Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In what I viewed as one of the cleaner deals, <a href="https://www.smartkarma.com/entities/cpmc-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10427:1" rel="noopener">CPMC Holdings (906 HK)</a> announced a pre-conditional Offer from SASAC and the National Council for Social Security Fund of China.</li>
<li>A decent premium to undisturbed, a low tendering threshold, and a large shareholder giving an irrevocable - this looked done. </li>
<li>Now ORG Development Limited/<a href="https://www.smartkarma.com/entities/org-technology-co-ltd-a" target="_blank" data-smartkarma-citation="entities:17510:1" rel="noopener">ORG Technology Co., Ltd. A (002701 CH)</a>, holding 24.4% of shares out, is mulling a competing conditional general cash Offer. One of these Offers will get up.</li>
</ul>


In what I viewed as one of the cleaner deals, CPMC Holdings (906 HK) announced a pre-conditional Offer from SASAC and the National Council for Social Security Fund of China.
A decent premium to undisturbed, a low tendering threshold, and a large shareholder giving an irrevocable - this looked done. 
Now ORG Development Limited/ORG Technology Co., Ltd. A (002701 CH), holding 24.4% of shares out, is mulling a competing conditional general cash Offer. One of these Offers will get up.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/dai-ichi-life-insurance" target="_blank" data-smartkarma-citation="entities:1109:1" rel="noopener">Dai Ichi Life (8750 JP)</a>'s proposal suggests more upside to <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One (2412 JP)</a>'s minorities than originally thought, and less upside (but still a chunk) to <a href="https://www.smartkarma.com/entities/pasona-group-inc" target="_blank" data-smartkarma-citation="entities:15778:1" rel="noopener">Pasona Group (2168 JP)</a>.</li>
<li>It's all over for <a href="https://www.smartkarma.com/entities/eoflow-co-ltd" target="_blank" data-smartkarma-citation="entities:36100:1" rel="noopener">EOFlow (294090 KS)</a>, as <a href="https://www.smartkarma.com/entities/medtronic-plc" target="_blank" data-smartkarma-citation="entities:14982:1" rel="noopener">Medtronic Plc (MDT US)</a> folds it tent. </li>
<li>Cho Hyun-Sik (eldest son of Cho Yang-Rae, Chairman of <a href="https://www.smartkarma.com/entities/hankook-company-co-ltd" target="_blank" data-smartkarma-citation="entities:19369:1" rel="noopener">Hankook &amp; Company (000240 KS)</a> has joined MBK Partners in making a partial Tender Offer for Hankook &amp; Co.</li>
</ul>



Dai Ichi Life (8750 JP)'s proposal suggests more upside to Benefit One (2412 JP)'s minorities than originally thought, and less upside (but still a chunk) to Pasona Group (2168 JP).
It's all over for EOFlow (294090 KS), as Medtronic Plc (MDT US) folds it tent. 
Cho Hyun-Sik (eldest son of Cho Yang-Rae, Chairman of Hankook &amp; Company (000240 KS) has joined MBK Partners in making a partial Tender Offer for Hankook &amp; Co.


Last Week in Event SPACE: Pasona/Benefit One, EOFlow, Swire Pacific, Hankook & Co, Toyo Construction

<ul>
<li>I tally 42 - 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>Four new deals discussed this week: <a href="https://www.smartkarma.com/entities/washington-h-soul-pattinson-and-co-ltd" target="_blank" data-smartkarma-citation="entities:6054:1" rel="noopener">WashSoul</a>'s tilt for <a href="https://www.smartkarma.com/entities/perpetual-ltd" target="_blank" data-smartkarma-citation="entities:599:1" rel="noopener">Perpetual (PPT AU)</a>; <a href="https://www.smartkarma.com/entities/cpmc-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10427:1" rel="noopener">CPMC (906 HK)</a>'s SASAC Offer; <a href="https://www.smartkarma.com/entities/weiqiao-textile-co" target="_blank" data-smartkarma-citation="entities:3690:1" rel="noopener">Weiqiao Textile  (2698 HK)</a>'s Offer; and <a href="https://www.smartkarma.com/entities/tokyo-rakutenchi-co-ltd" target="_blank" data-smartkarma-citation="entities:2078:1" rel="noopener">Tokyo Rakutenchi (8842 JP)</a>'s Tender Offer.</li>
<li>Key updates took place on: <a href="https://www.smartkarma.com/entities/origin-energy-ltd" target="_blank" data-smartkarma-citation="entities:797:1" rel="noopener">Origin Energy (ORG AU)</a>, <a href="https://www.smartkarma.com/entities/healius-ltd-6d4d947d-ad32-4aea-b2d8-265f5768b55e" target="_blank" data-smartkarma-citation="entities:14208:1" rel="noopener">Healius (HLS AU)</a>, <a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a>, <a href="https://www.smartkarma.com/entities/eoflow-co-ltd" target="_blank" data-smartkarma-citation="entities:36100:1" rel="noopener">Eoflow (294090 KS)</a>, and <a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a>.</li>
</ul>


I tally 42 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Four new deals discussed this week: WashSoul's tilt for Perpetual (PPT AU); CPMC (906 HK)'s SASAC Offer; Weiqiao Textile  (2698 HK)'s Offer; and Tokyo Rakutenchi (8842 JP)'s Tender Offer.
Key updates took place on: Origin Energy (ORG AU), Healius (HLS AU), Toyo Construction (1890 JP), Eoflow (294090 KS), and Chindata Group (CD US).


(Mostly) Asia-Pac Weekly Risk Arb Wrap: Perpetual, Weiqiao Textile,Tokyo Rakutenchi,Toyo, Chindata

<ul>
<li>Packaging play <a href="https://www.smartkarma.com/entities/cpmc-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10427:1" rel="noopener">CPMC Holdings (906 HK)</a> has <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2023/1206/2023120601566.pdf" target="_blank" rel="noopener">announced</a> a pre-conditional Offer from SASAC and the National Council for Social Security Fund of China.</li>
<li>The joint offerors have offered $6.87/share, an okay 32.1% premium to last close. Pre-cons involve the standard PRC regulators. The Offer itself is contingent on a 50% acceptance hurdle. </li>
<li>
<a href="https://www.smartkarma.com/entities/china-foods-ltd" target="_blank" data-smartkarma-citation="entities:6077:1" rel="noopener">China Foods (506 HK)</a> has given an irrevocable for its 29.7% stake.  This will turn unconditional. The timing of the Offer is interesting as a VP is under graft investigation.</li>
</ul>


Packaging play CPMC Holdings (906 HK) has announced a pre-conditional Offer from SASAC and the National Council for Social Security Fund of China.
The joint offerors have offered $6.87/share, an okay 32.1% premium to last close. Pre-cons involve the standard PRC regulators. The Offer itself is contingent on a 50% acceptance hurdle. 

China Foods (506 HK) has given an irrevocable for its 29.7% stake.  This will turn unconditional. The timing of the Offer is interesting as a VP is under graft investigation.


HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cpmc-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10427:1" rel="noopener">CPMC Holdings (906 HK)</a> is currently suspended from trading. We think the announcement is likely to involve China Baowu Steel acquiring all stakes from its largest shareholder COFCO.</li>
<li>There are benefits to be realised as Baowu also owns a packaging A-share <a href="https://www.smartkarma.com/entities/shanghai-baosteel-packaging-a" target="_blank" data-smartkarma-citation="entities:25102:1" rel="noopener">Shanghai Baosteel Packaging-A (601968 CH)</a>. CPMC's 1H23 result is very solid with good margin expansion.  </li>
<li>Despite a 61.5% rally YTD, CPMC does not look expensive at 10.9x and 9.9x PERs for FY23 and FY24. These are levels at discounts to peers which are mostly A-shares.</li>
</ul>



CPMC Holdings (906 HK) is currently suspended from trading. We think the announcement is likely to involve China Baowu Steel acquiring all stakes from its largest shareholder COFCO.
There are benefits to be realised as Baowu also owns a packaging A-share Shanghai Baosteel Packaging-A (601968 CH). CPMC's 1H23 result is very solid with good margin expansion.  
Despite a 61.5% rally YTD, CPMC does not look expensive at 10.9x and 9.9x PERs for FY23 and FY24. These are levels at discounts to peers which are mostly A-shares.


Hong Kong

China Foods Limited, through its subsidiaries, operates food processing businesses.  The Company processes and refines edible oil and fats, produces confectionery products, wine and beverage as well as flour including wheat and other grain products.  In addition, China Foods Limited trades food products.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

China Foods Ltd (506 HK)

CPMC (906 HK): SASAC Usurper?

One of these transaction will turn unconditional. Either the current Offer stands, and Zhang Wei tips in his 21.91% stake. OR, ORG comes in with a...

David Blennerhassett

Last Week in Event SPACE: Pasona/Benefit One, EOFlow, Swire Pacific, Hankook & Co, Toyo Construction

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Perpetual, Weiqiao Textile,Tokyo Rakutenchi,Toyo, Chindata

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

CPMC (906 HK): SASAC Takeover

This will turn unconditional. It's a question whether compulsory acquisition will be afforded. The key risk to the deal is one of timing. Assuming...

David Blennerhassett

CPMC Holdings (906 HK): What's Brewing?

CPMC is likely to be acquired by China Baowu Steel, and it will benefit from synergy with A-share Shanghai Baosteel Packaging. CPMC 1H23 results...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

CPMC (906 HK): SASAC Usurper?

One of these transaction will turn unconditional. Either the current Offer stands, and Zhang Wei tips in his 21.91% stake. OR, ORG comes in with a...

David Blennerhassett

Last Week in Event SPACE: Pasona/Benefit One, EOFlow, Swire Pacific, Hankook & Co, Toyo Construction

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Perpetual, Weiqiao Textile,Tokyo Rakutenchi,Toyo, Chindata

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

CPMC (906 HK): SASAC Takeover

This will turn unconditional. It's a question whether compulsory acquisition will be afforded. The key risk to the deal is one of timing. Assuming...

David Blennerhassett

CPMC Holdings (906 HK): What's Brewing?

​CPMC is likely to be acquired by China Baowu Steel, and it will benefit from synergy with A-share Shanghai Baosteel Packaging. CPMC 1H23 results...

Osbert Tang, CFA

CPMC is likely to be acquired by China Baowu Steel, and it will benefit from synergy with A-share Shanghai Baosteel Packaging. CPMC 1H23 results...