HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

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<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> may potentially receive another takeover proposal from <a href="https://www.smartkarma.com/entities/org-technology-co-ltd-a" target="_blank" data-smartkarma-citation="entities:17510:1" rel="noopener">ORG Technology Co., Ltd. A (002701 CH)</a> which has a 22% market share in the industry.</li>
<li>ORG has every reason to launch such a proposal and given its operational and financial performance, it looks to have the capability to realise good synergy.</li>
<li>CPMC still looks inexpensive relative to the industry based on its PER valuations. No matter what, the 4th largest player <a href="https://www.smartkarma.com/entities/sunrise-group-company-limited" target="_blank" data-smartkarma-citation="entities:25257:1" rel="noopener">Sunrise Group (002752 CH)</a> will now become interesting.</li>
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CPMC Holdings (906 HK) may potentially receive another takeover proposal from ORG Technology Co., Ltd. A (002701 CH) which has a 22% market share in the industry.
ORG has every reason to launch such a proposal and given its operational and financial performance, it looks to have the capability to realise good synergy.
CPMC still looks inexpensive relative to the industry based on its PER valuations. No matter what, the 4th largest player Sunrise Group (002752 CH) will now become interesting.


CPMC Holdings (906 HK): Another Potential Contender

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<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.


China

Sunrise Group Company Limited is a metal containers manufacturer. The Company produces cans and other metal packaging products.

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Sunrise Group (002752 CH)

CPMC Holdings (906 HK): Another Potential Contender

CPMC may receive a takeover proposal from ORG, which has a 22% market share. ORG can achieve synergy and CPMC is still undervalued against the...

Osbert Tang, CFA

CPMC Holdings (906 HK): What's Brewing?

CPMC is likely to be acquired by China Baowu Steel, and it will benefit from synergy with A-share Shanghai Baosteel Packaging. CPMC 1H23 results...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

CPMC Holdings (906 HK): Another Potential Contender

​CPMC may receive a takeover proposal from ORG, which has a 22% market share. ORG can achieve synergy and CPMC is still undervalued against the...

Osbert Tang, CFA

CPMC Holdings (906 HK): What's Brewing?

​CPMC is likely to be acquired by China Baowu Steel, and it will benefit from synergy with A-share Shanghai Baosteel Packaging. CPMC 1H23 results...

Osbert Tang, CFA

CPMC may receive a takeover proposal from ORG, which has a 22% market share. ORG can achieve synergy and CPMC is still undervalued against the...

CPMC is likely to be acquired by China Baowu Steel, and it will benefit from synergy with A-share Shanghai Baosteel Packaging. CPMC 1H23 results...