In today’s briefing:
- (Mostly) Asia-Pac M&A: APM Human Services, TCM, Alps Logistics, Fancl, Jeisys Medical, PropertyGuru
- ESR Group (1821 HK): A Rumoured Offer Price Surfaces
- Henlius (2696 HK): Share Alternative Facilitates the Vote
- China Healthcare Weekly (Aug.25)- China TCM 24H1 Profit Warning, Financing Activities, Giant Biogene
- Alibaba Group: A Blend of Growth
- JD.com Inc.: Enhancing Platform Ecosystem For Third-Party Sellers As A Key Growth Catalyst! – Major Drivers
- Tencent Music Entertainment Group: Innovation In Subscription & User Experience & Other Major Drivers
(Mostly) Asia-Pac M&A: APM Human Services, TCM, Alps Logistics, Fancl, Jeisys Medical, PropertyGuru
- I tally 45 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal
- Two new deals were discussed this week: Alimentation Couche-Tard (ATD CN)‘s non-binding proposal for Seven & I Holdings (3382 JP).; and EQT’s Offer for PropertyGuru (PGRU US).
- Key updates took place on APM Human Services (APM AU), TCM (570 HK), GaPack (468 HK), Alps Logistics (9055 JP), Fancl Corp (4921 JP), and Jeisys Medical (287410 KS).
ESR Group (1821 HK): A Rumoured Offer Price Surfaces
- A media outlet that Reports on Deals reported that the consortium will offer HK$14.50 per share, a 22.1% and 61.8% premium to the last close (HK$11.88) and undisturbed price (HK$8.96).
- While not a knockout offer, the consortium’s impending binding proposal suggests confidence that the offer price and structure would gain the support of the substantial shareholders.
- The downside to a deal break is low as ESR’s valuation is undemanding. Its forward EV/EBITDA multiple is at a 30% discount to the median peers’ multiple.
Henlius (2696 HK): Share Alternative Facilitates the Vote
- Shanghai Fosun Pharmaceutical (Group) (2196 HK) announced the Shanghai Henlius Biotech (2696 HK) share alternative offer, subject to proration due to a cap of 8% of outstanding shares.
- The share alternative offer was necessary to facilitate the vote as the HK$24.60 offer is half the HK$49.60 IPO price.
- The co-founders, HenLink and LVC, will likely tender some or all their shares for scrip. At the last close and for the December-end payment, the gross/annualised spread is 7.4%/17.9%.
China Healthcare Weekly (Aug.25)- China TCM 24H1 Profit Warning, Financing Activities, Giant Biogene
- China Traditional Chinese Medicine (570 HK)‘s profit warning suggests weaker-than-expected 2024H1 results, but the interim report is needed for clarity. This is unlikely to negatively affect the company’s privatization plans.
- In 24H1, healthcare investment and financing activities have slowed, and it will take time for investors’ confidence in the sector to recover.
- Giant Biogene (2367 HK)‘s 24H1 results exceeded expectations, leading management to raise its 2024 guidance. However, the profit margin declined, and we remain cautious about long-term growth prospects.
Alibaba Group: A Blend of Growth
- Alibaba Group’s June Quarter 2024 financial report showcases a blend of growth, challenges, and strategic advancements.
- The group reported steady growth in its core e-commerce businesses, Taobao and Tmall Group, with an increase in Gross Merchandise Volume (GMV) and order volumes.
- Particularly, the company’s focus on enhancing user experience and AI-driven strategies appears to be bearing fruit, assuring an upward trajectory in retaining and attracting customers, which is crucial in a competitive e-commerce landscape.
JD.com Inc.: Enhancing Platform Ecosystem For Third-Party Sellers As A Key Growth Catalyst! – Major Drivers
- JD.com reported its second quarter and interim 2024 earnings, presenting a mixed performance amid challenging market conditions.
- The company achieved record non-GAAP net profit for a single quarter, indicating strong profitability and effective cost management.
- However, revenue growth was modest, reflecting the competitive and dynamic nature of the market JD.com operates in.
Tencent Music Entertainment Group: Innovation In Subscription & User Experience & Other Major Drivers
- Tencent Music Entertainment (TME) demonstrated a strong performance in the second quarter of 2024, anchored by significant growth in its online music services and a robust increase in adjusted net profit.
- The company reported a 28% year-over-year growth in online music services and a 26% increase in adjusted net profit, signaling robust operational health and profitability.
- The addition of over 10 million music subscribers in the first half of 2024, combined with an increase in average revenue per paying user (ARPPU), underscores the company’s effective market penetration and pricing strategy.
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