In today’s briefing:
- Merger Arb Mondays (17 Jul) – Chindata, Eoflow, JSR, IMAX, Mason, Estia, Musgrave, Origin, InvoCare
- Pre-IPO WuXi XDC – The Beautiful Story and the Truth Behind
- Guangdong Archealth Health Industry Group Tearsheet
- New Horizon Health 1H23: Management Call Takeaway
- [JD Logistics (2618 HK, SELL, TP HK$9.4) TP Change]: Premium Parcel Delivery Is Increasingly Crowded
Merger Arb Mondays (17 Jul) – Chindata, Eoflow, JSR, IMAX, Mason, Estia, Musgrave, Origin, InvoCare
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads 111 Inc (YI US), Chindata Group (CD US), ENM Holdings (128 HK), Estia Health (EHE AU), Poly Culture Group Corp H (3636 HK), Costa Group Holdings (CGC AU).
- Lowest spreads – Healius (HLS AU), Liontown Resources (LTR AU), Toyo Construction (1890 JP), Kenedix Residential Investment (3278 JP), Penguin International (PBS SP), Challenger Technologies (CHLG SP).
Pre-IPO WuXi XDC – The Beautiful Story and the Truth Behind
- Although WuXi XDC has financing needs, we’re more inclined to view this spin-off listing as another capital operation of WuXi AppTec/WuXi Bio, who may not want to take risks alone.
- Global ADC/broader bioconjugate market is at a nascent stage of development, with high R&D risks/commercialization uncertainties. We cannot guarantee whether WuXi XDC will maintain its industry-leading position in the future.
- Although high growth can bring good stories, we’re not sure how much actual market space WuXi XDC will have in the future,which is the key to determining the valuation ceiling.
Guangdong Archealth Health Industry Group Tearsheet
- Guangdong Archealth Health Industry Group (GAHI HK) is looking to raise around US$100m in its upcoming Hong Kong IPO. The bookrunners on the deal are CICC and ABCI.
- Guangdong Archealth Health Industry Group (GAHI) is a digital health management provider.
- According to F&S, the firm ranked first in the weight management industry and first in the digital weight management industry in China as per 2022 sales.
New Horizon Health 1H23: Management Call Takeaway
- New Horizon Health reported a solid set of preliminary results for 1H2023
- We speak to the company’s management post result announcement to figure out the key drivers and summarize the key points in this note.
- The company upgraded its full year guidance and is on track to meet its long term target.
[JD Logistics (2618 HK, SELL, TP HK$9.4) TP Change]: Premium Parcel Delivery Is Increasingly Crowded
- We expect JDL to report C2Q23 revenue and non-IFRS net profit margin (1.5%) and 0.4ppts vs. consensus. We expect 2Q revenue (excl. Deppon) to grow 5%~ YoY .
- JDL is facing increasing competition from (1) the recent launch of Cainiao’s high-end delivery service, (2) improved ZTO service, and (2) Douyin’s actions to increasingly in-source logistics.
- We maintain JDL’s SELL rating but raise its TP to HK$ 9.4, as we expect JDL will lower staffing costs, and by reducing staff redundancy.
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