In today’s briefing:
- CPMC (906 HK): SASAC Usurper?
- CPMC Holdings (906 HK): Possible Scenarios as ORG Mulls a Competing Offer
- CPMC Holdings (906 HK): Another Potential Contender
- REPT BATTERO IPO Preview and Valuation Analysis: Burning Cash and Rising Debt Ahead of the IPO
CPMC (906 HK): SASAC Usurper?
- In what I viewed as one of the cleaner deals, CPMC Holdings (906 HK) announced a pre-conditional Offer from SASAC and the National Council for Social Security Fund of China.
- A decent premium to undisturbed, a low tendering threshold, and a large shareholder giving an irrevocable – this looked done.
- Now ORG Development Limited/ORG Technology Co., Ltd. A (002701 CH), holding 24.4% of shares out, is mulling a competing conditional general cash Offer. One of these Offers will get up.
CPMC Holdings (906 HK): Possible Scenarios as ORG Mulls a Competing Offer
- CPMC Holdings (906 HK) disclosed that ORG Technology Co., Ltd. A (002701 CH), the second-largest shareholder, is considering a competing voluntary conditional general cash offer.
- It is rare to bid against an SOE bidder. ORG likely has implicit SOE support to launch a competing offer due to the need for Chinese regulatory approvals.
- The possible scenarios suggest Mr Zhang Wei is the winning bid’s kingmaker. Mr Wei sold down 260K shares at HK$6.35 on 8 December, indicating a willingness to exit.
CPMC Holdings (906 HK): Another Potential Contender
- CPMC Holdings (906 HK) may potentially receive another takeover proposal from ORG Technology Co., Ltd. A (002701 CH) which has a 22% market share in the industry.
- ORG has every reason to launch such a proposal and given its operational and financial performance, it looks to have the capability to realise good synergy.
- CPMC still looks inexpensive relative to the industry based on its PER valuations. No matter what, the 4th largest player Sunrise Group (002752 CH) will now become interesting.
REPT BATTERO IPO Preview and Valuation Analysis: Burning Cash and Rising Debt Ahead of the IPO
- REPT BATTERO, a Chinese Li-ion battery manufacturer, announced terms for its IPO in Hong Kong. The initial public offering price is expected to be between HK$18.20 and HK$20.60 per share.
- The company plans to raise ~HK$2.1B of net proceeds at HK$19.40/share. REPT BATTERO will begin trading on the Hong Kong Stock Exchange under the stock code 0666 on December 18.
- I have a negative view of the upcoming REPT BATTERO IPO and expect the stock will underperform during the first trading day as a publicly listed company.
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