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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a>’s US$8.60 per ADS offer from Bain Capital is conditional on dissenting shareholders representing less than 12% of outstanding shares. </li>
<li>Oasis Management, an activist fund, <a href="https://investor.chindatagroup.com/static-files/87aad398-55ac-469c-959f-849e42247988" target="_blank" rel="noopener">recently disclosed</a> a shareholding representing 65.9 million ordinary shares, 8.99% of outstanding shares and 1.24% of voting interest. </li>
<li>Precedent transactions where the dissent condition was exceeded suggest two possibilities – the offeror waives the condition or persuades sufficient shareholders to withdraw as dissenters.</li>
</ul>



Chindata Group (CD US)’s US$8.60 per ADS offer from Bain Capital is conditional on dissenting shareholders representing less than 12% of outstanding shares. 
Oasis Management, an activist fund, recently disclosed a shareholding representing 65.9 million ordinary shares, 8.99% of outstanding shares and 1.24% of voting interest. 
Precedent transactions where the dissent condition was exceeded suggest two possibilities – the offeror waives the condition or persuades sufficient shareholders to withdraw as dissenters.


Chindata (CD US): Maximum Dissent Condition in Focus as Oasis Builds a Stake

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Back on the <a href="https://investor.chindatagroup.com/static-files/cb5912cf-662a-4900-8c41-751c53513ef4" target="_blank" rel="noopener">11 August</a>, Chinese data center provider <strong><a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a></strong> and major shareholder Bain Capital entered into a definitive agreement at US$8.60/ADS.</li>
<li>The EGM was held yesterday, the 4 December, and the merger was approved by 97.75% of the total votes cast. No specific PRC regulatory approval is needed for this merger. </li>
<li>All good right? Not quite. There's still the nagging issue involving 22.79% of shares out objecting to the deal, exceeding the 12% dissenting threshold, a condition to the merger. </li>
</ul>


Back on the 11 August, Chinese data center provider Chindata Group (CD US) and major shareholder Bain Capital entered into a definitive agreement at US$8.60/ADS.
The EGM was held yesterday, the 4 December, and the merger was approved by 97.75% of the total votes cast. No specific PRC regulatory approval is needed for this merger. 
All good right? Not quite. There's still the nagging issue involving 22.79% of shares out objecting to the deal, exceeding the 12% dissenting threshold, a condition to the merger. 


Dissenters Mobilise As Chindata (CD US)'s Shareholders Approve Bain's Offer

China and US Equity Analyst

Roger Xie

Equity Bottom-Up

<ul>
<li>News reported that Alibaba is in talks with Shanghai Media Group to sell its 30% stake in <a href="https://www.smartkarma.com/entities/weibo-corp-adr" target="_blank" data-smartkarma-citation="entities:3826:1" rel="noopener">Weibo Corp (WB US)</a>, which we have expected since Weibo's Hong Kong listing.</li>
<li>Since 2013, Alibaba has started to invest in Weibo before its NASDAQ IPO and continued to increase the holdings. Alibaba remains a strategic partner with Weibo on platform advertisement.</li>
<li>We view the potential transaction net positive for <a href="https://www.smartkarma.com/entities/weibo-corp-adr" target="_blank" data-smartkarma-citation="entities:3826:1" rel="noopener">Weibo Corp (WB US)</a> as it will realign Weibo strategic direction and Alibaba impact will be minimized. Weibo valuation is also attractive.</li>
</ul>


News reported that Alibaba is in talks with Shanghai Media Group to sell its 30% stake in Weibo Corp (WB US), which we have expected since Weibo's Hong Kong listing.
Since 2013, Alibaba has started to invest in Weibo before its NASDAQ IPO and continued to increase the holdings. Alibaba remains a strategic partner with Weibo on platform advertisement.
We view the potential transaction net positive for Weibo Corp (WB US) as it will realign Weibo strategic direction and Alibaba impact will be minimized. Weibo valuation is also attractive.


Weibo (WB US): Alibaba Potential Stake Sale, More Visibility on Strategic Direction

Research on International Stock Ideas, Value Punks

Value Punks

Research on International Stock Ideas

Value Punks’ mission is to deliver institutional-grade research on international stock ideas in a digestible, reader-friendly format.

At Value Punks, we blend our background in traditional value-investing with an openness to embrace a constantly and rapidly evolving investment and business landscape.

Institutional-Grade Research

Thematic (Sector/Industry)

<ul>
<li>2021 has been a year of regulations for Chinese stocks. Alongside the intensified regulatory landscape, we have seen concerns of VIE risk resurfacing</li>
<li>There are those who have brought out the loudspeaker to drive the narrative that the risks associated with VIE is growing. We disagree.</li>
<li>The narrative that an official VIE ban is in order stems from confusion and to us seems like an uninformed attempt at connecting the regulatory dots.</li>
</ul>


2021 has been a year of regulations for Chinese stocks. Alongside the intensified regulatory landscape, we have seen concerns of VIE risk resurfacing
There are those who have brought out the loudspeaker to drive the narrative that the risks associated with VIE is growing. We disagree.
The narrative that an official VIE ban is in order stems from confusion and to us seems like an uninformed attempt at connecting the regulatory dots.


<ul>
<li>The SEC has finalised the Holding Foreign Companies Accountable Act rules. Under the current timeframe, the SEC may force the delisting of foreign companies in three years if in contravention.</li>
<li>Amid <a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Global (DIDI US)</a>'s intention to delist from the US, the CSRC refutes it is pushing for VIEs to drop their listings in the United States.</li>
<li>Expect continued volatility as the ~248 US-listed China plays seek to avoid delisting if they don’t comply with auditing rules.</li>
</ul>


The SEC has finalised the Holding Foreign Companies Accountable Act rules. Under the current timeframe, the SEC may force the delisting of foreign companies in three years if in contravention.
Amid DiDi Global (DIDI US)'s intention to delist from the US, the CSRC refutes it is pushing for VIEs to drop their listings in the United States.
Expect continued volatility as the ~248 US-listed China plays seek to avoid delisting if they don’t comply with auditing rules.


Delisting Chinese ADRs: High Foreign-Holding, With No Fixed Abode, Most At Risk

China

SINA Corporation is a global Internet media company operating Chinese-language destination sites. The Company offers a network of branded content and services targeting people of Chinese descent worldwide. SINA.com offers online news, entertainment, community, and commerce through web sites that are produced and updated by local teams in China, Hong Kong, Taiwan, and North America.

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Sina Corp (Class A) (SINA US)

Chindata (CD US): Maximum Dissent Condition in Focus as Oasis Builds a Stake

The transaction received shareholder approval. Dissenting shareholders represent 22.79% of outstanding shares vs. the requirement of less than 12%...

Arun George

Dissenters Mobilise As Chindata (CD US)'s Shareholders Approve Bain's Offer

This is done. Trading at a 2% gross spread to terms, or ~14% annualised assuming late-Jan completion. Not bad. Not great. It was certainly more...

David Blennerhassett

Weibo (WB US): Alibaba Potential Stake Sale, More Visibility on Strategic Direction

We view the potential stake sale transaction net positive for Weibo Corp (WB US) as it will realign Weibo strategic direction and Alibaba impact...

Roger Xie

Governance: The bottom-line on VIE

2021 has been a year of regulations for Chinese stocks. Alongside the intensified regulatory landscape, we have seen concerns of VIE risk resurfacing

Value Punks

Delisting Chinese ADRs: High Foreign-Holding, With No Fixed Abode, Most At Risk

This does not strike me as the time to be bargain hunting. Not when there remains confusion as to how and when delistings will unfold. The focus...

David Blennerhassett

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