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>
<a href="https://www.smartkarma.com/entities/cimc-vehicles-group-co-ltd" target="_blank" data-smartkarma-citation="entities:28012:1" rel="noopener">CIMC Vehicle Group Co Ltd (1839 HK)</a> possible H Share buyback offer, excluding <a href="https://www.smartkarma.com/entities/china-international-marine-cntnrs-gp-ltd" target="_blank" data-smartkarma-citation="entities:11752:1" rel="noopener">China International Marine Cntnrs Gp (2039 HK)</a>’s shares, is HK$7.00, an 8.7% premium to the undisturbed price. </li>
<li>The key condition is approval by at least 75% of independent H Shareholders (&lt;10% of all independent H Shareholders rejection). There could also be a 90% minimum acceptance condition.</li>
<li>The offer is light, but independent H shareholders holding blocking stakes will likely be supportive. The final offer will be made on “same or better terms”, suggesting a potential bump.</li>
</ul>



CIMC Vehicle Group Co Ltd (1839 HK) possible H Share buyback offer, excluding China International Marine Cntnrs Gp (2039 HK)’s shares, is HK$7.00, an 8.7% premium to the undisturbed price. 
The key condition is approval by at least 75% of independent H Shareholders (&lt;10% of all independent H Shareholders rejection). There could also be a 90% minimum acceptance condition.
The offer is light, but independent H shareholders holding blocking stakes will likely be supportive. The final offer will be made on “same or better terms”, suggesting a potential bump.


CIMC Vehicles (1839 HK): Possible H Share Buyback Offer

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>What is new? On 23 Nov, SANY AWP (三一高空机械) signed an agreement with the municipal government of Huzhou, Zhejiang (source).</li><li>According to the agreement, SANY AWP will spend &gt;RMB10bn to build a production base for aerial work platform (AWP) and research centre in Wuxing District, Huzhou.</li><li>Upon the completion of the construction, the annual capacity of AWP is expected to reach 150k units, covering various types of boom lift, scissors lift and large-size intelligent AWP models.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

What is new? On 23 Nov, SANY AWP (三一高空机械) signed an agreement with the municipal government of Huzhou, Zhejiang (source).According to the agreement, SANY AWP will spend &gt;RMB10bn to build a production base for aerial work platform (AWP) and research centre in Wuxing District, Huzhou.Upon the completion of the construction, the annual capacity of AWP is expected to reach 150k units, covering various types of boom lift, scissors lift and large-size intelligent AWP models.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Huge AWP Expansion Plan by SANY Points to Deterioration of Competitive Landscape

<ul><li>What is new? The European Commission announced yesterday (13 Nov) that it will initiate an anti-dumping proceeding concerning imports of mobile access equipment (MAE, or AWP) from China.</li><li>While this looks negative to the Chinese AWP manufacturers at first glance, we think the estimated investigation time of 13-14 months will provide the Chinese manufacturers with time to take measures to mitigate the potential impact.</li><li>For instance, they can localize their AWP production overseas to avoid the potential duties. Besides, given that different tariffs may be applied, manufacturers with more experience in dealing with the investigation will have the chance to fight for lower tariffs.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

What is new? The European Commission announced yesterday (13 Nov) that it will initiate an anti-dumping proceeding concerning imports of mobile access equipment (MAE, or AWP) from China.While this looks negative to the Chinese AWP manufacturers at first glance, we think the estimated investigation time of 13-14 months will provide the Chinese manufacturers with time to take measures to mitigate the potential impact.For instance, they can localize their AWP production overseas to avoid the potential duties. Besides, given that different tariffs may be applied, manufacturers with more experience in dealing with the investigation will have the chance to fight for lower tariffs.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

<ul><li>Four companies reported their 3Q23 results last night. Weichai Power and Zoomlion reported better-than-expected results, while SANY Heavy and Jiangsu Hengli are below expectations.</li><li>All of them reported gross margin expansion but very different revenue growth trends due to different product mixes and geographic focuses.</li><li>All of them reported declines in net finance income due to the volatility of FX rates. Weichai Power and Zhejiang Dingli (reported over the weekend) remain our sector key picks.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Four companies reported their 3Q23 results last night. Weichai Power and Zoomlion reported better-than-expected results, while SANY Heavy and Jiangsu Hengli are below expectations.All of them reported gross margin expansion but very different revenue growth trends due to different product mixes and geographic focuses.All of them reported declines in net finance income due to the volatility of FX rates. Weichai Power and Zhejiang Dingli (reported over the weekend) remain our sector key picks.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Construction Machinery & HDT – 3Q23 Earnings Review

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>While valuations for <a href="https://www.smartkarma.com/entities/lonking-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3944:1" rel="noopener">Lonking Holdings (3339 HK)</a> do not appear expensive, there is a risk that the 2H23 earnings outlook is weaker than expected. This opens room for disappointment.</li>
<li>There is no sign that domestic sales have picked up and Jul-Aug was still down significantly. Meanwhile, the strong export in 1H23 has not sustained in the last two months. </li>
<li>The weaker A-share market so far in 2H23 also does not bode well for investment gains, which are important contributors to the impressive earnings rebound in 1H23.</li>
</ul>


While valuations for Lonking Holdings (3339 HK) do not appear expensive, there is a risk that the 2H23 earnings outlook is weaker than expected. This opens room for disappointment.
There is no sign that domestic sales have picked up and Jul-Aug was still down significantly. Meanwhile, the strong export in 1H23 has not sustained in the last two months. 
The weaker A-share market so far in 2H23 also does not bode well for investment gains, which are important contributors to the impressive earnings rebound in 1H23.


Lonking (3339 HK): Between a Rock and a Hard Place

China

Zoomlion Heavy Industry Science and Technology Co., Ltd.manufactures and markets construction machinery.  The Company's products include concrete machinery, cranes, road machinery, drilling equipment, and other heavy construction equipment.  Zoomlion also produces environmental machinery and satellite navigation products.

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Zoomlion Heavy Industry S A (000157 CH)

Huge AWP Expansion Plan by SANY Points to Deterioration of Competitive Landscape

What is new? On 23 Nov, SANY AWP (三一高空机械) signed an agreement with the municipal government of Huzhou, Zhejiang (source).

CMB International

China Construction Machinery

The European Commission announced yesterday (13 Nov) that it will initiate an anti-dumping proceeding concerning imports of mobile access equipment...

CMB International

China Construction Machinery & HDT – 3Q23 Earnings Review

Four companies reported their 3Q23 results last night. Weichai Power and Zoomlion reported better-than-expected results, while SANY Heavy and...

CMB International

Lonking (3339 HK): Between a Rock and a Hard Place

Lonking's valuations are not too expensive, but 2H23 earnings may disappoint. Domestic sales have not improved, strong export in 1H23 not...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

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CIMC Vehicles (1839 HK): Possible H Share Buyback Offer

The offer is light, but independent H shareholders holding blocking stakes will likely be supportive. The final offer will be made on “same or...

Arun George

Huge AWP Expansion Plan by SANY Points to Deterioration of Competitive Landscape

What is new? On 23 Nov, SANY AWP (三一高空机械) signed an agreement with the municipal government of Huzhou, Zhejiang (source).

CMB International

China Construction Machinery

The European Commission announced yesterday (13 Nov) that it will initiate an anti-dumping proceeding concerning imports of mobile access equipment...

CMB International

China Construction Machinery & HDT – 3Q23 Earnings Review

Four companies reported their 3Q23 results last night. Weichai Power and Zoomlion reported better-than-expected results, while SANY Heavy and...

CMB International

Lonking (3339 HK): Between a Rock and a Hard Place

​Lonking's valuations are not too expensive, but 2H23 earnings may disappoint. Domestic sales have not improved, strong export in 1H23 not...

Osbert Tang, CFA

Lonking's valuations are not too expensive, but 2H23 earnings may disappoint. Domestic sales have not improved, strong export in 1H23 not...