Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Given the likelihood of more buybacks and pressure on capital allocation and structuring of the renewable energy business, <a href="https://www.smartkarma.com/entities/cosmo-energy-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:26565:1" rel="noopener">Cosmo Energy (5021 JP)</a> is more of a buy than a sell.</li>
<li>
<a href="https://www.smartkarma.com/entities/olam-group" target="_blank" data-smartkarma-citation="entities:765:1" rel="noopener">Olam Group (OLG SP)</a> is a tricky beast to analyze. A key issue for investors is valuing Olam, ex- Olam Agri, ex- OFI.</li>
<li>Unloved as it is, <a href="https://www.smartkarma.com/entities/yamada-denki-co-ltd" target="_blank" data-smartkarma-citation="entities:641:1" rel="noopener">Yamada Denki (9831 JP)</a> is still cheap. </li>
</ul>


Given the likelihood of more buybacks and pressure on capital allocation and structuring of the renewable energy business, Cosmo Energy (5021 JP) is more of a buy than a sell.

Olam Group (OLG SP) is a tricky beast to analyze. A key issue for investors is valuing Olam, ex- Olam Agri, ex- OFI.
Unloved as it is, Yamada Denki (9831 JP) is still cheap. 


Last Week In SPACE: Cosmo, Olam, Yamada Denki, Jardine Cycle/Astra, Tianneng Power/Battery, Fujitsu

<ul>
<li>The data in this insight is collated from the "shareholding disclosure" link on the HKEx website.</li>
<li>Often there is a corresponding HKEx announcement on the increase - or decrease - in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.</li>
<li>Stocks mentioned include <a href="https://www.smartkarma.com/entities/wwpkg-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:31063:1" rel="noopener">WWPKG Holdings Co Ltd (8069 HK)</a>, <a href="https://www.smartkarma.com/entities/tianyun-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:31104:1" rel="noopener">Tianyun International Holdings (6836 HK)</a>, <a href="https://www.smartkarma.com/entities/yeahka-limited" target="_blank" data-smartkarma-citation="entities:28436:1" rel="noopener">Yeahka Limited (9923 HK)</a>, <a href="https://www.smartkarma.com/entities/hydoo-international-holding" target="_blank" data-smartkarma-citation="entities:11083:1" rel="noopener">GHKGBA (1396 HK)</a>, and <a href="https://www.smartkarma.com/entities/flat-glass-group-ltd" target="_blank" data-smartkarma-citation="entities:1108:1" rel="noopener">Flat Glass (6865 HK)</a>.</li>
</ul>


The data in this insight is collated from the "shareholding disclosure" link on the HKEx website.
Often there is a corresponding HKEx announcement on the increase - or decrease - in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
Stocks mentioned include WWPKG Holdings Co Ltd (8069 HK), Tianyun International Holdings (6836 HK), Yeahka Limited (9923 HK), GHKGBA (1396 HK), and Flat Glass (6865 HK).


Hong Kong CEO & Director Dealings (15 Jan): WWPKG, Tianyun International, Yeahka, Flat Glass

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Jul 8th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short interest changes in Innovent Biologics, Yeahka, CR Beer, Great Wall Motor.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Jul 8th.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short interest changes in Innovent Biologics, Yeahka, CR Beer, Great Wall Motor.


HK Short Interest: Innovent Biologics, Yeahka, CR Beer, Great Wall Motor

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>
<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 scheme document is out with the scheme meeting scheduled for 26 April. The IFA considers the offer to be fair and reasonable. </li>
<li>The headcount test, the key risk, applies unless the amended Cayman Islands Act becomes law before the court meeting date on 26 April. The legislative timetable has not been set. </li>
<li>Current deal probability implies a 65% chance of success, which fairly reflects the deal risk in our view. At last close, the gross spread is 14.2%. </li>
</ul>



Razer Inc (1337 HK)'s scheme document is out with the scheme meeting scheduled for 26 April. The IFA considers the offer to be fair and reasonable. 
The headcount test, the key risk, applies unless the amended Cayman Islands Act becomes law before the court meeting date on 26 April. The legislative timetable has not been set. 
Current deal probability implies a 65% chance of success, which fairly reflects the deal risk in our view. At last close, the gross spread is 14.2%. 


Razer’s Scheme Meeting on 26 April, Headcount Test Still Applicable, IFA Opinion

<div>
Back on the 28 February this year, SaaS provider <a href="https://www.smartkarma.com/entities/china-youzan-limited" target="_blank" data-smartkarma-citation="entities:11467:1" rel="noopener">China Youzan Limited (8083 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/gem/2021/0228/2021022800069.pdf" target="_blank" rel="noopener">announced</a> a pre-conditional Offer by way of a Scheme to take its GEM-listed shares private, then list 51.7%-held Youzan Technology on Hong Kong's mainboard by "way of introduction". Shareholders were to be offered HK$0.1352/share in cash plus an in-specie distribution of 0.05077265 Youzan Technology shares for every China Youzan share held. The total indicative Offer price was HK$2.3088/share, a 30.2% discount to last close. The scrip portion was based on a fair value of RMB35.73/share for Youzan Tech.
</div>
<div>
In <a href="https://skr.ma/qgiJ9" target="_blank" rel="noopener">China Youzan (8083 HK): Proposal Towards Relisting Youzan Tech</a>, I recommended avoiding the stock -  China Youzan was up 283% in the past year, and 44% YTD prior to the Offer announcement. 
</div>
<div>
Disinterested Scheme Shareholders <a href="https://www1.hkexnews.hk/listedco/listconews/gem/2021/0506/2021050602278.pdf" target="_blank" rel="noopener">approved</a> at the First SGM on the 6 May, a rollover arrangement and other side-agreements - not the take-private proposal as was incorrectly reported by some media sources.
At the time, shares were trading at $2.09/share, down 37% since the delisting proposal. 
And shares continued to fall, with double-digit declines on multiple days including 19.5% on the 11 May on significant volume. 
The Scheme Document was expected to be posted on or before the 15 June, but was <a href="https://www1.hkexnews.hk/listedco/listconews/gem/2021/0715/2021071500984.pdf" target="_blank" rel="noopener">delayed</a> on that day to at least the 19 October. 
Reportedly Youzan Tech's listing application had been rejected, however, the wording in the monthly update on the <a href="https://www1.hkexnews.hk/listedco/listconews/gem/2021/0813/2021081300886.pdf" target="_blank" rel="noopener">13 August</a> said "Youzan Technology has been revising features of its application", a slightly varied statement to "Youzan Technology has continued to progress its application with the Stock Exchange" seen in previous monthly <a href="https://www1.hkexnews.hk/listedco/listconews/gem/2021/0715/2021071500984.pdf" target="_blank" rel="noopener">updates</a>. 
Shares touched a low of HK$0.71/share on the 23 August. 
<h3>The New News</h3>
China Youzan <a href="https://www1.hkexnews.hk/listedco/listconews/gem/2021/0830/2021083000295.pdf" target="_blank" rel="noopener">announced</a> yesterday Youzan Tech has re-filed its application for the listing of shares, which will now be done by way of an offering of new shares, not a listing by introduction. 
Both the scrip ratio and cash portion remain unchanged under China Youzan's delisting transaction, by way of Scheme.
The estimated value per Youzan Tech shares by an independent valuer is now RMB21.76 (~HK$26.20/share), down 39% from the previous indicative price. 
Therefore the proposed consideration for China Youan shareholders is HK$1.4654/share (HK$0.1352 +(HK$0.05077265 x HK$26.20)), a 100.7% premium to last close, but a 55.7% discount to last close ahead of the initial announcement in February this year. 
Shares are up ~16% in the last two trading days, but down 74% since the delisting proposal and 37% adrift of the indicative Offer price in February. Those are pretty grim performance numbers.
There's probably value to be had here at the current level, but there are a multitude of factors at work in arriving at a "fair value." Further delays in the dispatch of the Scheme Doc are feasible. And will the Exchange grant this listing application, when it clearly had issues with the prior submission?
More below the fold.
</div>


Back on the 28 February this year, SaaS provider China Youzan Limited (8083 HK) announced a pre-conditional Offer by way of a Scheme to take its GEM-listed shares private, then list 51.7%-held Youzan Technology on Hong Kong's mainboard by "way of introduction". Shareholders were to be offered HK$0.1352/share in cash plus an in-specie distribution of 0.05077265 Youzan Technology shares for every China Youzan share held. The total indicative Offer price was HK$2.3088/share, a 30.2% discount to last close. The scrip portion was based on a fair value of RMB35.73/share for Youzan Tech.


In China Youzan (8083 HK): Proposal Towards Relisting Youzan Tech, I recommended avoiding the stock -  China Youzan was up 283% in the past year, and 44% YTD prior to the Offer announcement. 


Disinterested Scheme Shareholders approved at the First SGM on the 6 May, a rollover arrangement and other side-agreements - not the take-private proposal as was incorrectly reported by some media sources.
At the time, shares were trading at $2.09/share, down 37% since the delisting proposal. 
And shares continued to fall, with double-digit declines on multiple days including 19.5% on the 11 May on significant volume. 
The Scheme Document was expected to be posted on or before the 15 June, but was delayed on that day to at least the 19 October. 
Reportedly Youzan Tech's listing application had been rejected, however, the wording in the monthly update on the 13 August said "Youzan Technology has been revising features of its application", a slightly varied statement to "Youzan Technology has continued to progress its application with the Stock Exchange" seen in previous monthly updates. 
Shares touched a low of HK$0.71/share on the 23 August. 
The New News
China Youzan announced yesterday Youzan Tech has re-filed its application for the listing of shares, which will now be done by way of an offering of new shares, not a listing by introduction. 
Both the scrip ratio and cash portion remain unchanged under China Youzan's delisting transaction, by way of Scheme.
The estimated value per Youzan Tech shares by an independent valuer is now RMB21.76 (~HK$26.20/share), down 39% from the previous indicative price. 
Therefore the proposed consideration for China Youan shareholders is HK$1.4654/share (HK$0.1352 +(HK$0.05077265 x HK$26.20)), a 100.7% premium to last close, but a 55.7% discount to last close ahead of the initial announcement in February this year. 
Shares are up ~16% in the last two trading days, but down 74% since the delisting proposal and 37% adrift of the indicative Offer price in February. Those are pretty grim performance numbers.
There's probably value to be had here at the current level, but there are a multitude of factors at work in arriving at a "fair value." Further delays in the dispatch of the Scheme Doc are feasible. And will the Exchange grant this listing application, when it clearly had issues with the prior submission?
More below the fold.


China

Yeahka Technology Co., Ltd. operates as a payment-based technology platform. The Company offers products for POS payment and QR code aggregation, as well as provides merchant, financial, and artificial intelligence services. Yeahka Technology serves merchants and consumers in China. 

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Yeahka Limited (9923 HK)

Last Week In SPACE: Cosmo, Olam, Yamada Denki, Jardine Cycle/Astra, Tianneng Power/Battery, Fujitsu

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Hong Kong CEO & Director Dealings (15 Jan): WWPKG, Tianyun International, Yeahka, Flat Glass

The data in this insight is collated from the "shareholding disclosure" link on the HKEx website. These insights also flag those companies where...

David Blennerhassett

HK Short Interest: Innovent Biologics, Yeahka, CR Beer, Great Wall Motor

We highlight week on week short interest changes in Innovent Biologics, Yeahka, CR Beer, Great Wall Motor based on the latest HK SFC short...

Ke Yan, CFA, FRM

Razer’s Scheme Meeting on 26 April, Headcount Test Still Applicable, IFA Opinion

Razer's scheme/court meeting is scheduled for 26 April. The headcount test applies unless the amended Cayman Islands Act becomes law before the...

Arun George

China Youzan (8083 HK): Once Bitten ...

But I would avoid this stock and extremely volatile. Plus there is a question mark over timing, and whether the listing gets Exchange approval. I...

David Blennerhassett

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