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

<ul>
<li>PAG completed the auction procedures for the acquisition of a 70.92% stake in <a href="https://www.smartkarma.com/entities/shandong-fengxiang-co-ltd-h" target="_blank" data-smartkarma-citation="entities:29164:1" rel="noopener">Shandong Fengxiang (9977 HK)</a>. This will trigger an unconditional MGO at HK$1.5132 per H Share.</li>
<li>As PAG has no compulsory acquisition rights, it will also seek shareholder delisting approval. The MGO is not conditional on the approval of the delisting resolution.</li>
<li>The composite document is to be despatched on or before 28 December. At last close and for an end-of-January payment, the gross and annualised spread is 5.1% and 65.9%, respectively.</li>
</ul>


PAG completed the auction procedures for the acquisition of a 70.92% stake in Shandong Fengxiang (9977 HK). This will trigger an unconditional MGO at HK$1.5132 per H Share.
As PAG has no compulsory acquisition rights, it will also seek shareholder delisting approval. The MGO is not conditional on the approval of the delisting resolution.
The composite document is to be despatched on or before 28 December. At last close and for an end-of-January payment, the gross and annualised spread is 5.1% and 65.9%, respectively.


Fengxiang (9977 HK)’s Share Transfer to PAG Complete, Unconditional MGO

Alpha-Centric ESG Research

Kyle Rudden

<ul>
<li>COP27, the 27th annual United Nations international conference on climate change, starts on 6 November and runs through 18 November – in the Egyptian coastal city of Sharm el-Sheikh.</li>
<li>Whereas climate mitigation and clean energy were the main focus of prior conferences, climate adaptation and sustainable agriculture and food are top priorities for the COP26 Presidency.</li>
<li>Therefore, agriculture and food stocks are poised to be the most impacted on a relative basis by COP27 proceedings and outcomes. This Insight considers the potential "winners and losers."</li>
</ul>


COP27, the 27th annual United Nations international conference on climate change, starts on 6 November and runs through 18 November – in the Egyptian coastal city of Sharm el-Sheikh.
Whereas climate mitigation and clean energy were the main focus of prior conferences, climate adaptation and sustainable agriculture and food are top priorities for the COP26 Presidency.
Therefore, agriculture and food stocks are poised to be the most impacted on a relative basis by COP27 proceedings and outcomes. This Insight considers the potential "winners and losers."


COP27: Agriculture and Food Stocks Likely to Be Most Affected by Conference Talks

<ul>
<li>PAG is the successful bidder for <a href="https://www.smartkarma.com/entities/shandong-fengxiang-co-ltd-h" target="_blank" data-smartkarma-citation="entities:29164:1" rel="noopener">Shandong Fengxiang (9977 HK)</a>'s controlling shareholder’s 70.92% stake at HK$1.5132 per H Share (RMB1.3822 per domestic share).</li>
<li>As PAG has no compulsory acquisition rights, it will also seek shareholder delisting approval. The MGO is not conditional on the approval of the delisting resolution.</li>
<li>The share sale transfer requires SAMR approval which will be forthcoming. Our best guess is the MGO completes end-January 2023. At the last close, the gross spread is 14.6%.</li>
</ul>


PAG is the successful bidder for Shandong Fengxiang (9977 HK)'s controlling shareholder’s 70.92% stake at HK$1.5132 per H Share (RMB1.3822 per domestic share).
As PAG has no compulsory acquisition rights, it will also seek shareholder delisting approval. The MGO is not conditional on the approval of the delisting resolution.
The share sale transfer requires SAMR approval which will be forthcoming. Our best guess is the MGO completes end-January 2023. At the last close, the gross spread is 14.6%.


Fengxiang’s Unconditional MGO at HK$ 1.5132 from PAG

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>I-Tail Corporation, an original equipment manufacturer (OEM) in the wet pet food category, aims to list in Thailand in 4Q22. ITC is a subsidiary of <a href="https://www.smartkarma.com/entities/thai-union-group-pcl" target="_blank" data-smartkarma-citation="entities:161:1" rel="noopener">Thai Union Group (TU TB)</a>. </li>
<li>As per ITC, it was the number two pet food company in Asia and in the top ten pet food companies globally. ITC expertise lies in fish-based wet pet food.</li>
<li>In our previous notes, we have looked at the company’s past performance. In this note, we undertake a peer comparison.</li>
</ul>


I-Tail Corporation, an original equipment manufacturer (OEM) in the wet pet food category, aims to list in Thailand in 4Q22. ITC is a subsidiary of Thai Union Group (TU TB). 
As per ITC, it was the number two pet food company in Asia and in the top ten pet food companies globally. ITC expertise lies in fish-based wet pet food.
In our previous notes, we have looked at the company’s past performance. In this note, we undertake a peer comparison.


I-Tail Corporation Pre-IPO - Peer Comparison

<ul>
<li>A <a href="https://susong-item.taobao.com/auction/683969821701.htm?spm=a213w.7398554.paiList.1.51e41fa3epY51Y" target="_blank" rel="noopener">successful bidder</a> (identity unknown at the time of writing) has emerged for <a href="https://www.smartkarma.com/entities/shandong-fengxiang-co-ltd-h" target="_blank" data-smartkarma-citation="entities:29164:1" rel="noopener">Shandong Fengxiang (9977 HK)</a> controlling shareholder’s 70.92% stake at the base bid price of RMB1,372.2 million.</li>
<li>As the bidder will hold 30% or more of the voting rights, it will result in an MGO at RMB1.383 per share (HK$1.526 at the <a href="https://www.bankofchina.com/sourcedb/whpj/enindex_1619.html" target="_blank" rel="noopener">median BOC</a> FX of 0.9056).  </li>
<li>The transfer of the sale shares is subject to completion procedures. Our best guess is the offer completes end-January 2023. At the last close, the gross spread is 15.6%. </li>
</ul>


A successful bidder (identity unknown at the time of writing) has emerged for Shandong Fengxiang (9977 HK) controlling shareholder’s 70.92% stake at the base bid price of RMB1,372.2 million.
As the bidder will hold 30% or more of the voting rights, it will result in an MGO at RMB1.383 per share (HK$1.526 at the median BOC FX of 0.9056).  
The transfer of the sale shares is subject to completion procedures. Our best guess is the offer completes end-January 2023. At the last close, the gross spread is 15.6%. 


Fengxiang’s Judical Auction Successful, MGO Upcoming

Thailand

Thai Union Group Public Company Limited produces and exports frozen and canned seafood products including frozen tuna loin, shrimp and cephalopod. The Company also produces canned pet foods from by products of its seafood process.  Additionally, the Company produces fish snack and canned tuna which are marketed locally.

Sappe Public Company Limited manufactures and distributes health drinks. The Company manufactures dietary and fruit juice drinks. Sappe distributes their products internationally.

President Bakery PCL produces and distributes a wide variety of baked goods to fast food restaurants and convenient stores.  The company also sells its product through its own retail stores under Farmhouse shop and Deliya by Farmhouse.

Ichitan Group PCL operates in the beverage industry. The Company, through its subsidiaries, produces and distributes a variety of tea beverages.

Thai Vegetable Oil Public Company Limited produces and markets soybean cooking oil under its A-ngoon brand name.  Additionally, the Company produced other soybean products including soymeal, full-fat soy, cooked and un-extracted soybeanseed, and lecithin.  Its products are also used in industrial applications such as the production of paint or canned food.

Thaitheparos PCL manufactures food seasoning products including flavor sauce, vinegar, chili sauce, tomato sauce, oyster sauce, chili and tomato sauce, soy sauce, and powdered sauce, under branded names.  The Company also produces canned fruits.

GFPT Public Company Limited produces frozen chicken parts and distributes its products under GFPT, Common Food, and Nichirei Core.  The Company sells its products to domestic and export markets.

Kaset Thai International Sugar Corp PCL produces and distributes sugar to domestic and international clients.  The Company also produces bio products, which are used by-products from sugar production as raw materials, such as paper pulp from bagasse, and, ethanol from molasses and electrical energy from biomass.

Kaset Thai International Sugar Corp (KTIS TB)

Exotic Food Public Company Limited manufactures Thai food products that are sold in independent food stores globally.

Khon Kaen Sugar Industry PCL produces sugar, energy and agricultural products. The Company produces sugar and molasses, fertilizers, ethanol, and electricity.

PPB Group Berhad is an investment holding company. The Company operations include grains trading, flour and animal feed milling industry as well as downstream activities including livestock farming, food processing and consumer products distribution with primary focus in Indonesia, Malaysia, China, India and Europe.

Dali Foods Group Company Ltd. is a snack food and beverage company. The Company is actively expanding its products offering and distributes its products through retailers.

IOI Corporation Berhad cultivates and processes oil palm and rubber.  The Company, through its subsidiaries, operates in property development and investment, provides landscape services, and sells ornamental plants and turfing grass. IOI Corporation also manufactures industrial and medical gases, and provides building, engineering, and construction services.

CJ CheilJedang Corp. manufactures processed food products.  The Company's products include refined sugar, monosodium glutamate (MSG), condiment, wheat powder, flour, cooking oil, processed meats, and animal feed.  CJ CheilJedang also manufactures pharmaceutical and household products.

Flowers Foods, Inc. produces and markets packaged bakery foods for retail and foodservice customers. The Company offers fresh packaged and frozen bakery products, as well as pastries, doughnuts, and bakery snack products. Flowers Foods serves customers in the State of Georgia.

Universal Robina Corporation manufactures, markets, and distributes branded consumer foods. The Company's products include hogs and poultry farming, animal feeds, corn products, and animal health products.

YAMAZAKI BAKING CO., LTD. produces baking foods including bread, pastry, and cake.  The Company operates nationwide sales network.  YAMAZAKI BAKING also operates franchised cafeterias and convenience stores.

Nestle (Malaysia) Berhad is an investment holding company.  The Company, through its subsidiaries, markets and sells powdered milk and drinks, liquid milk and juices, instant coffee, and instant noodles. Nestle also manufactures and provides packaging for culinary and chocolate-based food products and trades flavoring ingredients.

PT Charoen Pokphand Indonesia Tbk manufactures and distributes animal feeds, woven plastic bags, and poultry equipment as well as processes chicken.  Through its subsidiaries, the Company also operates poultry farms and distributes its products.

Ruchi Soya Industries Limited manufactures soybean oil, vanaspati vegetable fat, texturized soya protein, soya flour and other soya products.  The Group has also developed Palm stearin and Palm olein cooking oils.

Charoen Pokphand Foods Public Company Limited produces a wide range of food products. The Company's products include chicken, pork, shrimp, fish, eggs. and duck.

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CP FOODS (CPF TB)

COP27: Agriculture and Food Stocks Likely to Be Most Affected by Conference Talks

COP27 starts next week, and sustainable agriculture/food is at the top of the agenda. That could mean agriculture stocks are the most impacted by...

Kyle Rudden

Fengxiang’s Unconditional MGO at HK$ 1.5132 from PAG

The unconditional MGO is HK$1.5132 per H Share. Our best guess is the MGO completes end-January 2023. At the last close, the gross spread is 14.6%.

Arun George

I-Tail Corporation Pre-IPO - Peer Comparison

I-Tail Corporation, an OEM in the wet pet food category, aims to list in Thailand in 4Q22. ITC is a subsidiary of Thai Union Group. In this note,...

Sumeet Singh

Fengxiang’s Judical Auction Successful, MGO Upcoming

The succesful bid will result in an MGO at HK$1.526 (at the median BOC FX of 0.9056). Our best guess is the offer completes end-January 2023. At...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Fengxiang (9977 HK)’s Share Transfer to PAG Complete, Unconditional MGO

The composite document is to be despatched on or before 28 December. At last close and for an end-of-January payment, the gross and annualised...

Arun George

COP27: Agriculture and Food Stocks Likely to Be Most Affected by Conference Talks

COP27 starts next week, and sustainable agriculture/food is at the top of the agenda. That could mean agriculture stocks are the most impacted by...

Kyle Rudden

Fengxiang’s Unconditional MGO at HK$ 1.5132 from PAG

The unconditional MGO is HK$1.5132 per H Share. Our best guess is the MGO completes end-January 2023. At the last close, the gross spread is 14.6%.

Arun George

I-Tail Corporation Pre-IPO - Peer Comparison

I-Tail Corporation, an OEM in the wet pet food category, aims to list in Thailand in 4Q22. ITC is a subsidiary of Thai Union Group. In this note,...

Sumeet Singh

Fengxiang’s Judical Auction Successful, MGO Upcoming

The succesful bid will result in an MGO at HK$1.526 (at the median BOC FX of 0.9056). Our best guess is the offer completes end-January 2023. At...

Arun George