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>
<a href="https://www.smartkarma.com/entities/xingda-international-holdings" target="_blank" data-smartkarma-citation="entities:17836:1" rel="noopener">Xingda International (1899 HK)</a> has disclosed a voluntary conditional offer from Mr Liu Jinlan (Chairman) at HK$1.30 per share, which aligns with the last close price. </li>
<li>The offer is conditional on the offeror and concert parties representing more than 50% of voting rights. The offeror and concert parties represent 37.03% of voting rights.  </li>
<li>The offer is a reaction to Mr Zhao Yue's “hostile” emergence as a substantial shareholder. It is unattractive and will require a bump to satisfy the minimum acceptance condition.   </li>
</ul>



Xingda International (1899 HK) has disclosed a voluntary conditional offer from Mr Liu Jinlan (Chairman) at HK$1.30 per share, which aligns with the last close price. 
The offer is conditional on the offeror and concert parties representing more than 50% of voting rights. The offeror and concert parties represent 37.03% of voting rights.  
The offer is a reaction to Mr Zhao Yue's “hostile” emergence as a substantial shareholder. It is unattractive and will require a bump to satisfy the minimum acceptance condition.   


Xingda (1899 HK): No Premium Voluntary Conditional Offer to Ward off a Hostile Holder

<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> has announced a pre-conditional voluntary offer from Changping Industrial at HK$6.87 per share, a 32.1% premium to the undisturbed price (16 August). </li>
<li>The pre-condition mainly relates to Chinese approvals. The offer is conditional on the offeror and concert parties representing more than 50% of voting rights.</li>
<li>The 50% minimum acceptance condition should be met due to COFCO’s irrevocable and the second-largest shareholders' past dealings with COFCO. At the last close, the gross spread was 6.0%.</li>
</ul>



CPMC Holdings (906 HK) has announced a pre-conditional voluntary offer from Changping Industrial at HK$6.87 per share, a 32.1% premium to the undisturbed price (16 August). 
The pre-condition mainly relates to Chinese approvals. The offer is conditional on the offeror and concert parties representing more than 50% of voting rights.
The 50% minimum acceptance condition should be met due to COFCO’s irrevocable and the second-largest shareholders' past dealings with COFCO. At the last close, the gross spread was 6.0%.


CPMC Holdings (906 HK): Pre-Conditional Voluntary Offer at HK$6.87

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.


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>I tally 50 - 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>Three new deals discussed this week: <a href="https://www.smartkarma.com/entities/fancl-corp" target="_blank" data-smartkarma-citation="entities:15862:1" rel="noopener">Fancl (4921 JP)</a>'s Tender offer, <a href="https://www.smartkarma.com/entities/a8-new-media-group-ltd" target="_blank" data-smartkarma-citation="entities:3444:1" rel="noopener">A8 New Media (800 HK)</a>'s Scheme, and <a href="https://www.smartkarma.com/entities/jeisys-medical-inc" target="_blank" data-smartkarma-citation="entities:36766:1" rel="noopener">Jeisys Medical (287410 KS)</a>'s delisting offer. Bain also approached <a href="https://www.smartkarma.com/entities/bapcor-ltd" target="_blank" data-smartkarma-citation="entities:8433:1" rel="noopener">Bapcor (BAP AU)</a>.</li>
<li>Key updates took place on: <a href="https://www.smartkarma.com/entities/sigma-healthcare-ltd" target="_blank" data-smartkarma-citation="entities:15966:1" rel="noopener">Sigma Healthcare (SIG AU)</a>, <a href="https://www.smartkarma.com/entities/alumina-ltd" target="_blank" data-smartkarma-citation="entities:939:1" rel="noopener">Alumina (AWC AU)</a>, <a href="https://www.smartkarma.com/entities/greatview-aseptic-packaging" target="_blank" data-smartkarma-citation="entities:10802:1" rel="noopener">Greatview Aseptic Packaging (468 HK)</a>, <a href="https://www.smartkarma.com/entities/helios-techno-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:13934:1" rel="noopener">Helios Techno (6927 JP)</a>, and <a href="https://www.smartkarma.com/entities/tatsuta-electric-wire-cable-co-ltd" target="_blank" data-smartkarma-citation="entities:12509:1" rel="noopener">Tatsuta Electric Wire &amp; Cable (5809 JP)</a>.</li>
</ul>


I tally 50 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Three new deals discussed this week: Fancl (4921 JP)'s Tender offer, A8 New Media (800 HK)'s Scheme, and Jeisys Medical (287410 KS)'s delisting offer. Bain also approached Bapcor (BAP AU).
Key updates took place on: Sigma Healthcare (SIG AU), Alumina (AWC AU), Greatview Aseptic Packaging (468 HK), Helios Techno (6927 JP), and Tatsuta Electric Wire &amp; Cable (5809 JP).


(Mostly) Asia-Pac M&A: Fancl, Jeisys Medical, A8 New Media, Bapcor, Helios Techno,Tatsuta Electric

<ul>
<li>We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.</li>
<li>Highest spreads: <a href="https://www.smartkarma.com/entities/renewable-japan-co-ltd" target="_blank" data-smartkarma-citation="entities:35211:1" rel="noopener">Renewable Japan (9522 JP)</a>, <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a>, <a href="https://www.smartkarma.com/entities/macromill-inc" target="_blank" data-smartkarma-citation="entities:24026:1" rel="noopener">Macromill, Inc (3978 JP)</a>, <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a>, <a href="https://www.smartkarma.com/entities/canvest-environmental-protection-group-co-ltd" target="_blank" data-smartkarma-citation="entities:100:1" rel="noopener">Canvest Environmental Protection Group (1381 HK)</a>. 
</li>
<li>Lowest spreads: <a href="https://www.smartkarma.com/entities/nec-networks-system-integr" target="_blank" data-smartkarma-citation="entities:16396:1" rel="noopener">Nec Networks &amp; System Integr (1973 JP)</a>, <a href="https://www.smartkarma.com/entities/net-one-systems-co-ltd" target="_blank" data-smartkarma-citation="entities:1279:1" rel="noopener">Net One Systems (7518 JP)</a>, <a href="https://www.smartkarma.com/entities/avarga-ltd" target="_blank" data-smartkarma-citation="entities:13105:1" rel="noopener">Avarga Ltd (AVARGA SP)</a>, <a href="https://www.smartkarma.com/entities/t-gaia-corp" target="_blank" data-smartkarma-citation="entities:8339:1" rel="noopener">T Gaia Corp (3738 JP)</a>, <a href="https://www.smartkarma.com/entities/nishimoto-co-ltd" target="_blank" data-smartkarma-citation="entities:44086:1" rel="noopener">Nishimoto (9260 JP)</a>, <a href="https://www.smartkarma.com/entities/elematec-corp" target="_blank" data-smartkarma-citation="entities:2866:1" rel="noopener">Elematec Corp (2715 JP)</a>. </li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Renewable Japan (9522 JP), Shanghai Henlius Biotech (2696 HK), Macromill, Inc (3978 JP), Seven &amp; I Holdings (3382 JP), Canvest Environmental Protection Group (1381 HK). 

Lowest spreads: Nec Networks &amp; System Integr (1973 JP), Net One Systems (7518 JP), Avarga Ltd (AVARGA SP), T Gaia Corp (3738 JP), Nishimoto (9260 JP), Elematec Corp (2715 JP). 


Merger Arb Mondays (18 Nov) - Henlius, GAPack, Xingda, Seven & I, Fuji Soft, NEC Networks, Macromill

China

CPMC Holdings Ltd. manufactures food packaging products.

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CPMC Holdings (906 HK)

Xingda (1899 HK): No Premium Voluntary Conditional Offer to Ward off a Hostile Holder

Unsurprisingly, the IFA has opined that the offer is not fair and reasonable, and the independent Board committee recommends not accepting it. The...

Arun George