In today’s briefing:
- Haidilao’s Spin-Off of Super Hi: Index Implications
- HSCEI: Index Handling Changes for Secondary & Dual-Primary Listings
- Acotec Scientific Holdings: Boston Scientific’s Partial Offer
- Acotec Scientific (6669 HK)’s Partial Offer of HK$20 from Boston Scientific
- Post Card from Dhaka – A Primer on the Bangladesh Market
- BILIBILI (BILI US): Can Achieving Breakeven Justify US$10bn Market Cap?
- HSTECH: Index Handling Changes & Flows in March
- Home Consortium (HMC AU) FTSE EPRA Index Deletion – Underperforming but STILL Expensive
- 2023 IPOs Pipeline Worldwide (Top 100 Companies)
- IHI (7013) | Boeing Orders Take Off
Haidilao’s Spin-Off of Super Hi: Index Implications
- Haidilao (6862 HK) intends to spin-off its 90% holding in Super Hi International Holding (SHI HK) with an ex-date of 16 December.
- Super Hi International Holding (SHI HK) will be deleted from the Hong Kong Hang Seng Index and Hang Seng China Enterprises Index at the close on listing day.
- There could be nationality changes and selling from MSCI and FTSE trackers as well, though the timing is uncertain at this point.
HSCEI: Index Handling Changes for Secondary & Dual-Primary Listings
- Hang Seng Indexes has changed the index handling treatment for Secondary Listings and Dual Primary Listings from the next rebalance in March.
- The changes could lead to an increase in the index weighting for Li Auto (2015 HK) and the inclusion of XPeng (9868 HK) at the March rebalance.
- The improved rankings for the Secondary and Dual Primary listings will lead to other changes to the index in March.
Acotec Scientific Holdings: Boston Scientific’s Partial Offer
- Acotec Scientific Holdings (6669 HK), a Chinese medical technology company, has announced a Partial Offer from Boston Scientific (BSX US).
- The Offer Price for up to 65% of shares out is HK20/share, a 31.6% premium to last close, but below last year’s IPO price of HK$23.80/share.
- Irrevocables who intend to tender a total of up to 60.14% of shares out. This includes the CEO and the key pre-IPO investor.
Acotec Scientific (6669 HK)’s Partial Offer of HK$20 from Boston Scientific
- Acotec Scientific Holdings (6669 HK) disclosed a partial offer from Boston Scientific (BSX US) to acquire a maximum of 203.7 million shares at HK$20 per share.
- The partial offer is conditional on the offeror hitting 50.01% voting rights and approval by the requisite majority of shareholders. Irrevocables represent a minimum of 55.14% of outstanding shares.
- Despite the recent share price pop on the back of FDA approval for Vericor, the partial offer represents an all-time share price high. Therefore, the offer will be declared unconditional.
Post Card from Dhaka – A Primer on the Bangladesh Market
- Bangladesh is the eighth-most populous country in the world and is the second-largest economy in South Asia after India making it a consumer market that warrants close attention.
- India – Bangladesh FTA promises to accelerate trade, but we find little excitement on the ground.
- For an EM Investor, it may be a bit too adventurous to venture into this frontier market plagued with political dynamics and governance risks which are too large to ignore.
BILIBILI (BILI US): Can Achieving Breakeven Justify US$10bn Market Cap?
- BILIBILI shares have rallied more than 200% since early November on prospects of China exiting zero-COVID, short covering, and accelerated breakeven timeline.
- Yet simply achieving breakeven doesn’t justify its US$10 billion valuation. It has to be accompanied by decent profitable growth – an unlikely scenario given the aggressive downsizing needed for breakeven.
- BILI’s businesses also entail structurally low margin. Stock could easily de-rate by 30% or more when growth euphoria recedes and disappointed profitability checks in during 2023.
HSTECH: Index Handling Changes & Flows in March
- Hang Seng Indexes has changed the index handling treatment for Secondary Listings and Dual Primary Listings from the next rebalance in March.
- The change could result in Tencent Music Entertainment Group (1698 HK) replacing Ming Yuan Cloud Group (909 HK) in the index.
- There could be passive buying on Li Auto (2015 HK) and XPeng (9868 HK) due to an increase in the index shares with outflows on other index constituents.
Home Consortium (HMC AU) FTSE EPRA Index Deletion – Underperforming but STILL Expensive
- Home Consortium Ltd (HMC AU) is a Super Stapled Security, having developed HomeCo Daily Needs REIT (HDN AU), overseen the Aventus Group (AVN AU) merger, IPOed HealthCo REIT (HCW AU).
- The current market cap is 1.6x book and probably closer to 2x tangible book as a large “management and development capability premium” is baked in.
- There is a FTSE EPRA Nareit index deletion on Friday. That could prompt further underperformance.
2023 IPOs Pipeline Worldwide (Top 100 Companies)
- This is our fourth annual edition of the IPOs Pipeline Worldwide (Top 100 Companies) report.
- Among 100 companies in our list, those from the US, India, China/HK, and the UK account for 79% of total.
- For those investors that closely monitor the global IPO opportunities, this is a good reference insight to check out the largest potential IPOs that could get completed next year.
IHI (7013) | Boeing Orders Take Off
- Boeing’s stock price is recovering sharply as it benefits from recent multi-billion-dollar order wins
- Japanese stocks (IHI, MHI, KHI & Subaru) are highly geared into the Boeing supply chain
- We highlight IHI as a top pick on this thematic and believe aero-engine revenues will continue to recover, driving a stock re-rating
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