In today’s briefing:
- Changyou (CYOU US): Short-Form Merger Dissent Now (Definitely) Permitted
- CSI500 Index Rebalance Preview: 50 Changes; 10% Turnover; US$3.6bn Round-Trip Trade
- ESR Group (1821 HK): Steady Progress
- Lonking (3339 HK): Boom, Boom, Boom
- Lucror Analytics – Morning Views Asia
- BYD (1211 HK) 2024 Result Preview: Expanding in Domestic Market and 19% Upside Left
- Pre-IPO Shanghai Bao Pharmaceuticals – Future Commercialization Is a Test
- Annual Tire Company Results Show Pace Of Change
- Softcare Pre-IPO – Strong Market Penetration but Gross Margins May Be Capped
Changyou (CYOU US): Short-Form Merger Dissent Now (Definitely) Permitted
- In a long-form merger for Cayman incorporated companies, dissenters can petition the Grand Court for determination of fair value. For short form merges, that avenue of dissent was not available.
- But on the 28 January 2021, the Grand Court of the Cayman Islands concluded that shareholders of companies that undertake a ‘short-form’ merger were entitled to dissent.
- Changyou.com (CYOU US) appealed this decision in the Court of Appeal, and was dismissed. Then appealed to the Privy Council. In a judgement handed down yesterday, this was also dismissed.
CSI500 Index Rebalance Preview: 50 Changes; 10% Turnover; US$3.6bn Round-Trip Trade
- With 85% of the review period now complete, we forecast 50 changes (the maximum permitted) for the CSI Smallcap 500 Index at the close on 13 June.
- We estimate a one-way turnover of 10% at the rebalance resulting in a round-trip trade of CNY26.4bn (US$3.6bn). The Information Technology gains at the expense of Healthcare and Consumer Staples.
- The forecast adds have outperformed the forecast deletes and the CSI Smallcap500 Index over the last 6 months. The best part is that the volatility of the trade is very low.
ESR Group (1821 HK): Steady Progress
- ESR Group (1821 HK)’s preconditional scheme offer from the consortium is either cash (HK$13.00), scrip or a combination of cash/scrip. The offer is final.
- On 7 March, the consortium disclosed two additional irrevocable (3.47% of outstanding shares) and satisfied two regulatory preconditions (UK FCA and Singapore MAS).
- Since announcing the offer, peers have materially derated, lowering the vote risk. At the last close and for an end August payment, the gross/annualised spread is 4.5%/10.1%
Lonking (3339 HK): Boom, Boom, Boom
- Industry sales of wheel loaders and excavators surged 16.5% and 27.2% in 2M25. For Feb alone, the growth rates are even more impressive at 34.4% and 52.8%, respectively.
- Post-CNY, the utilisation hours and rates of construction machinery rose 70.3% YoY and 12.3pp. Market share gain in developing countries will drive exports.
- Government supportive policies announced in NPC will provide support to demand. Current consensus forecasts for profit decline in FY25 are disconnected from industry data.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: China Jinmao, Nickel Industries, Vedanta Resources, Bharti Airtel
- In the US, JOLTS job openings increased slightly to 7.74 mn (7.60 mn e / 7.51 mn revised p) in January, with the job openings rate little changed m-o-m at 4.6%. Layoffs declined for a fourth straight month to the lowest level since June 2024.
- Overall, the JOLTS report showed that the labour market was steady in January, albeit demand for labour could soften in the months ahead.
BYD (1211 HK) 2024 Result Preview: Expanding in Domestic Market and 19% Upside Left
- BYD will release its 2025 annual results on March 24.
- The stock price has risen by 38% since our last buy rating on January 6.
- However, we believe there is still an upside of 19% for the next twelve months.
Pre-IPO Shanghai Bao Pharmaceuticals – Future Commercialization Is a Test
- KJ017 is the first and only recombinant human hyaluronidase to reach NDA stage in China. Bao needs to combine SC Formulations with antibodies. KJ103 may not be a blockbuster variety.
- Considering multiple mature FSH products have been on the market for many years and also been recognized by patients, Bao needs to invest in educating the market/patients to accept SJ02.
- After Series C+ Financing, Post-money valuation reached RMB4.87 billion. However, we think there could be some uncertainties in terms of future commercialization performance of Bao’s three core products.
Annual Tire Company Results Show Pace Of Change
- The tire majors losing volume
- Smaller tire makers gaining prominence
- Most tire majors saw flat or drop in profits
Softcare Pre-IPO – Strong Market Penetration but Gross Margins May Be Capped
- Softcare (SOFT HK) is looking to raise at least US$300m in its upcoming Hong Kong IPO.
- Softcare (SC) is an international hygiene product corporation engaged in the development, manufacturing and sales of baby and feminine hygiene products.
- In this note, we look at the firm’s past performance.
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
Unlock all research summaries