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

<p>On 28 February, <a href="https://www.smartkarma.com/entities/china-youzan-limited" target="_blank" data-smartkarma-citation="entities:11467:1" rel="noopener">China Youzan Limited (8083 HK)</a> disclosed a privatisation offer from Mr Zhu Ning, the CEO. Mr Ning is taking private China Youzan through the distribution in-specie of Youzan Technology and a cash buyout of the payment business. China Youzan will distribute in-specie its equity holdings in Youzan Technology by offering 0.05077265 Youzan Technology share for every China Youzan share along with HK$0.1352 in cash per scheme share. Youzan Technology will be listed on the Main Board of the HKEx. </p><p>The total privatisation price of HK$2.3088 per share is 30.2% and 28.3% discount to the last trading date price of HK$3.31 (25 February 2021) and the last close price of HK$3.23, respectively. The key pre-conditions are HKEx listing approval for Youzan Technology and shareholder approval at the first SGM. The key conditions precedents are the headcount test and the scheme approved by at least 75% disinterested shareholders (&lt;10% disinterested shareholders rejection). The offeror and concert parties represent 4,020.8 million shares or 23.31% of shares outstanding. Disinterested scheme shareholders represent 13,239.3 million shares or 76.69% of shares outstanding, which implies the 10% blocking stake is 1,323.9 million shares or 7.67% of shares outstanding.</p><div class="content-highlight"><p>The privatisation offer is fair in both the distribution in-specie (distribution ratio in line with the control ratio) and the cash consideration (in line with the value of the payments business). The discrepancy between the privatisation bid and the current share price can be explained by Youzan Technology's potential standalone value as a listed entity. If Youzan Technology is valued at <a href="https://www.smartkarma.com/entities/shopify-inc-de74469e-4678-489b-9b50-a80a5790c5ef" target="_blank" data-smartkarma-citation="entities:25906:1" rel="noopener">Shopify Inc (SHOP US)</a>’s current trailing EV/Sales multiple of 53.5x (arguably the closest peer), it would imply a fair value of China Youzan of HK$3.54 per share. Overall, we believe that the privatisation bid will succeed due to the reasonable terms.  </p></div>

On 28 February, China Youzan Limited (8083 HK) disclosed a privatisation offer from Mr Zhu Ning, the CEO. Mr Ning is taking private China Youzan through the distribution in-specie of Youzan Technology and a cash buyout of the payment business. China Youzan will distribute in-specie its equity holdings in Youzan Technology by offering 0.05077265 Youzan Technology share for every China Youzan share along with HK$0.1352 in cash per scheme share. Youzan Technology will be listed on the Main Board of the HKEx. The total privatisation price of HK$2.3088 per share is 30.2% and 28.3% discount to the last trading date price of HK$3.31 (25 February 2021) and the last close price of HK$3.23, respectively. The key pre-conditions are HKEx listing approval for Youzan Technology and shareholder approval at the first SGM. The key conditions precedents are the headcount test and the scheme approved by at least 75% disinterested shareholders (&lt;10% disinterested shareholders rejection). The offeror and concert parties represent 4,020.8 million shares or 23.31% of shares outstanding. Disinterested scheme shareholders represent 13,239.3 million shares or 76.69% of shares outstanding, which implies the 10% blocking stake is 1,323.9 million shares or 7.67% of shares outstanding.The privatisation offer is fair in both the distribution in-specie (distribution ratio in line with the control ratio) and the cash consideration (in line with the value of the payments business). The discrepancy between the privatisation bid and the current share price can be explained by Youzan Technology's potential standalone value as a listed entity. If Youzan Technology is valued at Shopify Inc (SHOP US)’s current trailing EV/Sales multiple of 53.5x (arguably the closest peer), it would imply a fair value of China Youzan of HK$3.54 per share. Overall, we believe that the privatisation bid will succeed due to the reasonable terms.  

Pan-Asia Equity Bottom-up, Wickhams Hill

Lloyd Moffatt

Pan-Asia Equity Bottom-up

Research-Intensive Fundamental Value Advisor

Wickhams Hill

Wickhams Hill Capital is a research-intensive fundamental value advisor, on long and occasionally short investment opportunities concentrated in small and mid-cap public companies.

Thematic (Sector/Industry)

<p>Asian small cap markets were poor performers across the board, with the exception of our WHC Hong Kong Index that eked out a gain of 2.9%. The strong USD can largely be attributed to the weak performance, noting that the larger MSCI indices fell more than their small-cap counterparts.</p><p>Year-to-date, Singapore continues to lead the pack with a 6.5% gain in the Wickhams Hill Singapore Index. This out performance is broadly reflected by the mainstream indices.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/054/959/original/1.png?1528801082" class="editor-image img-responsive" data-smartkarma-image-id="54959"></figure><div class="content-caption"><p style="text-align: left;">Source: WHC Analysis</p></div><p>Most interesting is…</p>

Asian small cap markets were poor performers across the board, with the exception of our WHC Hong Kong Index that eked out a gain of 2.9%. The strong USD can largely be attributed to the weak performance, noting that the larger MSCI indices fell more than their small-cap counterparts.Year-to-date, Singapore continues to lead the pack with a 6.5% gain in the Wickhams Hill Singapore Index. This out performance is broadly reflected by the mainstream indices.Source: WHC AnalysisMost interesting is…

Asia Small-Cap: Top Movers, Buybacks and Insider Dealing - May’18

Founder, Riedel Research

David Riedel

Founder

Independent equity research on GEM Markets

Riedel Research

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<ul>
<li>This 5 minute interview on Bloomberg's DayBreak Asia show reviews current actionable ideas in India and China including some lesser-known tech and manufacturing companies.</li>
<li>China:  Find opportunities in the areas of focus for President Xi's second term.  Robotics and Digital Payments. <a href="https://www.smartkarma.com/entities/16185" target="_blank" data-smartkarma-citation="entities:16185:1">Midea Group Co Ltd A (000333 CH)</a> and <a href="https://www.smartkarma.com/entities/11467" target="_blank" data-smartkarma-citation="entities:11467:1">China Innovationpay Group (8083 HK)</a>
</li>
<li>Yuan likely to be stable going into October meetings.</li>
<li>India: Focus on niche manufacturers <a href="https://www.smartkarma.com/entities/6958" target="_blank" data-smartkarma-citation="entities:6958:1">Essel Propack Ltd (ESEL IN)</a> and <a href="https://www.smartkarma.com/entities/16586" target="_blank" data-smartkarma-citation="entities:16586:1">Aia Engineering Ltd</a>…</li>
</ul>


This 5 minute interview on Bloomberg's DayBreak Asia show reviews current actionable ideas in India and China including some lesser-known tech and manufacturing companies.
China:  Find opportunities in the areas of focus for President Xi's second term.  Robotics and Digital Payments. Midea Group Co Ltd A (000333 CH) and China Innovationpay Group (8083 HK)

Yuan likely to be stable going into October meetings.
India: Focus on niche manufacturers Essel Propack Ltd (ESEL IN) and Aia Engineering Ltd…


Under the Radar Tech and Mfg Ideas in India and China - Riedel Interview on Bloomberg Daybreak Asia

China

China Youzan Limited operates as an investment holding company principally engaged in the merchant service business. The Company provides e-commerce platform with SaaS products and comprehensive services, third-party payment services and related consultancy services, general trading, sales of integrated smart point of sales (POS) devices. China Youzan markets its products worldwide.

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China Youzan (8083 HK)

China Youzan’s Privatisation Proposal

China Youzan disclosed a privatisation offer through the distribution in-specie of Youzan Technology and a cash buyout of the payment business. The...

Arun George

Asia Small-Cap: Top Movers, Buybacks and Insider Dealing - May’18

Asian small cap markets were poor performers across the board, with the exception of our WHC Hong Kong Index that eked out a gain of 2.9%. The...

Lloyd Moffatt

Under the Radar Tech and Mfg Ideas in India and China - Riedel Interview on Bloomberg Daybreak Asia

This 5 minute interview on Bloomberg's DayBreak Asia show reviews current actionable ideas in India and China including some lesser-known tech and...

David Riedel

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52-week Range

Market Cap (USDm)

P/E

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