In today’s briefing:
- To Tender Or Not – Gauging The Future of Sun Corp (6736)
- HSCEI/HSTECH/HSIII Index Rebalance Preview: Potential Changes, Flow & Positioning
- CPMC Holdings (906 HK): A Carefully Caveated Board Recommendation of Changping Industrial’s Offer
- Greatview Aseptic Packaging (468.HK) – The Story Behind The “Hostile Offer”
- Orora Ltd (ORA AU) Rejects A$2.55/Share Offer From Lone Star
- Quiddity Leaderboard HSTECH Sep 24: Expected ADD and DEL Have 10+ Days to Trade
- Tencent to Report 2Q FY24 Results (What Is Priced?), MSC Index Changes for Aug Rebalance Published
- Quiddity Leaderboard HSCEI Sep 24: Announcement Soon; Updated Flow Expectations and Trade Idea
- Orora (ORA AU): Lone Star’s Opportunistic A$2.55 Offer
- DB Hitek: Buying a Golf Course Overshadows Corporate Value Up Efforts
To Tender Or Not – Gauging The Future of Sun Corp (6736)
- The revised/final True Wind Tender Offer for up to 19% of Sun Corp (6736 JP) ends this week. With the “excitement” the last two weeks, the SunCorp/CLBT ratio is higher.
- The minimum threshold is relatively low. The Tender will most likely succeed with very high pro-ration.
- For those on the edge, I discuss possibilities on the back end. It will be less liquid, but that may not be bad.
HSCEI/HSTECH/HSIII Index Rebalance Preview: Potential Changes, Flow & Positioning
- The constituent changes for the Hang Seng China Enterprises Index (HSCEI INDEX), Hang Seng TECH Index (HSTECH INDEX) and HSIII Index will be announced after market close on Friday.
- We forecast 2 changes for the Hang Seng China Enterprises Index (HSCEI INDEX), 1 change for the Hang Seng TECH Index (HSTECH INDEX) and 3 changes for the HSIII Index.
- With same-way and opposing flow on stocks from different passive trackers, the one-way trade is currently estimated at HK$5.2bn (US$672m). That will change with final capping done on 3 September.
CPMC Holdings (906 HK): A Carefully Caveated Board Recommendation of Changping Industrial’s Offer
- The CPMC Holdings (906 HK) Board recommends that shareholders accept Changping Industrial’s HK$6.87 offer, which the IFA opines is fair and reasonable.
- The Board’s carefully crafted and suitably caveated recommendation acknowledges that shares continue to trade through terms and ORG Technology Co., Ltd. A (002701 CH)’s HK$7.21 offer is higher but preconditional.
- Based on ORG’s shareholding/irrevocable and volume traded above terms, Changping Industrial’s offer has little chance of success. It remains a question of when, not if, Changping Industrial will bump.
Greatview Aseptic Packaging (468.HK) – The Story Behind The “Hostile Offer”
- The connection between Newjf and Greatview is deep. Newjf expressed an interest in acquiring Greatview early on, but the two parties didn’t reach an agreement. Greatview is not entirely “innocent”.
- Newjf’s decision to forcibly acquire Greatview at this moment should be made after careful consideration. Mengniu may not necessarily oppose this merger. Mengniu is likely to take a neutral stance.
- Newjf’s Offer is attractive. In the absence of a more realistic action by Greatview to make a higher Offer, we advise investors not to walk away from Newjf’s Offer easily.
Orora Ltd (ORA AU) Rejects A$2.55/Share Offer From Lone Star
- Sustainable packaging play Orora Ltd (ORA AU) has “received and has rejected an opportunistic, conditional and non-binding indicative proposal from Lone Star Fund“.
- The A$2.55/share Offer (less any dividends declared or payable), by way of a Scheme, was a 33.9% premium to last close. Orora was down 25% YTD, prior to the proposal.
- Orora’s FY24 results will be released tomorrow. Expect more commentary on the rejection of Lone Star’s approach in the Q&A.
Quiddity Leaderboard HSTECH Sep 24: Expected ADD and DEL Have 10+ Days to Trade
- The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
- There could be one index change during the September 2024 index rebal event. The official results will be announced after market close on 16th August 2024.
- In this insight, we take a look at our latest flow expectations based on closing prices on Monday 12th August 2024.
Tencent to Report 2Q FY24 Results (What Is Priced?), MSC Index Changes for Aug Rebalance Published
- Last night, MSC published index changes due at the August rebalance. There will be no changes to SA constituents.
- The rebalance is set to take place at the end of the month on Friday the 30th.
- Tomorrow after the HK close, Tencent is expected to report results for 2Q FY24.
Quiddity Leaderboard HSCEI Sep 24: Announcement Soon; Updated Flow Expectations and Trade Idea
- The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
- The index changes and indicative weights for the September 2024 index rebal event is expected to be announced after market close on Friday 16th August 2024.
- In this insight, we take a look at our latest expectations for capping flows based on current prices.
Orora (ORA AU): Lone Star’s Opportunistic A$2.55 Offer
- In response to media speculation, Orora Ltd (ORA AU) disclosed that it had rejected Lone Star’s indicative non-binding proposal at A$2.55 per share, a 33.5% premium to the undisturbed price.
- The offer is opportunistically timed to take advantage of the share price collapse precipitating from the profit warning on 2 April.
- The Lone Star offer is unattractive and could also draw other suitors. If Lone Star walks, the downside is low, as Orora’s valuation is undemanding compared to peer multiples.
DB Hitek: Buying a Golf Course Overshadows Corporate Value Up Efforts
- DB Hitek’s investment in a golf course operating company is a poor investment, one that destroys shareholder value.
- Most investors would rather have DB Hitek increase shareholder returns through share buybacks/cancellations and dividends as well as invest in its core semiconductor business rather then buy a golf course.
- Given DB Inc’s lack of cash, there is a growing possibility that it will use the proceeds from selling its DB World shares to increase its stake in DB Hitek.
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