Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/razer-inc" target="_blank" data-smartkarma-citation="entities:24380:1" rel="noopener">Razer Inc (1337 HK)</a> has <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0221/2022022100862.pdf" target="_blank" rel="noopener">announced</a> the remaining pre-conditions have now been fulfilled.</li>
<li>The next step is the Scheme vote, which may be held in early May, with possible completion in early June.</li>
<li>Despite SAMR approval last month, this transaction continues to trade wide to terms on concerns retail investors will disrupt the headcount test.</li>
</ul>



Razer Inc (1337 HK) has announced the remaining pre-conditions have now been fulfilled.
The next step is the Scheme vote, which may be held in early May, with possible completion in early June.
Despite SAMR approval last month, this transaction continues to trade wide to terms on concerns retail investors will disrupt the headcount test.


<ul>
<li>China's State Administration for Market Supervision has unconditionally approved <a href="https://www.smartkarma.com/entities/razer-inc" target="_blank" data-smartkarma-citation="entities:24380:1" rel="noopener">Razer Inc (1337 HK)</a>'s privatisation. </li>
<li>Provided all other regulatory approvals are obtained, the key condition to the Scheme completing is the shareholder vote. </li>
<li>Trading wide to terms on concerns retail investors could disrupt the headcount test.</li>
</ul>


China's State Administration for Market Supervision has unconditionally approved Razer Inc (1337 HK)'s privatisation. 
Provided all other regulatory approvals are obtained, the key condition to the Scheme completing is the shareholder vote. 
Trading wide to terms on concerns retail investors could disrupt the headcount test.


Razer Inc (1337 HK): SAMR Done. Now For The Vote

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.

<ul>
<li>The gross spread to the HK$2.82 per share offer has retouched the high of 23%. The headcount test is a key challenge as some minorities voice displeasure over the price.  </li>
<li>Based on the unaffected price of HK$1.81 and at the last close of HK$2.30, the deal probability retouched lows of 48.5%. A 65% deal probability would imply HK$2.47 per share. </li>
<li>In the event of a failed deal, <a href="https://www.smartkarma.com/entities/razer-inc" target="_blank" data-smartkarma-citation="entities:24380:1" rel="noopener">Razer Inc (1337 HK)</a>’s strong fundamentals provide solid valuation support. Our SoTP valuation is HK$2.96 per share, 5% higher than the privatisation price.</li>
</ul>


The gross spread to the HK$2.82 per share offer has retouched the high of 23%. The headcount test is a key challenge as some minorities voice displeasure over the price.  
Based on the unaffected price of HK$1.81 and at the last close of HK$2.30, the deal probability retouched lows of 48.5%. A 65% deal probability would imply HK$2.47 per share. 
In the event of a failed deal, Razer Inc (1337 HK)’s strong fundamentals provide solid valuation support. Our SoTP valuation is HK$2.96 per share, 5% higher than the privatisation price.


Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

<ul>
<li>
Default: On December 6, 2021, several investors appear to have confirmed that China Evergrande Group (3333.HK) [Evergrande] does not have the financial wherewithal to cover grace period payments;</li>
<li>
Fire Brigade Called: Evergrande established a risk-management committee (RMC) to assist in "mitigating and eliminating the future risks", in addition to Guangdong Province disseminating a team to Evergrande; and</li>
<li>
Intensified Bank Risk: Shenjing Bank (2066.HK) has CNY 129.4 bn exposure to Evergrande, implying stated NPLs of 24.4%. Other bank creditors: China Minsheng, China Zheshang, Shanghai Pudong, and Citic Trust.</li>
</ul>



Default: On December 6, 2021, several investors appear to have confirmed that China Evergrande Group (3333.HK) [Evergrande] does not have the financial wherewithal to cover grace period payments;

Fire Brigade Called: Evergrande established a risk-management committee (RMC) to assist in "mitigating and eliminating the future risks", in addition to Guangdong Province disseminating a team to Evergrande; and

Intensified Bank Risk: Shenjing Bank (2066.HK) has CNY 129.4 bn exposure to Evergrande, implying stated NPLs of 24.4%. Other bank creditors: China Minsheng, China Zheshang, Shanghai Pudong, and Citic Trust.


<ul>
<li>
Stadium Levy:Likely Guangzhou City Construction Investment Group has seized the halted China Evergrande Group’s (3333.HK) [Evergrande] stadium project in order to dispose of it;</li>
<li>
Stake Sale:In order to stave off default, Evergrande’s Chairman reduced his family’s stake, raising the equivalent USD 344 mn; and</li>
<li>
Guarantee and Grace Period:Investors are threatening to re-invoke Evergrande’s Jumbo Fortune bond guarantee, and we await the expiry of another 30-day grace period expiry on December 6, 2021.</li>
</ul>



Stadium Levy:Likely Guangzhou City Construction Investment Group has seized the halted China Evergrande Group’s (3333.HK) [Evergrande] stadium project in order to dispose of it;

Stake Sale:In order to stave off default, Evergrande’s Chairman reduced his family’s stake, raising the equivalent USD 344 mn; and

Guarantee and Grace Period:Investors are threatening to re-invoke Evergrande’s Jumbo Fortune bond guarantee, and we await the expiry of another 30-day grace period expiry on December 6, 2021.


China Evergrande Group – Levies and Liquidations

Hong Kong

Chinese Estates Holdings Limited, through its subsidiaries, invests in and develops real estate properties.  The Company also invests in securities and provides brokerage and money lending services.

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Chinese Estates Holdings (127 HK)

Razer Inc (1337 HK): Pre-Conditions Done

The key concern is that retail investors who bought at the IPO, will disrupt the headcount vote. I'd buy here, and buy up to $2.70/share or 4.4%...

David Blennerhassett

Razer Inc (1337 HK): SAMR Done. Now For The Vote

I think this has been oversold. Your downside to the undisturbed price is 17% versus 29% upside. I'd buy here, and buy up to ~$2.60/share or 8.5%...

David Blennerhassett

Razer's Offer Spread Risk/Reward

The gross spread to the HK$2.82 per share offer has retouched the high of 23%. In the event of a failed deal, the strong fundamentals provide solid...

Arun George

China Evergrande Group – Fire Sale

EVERGRANDE: Several investors appear to have confirmed that Evergrande failed to cover grace period payments. Shenjing Bank has CNY 129.4 bn...

Thomas J. Monaco

China Evergrande Group – Levies and Liquidations

EVERGRANDE: Authorities have seized Evergrande's stadium project. The Chairman reduced his family’s stake, but we await the outcome of a bond...

Thomas J. Monaco

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52-week Range

Market Cap (USDm)

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Razer Inc (1337 HK): Pre-Conditions Done

The key concern is that retail investors who bought at the IPO, will disrupt the headcount vote. I'd buy here, and buy up to $2.70/share or 4.4%...

David Blennerhassett

Razer Inc (1337 HK): SAMR Done. Now For The Vote

I think this has been oversold. Your downside to the undisturbed price is 17% versus 29% upside. I'd buy here, and buy up to ~$2.60/share or 8.5%...

David Blennerhassett

Razer's Offer Spread Risk/​Reward

The gross spread to the HK$2.82 per share offer has retouched the high of 23%. In the event of a failed deal, the strong fundamentals provide solid...

Arun George

China Evergrande Group – Fire Sale

EVERGRANDE: Several investors appear to have confirmed that Evergrande failed to cover grace period payments. Shenjing Bank has CNY 129.4 bn...

Thomas J. Monaco

China Evergrande Group – Levies and Liquidations

EVERGRANDE: Authorities have seized Evergrande's stadium project. The Chairman reduced his family’s stake, but we await the outcome of a bond...

Thomas J. Monaco

Razer's Offer Spread Risk/Reward