In today’s briefing:
- Samson (531 HK): 21 Oct Shareholder Vote
- Samson Holding (531 HK): Scheme Vote on 21 October
- Quiddity Leaderboard Hang Seng Index Dec 24: Special Focus on IT, Healthcare, and SOEs
- Nanshan Aluminium International Pre-IPO Tearsheet
- CR Beverage IPO: The Investment Case
- Oriental Watch 398 HK Earnings Preview H1 FY25: Resilient at 7.2x PE, 14% Yield, 52% Mkt Cap in Cash
- Shenzhen Mindray (300760 CH): Sustained Growth Momentum; China Recovery To Provide Further Filip
- Chongqing Terminus Pre IPO Tearsheet
- Pre-IPO Sichuan Biokin Pharmaceutical – Would Investors Be Willing to Take a Gamble?
- QuantaSing Group Limited – “Silver Linings Playbook”
Samson (531 HK): 21 Oct Shareholder Vote
- Back on the 16th July, furniture trader Samson Holding (531 HK) announced an Offer, by way of a Scheme, from Shan Huei Kuo, Samson’s Chairman.
- The Cancellation Price is $0.48/share (final), a 50% premium to last close; but more notable if going back a month. This looks done. However, Samson is an illiquid micro-cap.
- The Scheme Doc is now out, with a Court Meeting to be held on the 21st October. Expected payment on the 14 November. The IFA says fair & reasonable.
Samson Holding (531 HK): Scheme Vote on 21 October
- Samson Holding (531 HK)’s IFA opines that Mr Samuel Kuo (Chairman)’s HK$0.48 privatisation offer to be fair and reasonable. The vote is on 21 October.
- Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection). Despite the market rally, most peers’ shares have declined since the offer announcement.
- The attractive premium, lack of shareholders holding a blocking stake, and low AGM minority participation rate point to a done deal. At the last close, the gross/annualised spread is 3.2%/29.8%.
Quiddity Leaderboard Hang Seng Index Dec 24: Special Focus on IT, Healthcare, and SOEs
- The Hang Seng Index is the benchmark index for Hong Kong stocks. It follows a highly-subjective selection process which makes it difficult to predict index changes.
- In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes during the next review in December 2024.
- The index changes for the December 2024 index rebal event will be announced after market close on 22nd November 2024.
Nanshan Aluminium International Pre-IPO Tearsheet
- Nanshan Aluminium International Holdings (NAI HK) is looking to raise about US$500m in its upcoming Hong Kong IPO. The deal will be run by Huatai International.
- Nanshan Aluminium International is a leading alumina manufacturer in Southeast Asia.
- The firm’s primary focus has been tapping into Indonesia’s abundant bauxite and coal reserves, utilizing the low-temperature Bayer process to produce metallurgical-grade alumina in sand form.
CR Beverage IPO: The Investment Case
- China Resources Beverage (CRB HK), China’s largest purified drinking water company, is premarketing an HKEx to raise US$0.5-1 billion.
- We previously discussed the IPO in CR Beverage IPO: The Bull Case and CR Beverage IPO: The Bear Case. In this note, we examine the latest updates in the PHIP.
- The investment case rests on core business offsetting slowing growth with margin improvement, beverage’s fast-paced growth, narrowing the margin gap with Nongfu Spring (9633 HK), and return to FCF generation.
Oriental Watch 398 HK Earnings Preview H1 FY25: Resilient at 7.2x PE, 14% Yield, 52% Mkt Cap in Cash
- Oriental Watch (398 HK) will report its H1 FY25 result in mid-November. We expect earnings to be down 5-10% YoY, as SSSG would be flattish for the period.
- We expect a 25-26 cent dividend ( ~14% yield annualized). With the stimulus measures in place, we expect China’s mood to be slightly more upbeat.
- Oriental Watch (398 HK) goes ex-dividend today (23.5 cent/share dividend). As we enter trading today, it may be available at a higher yield.
Shenzhen Mindray (300760 CH): Sustained Growth Momentum; China Recovery To Provide Further Filip
- Shenzhen Mindray Bio-Medical Electronics (300760 CH) reported double-digit growth in revenue and net profit in 1H24.
- In-Vitro diagnostics and medical imaging systems segments drive performance, while patient monitoring and life support lagged.
- International market continues to show strength, while China lingers for now.
Chongqing Terminus Pre IPO Tearsheet
- Chongqing Terminus (2471080D CH) is looking to raise about US$300m in its upcoming Hong Kong IPO. The deal will be run by CITIC Securities and Haitong.
- Chongqing Terminus is a leader and pioneer in China’s public realm AIoT (Artificial Intelligence of Things) industry.
- It leverages its innovative AIoT operating system, TacOS, to provide enterprises, public administrators and public realm participants with full stack AIoT products i.e. software, hardware and services. .
Pre-IPO Sichuan Biokin Pharmaceutical – Would Investors Be Willing to Take a Gamble?
- Biokin’s traditional chemical drug and TCM businesses would continue to shrink and their valuation contribution can be negligible. The collaboration agreement for BL-B01D1 with BMS changes the outlook of Biokin.
- The clinical data of BL-B01D1 look good so far, but the R&D failure risk of BL-B01D1 is not low. It is uncertain if BL-B01D1 would finally be druggable.
- Biokin is overvalued and there is big bubble in valuation. If BL-B01D1 fails in R&D or its clinical data fail to meet high expectation, Biokin’s market value will plummet.
QuantaSing Group Limited – “Silver Linings Playbook”
- QuantaSing Group Limited (QSG) is a leading provider of “lifestyle solutions” (i.e., high-demand products and services) catering to middle-aged (45-64 years old) and elderly (65+) individuals, also known as the “silver” demographic, in China.
- The company’s legacy education business offers online courses across recreation and leisure, skills upgrading, and financial literacy programs.
- In addition to QuantaSing’s online education platform focused on individuals, the company provides marketing services to corporate enterprises.
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