HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

China National Building Material / Equity Bottom-Up

<ul>
<li>We view <a href="https://www.smartkarma.com/entities/china-national-building-ma-h" target="_blank" data-smartkarma-citation="entities:184:1" rel="noopener">China National Building Material (3323 HK)</a>'s proposal to buy back 9.98% of H-shares as a good opportunity for the shareholders to cash out in their position.</li>
<li>Without further significant government stimulus, CNBM will find it difficult to return to the HK$4.03 offer price. Potential weak FY24 results also mean downside risks.</li>
<li>Other companies with high gearing and low P/B may follow CNBM's move. We single out the infrastructure construction companies as the likely candidates.</li>
</ul>


We view China National Building Material (3323 HK)'s proposal to buy back 9.98% of H-shares as a good opportunity for the shareholders to cash out in their position.
Without further significant government stimulus, CNBM will find it difficult to return to the HK$4.03 offer price. Potential weak FY24 results also mean downside risks.
Other companies with high gearing and low P/B may follow CNBM's move. We single out the infrastructure construction companies as the likely candidates.


China National Building Materials (3323 HK): Buying Back 9.98% of H-Shares

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

China National Building Material / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-national-building-ma-h" target="_blank" data-smartkarma-citation="entities:184:1" rel="noopener">China National Building Material (3323 HK)</a> has launched a conditional share buyback to acquire a maximum of 841.7 million H Shares (18.47% of H Shares) at HK$4.03.</li>
<li>The share buyback seems designed to enable the CNBM parent company to bypass the creeper rule and squeeze the shorts. </li>
<li>The buyback is unattractive and will leave minorities short-changed, weakening a stretched balance sheet. Nevertheless, while potentially tricky, the votes should pass. </li>
</ul>



China National Building Material (3323 HK) has launched a conditional share buyback to acquire a maximum of 841.7 million H Shares (18.47% of H Shares) at HK$4.03.
The share buyback seems designed to enable the CNBM parent company to bypass the creeper rule and squeeze the shorts. 
The buyback is unattractive and will leave minorities short-changed, weakening a stretched balance sheet. Nevertheless, while potentially tricky, the votes should pass. 


China National Building Material (3323 HK): H Share Buyback Short Changes Minorities

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

China Resources Beverage / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-resources-beverage" target="_blank" data-smartkarma-citation="entities:41984:1" rel="noopener">China Resources Beverage (CRB HK)</a> is looking to raise up to US$1bn in its upcoming Hong Kong IPO. </li>
<li>China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.</li>
<li>In our earlier notes, we talked about the company’s past performance and provided our thoughts on valuations. In this note, we will look at updates from its most recent filings.</li>
</ul>



China Resources Beverage (CRB HK) is looking to raise up to US$1bn in its upcoming Hong Kong IPO. 
China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
In our earlier notes, we talked about the company’s past performance and provided our thoughts on valuations. In this note, we will look at updates from its most recent filings.


China Resources Beverage Pre-IPO - PHIP Updates - Revenue Slowing, Margins Growing

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-resources-beverage" target="_blank" data-smartkarma-citation="entities:41984:1" rel="noopener">China Resources Beverage</a> is looking to raise US$1bn in its upcoming Hong Kong IPO.</li>
<li>China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.</li>
<li>In our earlier notes, we talked about the company’s past performance and undertook a peer comparison. In this note, we will look at valuations.</li>
</ul>



China Resources Beverage is looking to raise US$1bn in its upcoming Hong Kong IPO.
China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
In our earlier notes, we talked about the company’s past performance and undertook a peer comparison. In this note, we will look at valuations.


China Resources Beverage Pre-IPO - Thoughts on Valuation

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Back on the 5th June, Chinese cement play <a href="https://www.smartkarma.com/entities/asia-cement-china-holdings" target="_blank" data-smartkarma-citation="entities:3374:1" rel="noopener">Asia Cement China (743 HK)</a> announced a rubbish HK$3.22/share Offer from its parent <a href="https://www.smartkarma.com/entities/asia-cement-corp" target="_blank" data-smartkarma-citation="entities:15350:1" rel="noopener">Asia Cement (1102 TT)</a>.</li>
<li>This best &amp; final cash Offer was a ~ 45% premium to undisturbed, and a 37% discount to FY23's net cash. It's a 39% discount to 1H24's net cash.</li>
<li>The<a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0802/2024080201151.pdf" target="_blank" rel="noopener"> Scheme Doc</a> is now out, with a 26th August independent shareholder vote. And payment (if it were to occur) on 20th September. The IFA (unsurprisingly) says fair and reasonable. </li>
</ul>


Back on the 5th June, Chinese cement play Asia Cement China (743 HK) announced a rubbish HK$3.22/share Offer from its parent Asia Cement (1102 TT).
This best &amp; final cash Offer was a ~ 45% premium to undisturbed, and a 37% discount to FY23's net cash. It's a 39% discount to 1H24's net cash.
The Scheme Doc is now out, with a 26th August independent shareholder vote. And payment (if it were to occur) on 20th September. The IFA (unsurprisingly) says fair and reasonable. 


Asia Cement (743 HK): 26th August Vote. Shareholders Should Reject Terms

Hong Kong

China Resources Cement Holdings Limited, through its subsidiaries, produces, distributes and sells cement, clinker and concrete.

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China Resources Cement (1313 HK)

China National Building Materials (3323 HK): Buying Back 9.98% of H-Shares

CNBM's buyback proposal offers shareholders a chance to cash out, but without government stimulus, returning to the offer price is not easy. Other...

Osbert Tang, CFA

China Resources Beverage Pre-IPO - PHIP Updates - Revenue Slowing, Margins Growing

China Resources Beverage (CRB HK) is looking to raise up to US$1bn in its upcoming Hong Kong IPO. In this note, we talk about updates from its PHIP...

Sumeet Singh

China Resources Beverage Pre-IPO - Thoughts on Valuation

China Resources Beverage has now filed its PHIP and will begin pre-marketing soon. We will have a look at its latest filing and revise our...

Sumeet Singh

Asia Cement (743 HK): 26th August Vote. Shareholders Should Reject Terms

The Scheme failed. No surprises there. The Offer price was rubbish. 30.58% of total disinterested shares votes against the transaction, well in...

David Blennerhassett

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China National Building Materials (3323 HK): Buying Back 9.98% of H-Shares

​CNBM's buyback proposal offers shareholders a chance to cash out, but without government stimulus, returning to the offer price is not easy. Other...

Osbert Tang, CFA

China National Building Material (3323 HK): H Share Buyback Short Changes Minorities

The buyback is unattractive and will leave minorities short-changed, weakening a stretched balance sheet. Nevertheless, while potentially tricky,...

Arun George

China Resources Beverage Pre-IPO - PHIP Updates - Revenue Slowing, Margins Growing

China Resources Beverage (CRB HK) is looking to raise up to US$1bn in its upcoming Hong Kong IPO. In this note, we talk about updates from its PHIP...

Sumeet Singh

China Resources Beverage Pre-IPO - Thoughts on Valuation

China Resources Beverage has now filed its PHIP and will begin pre-marketing soon. We will have a look at its latest filing and revise our...

Sumeet Singh

Asia Cement (743 HK): 26th August Vote. Shareholders Should Reject Terms

The Scheme failed. No surprises there. The Offer price was rubbish. 30.58% of total disinterested shares votes against the transaction, well in...

David Blennerhassett

CNBM's buyback proposal offers shareholders a chance to cash out, but without government stimulus, returning to the offer price is not easy. Other...