://www.smartkarma.com/entities/shanghai-electric-group-company-limited-d542164d-4d5a-4ce0-b33e-5fe6bc34722c" target="_blank" data-smartkarma-citation="entities:8777:1" rel="noopener">Shanghai Electric Group Company (2727 HK) </a>announce a buyback plan for 10% of A and H shares outstanding.  The company also announced the acquisition of the China Fanuc robotics business.
</li>
</ul>


Hong Kong markets continue to outperform globally this year with short selling declining and mainland buying increasing.  These trends should accelerate going into next year.

Sun Art Retail (6808 HK)resumed trading after announcing that the company is entertaining one or more potential acquisition plans for the company.  The company also announced strong 1H25 earnings.


Shanghai Electric Group Company (2727 HK) announce a buyback plan for 10% of A and H shares outstanding.  The company also announced the acquisition of the China Fanuc robotics business.



The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (October 22)

Hong Kong

Sun Art Retail Group Ltd. operates hypermarkets.  The Company retails food and offers amenities such as restaurants, automated teller machines, pharmacies and dry cleaners.

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Sun Art Retail (6808 HK)

Sun Art (6808 HK): IFA Says MGO Is Not Fair. Rightfully So

Bricks and mortar investments in the PRC have been in retreat - and that's direct from Alibaba's chairman. Unless you feel DCP has the Midas touch...

David Blennerhassett