In today’s briefing:
- ASMPT (522 HK): Don’t Bet on a KKR Privatisation
- GA Pack (468 HK): Crunch Time
- ASMPT (ASM Pacific). 522 HK. M&A. Takeover Target Talk. Déjà Vu ?
- China Resources Beverage Pre-IPO – PHIP Updates – Revenue Slowing, Margins Growing
- CMCDI (133 HK)’s Proposals Light On Detail
- ASMPT (522 HK): KKR’s Proposal Is A Non-Starter
- Quiddity Leaderboard HSTECH Dec 24: Midea Group Question Mark and Final Rankings for Exp ADDs/DELs
- Quiddity Leaderboard HSCEI Dec 24: Two Changes Likely; US$474mn Capping Flows One-Way
- China Resources Beverage Pre-IPO – Updated Thoughts on Valuation
- Pre-IPO China Resources Beverage (PHIP Updates) – Some Points Worth the Attention
ASMPT (522 HK): Don’t Bet on a KKR Privatisation
- Bloomberg reported that KKR has made a non-binding, preliminary approach to taking ASM Pacific Technology (522 HK) private. ASMPT has been the subject of takeover rumours in the past.
- The trading patterns of the substantial shareholders suggest a willingness to exit. However, past privatisation rumours suggest issues with the offeror matching key shareholders’ price expectations.
- A binding proposal is unlikely as the timing would be viewed as opportunistic, with the recent market rally eroding a potential takeover premium and ASMPT’s premium multiple compared to peers.
GA Pack (468 HK): Crunch Time
- Unsurprisingly, the Greatview Aseptic Packaging (468 HK) Board has recommended shareholders vote against the appointment of Shandong Xinjufeng Technology Packaging (301296 CH)’s two director nominees.
- The EGM vote on 18 October is too close to call and depends on Shandong Xinjufeng and management’s ability to rally disengaged minorities to their respective causes.
- Irrespective of the EGM vote results, Shandong Xinjufeng will be keen to launch its offer to ward off the threat of a possible competing offer from management.
ASMPT (ASM Pacific). 522 HK. M&A. Takeover Target Talk. Déjà Vu ?
- The second PE rumoured interest in ASMPT in 18 months, with KKR circling.
- Semiconductor M&A has surged in 2024 YTD with a 33% increase in deal activity compared to 2023.
- ASM’s leadership in TCB, potential growth within HBM, expansion at TSM and enabling the Nvidia Blackwell platform are all reasons for M&A interest.
China Resources Beverage Pre-IPO – PHIP Updates – Revenue Slowing, Margins Growing
- China Resources Beverage (CRB HK) is looking to raise up to US$1bn in its upcoming Hong Kong IPO.
- China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
- In our earlier notes, we talked about the company’s past performance and provided our thoughts on valuations. In this note, we will look at updates from its most recent filings.
CMCDI (133 HK)’s Proposals Light On Detail
- Argyle Street Management (ASM), a 9.01% shareholder in China Merchants China Direct Investments (133 HK), has been (very) publicly angling for change in this closed-end fund. Here is their website.
- The core issue is CMCDI’s P/NAV ratio of 0.41x compared to closed-end fund peers of 0.8x-0.9x.
- CMCDI has finally responded to ASM’s overtures with the prospect of a share buyback and a special dividend. But details are thin on the ground.
ASMPT (522 HK): KKR’s Proposal Is A Non-Starter
- Reportedly – Bloomberg – KKR has made a non-binding proposal for ASM Pacific Technology (522 HK), the world’s leading back-end semiconductor production equipment supplier.
- ASMPT’s largest shareholder, ASM International Nv (ASM NA), with 25%, has been the focus of activists for some time to sell its stake.
- This bid has all the hallmarks of the approach (also cited by Bloomberg) by PAG last year. Which came to nought. From a regulatory standpoint, I can’t see this happening.
Quiddity Leaderboard HSTECH Dec 24: Midea Group Question Mark and Final Rankings for Exp ADDs/DELs
- The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
- In this insight, we take a look at the final rankings of potential ADDs and potential DELs for the December 2024 index rebal event.
- We do not expect any changes for the HSTECH index in December 2024. However, we expect there to be capping flows of US$1,079mn one-way.
Quiddity Leaderboard HSCEI Dec 24: Two Changes Likely; US$474mn Capping Flows One-Way
- The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
- In this insight, we take a look at the final rankings for the HSCEI potential ADDs and potential DELs for the index rebal event in December 2024.
- We see two ADDs/DELs – the same names we had in our last insight. At present, we expect US$474mn capping flows one-way but this can change by early-December 2024.
China Resources Beverage Pre-IPO – Updated Thoughts on Valuation
- China Resources Beverage (CRB HK) is looking to raise up to US$1bn in its upcoming Hong Kong IPO.
- China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
- In our earlier notes, we talked about the company’s past performance and provided our initial thoughts on valuations. In this note, we will relook at valuations post its PHIP updates.
Pre-IPO China Resources Beverage (PHIP Updates) – Some Points Worth the Attention
- Nongfu Spring is able to take a price war to grab market share,but the strategy of CR Beverage forced to cut prices may not work,making its profit margin further decline.
- CR Beverage’s business model is “single business + scale expansion”, worse than “multi-category structure + new product incubation”.Future performance growth may inevitably slow down if without the second growth curve.
- Whether in terms of product/revenue structure, profitability, or sustainability of growth momentum, CR Beverage isn’t as good as Nongfu Spring. Valuation of CR Beverage should be lower than Nongfu Spring.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
