In today’s briefing:
- CPMC Holdings (906 HK): ORG’s Competing Offer Kicks off an Auction
- Game On As ORG Lobs Competing Offer For CPMC (906 HK)
- [Meituan (3690 HK, BUY, TP HK$156) TP Change]: Counting on Execution to Navigate the Uncertainties
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CPMC Holdings (906 HK): ORG’s Competing Offer Kicks off an Auction
- CPMC Holdings (906 HK) disclosed a competing pre-conditional voluntary offer from ORG Technology Co., Ltd. A (002701 CH) at HK$7.21, a 4.9% premium to Changping Industrial’s HK$6.87 offer.
- Like the Changping Industrial offer, ORG’s offer is pre-conditional on regulatory approvals and has a 50% minimum acceptance condition. Changping Industrial has secured all regulatory approvals except SAMR.
- ORG’s skinny premium and precarious irrevocable from Mr Zhang Wei suggests Changping Industrial’s next move is to secure Mr Wei’s irrevocable with a revised higher offer.
Game On As ORG Lobs Competing Offer For CPMC (906 HK)
- After six months had elapsed, and CPMC Holdings (906 HK)‘s Offeror just needing SAMR/SAFE clearance before launching a firm bid, a competing Offer from ORG Technology (002701 CH) appeared unlikely.
- Yet in a surprise move, ORG has made a pre-conditional (NDRC, SAFE, MoC, SAMR, and shareholder approval) Offer at HK$7.21/share, a 4.9% premium to the ongoing SASAC/NCSSF Offer.
- ORG’s pre-con Offer also has a 50% acceptance condition. ORG and concert parties have 24.43%. And Zhang Wei (22.01%) has given has an irrevocable. Directors have 0.87%. Intriguing situation.
[Meituan (3690 HK, BUY, TP HK$156) TP Change]: Counting on Execution to Navigate the Uncertainties
- Meituan reported C1Q24 revenue 6.0%/6.2% higher our estimate/consensus, and adjusted net income 19%/29% higher than our estimate/consensus. The stock fell on lower takeout order and in-store revenue guidance for C2Q24;
- The stock has two uncertainties:(1)Strategic moves by Douyin and Eleme,(2)success of overseas expansion. There are no easy answers to these two questions but we believe the corner has been turned
- We maintain the stock as BUY rating and raise TP to HK$156/share to factor in the improvement in profitability.