In today’s briefing:
- CPMC (906 HK) Responds To Champion’s Offer
- To Tender Or Not – Gauging The Future of Sun Corp (6736)
- Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for September
- HSCEI/HSTECH/HSIII Index Rebalance Preview: Potential Changes, Flow & Positioning
- Softbank (9984 JP): The NAV Discount High Offers an Investment Opportunity
- 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”
- Quiddity Leaderboard HSTECH Sep 24: Expected ADD and DEL Have 10+ Days to Trade
- Orora Ltd (ORA AU) Rejects A$2.55/Share Offer From Lone Star
- Tencent to Report 2Q FY24 Results (What Is Priced?), MSC Index Changes for Aug Rebalance Published
CPMC (906 HK) Responds To Champion’s Offer
- On the 30th July 2024, packaging play CPMC Holdings (906 HK) dispatched the Composite Document for the HK$6.87/share, in cash, Offer from SASAC/NCSSF-backed Champion.
- The Response Document, including the IFA opinion (with a fair & reasonable conclusion) has now been dispatched.
- However, the focus remains on ORG Technology Co., Ltd. A (002701 CH)‘s superior HK$7.21/share Offer, which is currently negotiating the necessary regulatory approvals.
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.
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for September
- Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 September.
- With no constituent changes in March and 1 add/1 delete in June, there could be more changes in September with Health Care stocks among the potential inclusions.
- Changes to the Hang Seng Industry Classification System (HSICS) will be implemented from the September rebalance and that will alter industry coverage.
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.
Softbank (9984 JP): The NAV Discount High Offers an Investment Opportunity
- The announcement of JPY500bn share buybacks is a positive for SoftBank group minority shareholders, and confirms the positive impact of the emergence of Elliott as an activist shareholder
- The combination of the big weighting of Arm Holdings in the group’s equity value and the impact of the appreciating JPY has driven the NAV discount to very high levels
- Much bad news seems priced in following the market turbulence; we remain positive on Softbank shares as they trade at a historically high 57%+ discount to the estimated NAV
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.
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.
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.
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.
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