Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Midea Real Estate Holding  / Event-Driven

<ul>
<li>Back on the 23 June 2024, property developer <a href="https://www.smartkarma.com/entities/midea-real-estate-holding-ltd" target="_blank" data-smartkarma-citation="entities:27450:1" rel="noopener">Midea Real Estate Holding (3990 HK)</a> announced the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0623/2024062300057.pdf" target="_blank" rel="noopener">in-specie distribution of its core ops</a>, either in unlisted scrip, or HK$5.90/share in cash.</li>
<li>The in-specie involved distributing 97.8% of Midea's assets (involved in property development and sales); accounting for 95% of revenue and ~91% of profit. All figures as at FY23.</li>
<li>Midea went ex yesterday, closing down just HK$4.87/share. Midea, ex-in-specie, is currently trading at a trailing 0.6x P/B, and 2.3x PER. Pricing looks full.</li>
</ul>


Back on the 23 June 2024, property developer Midea Real Estate Holding (3990 HK) announced the in-specie distribution of its core ops, either in unlisted scrip, or HK$5.90/share in cash.
The in-specie involved distributing 97.8% of Midea's assets (involved in property development and sales); accounting for 95% of revenue and ~91% of profit. All figures as at FY23.
Midea went ex yesterday, closing down just HK$4.87/share. Midea, ex-in-specie, is currently trading at a trailing 0.6x P/B, and 2.3x PER. Pricing looks full.


Midea Real Estate (3990 HK): Now Trading Ex-In-Specie

Analyst

Steve

Equity Bottom-Up

Midea Real Estate Holding  / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/midea-real-estate-holding-ltd" target="_blank" data-smartkarma-citation="entities:27450:1" rel="noopener">Midea Real Estate Holding (3990 HK)</a> announced last night a proposal for distribution in specie of the property development business to shareholders.</li>
<li>The proposal allows shareholders to select between receiving pro rata shares in the PrivateCo, or the cash alternative at HKD5.90 per share, a 57% premium to last close at HKD3.75. </li>
<li>I believe this is a good deal for minority shareholders.  The company (ex. property development business) will continue to be listed on the HKSE after the distribution.  </li>
</ul>



Midea Real Estate Holding (3990 HK) announced last night a proposal for distribution in specie of the property development business to shareholders.
The proposal allows shareholders to select between receiving pro rata shares in the PrivateCo, or the cash alternative at HKD5.90 per share, a 57% premium to last close at HKD3.75. 
I believe this is a good deal for minority shareholders.  The company (ex. property development business) will continue to be listed on the HKSE after the distribution.  


Midea Real Estate (3990 HK):  Divesting Property Development Business (Cash Option At 57% Premium)

<ul>
<li>In an unusual move, property developer <a href="https://www.smartkarma.com/entities/midea-real-estate-holding-ltd" target="_blank" data-smartkarma-citation="entities:27450:1" rel="noopener">Midea Real Estate Holding (3990 HK)</a>  <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0623/2024062300057.pdf" target="_blank" rel="noopener">announced</a> the In-Specie distribution of its core ops, either in unlisted scrip, or HK$5.90/share in cash. </li>
<li>As this is considered a "very substantial disposal", a Scheme-like vote from independent shareholders is required at an EGM. And controlling shareholders - with 81.13% - are required to abstain. </li>
<li>The EGM will be held on the 2 September, with the cash payment expected on (or before) the 18 October. The question is: what is the Rump worth?</li>
</ul>


In an unusual move, property developer Midea Real Estate Holding (3990 HK)  announced the In-Specie distribution of its core ops, either in unlisted scrip, or HK$5.90/share in cash. 
As this is considered a "very substantial disposal", a Scheme-like vote from independent shareholders is required at an EGM. And controlling shareholders - with 81.13% - are required to abstain. 
The EGM will be held on the 2 September, with the cash payment expected on (or before) the 18 October. The question is: what is the Rump worth?


Midea Real Estate (3990 HK): Ex-In-Specie, The Rump Is Rich

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>On 25 June, <a href="https://www.smartkarma.com/entities/midea-real-estate-holding-ltd" target="_blank" data-smartkarma-citation="entities:27450:1" rel="noopener">Midea Real Estate Holding (3990 HK)</a> disclosed an in-specie distribution of its PD&amp;S business through a scrip or cash (HK$5.90 per share, 57.33% premium to undisturbed price).</li>
<li>The key condition will be approval of the distribution by at least 75% of disinterested shareholders (&lt;10% of all disinterested shareholders rejection).</li>
<li>Midea RE will remain listed with an asset-light retained business, which is estimated to be worth HK$1.93. The Group's estimated value is HK$7.83, a 17.6% upside to the last close.</li>
</ul>


On 25 June, Midea Real Estate Holding (3990 HK) disclosed an in-specie distribution of its PD&amp;S business through a scrip or cash (HK$5.90 per share, 57.33% premium to undisturbed price).
The key condition will be approval of the distribution by at least 75% of disinterested shareholders (&lt;10% of all disinterested shareholders rejection).
Midea RE will remain listed with an asset-light retained business, which is estimated to be worth HK$1.93. The Group's estimated value is HK$7.83, a 17.6% upside to the last close.


Midea Real Estate (3990 HK): An In-Specie Distribution to Unlock Value

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.

<ul>
<li>J&amp;T Global Express, a global logistics provider, raised about US$500m in its Hong Kong IPO in Oct 2023. Its pre-IPO investors will be released from its IPO linked lockup soon.</li>
<li>As per Frost &amp; Sullivan (F&amp;S), the firm is the leading express delivery business in Southeast Asia, with a 25.4% market share as per 2023 parcel volume.</li>
<li>In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.</li>
</ul>


J&amp;T Global Express, a global logistics provider, raised about US$500m in its Hong Kong IPO in Oct 2023. Its pre-IPO investors will be released from its IPO linked lockup soon.
As per Frost &amp; Sullivan (F&amp;S), the firm is the leading express delivery business in Southeast Asia, with a 25.4% market share as per 2023 parcel volume.
In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.


J&T Global Express IPO Lock-Up Expiry - Tiny Float with 87%+ Stake Lockup Release Worth >US$8.8bn

China

Midea Real Estate Holding Limited operates as a holding company. The Company, through its subsidiaries, provides property management, property sales, property development, and other services.

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Midea Real Estate Holding (3990 HK)

Midea Real Estate (3990 HK): Now Trading Ex-In-Specie

For those who bought in around the time of my last note, and are still holding - well done. Not the bet I would have taken. Midea is trading full...

David Blennerhassett

Midea Real Estate (3990 HK): Divesting Property Development Business (Cash Option At 57% Premium)

Midea Real Estate (3990 HK) announced last night a proposal for distribution of the property development business to shareholders. The cash...

Steve

Midea Real Estate (3990 HK): Ex-In-Specie, The Rump Is Rich

Pricing appears full . Plus this distribution will result in a significantly smaller cap company - and likely an illiquid one - with a very large...

David Blennerhassett

Midea Real Estate (3990 HK): An In-Specie Distribution to Unlock Value

After the distribution of the asset-heavy business, Midea RE will remain listed as an asset-light business, estimated to be worth HK$1.93. The...

Arun George

J&T Global Express IPO Lock-Up Expiry - Tiny Float with 87%+ Stake Lockup Release Worth >US$8.8bn

J&T Global Express' IPO linked lockup expired over the weeked. The stock has been correcting over the past few weeks, especially with the CCASS...

Sumeet Singh

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