In today’s briefing:
- VNET’s Languishing Shares Draws an Opportunistic $8.00 Bid
- Zhihu HK Secondary – Going Further than Autohome and Weibo, Stock Might Go Further Down as Well
- KOSDAQ 150 Rebalancing in June: Safely Tradable Names for Position Buildups at This Point
- Tencent/Netease: China Game Approval Resumption Is a Relieve, but Not Out of Tunnel
- Zhihu Secondary: There Is Upside Potential but Be Cautious
- Kurly’s Mgmt Needs to Drastically Lower Valuation Expectations to Complete IPO in Next 6 Months
- S&P Also Looking Vulnerable Again
VNET’s Languishing Shares Draws an Opportunistic $8.00 Bid
- VNET, formerly known as 21Vianet Group (VNET US), is a leading carrier and cloud-neutral data centre services provider in China.
- It has received a non-binding privatisation proposal from The Hina Group and Industrial Bank Co Ltd A (601166 CH) at $8.00 per ADS, a 48.1% premium to the undisturbed price.
- The Board has not made any decisions on the offer. Despite the juicy premium, the offer is unattractive in the context of historical multiples and share prices.
Zhihu HK Secondary – Going Further than Autohome and Weibo, Stock Might Go Further Down as Well
- Zhihu plans to raise around US$130m via a dual primary listing in Hong Kong.
- Unlike all the prior dual primary/secondary listings which have been done via offering either only primary or a mix of primary+secondary shares, Zhihu’s offering will consist of only secondary shares.
- In this note, we’ll talk about the deal dynamics and structure.
KOSDAQ 150 Rebalancing in June: Safely Tradable Names for Position Buildups at This Point
- Here are the tradable stocks for Long/Short position buildups for the KOSDAQ 150 rebalancing in June.
- LONG (Additions): Dear U (376300 KS), Vidente (121800 KS), GOLFZON (215000 KS), Hana Micron (067310 KS), Danal (064260 KS), & Intellian Technologies (189300 KS)
- SHORT (Deletions): Daea Ti (045390 KS), Advanced Process Systems (265520 KS), Unison (018000 KS), Danawa (119860 KS), OE Solutions (138080 KS), & Toptec (108230 KS)
Tencent/Netease: China Game Approval Resumption Is a Relieve, but Not Out of Tunnel
- China announced game approval last night, after 8 months of silence.
- We discussed in our previous note that China would resume game approval.
- There is no game approved for Tencent and Netease this round but we believe their approval will come in due time.
Zhihu Secondary: There Is Upside Potential but Be Cautious
- Zhihu has filed for a dual primary listing on the HKEx through offering of 26m shares (Class A) by existing shareholders at a maximum offer price of HK$51.8 per share.
- Two ADS represent one Class A ordinary share and shares closed at US$2.56 per ADS, and the maximum offer price implies a 31.5% premium to the last close.
- Zhihu’s business model seems to work in favour and the company’s shares are extremely cheap at the current multiples. There is upside but we would remain cautious.
Kurly’s Mgmt Needs to Drastically Lower Valuation Expectations to Complete IPO in Next 6 Months
- Kurly’s management team needs to drastically lower its valuation expectation in this difficult market environment.
- Due to weak market conditions, it is likely to have a difficult time completing this IPO if its valuation is stretched to about 6 trillion won to 7 trillion won.
- In our view, the company could complete its IPO if the valuation is close to about 3.5 trillion won to 4.5 trillion won.
S&P Also Looking Vulnerable Again
- The prices at work on the S&P 500 are warning of further weakness ahead
- Short term focus is on 4418 and if that gives way we could be en route towards the 4101 low again over the coming weeks
- Overall it is beginning to look as though the rebound over the past 4-6 weeks has been corrective
Before it’s here, it’s on Smartkarma
