In today’s briefing:
- HK Connect SOUTHBOUND Flows (To 16 Aug 2024); Big Net Buying On “Tiny” Overall Volume, ETFs Big
- PropertyGuru (PGRU US): EQT’s US$6.70 Offer Is A Done Deal
- Weekly Deals Digest (18 Aug) – JTower, Piolax, Fancl, China TCM, CPMC, PropertyGuru, Orora, WeRide
- ASPEED’s 159% July Revenue YoY Growth Bodes Well For H224 AI Server Shipments
- [Tencent (700 HK, BUY, TP HK$485) TP Change]: Revenue Acceleration and Margin Leverages to Come
HK Connect SOUTHBOUND Flows (To 16 Aug 2024); Big Net Buying On “Tiny” Overall Volume, ETFs Big
- SOUTHBOUND was again a net buyer, for HK$16.6bn this week (now 28wks in a row of net buying), on VERY LOW two-way volumes.
- Gross volumes were very low. Net volumes were decent. There were three ETFs in the top 5 SOUTHBOUND net buys this past week suggesting position unwinding.
- Top net buys other than the ETFs were China Mobile and Tencent (now 14 out of 15 days seeing net SOUTHBOUND buying)
PropertyGuru (PGRU US): EQT’s US$6.70 Offer Is A Done Deal
- PropertyGuru (PGRU US) entered into a definitive merger agreement with EQT (EQT SS) at US$6.70 per share, a 51.9% premium to the undisturbed price of US$4.41 (21 May).
- The shareholder vote is done (two-thirds voting threshold) due to TPG Inc (TPG US)/KKR & Co (KKR US)’s support and drag-along rights relating to REA Group Ltd (REA AU)’s shares.
- This is a clean deal as there is no dissenting condition or requirement for country antitrust approvals. At the last close and for end-of-year payment, the gross/annualised spread is 2.3%/6.4%.
Weekly Deals Digest (18 Aug) – JTower, Piolax, Fancl, China TCM, CPMC, PropertyGuru, Orora, WeRide
- 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: WeRide (WRD US) aims to raise up to US$119 million through a Nasdaq IPO and US$321 million through a concurrent private placement.
- Event-Driven developments:China Traditional Chinese Medicine (570 HK), CPMC Holdings (906 HK), JTower (4485 JP), Piolax Inc (5988 JP), Fancl Corp (4921 JP), PropertyGuru (PGRU US).
ASPEED’s 159% July Revenue YoY Growth Bodes Well For H224 AI Server Shipments
- ASPEED’s July revenue amounted to NTD 601 million, up 159% YoY
- ASPEED’s YTD revenue of NTD 2,970 million, is up 88% YoY
- This bodes well for H224 server shipments, both general purpose and AI accelerated and should be reflected in NVIDIA’s earnings/outlook scheduled for August 28
[Tencent (700 HK, BUY, TP HK$485) TP Change]: Revenue Acceleration and Margin Leverages to Come
- Tencent reported C2Q24 revenue, IFRS operating profit, and IFRS net income in-line, in-line, 10% vs. our estimates and in-line, in-line, 19% vs. consensus;
- Weak fintech revenue, due to weak consumption, dragged down overall growth. But we see structural revenue acceleration and margin leverages in advertising, game and AI;
- We raise TP to HK$485 and keep Tencent as our TOP PICK.
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