IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

SHIBAURA ELECTRONICS CO., LTD. manufactures and sells thermistor elements, sensors, measuring devices, and control equipment.  The Company's products include temperature sensors, air flow sensors, liquid level sensors, gas sensors, digital thermometers, temperature controllers, anemometers, digital hygrometers, and humidity controllers.

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<a href="https://www.smartkarma.com/entities/yageo-corporation" target="_blank" data-smartkarma-citation="entities:13212:1" rel="noopener">Yageo Corporation (2327 TT)</a> has revised its hostile preconditional tender offer for <a href="https://www.smartkarma.com/entities/shibaura-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:12704:1" rel="noopener">Shibaura Electronics (6957 JP)</a> to JPY5,400, representing a 20.0% premium to <a href="https://www.smartkarma.com/entities/minebea-mitsumi-inc" target="_blank" data-smartkarma-citation="entities:5032:1" rel="noopener">Minebea Mitsumi (6479 JP)</a>’s JPY4,500 offer.</li>
<li>All the other terms remain unchanged. In response to the revised Yageo offer, the Board will commence a sincere review to determine if the Yageo offer will enhance corporate value. </li>
<li>There is a 50/50 chance that Minebea walks or revises its offer. Yageo’s revised offer is marginally above the midpoint of Minebea IFA's DCF range, potentially justifying a higher offer.</li>
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Yageo Corporation (2327 TT) has revised its hostile preconditional tender offer for Shibaura Electronics (6957 JP) to JPY5,400, representing a 20.0% premium to Minebea Mitsumi (6479 JP)’s JPY4,500 offer.
All the other terms remain unchanged. In response to the revised Yageo offer, the Board will commence a sincere review to determine if the Yageo offer will enhance corporate value. 
There is a 50/50 chance that Minebea walks or revises its offer. Yageo’s revised offer is marginally above the midpoint of Minebea IFA's DCF range, potentially justifying a higher offer.


Shibaura Electronics (6957 JP): No Messing Around as Yageo (2327 TT) Returns with a JPY5,400 Offer

Canvest Environmental Protection Group / Event-Driven

Canvest Environment Protection Group Company Limited focuses on the development, management, and operation of waste-to-energy plants. The Company's plants are located in China.

Canvest Environmental Protection Group (1381 HK)

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<a href="https://www.smartkarma.com/entities/canvest-environmental-protection-group-co-ltd" target="_blank" data-smartkarma-citation="entities:100:1" rel="noopener">Canvest Environmental Protection Group (1381 HK)</a>’s IFA opines that <a href="https://www.smartkarma.com/entities/grandblue-environment-co-a" target="_blank" data-smartkarma-citation="entities:17887:1" rel="noopener">Grandblue Environment Co A (600323 CH)</a>’s HK$4.90 offer is fair and reasonable. The vote is on 12 May. </li>
<li>Key conditions include approval by at least 75% of independent shareholders (&lt;10% of independent shareholders' rejection). Shareholders with blocking stakes will be supportive.</li>
<li>This is a done deal. At the last close and for a 10 June payment, the gross/annualised spread is 2.3%/18.3%. </li>
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Canvest Environmental Protection Group (1381 HK)’s IFA opines that Grandblue Environment Co A (600323 CH)’s HK$4.90 offer is fair and reasonable. The vote is on 12 May. 
Key conditions include approval by at least 75% of independent shareholders (&lt;10% of independent shareholders' rejection). Shareholders with blocking stakes will be supportive.
This is a done deal. At the last close and for a 10 June payment, the gross/annualised spread is 2.3%/18.3%. 


Equity Capital Markets

China Resources Beverage / Equity Capital Markets

China Resources Beverage (Holdings) Company Limited manufactures and distributes drink products. The Company produces drinking water, lemon tea, chrysanthemum tea, sour plum soups, oolong tea, fruit tea, milk tea, and other products. China Resources Beverage (Holdings) markets its products throughout Hong Kong.

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<a href="https://www.smartkarma.com/entities/china-resources-beverage" target="_blank" data-smartkarma-citation="entities:41984:1" rel="noopener">China Resources Beverage (2460 HK)</a> trades 4.0% below its IPO of HK$14.50 per share. The first six-month lock-up period expires on 22 April.</li>
<li>At the end of the first lock-up expiry, shares representing 727.1m (30.32% of outstanding) will be eligible for sale. However, there is a low risk of substantial sales.</li>
<li>The fundamentals remain good, with margin improvement, beverage’s fast-paced growth, narrowing of the margin gap with Nongfu and undemanding valuation.</li>
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China Resources Beverage (2460 HK) trades 4.0% below its IPO of HK$14.50 per share. The first six-month lock-up period expires on 22 April.
At the end of the first lock-up expiry, shares representing 727.1m (30.32% of outstanding) will be eligible for sale. However, there is a low risk of substantial sales.
The fundamentals remain good, with margin improvement, beverage’s fast-paced growth, narrowing of the margin gap with Nongfu and undemanding valuation.


CR Beverage (2460 HK): Keep Calm Heading into the Lock-Up Expiry

LG Electronics India / Equity Capital Markets

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<a href="https://www.smartkarma.com/entities/lg-electronics-india" target="_blank" data-smartkarma-citation="entities:44148:1" rel="noopener">LG Electronics India (123D IN)</a>/LGEIL, a subsidiary of <a href="https://www.smartkarma.com/entities/lg-electronics-inc" target="_blank" data-smartkarma-citation="entities:8814:1" rel="noopener">LG Electronics (066570 KS)</a>, aims to raise up to US$1.5 billion through a secondary offering (15% of outstanding shares).</li>
<li>In <a href="https://www.smartkarma.com/insights/lg-electronics-india-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:182381" rel="noopener">LG Electronics India IPO: The Bull Case</a>, we highlighted the key elements of the bull case. In this note, we outline the bear case.</li>
<li>The bear case rests on bottom-quartile revenue growth, revenue decline in the largest product category, dividends to the parent far exceeding FCF and significant share overhang.</li>
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LG Electronics India (123D IN)/LGEIL, a subsidiary of LG Electronics (066570 KS), aims to raise up to US$1.5 billion through a secondary offering (15% of outstanding shares).
In LG Electronics India IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on bottom-quartile revenue growth, revenue decline in the largest product category, dividends to the parent far exceeding FCF and significant share overhang.


Chagee Holdings Limited operates as a holding company. The Company, through its subsidiaries, provides a wide range of tea drinks products and services. Chagee Holdings serves customers worldwide.

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<a href="https://www.smartkarma.com/entities/chagee-holdings-limited" target="_blank" data-smartkarma-citation="entities:45011:1" rel="noopener">Chagee Holdings (CHA US)</a>, a leading premium tea drinks brand, is seeking to raise US$382-411 million through a Nasdaq IPO.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/chagee-holdings-cha-us-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:181653" rel="noopener">Chagee Holdings (CHA US) IPO: The Bull Case</a> and <a href="https://www.smartkarma.com/insights/chagee-holdings-cha-us-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:182085" rel="noopener">Chagee Holdings (CHA US) IPO: The Bear Case</a>.</li>
<li>There are four cornerstone investors. Our valuation analysis suggests Chagee is attractively valued at the IPO price range. Therefore, we would participate in the IPO.</li>
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Chagee Holdings (CHA US), a leading premium tea drinks brand, is seeking to raise US$382-411 million through a Nasdaq IPO.
We previously discussed the IPO in Chagee Holdings (CHA US) IPO: The Bull Case and Chagee Holdings (CHA US) IPO: The Bear Case.
There are four cornerstone investors. Our valuation analysis suggests Chagee is attractively valued at the IPO price range. Therefore, we would participate in the IPO.


Chagee Holdings (CHA US) IPO: Valuation Insights

Arun has over 15 years’ experience covering the Technology sector. During this time, he has worked with technology start-ups and as an equity analyst in investment banks and independent research firms. He was formerly a Technology Analyst for Canaccord Genuity, Altium Securities, Espirito Santo Investment Bank, Noble Group and Clear Capital. He has a dual Master’s degree in Financial Engineering and Industrial and Operations Engineering from the University of Michigan. He obtained his Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Bombay. He is also a CFA charterholder.

Arun George
IPOs and Catalysts/Events
• Global Equity Research Ltd

Shibaura Electronics (6957 JP): No Messing Around as Yageo (2327 TT) Returns with a JPY5,400 Offer

There is a 50/50 chance that Minebea walks or returns with a revised offer. Yageo’s revised offer is marginally above the midpoint of Minebea IFA's...

Arun George

Canvest (1381 HK): Scheme Vote on 12 May

This is a done deal as the vote is low-risk. At the last close and for a 10 June payment, the gross/annualised spread is 2.3%/18.3%.

Arun George

CR Beverage (2460 HK): Keep Calm Heading into the Lock-Up Expiry

The shares are trading 4.0% below the IPO price. The first six-month lock-up period expires on 22 April. However, there is a low risk of...

Arun George

LG Electronics India IPO: The Bear Case

The bear case rests on bottom-quartile revenue growth, revenue decline in the largest product category, dividends to the parent far exceeding FCF...

Arun George

Chagee Holdings (CHA US) IPO: Valuation Insights

Our valuation analysis suggests Chagee is attractively valued at the IPO price range. Therefore, we would participate in the IPO.

Arun George