In today’s briefing:
- ESR Group (1821 HK): Consortium’s Scheme Cash/Scrip Privatisation Offer
- ESR (1821 HK): HK$13.00/Share Offer
- Robosense Technology, Driving in the Fast Lane While No One Is Looking
- Freetech Intelligent Technology Ltd Pre-IPO Tearsheet
- Parsing The Water Oasis (1161 HK) FY24 Profit Warning: Ex-One Offs Indicate Flat To Slight Growth
- Lucror Analytics – Morning Views Asia
- Shenzhen Yuejiang Technology IPO: PHIP and Valuation Updates, High Valuations and A Higher TAM
- Pre-IPO Mao Geping Cosmetics (PHIP Updates) – Some Points Worth the Attention
ESR Group (1821 HK): Consortium’s Scheme Cash/Scrip Privatisation Offer
- 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.
- The precondition relates to several regulatory approvals. The precondition satisfaction does not carry the same risk as the China Traditional Chinese Medicine (570 HK) deal break.
- The irrevocable (31.03% of outstanding shares) ensure that shareholders with blocking or close to blocking stakes are supportive. This is a done deal, with timing the key risk.
ESR (1821 HK): HK$13.00/Share Offer
- HK$13.00/Share (deemed final). That’s the key takeaway here as the Starwood/Warburg Pincus Consortium (finally) tables a firm offer, by way of a pre-conditional Scheme.
- Pre-Conditions are extensive, with a long stop date of the 4th September 2025.
- HK$13.00 is below prior expectations of a HK$14+ handle. But with irrevocables of 30.79% of the register (and 51.24% of Scheme shares), this is done. A scrip option is afforded.
Robosense Technology, Driving in the Fast Lane While No One Is Looking
- Robosense Technology (2498 HK) has seen its sales of LiDAR solution systems grow substantially as it achieved the ability to mass produce for its customers.
- The company integrates proprietary hardware and software, creating a barrier to entry for most LiDAR competitors, who produce only the hardware system.
- Robosense announced a strong set of results for 3Q24 and expects to be profitable at some time in 2025. The company has been actively buying back shares.
Freetech Intelligent Technology Ltd Pre-IPO Tearsheet
- Freetech Intelligent Systems (1901036D CH) is planning to raise about US$200m through its upcoming Hong Kong IPO. The lead bookrunners for the deal are CITIC Securities, CICC, Huatai International, HSBC.
- Freetech Intelligent Technology Ltd (FITL) is a provider of intelligent driving solutions, focusing on advanced driver assistance systems (ADAS) and autonomous driving systems (ADS) technologies.
- It ranks third among domestic suppliers of Level 2 and Level 2+/2++ intelligent driving solutions in China, with a 2023 market share of 14.6%, according to CIC.
Parsing The Water Oasis (1161 HK) FY24 Profit Warning: Ex-One Offs Indicate Flat To Slight Growth
- Headline profit numbers for FY24 indicate a 38-40% decline from 110 mn HKD in FY23 to 65-69 mn HKD, including non-cash impairment/property revaluation losses amounting to 44.2 mn HKD.
- The implication is that core profits would have been 109-113 mn HKD for FY24; a slight earnings growth at the upper end is admirable in a weak HK demand environment.
- Based on core earnings, the stock trades at 6x PE, >67% of the market capitalization in cash, and a 10% dividend yield. The company will release earnings on December 16th.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: Studio City, Yuexiu Property, Rakuten Group
- In the US, the October JOLTS job openings came in above estimates at 7.74 mn (7.52 mn e / 7.37 mn p).
- Long-end USTs fell yesterday, while the front end outperformed on expectations that a December rate cut remains on the table.
Shenzhen Yuejiang Technology IPO: PHIP and Valuation Updates, High Valuations and A Higher TAM
- Shenzhen Yuejiang Technology, more commonly known as just Dobot, updated its PHIP and plans to raise fresh capital for technology development for intelligent cobots.
- The company did not disclose the proposed size and price range for the offering. Guotai Junan international and ABC International are leading the IPO.
- I believe cobot industry can grow faster than third-party forecasts while the integration of AI into cobots will drive the development of smart cobots.
Pre-IPO Mao Geping Cosmetics (PHIP Updates) – Some Points Worth the Attention
- Behind MAO GEPING’s high profitability, there are hidden risks. One is the potential quality issues from ODM/OEM model, and the other is excessive reliance on Mr. Mao Geping’s personal IP.
- Without strong R&D capabilities, high-end positioning isn’t firm.With increasing downward pressure in the industry, MAO GEPING would become passive in fierce competition and the industry trend of customers pursuing cost-effectiveness.
- MAO GEPING’s valuation could be lower than Giant Biogene due to concerns on future sustainable growth prospects and profitability, but higher than industry average due to the strong short-term financial performance.
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