In today’s briefing:
- Weekly Deals Digest (07 Jan) – Ola Electric, Mixue, Aoki Super, Hollysys, Weiqiao Textile, Vinda
- Merger Arb Mondays (08 Jan) – Weiqiao Textile, IRC, Aoki Super, Hollysys, OreCorp, Tietto, Pact
- Anta Sports (2020 HK): In-Line 4Q23 Operational Update + Submission Of Amer Sports Listing On NYSE
- Anta Sports (2020 HK): An Updated Look at Implications of Amer Sports’ IPO
- Mainland Connect NORTHBOUND Flows (To 5 Jan 2024): Big Names Sold, Banks Bought
- Temu Versus Dollar Tree: More Online & Offline Adventures in Pursuit of Ultra-Cheap Stuff
- China Consumption Weekly (8 Jan 2024): BYD, Li Auto, PDD, AliPay, Mixue, Baidu
- “Requests” Through Overseas Investor Engagement Will Continue to Be More Effective than TSE Requests
Weekly Deals Digest (07 Jan) – Ola Electric, Mixue, Aoki Super, Hollysys, Weiqiao Textile, Vinda
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – Ola Electric (1700674D IN) and Mixue Group (MIX HK) IPOs.
- Event-Driven developments – Aoki Super (9977 JP), Hollysys Automation Technologies (HOLI US), Weiqiao Textile Co (2698 HK), Vinda International (3331 HK).
Merger Arb Mondays (08 Jan) – Weiqiao Textile, IRC, Aoki Super, Hollysys, OreCorp, Tietto, Pact
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads – Aoki Super (9977 JP), Hollysys Automation Technologies (HOLI US), JSR Corp (4185 JP), Shinko Electric Industries (6967 JP), Probiotec Ltd (PBP AU), Adbri (ABC AU).
- Lowest spreads – Pact Group Holdings (PGH AU), T&K Toka Co Ltd (4636 JP), A2B Australia (A2B AU), Tietto Minerals Ltd (TIE AU), IJTT Co., Ltd. (7315 JP).
Anta Sports (2020 HK): In-Line 4Q23 Operational Update + Submission Of Amer Sports Listing On NYSE
- Anta Sports Products (2020 HK) announced a set of in-line 4Q23 operating data.
- In addition, the company has filed a registration statement with the U.S. SEC on January 4 for a proposed listing of Amer Sports on the New York Stock Exchange.
- Anta currently trades at a forward PE of 17x based on estimated 2024 earnings, compared to a historical forward PE of 24x since 2017.
Anta Sports (2020 HK): An Updated Look at Implications of Amer Sports’ IPO
- Amer Sports, 52.7% owned by Anta Sports Products (2020 HK), has finally filed a US IPO registration. This is positive for Anta Sports as it can realise Amer’s value.
- Reported losses at Amer have increased YoY for 9M23 due to higher finance cost. But, its gross, operating, and adjusted EBITDA margins have all recorded solid improvements.
- Assuming Amer is listed at the sector’s average FY23 P/S of 1.6x, Anta Sports may book deemed disposal gain of HK$13.5bn, or about 6.8% of its market capitalisation.
Mainland Connect NORTHBOUND Flows (To 5 Jan 2024): Big Names Sold, Banks Bought
- The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
- Last week saw NORTHBOUND net SELL RMB 5.5bn of A-shares on lighter average activity. BIG net selling flows on the first day of the year for HK going north.
- Looking at the change in the weekly position charts over the last year is striking (easiest in the Sectors table to start). Still.
Temu Versus Dollar Tree: More Online & Offline Adventures in Pursuit of Ultra-Cheap Stuff
- A recent report shows apparent gains by Temu against US “dollar” store chains
- In this insight we introduce the “dollar” store concept and share our experiences
- We conclude that Temu & SHEIN don’t likely view some categories as priorities
China Consumption Weekly (8 Jan 2024): BYD, Li Auto, PDD, AliPay, Mixue, Baidu
- Chinese NEV (new energy vehicle) producers’ deliveries grew rapidly in 2023.
- PDD closed most “local life” businesses, including hotel booking, movie ticketing, etc.
- Jack Ma is no longer the controller of AliPay, the largest online payment app.
“Requests” Through Overseas Investor Engagement Will Continue to Be More Effective than TSE Requests
- In Japan, many companies have large gap between their stock price and their intrinsic value due to issues related to the use of assets and other resources or cash flow.
- Companies want to use the example of “improvement measures” to be released by TSE in January as a template, so we can’t expect “management is serious about tackling this issue.”
- The fact that ROE has improved modestly over the past decade indicates that management hasn’t made fundamental changes to traditional management strategies to address the challenges faced by individual companies.
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