In today’s briefing:
- Canvest Environmental (1381 HK): Possible Privatisation at HK$4.90
- Timee (215A JP) IPO: Valuation Insights
- Timee Pre-IPO – Thoughts on Valuation – Primed for a Decent Upside at the Current Range
- Mainland Connect NORTHBOUND Flows (To 5 July 2024): Finance, Consumer, IT Sold, Utilities Bought
- STAR100 Index Rebalance Preview: Outright Adds Outperforming Outright Deletes
- Cathay Pacific (293 HK, BUY, TP:HKD):
- Shenzhen Yuejiang Technology IPO Preview: Dobot Files to List IPO on Hong Kong Stock Exchange
- SF Holding Pre-IPO: Core EBITDA Margins Compare Favorably to Most Express Peers in China and US
Canvest Environmental (1381 HK): Possible Privatisation at HK$4.90
- Grandblue Environment Co A (600323 CH) disclosed a potential pre-conditional privatisation of Canvest Environmental Protection Group (1381 HK) at HK$4.90 per share, a 20.7% premium to the last close price.
- Completing the capital injection from SOE entities into the offeror is a precondition. Grandblue also proposes that the controlling shareholder roll over 7.23% of its effective 44.75% stake.
- While not a knockout bid, the offer is reasonable. Shareholders with blocking stakes should support a binding proposal. Timing is the key risk.
Timee (215A JP) IPO: Valuation Insights
- Timee Inc (215A JP), a leading part-time job platform in Japan, is seeking to raise up to US$286 million. Book-building runs from 9 to 23 July.
- We previously discussed the IPO in Timee (215A JP) IPO: The Bull Case and Timee (215A JP) IPO: The Bear Case.
- In this note, we discuss valuation. Our analysis suggests that Timee is attractively valued at the IPO price range in the context of the forecasted growth.
Timee Pre-IPO – Thoughts on Valuation – Primed for a Decent Upside at the Current Range
- Timee Inc (215A JP) is looking to raise US$290m in its Japan IPO. The IPO will be a 100% secondary selldown by existing shareholders.
- Timee operates an on-demand staffing platform that connects part-time jobseekers with businesses in Japan.
- In an earlier note, we looked at the firm’s past performance and peer comparison. In this note, we discuss our thoughts on valuation.
Mainland Connect NORTHBOUND Flows (To 5 July 2024): Finance, Consumer, IT Sold, Utilities 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 13.9bn of A-shares. NORTHBOUND bought utilities and raw materials and sold everything else, especially consumer names. Appliances remain on the sell side.
- It is notable that net flows as a percentage of value traded are clearly “short gamma”, which is to say, sector underperformers are being sold, not bought.
STAR100 Index Rebalance Preview: Outright Adds Outperforming Outright Deletes
- The review period for the September rebalance ends 30 July. We expect the changes to be announced 30 August with the implementation taking place after the close on 13 September.
- We forecast 6 changes for the index, including migrations between the STAR 100 Index and the SSE STAR50 (STAR50 INDEX).
- Excluding the migrations, the potential adds have outperformed the potential deletes since the start of the calendar year and there could be further outperformance over the next few weeks.
Cathay Pacific (293 HK, BUY, TP:HKD):
- Operations are on track with earlier guidance given during FY23 results, loads and yields are healthy, with UK and North American performing better than expected
- Will buyback and cancel remaining 97.7m preference shares for a sum of HKD10b by end of July 2024. Shareholder dilution has been avoided
- Cathay Pacific is a value BUY, our target price of HK$9.90 (+24% UPSIDE) implies 10x FY2024 PE, parity multiple against its arch-rival Singapore Airlines (SIA SP)
Shenzhen Yuejiang Technology IPO Preview: Dobot Files to List IPO on Hong Kong Stock Exchange
- Shenzhen Yuejiang Technology (Dobot), a China-based cobot company, filed for a Hong Kong IPO. Cobots are robots with operational robotic arms intended for collaboration within a shared space.
- Dobot was backed by CICC, CRRC VC, Greenpine Growth, Qianhai Equity, and China Internet Investment Fund, among others. The company was founded in 2015 in Shenzhen, PRC.
- The offering may attract significant investor interest after South Korea’s robotics company Doosan Robotics could raise ~$318M in October 2023.
SF Holding Pre-IPO: Core EBITDA Margins Compare Favorably to Most Express Peers in China and US
- We believe SF’s core express margins are higher than most of its peers’ margins
- But on 2023 EV / EBITDA SF trades at multiples below most Chinese, US peers
- One objective of SF listing in HK is to attract global investors, lift valuation
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