In today’s briefing:
- Sun Art Retail (6808 HK): BABA Takes Massive Hit After Inking SPA @ HK$1.38
- Canvest (1381 HK): Attractive Spread with Steady Progress in Precondition Satisfaction
- Bloks Group IPO (0325.HK): Global Offering, The Initial Price Range Is Seen As Attractively Valued
- Bloks Group IPO – PHIP Updates – Momentum Remains Strong, Although Some Lingering Doubts Persist
- Comment on Exchange Rate EUR/CNY – November 25, 2024
- China Slaps ADD On Japanese & S Korean Nitrile Rubber
- Pre-IPO Ascentage Pharma – The US Stock Listing Will Stimulate Future Growth Potential
Sun Art Retail (6808 HK): BABA Takes Massive Hit After Inking SPA @ HK$1.38
- HK$1.38/Share. That’s the takeaway as Alibaba Group (9988 HK) enters an SPA to offload its 78.7% stake in Sun Art (6808 HK) at HK$1.38/share, a 44.4% discount to last close.
- The buyer, Paragon Shine, an entity under Chinese PE outfit DCP Capital, is paying ~HK$12.3bn compared to BABA’s HK$28.1bn purchase of a 51% stake in October 2020.
- Should the SPA complete, an unconditional MGO is triggered. Minorities tendering can receive up to HK$1.58/share. But the question is: why would BABA be cashing out at this price?
Canvest (1381 HK): Attractive Spread with Steady Progress in Precondition Satisfaction
- Grandblue Environment Co A (600323 CH) continues to make steady progress in satisfying the precondition for its HK$4.90 privatisation offer for Canvest Environmental Protection Group (1381 HK).
- Two of the five preconditions are satisfied, and another will be satisfied by 20 January. The long stop date of 17 July provides ample time to satisfy the remaining two.
- Although the peers have materially re-rated, the offer implies a premium compared to peer multiples. Vote risk remains low, aided by selling by a shareholder with a blocking stake.
Bloks Group IPO (0325.HK): Global Offering, The Initial Price Range Is Seen As Attractively Valued
- Shanghai-Based Bloks Group, a leader of assembly character toys in China, has announced the initial price range for its IPO in Hong Kong.
- The offering is expected to be between HK$55.65 and HK$60.35, implying a market cap of ~HK$14B or ~$1.8B at the midpoint of the price range.
- Assuming IPO offer price of HK$58.00, UBS AM Singapore, Greenwoods AM and Fullgoal Investors have agreed to invest ~HK$388M or ~$50M in the offering.
Bloks Group IPO – PHIP Updates – Momentum Remains Strong, Although Some Lingering Doubts Persist
- Bloks Group (1850960D CH) is looking to raise US$188m in its Hong Kong IPO.
- Bloks Groups (Bloks) operates in the toy segment where it primarily assembles character and brick-based toys.
- In our previous note, we looked at the firm’s past performance. In this note, we discuss the latest PHIP updates.
Comment on Exchange Rate EUR/CNY – November 25, 2024
- During the period under review, i.e. October 22nd, 2024, to November 25th, 2024, the EUR/CNY pair experienced a slight but steady downward trajectory amid fluctuations.
- Initially, the pair followed an upward movement, reaching its peak at the price of 7.7654.
- However, after November 6th, 2024, the currency faced a general depreciation which persisted until the end of the period, signaling a bearish momentum.
China Slaps ADD On Japanese & S Korean Nitrile Rubber
- ADD on NBR imports from Japan, South Korea extended to five years
- Chinese companies beef up domestic carbon black production
- ZC Rubber unveils US$259 million and Longxing US$405 million projects
Pre-IPO Ascentage Pharma – The US Stock Listing Will Stimulate Future Growth Potential
- Ascentage has filed with the SEC to raise up to US$100 million in a US IPO. We think its future market value is expected to surpass that of Hutchmed.
- The outlook of olverembatinib is clear. Takeda can give more possibilities to olverembatinib. 2025 Sales of olverembatinib is expected to reach RMB500 million.Market value contribution from olverembatinib is US$1-1.5 billion.
- Investors have higher expectations on APG-2575 to be out-licensed to MNCs. We think the peak sales of APG-2575 is expected to surpass that of olverembatinib in overseas markets.
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