Category

Daily Briefs

Nov 18
0

Daily Brief Quantitative Analysis: KRX Foreign Holding Weekly (Nov 15th): Naver and more

By | Daily Briefs, Quantitative Analysis

In today’s briefing:

  • KRX Foreign Holding Weekly (Nov 15th): Naver, Samsung Electronics
  • TWSE Short Interest Weekly (Nov 15th): Wiwynn, Hon Hai Precision Industry, Ase Industrial, Mitac
  • Thailand Short Interest Weekly (Nov 15th): Delta Electronics, Bumrungrad Hospital, CP ALL, SCC
  • TWSE Foreign Holding Weekly (Nov 15th): Eva Airways, Mitac, TSMC, Quanta Computer

KRX Foreign Holding Weekly (Nov 15th): Naver, Samsung Electronics

By Ke Yan, CFA, FRM

  • We analyzed the changes in foreign holdings of KRX stocks as of Nov 15th which has an aggregated holding worth USD468.9bn.
  • We estimate that foreign flows to be outflows of USD937mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
  • We highlight changes of foreign holdings in Naver, Samsung Electronics.

TWSE Short Interest Weekly (Nov 15th): Wiwynn, Hon Hai Precision Industry, Ase Industrial, Mitac

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of TWSE Stocks as of Nov 15th which has an aggregated short interest worth USD21.5bn.
  • We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
  • We highlight short interest changes in Wiwynn, Hon Hai Precision Industry, Ase Industrial, Mitac, Bizlink, Wistron, Alchip Technologies, Lite-On Technology.

Thailand Short Interest Weekly (Nov 15th): Delta Electronics, Bumrungrad Hospital, CP ALL, SCC

By Ke Yan, CFA, FRM

  • We analyzed the changes in short interest of Stock Exchange of Thailand as of Nov 15th.We estimate that they had an aggregated short interest worth USD2.3bn.
  • We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
  • We highlight short interest changes in Delta Electronics, Bumrungrad Hospital, CP ALL, SCC.

TWSE Foreign Holding Weekly (Nov 15th): Eva Airways, Mitac, TSMC, Quanta Computer

By Ke Yan, CFA, FRM

  • We analyzed the changes in foreign holdings of TWSE Stocks as of Nov 15th which has an aggregated holding worth USD999.2bn.
  • We estimate that foreign flows to be outflows of USD2,830mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
  • We highlight changes of foreign holdings in Eva Airways, Mitac, TSMC, Quanta Computer, Hon Hai Precision Industry, Chailease, UMC.

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Nov 18
0

Daily Brief ESG: Management Mindset of Believing that Company Growth Is Not the Main Objective Is Hindering Growth and more

By | Daily Briefs, ESG

In today’s briefing:

  • Management Mindset of Believing that Company Growth Is Not the Main Objective Is Hindering Growth

Management Mindset of Believing that Company Growth Is Not the Main Objective Is Hindering Growth

By Aki Matsumoto

  • Listing criteria for TSE Growth Market will be raised to over 4 billion yen in market capitalization after 10 years of listing, but the details are left for further discussion.
  • It is necessary to provide opportunities for founders to exit and recover their capital without relying on an IPO, for example by creating a market for unlisted shares.
  • Switching to a policy of using cash for shareholder returns because of the inability to comply with TSE Growth Market listing maintenance standards is not a fundamental solution.

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Nov 18
0

Daily Brief Event-Driven: Fuji Soft (9749): KKR To Launch at ¥9 and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Fuji Soft (9749): KKR To Launch at ¥9,451, Fuji Soft REJECTS Bain’s Bid – Governance in Shambles
  • Yuanta/​P-Shares Taiwan Div+ ETF Rebalance Preview: 6 Adds, 5 Deletes, Capping, US$3.5bn Trade
  • 7&I (3382) – What If…  A Modest Proposal
  • Xingda (1899 HK): A Surprising Result as Offer Declared Unconditional
  • Merger Arb Mondays (18 Nov) – Henlius, GAPack, Xingda, Seven & I, Fuji Soft, NEC Networks, Macromill
  • Malaysia Airports (MAHB MK): A Firm Offer (Finally)
  • KLCI Index Rebalance Preview: One High Probability Change; One at the Cusp
  • Ping An Healthcare and Technology (1833 HK) – Privatization Ahead?
  • Taiwan Top 50 ETF Rebalance Preview: Shippers Sailing Back Into Indices
  • Xingda (1899 HK): Go Figure As Offer Turns Unconditional

Fuji Soft (9749): KKR To Launch at ¥9,451, Fuji Soft REJECTS Bain’s Bid – Governance in Shambles

By Travis Lundy

  • On Friday 15 November, KKR announced it would launch KKR Tender2 to buy the rest of FujiSoft not purchased in KKR Tender1. Their new price is ¥1 higher than Bain’s.
  • Fuji Soft Inc (9749 JP) announced (J) it supported the KKR2 Tender and rejected the Bain TOB Proposal. KKR1 shareholders are “made whole” at ¥9,451/share. Minimum is 53.22%.
  • The document, however, is a Governance Disaster – an absolute shambles, effectively gaslighting investors at every turn. And now investors can see it was problematic from the start.

Yuanta/​P-Shares Taiwan Div+ ETF Rebalance Preview: 6 Adds, 5 Deletes, Capping, US$3.5bn Trade

By Brian Freitas

  • Using data from the close on 15 November, there could be 6 adds and 5 deletes for the Yuanta/​P-Shares Taiwan Dividend Plus ETF in December.
  • There will also be capping and funding flows that will lead to a one-way turnover of 16.9% and a one-way trade of TWD 57.5bn (US$1.77bn).
  • Short interest is at the highs in most forecast deletes, while the trend is mixed among the potential inclusions.

7&I (3382) – What If…  A Modest Proposal

By Travis Lundy

  • A lot of the talk around the news that Ito family scion Ito Junro had proposed to Seven & I Holdings (3382 JP) an MBO was about thwarting Alimentation Couche-Tard.
  • Several mentioned that this bid – seemingly uncompetitive at the moment – would make ACT back down. I discussed the bid and its repercussions here. 
  • Here I suggest an alternate solution which might get everyone what they want.

Xingda (1899 HK): A Surprising Result as Offer Declared Unconditional

By Arun George

  • On its first closing date on 15 November, Xingda International (1899 HK) declared the Chairman’s offer unconditional as the offeror and concert parties represented 60.76% of outstanding shares. 
  • The result was surprising. The IFA opined that the offer was not fair or reasonable, and the independent Board recommended that the shareholder not accept it. 
  • The CCASS movements suggest that the offer was declared unconditional mainly because friends and family supported the Chairman’s offer. The gross/annualised spread is 1.6%/92.6%.

Merger Arb Mondays (18 Nov) – Henlius, GAPack, Xingda, Seven & I, Fuji Soft, NEC Networks, Macromill

By Arun George

Malaysia Airports (MAHB MK): A Firm Offer (Finally)

By David Blennerhassett

  • Talk about cutting it fine. On the pre-conditional long stop date, the Gateway Development Alliance has now made a firm Offer for Malaysia Airports Holdings (MAHB MK) at RM11/share. 
  • The consortium, led by Khazanah Nasional’s subsidiary UEM Group Bhd and EPF, together with the Abu Dhabi Investment Authority and Global Infrastructure Partners, collectively hold 41.22%. 
  • This is a Tender Offer with a 90% acceptance threshold. “The Joint Offerors reserve the right to revise the level of the Acceptance Condition to a lower level“.

KLCI Index Rebalance Preview: One High Probability Change; One at the Cusp

By Brian Freitas

Ping An Healthcare and Technology (1833 HK) – Privatization Ahead?

By Xinyao (Criss) Wang

  • PAGD’s business model is problematic, leading to continuous shrinking revenue scale. As PAGD will entirely lose competitiveness in the future, the management wants to find a suitable way to “exit”.
  • Privatizing PAGD at low price and integrating it into the Ping An Group’s system is a good choice. In other words, Ping An hopes other shareholders to choose cash dividends.
  • Due to high tax, Hong Kong Stock Connect investors would prefer to sell in advance. Arbitrageurs can wait until stock price drops then make decisions based on new conversion price.

Taiwan Top 50 ETF Rebalance Preview: Shippers Sailing Back Into Indices

By Brian Freitas

  • Wan Hai Lines (2615 TT) and Yang Ming Marine Transport (2609 TT) are currently in contention to be added to the Yuanta/P-Shares Taiwan Top 50 ETF in December.
  • Passive trackers will need to trade around 0.5x ADV in the inclusions while impact on the forecast deletes is between 0.36-2.2x ADV.
  • Short interest has decreased and is near the lows for the forecast adds while short interest has been increasing in the forecast deletions.

Xingda (1899 HK): Go Figure As Offer Turns Unconditional

By David Blennerhassett

  • Back on the 24 September, tyre component manufacturer Xingda International (1899 HK) announced a zero-premium $1.30/share cash Offer from Liu Jinlan, chairman and executive director.
  • Liu and concert parties held 37.03%, and the Offer was conditional on a 50% acceptance hurdle. The IFA concluded the Offer was not fair.
  • Surprisingly, 23.73% of shares out have tendered, and the Offer is now unconditional in all respects. The Offer will remain open to acceptances until the 29th November.

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Nov 18
0

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Significant Reversal and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Ohayo Japan | Significant Reversal
  • China & HK Strategy: Stocks Exposed to the US and Higher Tariffs
  • Japan Morning Connection: Potential for Ibiden and Renesas to Be Seen as NVDA Plays
  • Silicon Wafers Q324 Area Shipments, Revenue, EBIT, Outlook & More

Ohayo Japan | Significant Reversal

By Mark Chadwick

  • US stocks plummeted on Friday, with the S&P 500 dropping 1.3% and the Nasdaq Composite falling 2.2%.
  • Investors face a sparse economic calendar next week, with Nvidia’s quarterly earnings taking center stage
  • Sony Honda Mobility will showcase its luxury electric vehicle, AFEELA, at CES 2025 in Las Vegas.

China & HK Strategy: Stocks Exposed to the US and Higher Tariffs

By Osbert Tang, CFA

Japan Morning Connection: Potential for Ibiden and Renesas to Be Seen as NVDA Plays

By Andrew Jackson

  • AMAT numbers sends US SPE lower on Friday which should spill over into Japan.
  • Trump’s Energy Secretary nomination may be a short term positive for oil and gas related, longer-term questionable.
  • Both Ibiden and Renesas have potential to be rerated on their NVDA exposure, but market indifferent so far.

Silicon Wafers Q324 Area Shipments, Revenue, EBIT, Outlook & More

By William Keating

  • Silicon wafer area shipments in Q324 amounted to 3,214 million square inches (MSI), up 5.9% QoQ and up 6.8% YoY,
  • Q324 saw the combined revenues from the top four players in the segment reaching $2.5 billion, up 0.5% QoQ and up 6.5% YoY
  • Top 4 EBIT amounted to just $337 million, up 1.5% QoQ but down 38.9% YoY.

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Nov 18
0

Daily Brief Equity Bottom-Up: TSMC Has Increased Its Dividend. Again. It Will Keep Increasing. and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • TSMC Has Increased Its Dividend. Again. It Will Keep Increasing.
  • Taiwan Dual-Listings Monitor: Weakness Could Open TSMC Long Level; ASE Short Interest Keeps Surging
  • Taiwan Tech Weekly: Taiwan Firms to Surge U.S. Investment Due to Trump?; AI PCs & Memory Expansion
  • Tech News This Week: TSMC, Samsung, Amazon / Nvidia, Super Micro, Smartphone ASP Increasing, AI PC
  • Appointment of RFK Jr as the US Health Secretary and a Book Review Of “The Real Anthony Fauci”
  • PC Monitor: Asustek & Lenovo Signal Strong PC Growth, AI PC Expansion in Process
  • Oriental Watch (398 HK)  H1 FY25 and Mgmt Meeting: Resilient 14% Yield Despite Tough Environment

TSMC Has Increased Its Dividend. Again. It Will Keep Increasing.

By Nicolas Baratte

  • TSMC cash dividend has increased by 65% in 2 years or NT$2.75 in 4Q22 to NT$4.50 in 3Q24. It will keep increasing.
  • TSMC is spinning cash. 2nm-16A could increase Capex intensity but still we estimate that quarterly dividend can increase to NT$5.50 in 2025 and NT$6.00 in 2026.
  • Consensus forecasts similar EPS growth for TSMC and ASML: 30% in 2025, 20% in 2026. TSMC is 50% cheaper than ASML. 2025 PEx: TSMC 18x and ASML 28x.

Taiwan Dual-Listings Monitor: Weakness Could Open TSMC Long Level; ASE Short Interest Keeps Surging

By Vincent Fernando, CFA

  • TSMC: +16.7% Premium; Further Market Weakness Could Soon Open Up Good Long Level
  • UMC: -2.1% Discount; Good Level to Go Long the ADR Spread
  • ASE: -0.1% Discount; Premium Completely Broken Down & Local Short Interest Continues to Surge

Taiwan Tech Weekly: Taiwan Firms to Surge U.S. Investment Due to Trump?; AI PCs & Memory Expansion

By Vincent Fernando, CFA

  • Hon Hai, Pegatron, and Quanta Gear Up for Potential U.S. Investment Surge Amid Trump Policy Speculation
  • PC Monitor: Asustek & Lenovo Signal Strong PC Growth, AI PC Expansion in Process
  • Semiconductor Memory Q324 Revenue Close To Historic Highs Even As Decoupling Intensifies 

Tech News This Week: TSMC, Samsung, Amazon / Nvidia, Super Micro, Smartphone ASP Increasing, AI PC

By Nicolas Baratte

  • TSMC: more restrictions on export to China. TSMC can’t make 2nm in US before 2028-29. Lawsuit in Arizona.
  • Korea: special chips act to give chipmakers subsidies and an exemption from a national cap on working hours. Korean engineers only work 52 hours / week. That’s a problem.
  • Amazon more in-house AI chips. Super Micro trying to avoid delisting. Smartphone ASP keep increasing because chip prices are increasing (ie Mediatek, Qualcomm). AI PC reaching 20% in 3Q214. 

Appointment of RFK Jr as the US Health Secretary and a Book Review Of “The Real Anthony Fauci”

By Douglas Kim

  • In this insight, we provide some of the main highlights of the book “The Real Anthony Fauci”, which was written by Robert F. Kennedy Jr. (RFK Jr) in 2021.
  • We discuss how the appointment of RFK Jr could impact some of the major health care stocks in Korea, especially those that are involved in developing and producing vaccines.
  • Although the share prices of many Korean vaccines related stocks have declined materially in the past 2-3 years, RFK Jr becoming the next US Health Secretary could pose further headwinds.

PC Monitor: Asustek & Lenovo Signal Strong PC Growth, AI PC Expansion in Process

By Vincent Fernando, CFA

  • Asustek Guides for 20%+ YoY PC Revenue Growth in 4Q24E;  Lenovo Delivers 17% YoY PC Revenue Growth in CY3Q24
  • AI PCs: A Multi-Year Upgrade Cycle with Rising Average Selling Prices; AI PCs 80% of the PC Market by 2027E
  • Maintain Structural Long View for AI PC Up-Cycle; Asustek, Acer, & Lenovo Well-Positioned Through 2025E

Oriental Watch (398 HK)  H1 FY25 and Mgmt Meeting: Resilient 14% Yield Despite Tough Environment

By Sameer Taneja

  • Oriental Watch reported H1 FY25 revenues/profits down 2.6%/-13.7 % YoY despite the tough retail sales environment, especially in HK (25% of revenues).
  • The company declared a 24.6 HKD cents dividend, equivalent to a 14% dividend yield annualized on the current price.
  • With 62% of the market capitalization in cash, a 7x PE, and a 14% dividend yield (assuming a consistent 100% payout), this is a name to look at.

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Nov 18
0

Daily Brief ECM: SF Holding H Share Listing: AH Discount Views and more

By | Daily Briefs, ECM

In today’s briefing:

  • SF Holding H Share Listing: AH Discount Views
  • Cuscal IPO – Peers Have Traded Up, Decent Margin of Safety from Here
  • Pony AI IPO – Autonomous Valuation
  • ECM Weekly (18th Nov 2024) – SF Holdings, MNC, Swiggy, Sagility, Niva, GMM, Zinka, Kansai, Go Digit
  • CiDi IPO Preview: Uniquely Positioned For Growth In Autonomous Mining and Logistics Trucks

SF Holding H Share Listing: AH Discount Views

By Arun George

  • S.F. Holding (002352 CH), the largest Asian integrated logistics service provider, is premarketing an H Share listing to raise US$1.0-1.5 billion, according to press reports.
  • In SF Holding H Share Listing: Updates Point to Improving Fundamentals, we noted that SF is in good health, with a return to growth, rising margins, and strong cash generation.
  • In this note, we examine the likely discount SF Holding will offer its H Shares compared to the A Shares.

Cuscal IPO – Peers Have Traded Up, Decent Margin of Safety from Here

By Clarence Chu

  • Cuscal (1229Z AU) is looking to raise A$337m (US$218m) in its Australia IPO.
  • Cuscal is an authorized deposit-taking institution (ADI) in Australia that primarily provides financial infrastructure and payment services in Australia.
  • In this note, we look at the updates since our last look-through and share our thoughts on valuation.

Pony AI IPO – Autonomous Valuation

By Sumeet Singh

  • Pony AI (PONY US), an autonomous mobility solutions provider, is looking to raise up to US$195m in its US IPO.
  • As per Frost & Sullivan, Pony AI was among the first companies in China to obtain licenses to operate fully driverless robotaxis in all four Tier-1 cities in China.
  • We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

ECM Weekly (18th Nov 2024) – SF Holdings, MNC, Swiggy, Sagility, Niva, GMM, Zinka, Kansai, Go Digit

By Sumeet Singh

  • Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
  • On the IPOs front, the usual year end deal flow appears to be picking up with US elections now out of the way.
  • On the placements front, Kansai Electric Power (9503 JP) launched a large primary offering, while Varun Beverages (VBL IN) did the same in India.

CiDi IPO Preview: Uniquely Positioned For Growth In Autonomous Mining and Logistics Trucks

By Andrei Zakharov

  • CiDi, a China’s leading provider of AD technology for commercial vehicles, will tap equity markets in Hong Kong for growth capital.
  • The autonomous driving company with focus on autonomous mining and logistics trucks, V2X technologies, and high-performance perception solutions, filed its IPO prospectus.
  • I like CiDi’s leadership position in autonomous mining industry, hyper-growth trajectory and differentiated full-stack autonomous mining solution.

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Nov 18
0

Daily Brief Macro: 2025 High Conviction Idea: Gold and more

By | Daily Briefs, Macro

In today’s briefing:

  • 2025 High Conviction Idea: Gold
  • Fed to Face Accusations of Political Bias as Baseline Policy Outlook Shifts
  • Can Trump Make Equities Great Again?
  • Kerala Smallholders Turn The Heat On Tire Makers; To Cut Supply

2025 High Conviction Idea: Gold

By Cam Hui

  • Gold prices have staged multi-year breakouts in multiple currencies, indicating a long-term bullish outlook.
  • In addition, gold is on the verge of staging relative breakouts against global equity markets that point to multi-year outperformance ahead.
  • The U.S. macro outlook calls for a re-acceleration of inflation, which is also positive for gold.

Fed to Face Accusations of Political Bias as Baseline Policy Outlook Shifts

By Said Desaque

  • Declining political approval ratings were sending a clear message to the Democrats that all was not well during the current post-pandemic economic recovery, notably tight household finances for many.  
  • Markets are discounting only 50 basis points of Fed easing in 2025, raising the spectre of criticism about political bias against the incoming Trump administration’s fiscal policy agenda. 
  • Chairman Powell will argue that policy is data-dependent. The magnitude of recent easing cannot be justified by incoming information over this period, thereby exposing the Fed to potential flak.

Can Trump Make Equities Great Again?

By Cam Hui

  • U.S. equities have surged in the wake of Trump’s electoral victory while stock markets in the rest of the world have been flat to down.
  • While the combination of narrowing global leadership and elevated U.S. valuation are concerns, we remain cautious but not bearish on the U.S. and global equity markets.
  • Fundamental and macro momentum are strong, and there are no signs of reversal in funding costs.

Kerala Smallholders Turn The Heat On Tire Makers; To Cut Supply

By Vinod Nedumudy

  • Consortium appeals to farmers not to sell below INR 200/kg
  • Supply to market expected to fall by 30% in coming days
  • Compound rubber imports go up by 47.5% YoY until Sept

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Nov 18
0

Daily Brief South Korea: SK Bioscience and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Appointment of RFK Jr as the US Health Secretary and a Book Review Of “The Real Anthony Fauci”

Appointment of RFK Jr as the US Health Secretary and a Book Review Of “The Real Anthony Fauci”

By Douglas Kim

  • In this insight, we provide some of the main highlights of the book “The Real Anthony Fauci”, which was written by Robert F. Kennedy Jr. (RFK Jr) in 2021.
  • We discuss how the appointment of RFK Jr could impact some of the major health care stocks in Korea, especially those that are involved in developing and producing vaccines.
  • Although the share prices of many Korean vaccines related stocks have declined materially in the past 2-3 years, RFK Jr becoming the next US Health Secretary could pose further headwinds.

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Nov 18
0

Daily Brief Australia: Cuscal and more

By | Australia, Daily Briefs

In today’s briefing:

  • Cuscal IPO – Peers Have Traded Up, Decent Margin of Safety from Here

Cuscal IPO – Peers Have Traded Up, Decent Margin of Safety from Here

By Clarence Chu

  • Cuscal (1229Z AU) is looking to raise A$337m (US$218m) in its Australia IPO.
  • Cuscal is an authorized deposit-taking institution (ADI) in Australia that primarily provides financial infrastructure and payment services in Australia.
  • In this note, we look at the updates since our last look-through and share our thoughts on valuation.

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Nov 18
0

Daily Brief China: S.F. Holding, Xingda International, Shanghai Henlius Biotech , Ping An Healthcare and Technology, Pony AI, Oriental Watch, CiDi Inc and more

By | China, Daily Briefs

In today’s briefing:

  • SF Holding H Share Listing: AH Discount Views
  • Xingda (1899 HK): A Surprising Result as Offer Declared Unconditional
  • Merger Arb Mondays (18 Nov) – Henlius, GAPack, Xingda, Seven & I, Fuji Soft, NEC Networks, Macromill
  • Ping An Healthcare and Technology (1833 HK) – Privatization Ahead?
  • Xingda (1899 HK): Go Figure As Offer Turns Unconditional
  • Pony AI IPO – Autonomous Valuation
  • Oriental Watch (398 HK)  H1 FY25 and Mgmt Meeting: Resilient 14% Yield Despite Tough Environment
  • CiDi IPO Preview: Uniquely Positioned For Growth In Autonomous Mining and Logistics Trucks

SF Holding H Share Listing: AH Discount Views

By Arun George

  • S.F. Holding (002352 CH), the largest Asian integrated logistics service provider, is premarketing an H Share listing to raise US$1.0-1.5 billion, according to press reports.
  • In SF Holding H Share Listing: Updates Point to Improving Fundamentals, we noted that SF is in good health, with a return to growth, rising margins, and strong cash generation.
  • In this note, we examine the likely discount SF Holding will offer its H Shares compared to the A Shares.

Xingda (1899 HK): A Surprising Result as Offer Declared Unconditional

By Arun George

  • On its first closing date on 15 November, Xingda International (1899 HK) declared the Chairman’s offer unconditional as the offeror and concert parties represented 60.76% of outstanding shares. 
  • The result was surprising. The IFA opined that the offer was not fair or reasonable, and the independent Board recommended that the shareholder not accept it. 
  • The CCASS movements suggest that the offer was declared unconditional mainly because friends and family supported the Chairman’s offer. The gross/annualised spread is 1.6%/92.6%.

Merger Arb Mondays (18 Nov) – Henlius, GAPack, Xingda, Seven & I, Fuji Soft, NEC Networks, Macromill

By Arun George

Ping An Healthcare and Technology (1833 HK) – Privatization Ahead?

By Xinyao (Criss) Wang

  • PAGD’s business model is problematic, leading to continuous shrinking revenue scale. As PAGD will entirely lose competitiveness in the future, the management wants to find a suitable way to “exit”.
  • Privatizing PAGD at low price and integrating it into the Ping An Group’s system is a good choice. In other words, Ping An hopes other shareholders to choose cash dividends.
  • Due to high tax, Hong Kong Stock Connect investors would prefer to sell in advance. Arbitrageurs can wait until stock price drops then make decisions based on new conversion price.

Xingda (1899 HK): Go Figure As Offer Turns Unconditional

By David Blennerhassett

  • Back on the 24 September, tyre component manufacturer Xingda International (1899 HK) announced a zero-premium $1.30/share cash Offer from Liu Jinlan, chairman and executive director.
  • Liu and concert parties held 37.03%, and the Offer was conditional on a 50% acceptance hurdle. The IFA concluded the Offer was not fair.
  • Surprisingly, 23.73% of shares out have tendered, and the Offer is now unconditional in all respects. The Offer will remain open to acceptances until the 29th November.

Pony AI IPO – Autonomous Valuation

By Sumeet Singh

  • Pony AI (PONY US), an autonomous mobility solutions provider, is looking to raise up to US$195m in its US IPO.
  • As per Frost & Sullivan, Pony AI was among the first companies in China to obtain licenses to operate fully driverless robotaxis in all four Tier-1 cities in China.
  • We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

Oriental Watch (398 HK)  H1 FY25 and Mgmt Meeting: Resilient 14% Yield Despite Tough Environment

By Sameer Taneja

  • Oriental Watch reported H1 FY25 revenues/profits down 2.6%/-13.7 % YoY despite the tough retail sales environment, especially in HK (25% of revenues).
  • The company declared a 24.6 HKD cents dividend, equivalent to a 14% dividend yield annualized on the current price.
  • With 62% of the market capitalization in cash, a 7x PE, and a 14% dividend yield (assuming a consistent 100% payout), this is a name to look at.

CiDi IPO Preview: Uniquely Positioned For Growth In Autonomous Mining and Logistics Trucks

By Andrei Zakharov

  • CiDi, a China’s leading provider of AD technology for commercial vehicles, will tap equity markets in Hong Kong for growth capital.
  • The autonomous driving company with focus on autonomous mining and logistics trucks, V2X technologies, and high-performance perception solutions, filed its IPO prospectus.
  • I like CiDi’s leadership position in autonomous mining industry, hyper-growth trajectory and differentiated full-stack autonomous mining solution.

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