In today’s briefing:
- Ant Group’s $6.0bn Buyback Move Casts Doubt on IPO Prospects
- China Tourism Duty Free Corp (601888. CH): Is Now Good Time for Bottom-Fishing?
- Plus Alpha Consulting Placement – Pulling Out All Stops for Deal Success as Insiders Are Selling
- Capital Efficiency Is the Topic of the June AGM, While What Is Happening to Passive Fund Voting?
Ant Group’s $6.0bn Buyback Move Casts Doubt on IPO Prospects
- China’s regulators on Friday imposed Ant Financial Services Group (6688 HK) with a fine of RMB 7.12bn. A day later, Ant Group unveiled a share buyback program worth $6bn.
- The last time media created a positive narrative around Ant Group was in January 2023 when Jack Ma relinquished control of the company.
- However, the media excitement was short-lived as Alibaba Group Holding (9988 HK)‘s share price quickly resumed a downward trend after rising by around 22%.
China Tourism Duty Free Corp (601888. CH): Is Now Good Time for Bottom-Fishing?
- CDF’s 1H23 preliminary results suggest that business recovery remains on track. Voices of bottom-fishing are getting louder as free fall in its share price already erased 50% market cap YTD.
- We believe the dynamics have fundamentally changed compared to three years ago when CDF was the stock market darling. Investors need be aware of the anchoring effect in making decisions.
- Moderate growth, pressured margin and contracted valuation multiple will be the new reality facing investors of the stock in our view. Wait for better entry point.
Plus Alpha Consulting Placement – Pulling Out All Stops for Deal Success as Insiders Are Selling
- Three shareholders of Plus Alpha Consulting (4071 JP) (PAC) aim to raise around US$230m via selling over 26% of the company.
- PAC was listed in 2021 and after a somewhat tepid initial performance it has been doing well over the past year.
- In this note, we talk about the deal dynamics and run the deal through our ECM framework
Capital Efficiency Is the Topic of the June AGM, While What Is Happening to Passive Fund Voting?
- Companies that accept reductions in policy shareholdings tend to repurchase their own shares. Pressure to reduce policy shareholdings will increase further this year when share prices are rising.
- In order to verify whether institutional investors’ voting criteria and voting behavior are consistent, the reasons for supporting/opposing individual proposals should be disclosed in more detail.
- Investors are expected to base decisions on performance, as voting advisers returned to policy of recommending voting against top management in companies with lower-than-standard ROEs due to recovery from COVID-19.
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