Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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<p>Back on the 10 March 2020, PRC commercial property-play <a href="https://www.smartkarma.com/entities/soho-china-ltd" target="_blank" data-smartkarma-citation="entities:4123:1" rel="noopener">Soho China Ltd (410 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0310/2020031000240.pdf" target="_blank" rel="noopener">announced</a> its shares had been suspended pursuant to the Hong Kong Code on Takeovers and Mergers. Shares gained 47.58% prior to the suspension.</p>
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<p>Various media sources suggested Blackstone Group was seeking to take the company private at a rumoured price of $6/share, a ~100% premium to the undisturbed price of $2.98.</p>
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<p>SOHO subsequently <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0311/2020031100644.pdf" target="_blank" rel="noopener">clarified</a> it had been in "<em>discussions with overseas financial investors to explore the possibility of a strategic partnership ... which may or may not lead to a general offer", </em>but stopped short of mentioning the name of the suitor(s).</p>
<p>Then nothing. After a handful of monthly updates pursuant to the Takeovers Code, stating there <em>were</em> no updates, SOHO <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0813/2020081301248.pdf" target="_blank" rel="noopener">announced</a> on the 13 August that the  "<em>Board wishes to update the shareholders and potential investors of the Company that in relation to the Potential Transaction referred to in the announcement of 11 March 2020, all previous discussions with various investors have now been terminated and have not at this time resulted in the terms for a Potential Transaction being agreed</em>."</p>
<h3>The New News</h3>
<p>SOHO <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0615/2021061500114.pdf" target="_blank" rel="noopener">announced</a> this morning its shares had been suspended pursuant to the Hong Kong Code on Takeovers and Mergers. And just to be consistent, shares gained 27% in the last two days of trading leading into the suspension.</p>
<p>SOHO remains 63.93% held by founder Pan Shiyi and his wife Zhang Xin.</p>
<p>Blackstone kicking tyres again?</p>
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<p>As always, there is more below the fold.</p>
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Back on the 10 March 2020, PRC commercial property-play Soho China Ltd (410 HK) announced its shares had been suspended pursuant to the Hong Kong Code on Takeovers and Mergers. Shares gained 47.58% prior to the suspension.


Various media sources suggested Blackstone Group was seeking to take the company private at a rumoured price of $6/share, a ~100% premium to the undisturbed price of $2.98.


SOHO subsequently clarified it had been in "discussions with overseas financial investors to explore the possibility of a strategic partnership ... which may or may not lead to a general offer", but stopped short of mentioning the name of the suitor(s).
Then nothing. After a handful of monthly updates pursuant to the Takeovers Code, stating there were no updates, SOHO announced on the 13 August that the  "Board wishes to update the shareholders and potential investors of the Company that in relation to the Potential Transaction referred to in the announcement of 11 March 2020, all previous discussions with various investors have now been terminated and have not at this time resulted in the terms for a Potential Transaction being agreed."
The New News
SOHO announced this morning its shares had been suspended pursuant to the Hong Kong Code on Takeovers and Mergers. And just to be consistent, shares gained 27% in the last two days of trading leading into the suspension.
SOHO remains 63.93% held by founder Pan Shiyi and his wife Zhang Xin.
Blackstone kicking tyres again?


As always, there is more below the fold.


SOHO China (410 HK) Suspended Pursuant To The Takeovers Code - Again

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.

Equity Capital Markets

<p>SF Real Estate Investment Trust (SFREIT), a logistics-focused REIT, aims to raise around US$345m in its Hong Kong IPO. SF REIT is sponsored by SF Holdings, listed in Shenzhen.</p><p>We have looked at the background of the deal in our previous note,<a href="https://www.smartkarma.com/insights/sf-reit-pre-ipo-one-trick-pony-who-s-not-doing-the-trick" target="_blank" rel="noopener"> SF REIT Pre-IPO -One trick pony, who’s not doing the trick</a>.</p><p>In this note, we’ll run the deal through our ECM framework and talk about valuations.</p>

SF Real Estate Investment Trust (SFREIT), a logistics-focused REIT, aims to raise around US$345m in its Hong Kong IPO. SF REIT is sponsored by SF Holdings, listed in Shenzhen.We have looked at the background of the deal in our previous note, SF REIT Pre-IPO -One trick pony, who’s not doing the trick.In this note, we’ll run the deal through our ECM framework and talk about valuations.

SF REIT IPO - Don’t See a Clear Reason to Buy

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.

<p><a href="https://www.smartkarma.com/entities/sf-real-estate-investment-trust" target="_blank" data-smartkarma-citation="entities:31496:1" rel="noopener">SF Real Estate Investment Trust (SF HK)</a> is a REIT formed with an initial focus on income-generating logistics properties in Hong Kong and China. The sponsor is <a href="https://www.smartkarma.com/entities/maanshan-dingtai-rare-a" target="_blank" data-smartkarma-citation="entities:4128:1" rel="noopener">S.F. Holding (002352 CH)</a>. SF REIT will be the first logistics-focused REIT to be listed in Hong Kong.</p><p>SF REIT has launched its IPO with an indicative price range of HK$4.68-5.16 per unit. The total proceeds will be HK$2,433.6-2,683.2 million ($313-345 million) at the price range. Two cornerstone investors will subscribe for $50.0 million of the offer units (15.2% of the offer units at the mid-point of the price range). The cornerstone investors are China Orient International Asset Management and <a href="https://www.smartkarma.com/entities/ci-financial-corp" target="_blank" data-smartkarma-citation="entities:25448:1" rel="noopener">Ci Financial (CIX CN)</a>. </p><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/sf-reit-ipo-initiation-the-reit-flow-of-things" target="_blank" data-smartkarma-citation="insights:50673" rel="noopener">SF REIT IPO Initiation: The REIT Flow of Things</a>,  we noted that SF REIT offers an attractive proposition for investors willing to invest in a niche segment of the Asian REIT sector. However, our valuation analysis suggests that units are fully priced at the minimum offer price. Consequently, we are inclined to give this IPO a pass and wait for a lower entry point. </p></div>

SF Real Estate Investment Trust (SF HK) is a REIT formed with an initial focus on income-generating logistics properties in Hong Kong and China. The sponsor is S.F. Holding (002352 CH). SF REIT will be the first logistics-focused REIT to be listed in Hong Kong.SF REIT has launched its IPO with an indicative price range of HK$4.68-5.16 per unit. The total proceeds will be HK$2,433.6-2,683.2 million ($313-345 million) at the price range. Two cornerstone investors will subscribe for $50.0 million of the offer units (15.2% of the offer units at the mid-point of the price range). The cornerstone investors are China Orient International Asset Management and Ci Financial (CIX CN). In SF REIT IPO Initiation: The REIT Flow of Things,  we noted that SF REIT offers an attractive proposition for investors willing to invest in a niche segment of the Asian REIT sector. However, our valuation analysis suggests that units are fully priced at the minimum offer price. Consequently, we are inclined to give this IPO a pass and wait for a lower entry point. 

HK/China Equity Long-Short

Osbert Tang, CFA

<p>In this Insight, we take a look on <a href="https://www.smartkarma.com/entities/sf-real-estate-investment-trust" target="_blank" data-smartkarma-citation="entities:31496:1" rel="noopener">SF Real Estate Investment Trust (SF HK)</a> (SF REIT), which is a proposed REIT listing in Hong Kong with <a href="https://www.smartkarma.com/entities/maanshan-dingtai-rare-a" target="_blank" data-smartkarma-citation="entities:4128:1" rel="noopener">S.F. Holding (002352 CH)</a> (SFH) as its sponsor. The REIT will initially have three logistics properties in its portfolio, one in Hong Kong and two in China (Foshan and Wuhu). Having a gross lettable area of 307,990.8 sq.m., the appraised value of these properties amounted to HK$6.1bn.</p><p>On balance and based on the information in the application proof prospectus, we view the REIT positively. Key positives are: 1.) quality assets; 2.) stable profit and cash flow; and 3.) potential injection. On the other hand, the key negatives are: 1.) focus on HK; 2.) reliance on SFH; and 3.) small size.</p>

In this Insight, we take a look on SF Real Estate Investment Trust (SF HK) (SF REIT), which is a proposed REIT listing in Hong Kong with S.F. Holding (002352 CH) (SFH) as its sponsor. The REIT will initially have three logistics properties in its portfolio, one in Hong Kong and two in China (Foshan and Wuhu). Having a gross lettable area of 307,990.8 sq.m., the appraised value of these properties amounted to HK$6.1bn.On balance and based on the information in the application proof prospectus, we view the REIT positively. Key positives are: 1.) quality assets; 2.) stable profit and cash flow; and 3.) potential injection. On the other hand, the key negatives are: 1.) focus on HK; 2.) reliance on SFH; and 3.) small size.

SF REIT Pre-IPO: Initial Thoughts on S.F. Holding's (002352 CH) Logistics REIT In HK

Jinmao Hotel & Jinmao (China) Hotel Investments and Management Limited / Event-Driven

Jinmao Hotel & Jinmao (China) Hotel Investments and Management Limited

<p><a href="https://www.smartkarma.com/entities/jinmao-hotel-jinmao-china-hotel-investments-and-management-limited" target="_blank" data-smartkarma-citation="entities:16994:1" rel="noopener">Jinmao Hotel &amp; Jinmao (China) Hotel Investments and Management Limited (6139 HK)</a> is a fixed single investment trust with a focus on the Chinese hospitality industry. After market close on Friday, it announced a privatisation offer by way of a scheme of arrangement from <a href="https://www.smartkarma.com/entities/china-jinmao-holdings-group" target="_blank" data-smartkarma-citation="entities:35:1" rel="noopener">China Jinmao Holdings (817 HK)</a>, the controlling shareholder with a 66.77% stake. China Jinmao will offer HK$4.80 per stapled unit. The bid represents a premium of 30.4% over the closing price of HK$3.68 per share stapled unit on the last trading day (5 June 2020). China Jinmao has received irrevocables from independent unitholders representing 21.04% of the total share stapled units in issue.</p><div class="content-highlight"><p>The key condition precedents are the headcount test (majority in the number of unitholders other than the offeror) along with the scheme approved by at least 75% independent unitholders and &lt;10% rejection by all independent unitholders. Overall, we believe that the privatisation bid will be successful. </p></div>

Jinmao Hotel &amp; Jinmao (China) Hotel Investments and Management Limited (6139 HK) is a fixed single investment trust with a focus on the Chinese hospitality industry. After market close on Friday, it announced a privatisation offer by way of a scheme of arrangement from China Jinmao Holdings (817 HK), the controlling shareholder with a 66.77% stake. China Jinmao will offer HK$4.80 per stapled unit. The bid represents a premium of 30.4% over the closing price of HK$3.68 per share stapled unit on the last trading day (5 June 2020). China Jinmao has received irrevocables from independent unitholders representing 21.04% of the total share stapled units in issue.The key condition precedents are the headcount test (majority in the number of unitholders other than the offeror) along with the scheme approved by at least 75% independent unitholders and &lt;10% rejection by all independent unitholders. Overall, we believe that the privatisation bid will be successful. 

Jinmao Hotel’s Privatisation Bid from China Jinmao

Hong Kong

Hui Xian Real Estate Investment Trust is a real estate investment trust. The trust's sole real estate investment interest at the time of its listing is its investment interest in the Oriental Plaza in Beijing.

Sunlight Real Estate Investment Trust is a real estate investment trust that invests in a portfolio of office and retail properties throughout Hong Kong.

Spring Real Estate Investment Trust is a real estate investment trust formed primarily to own and invest in high quality income-producing real estate in Asia.

Prosperity REIT is a real estate investment trust formed primarily to own and invest in commercial properties, with exposure to the office and industrial office sectors in Hong Kong.

Regal Real Estate Investment Trust is a real estate investment trust that invests in hotel properties.

Regal Real Estate Investment Trust (1881 HK)

China Merchants Commercial Real Estate Investment Trust operates as a Hong Kong collective investment scheme. The Company invests primarilyin income-generating properties and uses the income to provide stable returns to itsunitholders. China Merchants Commercial Real Estate Investment Trust provides services in Hong Kong.

China Merchants Commercial REIT (1503 HK)

C C Land Holdings Limited, through its subsidiaries, develops and invests in properties in Western China. The company also manufactures and trades packaging products and luggage, and invests in treasuries as well.

Poly Property Group Co., Ltd. develops, invests in, and manages properties in China.  The Company develops mid- to high-end residential and commercial projects in first-tier and second-tier provincial capitals in Central and Southwestern China.

Tian An China Investments Co Ltd, through its subsidiaries, develops and manages properties, and provides agency services.  The Company also sells construction materials.

K Wah International Holdings Limited is principally involved in property development and investment in Hong Kong, Mainland China and Singapore. The Company also holds an interest in Galaxy Entertainment Group.

Frasers Hospitality Trust operates as a real estate investment trust. The Trust owns, operates and invests in hotels and serviced residences.

Universal Health Realty Income Trust is a real estate investment trust that invests in healthcare and human service related facilities, including acute care hospitals, behavioral healthcare facilities, rehabilitation hospitals, sub-acute care facilities, surgery centers, childcare centers and medical office buildings.

Universal Health Realty Income Trust (UHT US)

Charter Hall Social Infrastructure REIT operates as a real estate investment trust. The Company invests in social infrastructure properties, as well as provides assets and capital management services. Charter Hall Social Infrastructure serves clients in Australia and New Zealand.

Charter Hall Social Infrastructure REIT (CQE AU)

Summit Hotel Properties, Inc. is a real estate investment trust.  The trust invests in hotels in the United States that do not serve food and beverages and serve the middle and upscale markets.  Most of the hotels are franchised from brand name hotel companies.

Whitestone REIT is a real estate investment trust.  The Trust invests in and operates retail, industrial and office properties.

Global One Real Estate Investment Corp., Ltd. is a real estate investment trust (REIT) that invests in income producing properties.  The Company mainly invests in office buildings in metropolitan, Chubu, and Kinki areas.

Global One Real Estate Investment Corp (8958 JP)

Hankyu Hanshin REIT, Inc. is a real estate investment trust (REIT). The Company invests in real estate properties such as commercial and office buildings.

Axis Real Estate Investment Trust is a real estate investment trust that owns and invests in a portfolio of commercial, office and office/retail real estate located in Malaysia. The portfolio includes Axis Business Park, Menara Axis, Crystal Plaza, Infinite Centre and Axis Plaza.

Gladstone Commercial Corporation was created to invest in and own net leased industrial and commercial real estate property and making long-term industrial and commercial mortgage loans.  The company is actively seeking and evaluating properties for potential acquisition or mortgage financing.

Property for Industry Limited is a property company that invests in New Zealand industrial properties. The Company's property portfolio includes sites in Auckland, Hamilton, Tauranga, Wellington and Christchurch.

Yuexiu Real Estate Investment Trust invests in a diverse portfolio of income producing properties which are used primarily for office, retail, and other commercial purposes in China.

Yuexiu Real Estate Investment Trust (405 HK)

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Yuexiu Real Estate Investment Trust (405 HK)

SOHO China (410 HK) Suspended Pursuant To The Takeovers Code - Again

With shares suspended, nothing to be done. Separately, Spring REIT is trading 40% below the 2018 Offer price of $.85/share.

David Blennerhassett

SF REIT IPO - Don’t See a Clear Reason to Buy

SF Real Estate Investment Trust (SFREIT), a logistics-focused REIT, aims to raise around US$345m in its Hong Kong IPO. SF REIT is sponsored by SF...

Sumeet Singh

SF REIT IPO: Valuation Insights

SF REIT has launched its IPO to raise $313-345 million at the price range. Our valuation analysis suggests that units are fully priced at the...

Arun George

SF REIT Pre-IPO: Initial Thoughts on S.F. Holding's (002352 CH) Logistics REIT In HK

SF REIT will be an interesting REIT given its close tie with SF Holding. We see the huge potential for future acquisitions from the sponsor a clear...

Osbert Tang, CFA

Jinmao Hotel’s Privatisation Bid from China Jinmao

Jinmao Hotel & Jinmao (China) Hotel Investments and Management Limited (6139 HK) is a fixed single investment trust with a focus on the Chinese...

Arun George

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52-week Range

Market Cap (USDm)

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