In today’s briefing:
- China VAST’s Vote on 23 November
- Chiho (976 HK): Possible Restructuring May Trigger Offer
- ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Stocks & Mean Reversion
- Vitasoy (345): Time to Bounce
- Quick Update on the New Hong Kong Crypto Policy Statement – A Revival of the Crypto Hub?
- Ping An Healthcare and Technology (1833.HK) – The New Acquisition Is Hard to Turn Things Around
- Geek+: Global Leader in Smart Logistics Robotic Technology
- HAI Robotics: The Pioneer and Leader in ACR Robot Market
- XPeng Robotics: Early-Stage VC Investment in Developer of Smart Robot Pony
- Gaussian Robotics: Leading Provider of AI-Powered Cleaning Robots
China VAST’s Vote on 23 November
- China Vast Industrial Urban Development (6166 HK)‘s scheme document is out with the court meeting scheduled for 23 November. The IFA considers the offer to be fair and reasonable.
- Key conditions include approval by at least 75% of independent shareholders (<10% rejection). Shareholders with blocking stakes either provided irrecovables or will likely support the offer.
- The offer is not great but headcount test is not applicable. At last close and for the 14 December payment, the gross and annualised spread is 0.8% and 6.7%, respectively.
Chiho (976 HK): Possible Restructuring May Trigger Offer
- Metal recycler Chiho Environmental Group Limited (976 HK) was suspended this morning pursuant to Hong Kong’s Takeovers Code.
- For more than a year, the controlling shareholder group has been implementing a potential restructuring. The ultimate controlling shareholder is Tu Jianhua, an executive director of Chiho.
- This long drawn-out reorganisation may finally result in an Offer for Chiho.
ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Stocks & Mean Reversion
- At the end of the review period, we forecast 10 changes for the Chinext Price Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index in December.
- Passive trackers will need to buy +/-0.5 days of ADV for most inclusions and exclusions from the indices. The impact on the potential deletions is higher on average.
- The potential adds have outperformed the potential deletes over the last six months, though there has been a sharp narrowing of the gap over the last few weeks.
Vitasoy (345): Time to Bounce
- Vitasoy Intl Holdings (345 HK) was shunned by investors last year as its products were taken off the shelves in China, causing its revenue from China to plummet.
- Recently announced a substantial increase in net profit vs last year.
- Despite the recent uptick, Vitasoy’s share price is still trading at 50% PBR vs 5 years ago.
Quick Update on the New Hong Kong Crypto Policy Statement – A Revival of the Crypto Hub?
- Hong Kong government published on Oct 31 a statement titled “Policy Statement on Development of Virtual Assets in Hong Kong” with a much friendlier stance on crypto industry
- The policy statement mainly focuses on crypto asset ETF, NFT, tokenized assets, stablecoin, and e-HKD; while utility tokens are missing from it.
- While this has been perceived positively by the industry, the biggest concern is still the regulatory uncertainty, especially considering mainland China’s outright ban on all crypto-related activity
Ping An Healthcare and Technology (1833.HK) – The New Acquisition Is Hard to Turn Things Around
- In 2022H1, Ping An Health’s losses narrowed and gross profit margin increased, with various financial indicators showing an improving trend. The Company also announced a new acquisition recently.
- In the process of turning from 2C business to 2B business, Ping An Health hopes to expand B-end users who can contribute higher margin, but this transformation would encounter difficulties.
- If the payment method in China is not changed (still dominated by national medical insurance payment, with small portion of commercial insurance), it’s difficult to improve the profitability qualitatively.
Geek+: Global Leader in Smart Logistics Robotic Technology
- Geek+ is the fastest-growing robotics startup and producer of warehouse robots powered by AI and deep learning algorithms. The company successfully integrates logistics with robots.
- Beijing-Based Geek+ has raised a total of ~$532M in funding over 7 rounds. The last round was a $100M Series E in August 2022 that was led by Intel Capital.
- Warehouse robots have a huge market potential driven by rising labor costs in China, lack of human labor in the warehouse segment, and huge fluctuations in production capacity.
HAI Robotics: The Pioneer and Leader in ACR Robot Market
- Founded in 2016 by Richie Chen and Shengdong Xu, HAI Robotics is a pioneer in ACR systems and warehouse automation robotics unicorn.
- HAI Robotics offers flexible automation solutions to improve efficiency while reducing costs. The company’s vision is to utilize robotics to create and deliver value to each factory and warehouse.
- China is the hub for the production of AMRs and ACRs, easing the workforce shortage, improving operational efficiency, saving additional storage, and handling a wide range of SKUs.
XPeng Robotics: Early-Stage VC Investment in Developer of Smart Robot Pony
- XPeng Robotics is a bionic smart robot maker backed by Chinese EV giant XPeng and high-profile investor IDG Capital. The company focuses on AI, robot autonomy, and interaction.
- Founded in 2016 and headquartered in Shenzhen, XPeng Robotics is an affiliate of XPeng, with R&D centers in Beijing, Guangzhou, and Silicon Valley.
- Bloomberg reported that $100M+ Series A financing was the largest single-tranche fundraising for the bionic robot sector in China in the past two years.
Gaussian Robotics: Leading Provider of AI-Powered Cleaning Robots
- Gaussian Robotics sells a new generation of autonomous cleaning robots that can be applied in office buildings, shopping malls, indoor galleries, hotels, schools, healthcare facilities, and warehouses.
- Shanghai-Based unicorn wants to disrupt the cleaning industry with automation, promoting the use of low-cost autonomous cleaning robots worldwide.
- The company owns the world’s most advanced commercial cleaning robot portfolio offering cost-effective smart robotic solutions to 2,000+ customers in 40+ countries across 6 regions.
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