In today’s briefing:
- Bud APAC (1876 HK): Nursing a Hangover; Now Comes a Passive Overhang
- IRC (1029 HK)’s MBO’s MGO: Still An Avoid
- Huawei Faces Delays in EV Deliveries
- Two New Chinese Stocks
Bud APAC (1876 HK): Nursing a Hangover; Now Comes a Passive Overhang
- Budweiser Brewing APAC (1876 HK) has seen investors run for the hills over the last year. The halving of the stock price could mean deletion from passive portfolios.
- Other Hong Kong listed brewers, China Resources Beer Holdings (291 HK) and Tsingtao Brewery Co Ltd H (168 HK) have been beaten down too and have underperformed their Asian peers.
- The deletion from passive portfolios could provide a buying opportunity in Budweiser Brewing APAC (1876 HK) at the end of February (or earlier if the stock drops due to positioning).
IRC (1029 HK)’s MBO’s MGO: Still An Avoid
- Back on the 1st November, Nikolai Levitskii, Russian iron-ore play IRC (1029 HK)‘s chairman and largest shareholder, acquired 4.72% of shares out, lifting his stake above 30%, triggering an MGO.
- The Offer is conditional on Levitskii holding more than 50% of shares out. His intention is to maintain IRC’s listing. At the first close, he held 35.77% (5.16% had tendered).
- The current spread is 9.2%. MIC, with 16.67% of shares out, has yet to tender. Nor do I expect them to. Plus IRC is on the OFAC sanction list. Avoid.
Huawei Faces Delays in EV Deliveries
- Huawei Technologies Co. Ltd. is facing trouble in meeting delivery commitments for the first electric vehicle (EV) it has co-developed with auto partner Chery Automobile Co. Ltd., a possible sign of supply chain challenges for the model.
- Some people who placed orders for the Luxeed S7, which is the first electric sedan marketed under Huawei’s Smart Selection business model, recently complained online that they could not receive their cars within the promised timeframe.
- In an effort to mollify the customers, Luxeed announced Monday on social media that it will provide people who placed orders for the Luxeed S7 between Nov. 28 and Jan. 15 with varying cash compensation capped at 10,000 yuan ($1,403), based on their wait time.
Two New Chinese Stocks
- (I didn’t want to send it out right away, because I wanted to proofread my post before sending it, and unfortunately DADA is already up 10% since writing 🙁 )
- Recently Dada Nexus (DADA) , a Chinese last mile delivery service and on demand retail platform reported that about 500mn RMB ($70mn US) of revenue and costs were overstated for the first 3 reported quarters of 2023.
- This news came right after 2 JD executives had taken over management of the company in December last year.
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