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>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/yichang-hec-changjiang-pharmaceutical" target="_blank" data-smartkarma-citation="entities:21040:1" rel="noopener">Yichang HEC Changjiang Pharma (1558 HK)</a>, <a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation Technologies (HOLI US)</a>, <a href="https://www.smartkarma.com/entities/qv-equities-ltd" target="_blank" data-smartkarma-citation="entities:24284:1" rel="noopener">QV Equities Ltd (QVE AU)</a>, <a href="https://www.smartkarma.com/entities/ansarada-group-ltd" target="_blank" data-smartkarma-citation="entities:30718:1" rel="noopener">Ansarada Group Ltd (AND AU)</a>, <a href="https://www.smartkarma.com/entities/malaysia-airports-holdings-bhd" target="_blank" data-smartkarma-citation="entities:117:1" rel="noopener">Malaysia Airports Holdings (MAHB MK)</a>. </li>
<li>Lowest spreads: <a href="https://www.smartkarma.com/entities/chilled-frozen-logistics-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:40987:1" rel="noopener">Chilled &amp; Frozen Logistics Holdings (9099 JP)</a>, <a href="https://www.smartkarma.com/entities/mma-offshore-ltd" target="_blank" data-smartkarma-citation="entities:594:1" rel="noopener">Mma Offshore (MRM AU)</a>, <a href="https://www.smartkarma.com/entities/great-eastern-holdings-ltd" target="_blank" data-smartkarma-citation="entities:13993:1" rel="noopener">Great Eastern Holdings (GE SP)</a>, <a href="https://www.smartkarma.com/entities/mimasu-semiconductor-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:5531:1" rel="noopener">Mimasu Semiconductor Industry (8155 JP)</a>, <a href="https://www.smartkarma.com/entities/boral-ltd" target="_blank" data-smartkarma-citation="entities:1487:1" rel="noopener">Boral Ltd (BLD AU)</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: Yichang HEC Changjiang Pharma (1558 HK), Hollysys Automation Technologies (HOLI US), QV Equities Ltd (QVE AU), Ansarada Group Ltd (AND AU), Malaysia Airports Holdings (MAHB MK). 
Lowest spreads: Chilled &amp; Frozen Logistics Holdings (9099 JP), Mma Offshore (MRM AU), Great Eastern Holdings (GE SP), Mimasu Semiconductor Industry (8155 JP), Boral Ltd (BLD AU). 


Merger Arb Mondays (20 May) - L'Occitane, China TCM, SciClone, Malaysia Airports, I'rom, Hollysys

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>The HK$34/share offer price is final, which exceeds all-time high closing price of HK$33.60/share since IPO in 2010. EUR6 billion is equivalent to a PE of 52.17x, higher than peers.</li>
<li>Deploying China's sinking market is “a good story full of imagination”. However, it may fail to bring expected profits considering increasing competition/potential price war, leading to uncertain future performance growth.</li>
<li>For minority shareholders, this privatization provides an attractive opportunity to monetise their investments at a premium over market price. We don't think the current "technical bull market" to be lasting. </li>
</ul>


The HK$34/share offer price is final, which exceeds all-time high closing price of HK$33.60/share since IPO in 2010. EUR6 billion is equivalent to a PE of 52.17x, higher than peers.
Deploying China's sinking market is “a good story full of imagination”. However, it may fail to bring expected profits considering increasing competition/potential price war, leading to uncertain future performance growth.
For minority shareholders, this privatization provides an attractive opportunity to monetise their investments at a premium over market price. We don't think the current "technical bull market" to be lasting. 


L'Occitane (973.HK) Privatization - The Offer Price Is Good Enough

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>In the 29th April HK$34/share <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0429/2024042905713.pdf" target="_blank" rel="noopener">VGO announcement</a>, a share scrip alternative may be afforded if 10% of <a href="https://www.smartkarma.com/entities/l-occitane-international-sa" target="_blank" data-smartkarma-citation="entities:6772:1" rel="noopener">L'Occitane (973 HK)</a>'s disinterested shareholders expressed interest by the 15th May</li>
<li>That pre-condition has been <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0516/2024051601273.pdf" target="_blank" rel="noopener">satisfied</a>. However, we are none the wiser whether you receive shares of the levered-up Bidco, at some undetermined scrip ratio; or keep shares of L’Occitane as-is.</li>
<li>Some shareholders, like Butler Hall, considered terms low-balled. They now have the option to rollover. But there are still other large activists on the register, whose intentions are not known. </li>
</ul>


In the 29th April HK$34/share VGO announcement, a share scrip alternative may be afforded if 10% of L'Occitane (973 HK)'s disinterested shareholders expressed interest by the 15th May
That pre-condition has been satisfied. However, we are none the wiser whether you receive shares of the levered-up Bidco, at some undetermined scrip ratio; or keep shares of L’Occitane as-is.
Some shareholders, like Butler Hall, considered terms low-balled. They now have the option to rollover. But there are still other large activists on the register, whose intentions are not known. 


L'Occitane (973 HK): On Activism And The Scrip Alternative

<ul>
<li>
<a href="https://www.smartkarma.com/entities/l-occitane-international-sa" target="_blank" data-smartkarma-citation="entities:6772:1" rel="noopener">L'Occitane (973 HK)</a> announced that the share alternative pre-condition was satisfied. However, The share alternative offer is at the offeror’s discretion and with the consent of the financing parties. </li>
<li>The share alternative offer poses a dilemma due to the requirement to satisfy the minimum acceptance condition while not breaching the upper limit of the share alternative offer.</li>
<li>The share alternative offer is a play on higher multiples by relisting the business. At HK$50.00, L’Occitane would trade in line with its median global beauty peers’ multiples.</li>
</ul>



L'Occitane (973 HK) announced that the share alternative pre-condition was satisfied. However, The share alternative offer is at the offeror’s discretion and with the consent of the financing parties. 
The share alternative offer poses a dilemma due to the requirement to satisfy the minimum acceptance condition while not breaching the upper limit of the share alternative offer.
The share alternative offer is a play on higher multiples by relisting the business. At HK$50.00, L’Occitane would trade in line with its median global beauty peers’ multiples.


L’Occitane (973 HK): Dilemma as the Share Alternative Pre-Condition Met

Analyst

Steve Zhou, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/l-occitane-international-sa" target="_blank" data-smartkarma-citation="entities:6772:1" rel="noopener">L'Occitane (973 HK)</a> announced after market close yesterday that the controlling shareholder has terminated the potential general offer. </li>
<li>Shares trade at a significant discount to global cosmetics peers and its own historical trading range, while brands' growth momentum remain intact. </li>
<li>Take advantage of any potential significant sell-down caused by the drop of the privatization attempt. </li>
</ul>



L'Occitane (973 HK) announced after market close yesterday that the controlling shareholder has terminated the potential general offer. 
Shares trade at a significant discount to global cosmetics peers and its own historical trading range, while brands' growth momentum remain intact. 
Take advantage of any potential significant sell-down caused by the drop of the privatization attempt. 


L'Occitane (973 HK):  Underlying Fundamentals Intact

Hong Kong

Chow Tai Fook Jewellery Group Limited retails jewelry.  The Company sells rings, necklaces, earrings, pendants, bracelets, and small statues.  Chow Tai Fook Jewellery operates retail stores in China, Hong Kong, Macau, Taiwan, Malaysia, and Singapore.

Luk Fook Holdings (International) Limited retails jewellery. The Company engages in the sourcing, designing, wholesaling and retailing of a variety of platinum and gold jewellery, gold ornaments, gem-set jewellery, natural jadeites, gemstones, and other related products. Luk Fook offers its products in Hong Kong, Mainland China, Macau, Singapore, the United States and Canada.

Chow Sang Sang Holdings International Limited manufactures and retails gold and gem-set jewelry products.  The Company also retails watches, wholesales precious metals, invests in real estate, provides securities and commodity brokerage services, and trades in gold bullion.

Pou Sheng International (Holdings) Limited retails and wholesales sportswear, including sports footwear, apparel and accessories.

Dickson Concepts (International) Limited, through its subsidiaries, sells watches and fashion products.  The Company also trades luxury goods, and provides management and technical services.

Symphony Holdings Limited, through its subsidiaries, manufactures and trades footwear products.  The Company also invests in properties.

Giordano International Limited, through its subsidiaries, retails and distributes casual apparel and accessories under theGiordano, Giordano Ladies, Giordano Junior, BSX and Concepts One brands.

Sa Sa International Holdings Limited, through its subsidiaries, retails and wholesales cosmetics. The Company also provides beauty and health club services to members.

Glorious Sun Enterprises Limited, through its subsidiaries, retails and exports casual wear apparel.  The Company also manufactures casual wear products and trades fabric.

Oriental Watch Holdings Limited, through its subsidiaries, trades watches and invests in properties.

JB Hi-Fi Limited is a music and electronic goods retailer in Australia.  The Company operates stores at sites located in most Australian States.  Products include consumer electronics, car sound systems, music and DVDs.

ABC-MART, INC. plans, develops, wholesales, and retails shoes.  The Company also plans and develops brand name shoes such as VANS and G.T. HAWKINS.  ABC-Mart imports and wholesales shoes, apparel, bags, and sundries as well.

Abercrombie & Fitch Co.  a specialty retailer that operates stores and direct-to-consumer operations. Through these channels, the Company sells: casual sportswear apparel, including knit and woven shirts, graphic t-shirts, fleece, jeans and woven pants, shorts, sweaters, and outerwear; personal care products; and accessories for men, women and kids.

HIKARI TSUSHIN, INC. is a mobile telecommunication service subscription agency. The Company also operates telecommunication services stores, HIT SHOP, which sell cellular telephones, and related goods.  Hikari Tsushin also sells office automation equipment and insurance.

Five Below, Inc. operates as a specialty value retailer. The Company offers products such as crafts, party, candy, sports, media, and seasonal products. Five Below serves its customers throughout the United States.

The Gap, Inc., is an international specialty retailer operating retail and outlet stores.  The Company sells casual apparel, accessories and personal care products for men, women, and children. The Gap operates stores in the United States, Canada, the United Kingdom, France, Ireland, and Japan.

Urban Outfitters, Inc. operates retail stores and direct response, including a catalog and Web sites.  The Company's Urban Outfitters and Anthropologie retail concepts sell fashion apparel, accessories, and household and gift merchandise. Urban also designs and markets young women's casual wear which it provides to the Company's retail operations and sells to retailers worldwide.

RH distributes home furnishing products. The Company offers products such as furniture, lighting, textiles, bathware, decor, outdoor, and garden, as well as baby and child products. RH distributes its products through retail stores, catalogs, and websites.

American Eagle Outfitters, Inc. retails men's and women's casual apparel, footwear, outerwear, and accessories.  The Company's products include jeans, khakis, T-shirts, and other similar apparel.  American Eagle operates in the United States.

Zhongsheng Group Holdings Ltd. retails automobiles.  The Company imports and retails primarily luxury and mid- to high-end automobile brands.

L'Occitane International S.A. is a global, natural and organic ingredient based cosmetics and well-being products enterprise.  The Company designs, manufactures and markets a wide range of cosmetics and well-being products based on natural and organic ingredients sourced principally from or near Provence.

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

L'Occitane (973 HK)

Merger Arb Mondays (20 May) - L'Occitane, China TCM, SciClone, Malaysia Airports, I'rom, Hollysys

This week, the highest gross spreads are HEC Pharma (84.7%), Hollysys (16.5%), QV Equities (9.1%), Ansarada (8.7%), Malaysia Airports (8.3%), China...

Arun George

L'Occitane (973.HK) Privatization - The Offer Price Is Good Enough

The Offeror has received valid expressions of interest from Minority Shareholders holding, in aggregate, not less than 10% of Disinterested Shares....

Xinyao (Criss) Wang

L'Occitane (973 HK): On Activism And The Scrip Alternative

The Offeror prevaricating over the scrip alternative, despite sizeable interest; plus an activist potentially able to blockthe deal; expect shares...

David Blennerhassett

L'Occitane (973 HK): Underlying Fundamentals Intact

L'Occitane (973 HK)'s controlling shareholder terminates potential privatization offer, but the company's growth prospects remain strong. Take...

Steve Zhou, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Merger Arb Mondays (20 May) - L'Occitane, China TCM, SciClone, Malaysia Airports, I'rom, Hollysys

This week, the highest gross spreads are HEC Pharma (84.7%), Hollysys (16.5%), QV Equities (9.1%), Ansarada (8.7%), Malaysia Airports (8.3%), China...

Arun George

L'Occitane (973.HK) Privatization - The Offer Price Is Good Enough

The Offeror has received valid expressions of interest from Minority Shareholders holding, in aggregate, not less than 10% of Disinterested Shares....

Xinyao (Criss) Wang

L'Occitane (973 HK): On Activism And The Scrip Alternative

The Offeror prevaricating over the scrip alternative, despite sizeable interest; plus an activist potentially able to blockthe deal; expect shares...

David Blennerhassett

L’Occitane (973 HK): Dilemma as the Share Alternative Pre-Condition Met

While a positive, the share alternative offer needs to balance the requirement to satisfy the minimum acceptance condition while not breaching the...

Arun George

L'Occitane (973 HK): Underlying Fundamentals Intact

​L'Occitane (973 HK)'s controlling shareholder terminates potential privatization offer, but the company's growth prospects remain strong. Take...

Steve Zhou, CFA

L'Occitane (973 HK)'s controlling shareholder terminates potential privatization offer, but the company's growth prospects remain strong. Take...