IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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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

Evergrande Property Services Group / Event-Driven

Evergrande Property Services Group (6666 HK)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/evergrande-property-services" target="_blank" data-smartkarma-citation="entities:30921:1" rel="noopener">Evergrande Property Services (6666 HK)</a> is in a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers which contains inside information of the Company.” </li>
<li>The trading halt likely relates to <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande (3333 HK)</a> liquidators’ efforts to sell Evergrande Group’s majority interest in Evergrande Services.</li>
<li>The sale is likely to trigger an unconditional mandatory general offer. I estimate the potential offer price to be around HK$1.08 per share, a 17.8% premium to the last close.</li>
</ul>



Evergrande Property Services (6666 HK) is in a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers which contains inside information of the Company.” 
The trading halt likely relates to Evergrande (3333 HK) liquidators’ efforts to sell Evergrande Group’s majority interest in Evergrande Services.
The sale is likely to trigger an unconditional mandatory general offer. I estimate the potential offer price to be around HK$1.08 per share, a 17.8% premium to the last close.


Evergrande Services (6666 HK): Liquidation of Evergrande’s Stake to Trigger an Unconditional MGO?

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

Greentown Service Group / Equity Bottom-Up

<ul><li>Greentown Service’s 1H25 net profit (NP) rose 22.6% YoY and core operating profit (=GP-SG&amp;A) lifted 25.3% YoY, far exceeding the 15% full-year guidance set by management earlier.</li><li>During the period, revenue grew 6.1% YoY, with resilient core PM biz (+10.2% YoY) driven by strong third-party expansion (especially non-residential projects).</li><li>Non-owner VAS flat grew 0.6% YoY, while owner VAS dipped 6% YoY on partial business deconsolidation. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Greentown Service’s 1H25 net profit (NP) rose 22.6% YoY and core operating profit (=GP-SG&amp;A) lifted 25.3% YoY, far exceeding the 15% full-year guidance set by management earlier.During the period, revenue grew 6.1% YoY, with resilient core PM biz (+10.2% YoY) driven by strong third-party expansion (especially non-residential projects).Non-owner VAS flat grew 0.6% YoY, while owner VAS dipped 6% YoY on partial business deconsolidation. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Greentown Service (2869 HK) - Solid Growth Driven by Notable Efficiency Gains

<ul><li>Greentown Service’s revenue/core operating profit went up 11/26% YoY in 1H24, in-line with/beating market expectations buoyed by a stable parent company, robust third-party expansion, and a diversified VAS business.</li><li>Core OPM expanded 1.2ppt YoY to 9.8%, resulting from a +0.6ppt GP margin hike and a 0.6ppt decrease in SG&amp;A ratio attributable to efficient cost control.</li><li>Amid intensified competition in third-party expansion, the company delivered steady conversion from parentco projects to mitigate headwinds. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Greentown Service’s revenue/core operating profit went up 11/26% YoY in 1H24, in-line with/beating market expectations buoyed by a stable parent company, robust third-party expansion, and a diversified VAS business.Core OPM expanded 1.2ppt YoY to 9.8%, resulting from a +0.6ppt GP margin hike and a 0.6ppt decrease in SG&amp;A ratio attributable to efficient cost control.Amid intensified competition in third-party expansion, the company delivered steady conversion from parentco projects to mitigate headwinds. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Greentown Service (2869 HK) - Solid 1H24 Against Industry Headwinds

<ul>
<li>On 25 June, <a href="https://www.smartkarma.com/entities/midea-real-estate-holding-ltd" target="_blank" data-smartkarma-citation="entities:27450:1" rel="noopener">Midea Real Estate Holding (3990 HK)</a> disclosed an in-specie distribution of its PD&amp;S business through a scrip or cash (HK$5.90 per share, 57.33% premium to undisturbed price).</li>
<li>The key condition will be approval of the distribution by at least 75% of disinterested shareholders (&lt;10% of all disinterested shareholders rejection).</li>
<li>Midea RE will remain listed with an asset-light retained business, which is estimated to be worth HK$1.93. The Group's estimated value is HK$7.83, a 17.6% upside to the last close.</li>
</ul>


On 25 June, Midea Real Estate Holding (3990 HK) disclosed an in-specie distribution of its PD&amp;S business through a scrip or cash (HK$5.90 per share, 57.33% premium to undisturbed price).
The key condition will be approval of the distribution by at least 75% of disinterested shareholders (&lt;10% of all disinterested shareholders rejection).
Midea RE will remain listed with an asset-light retained business, which is estimated to be worth HK$1.93. The Group's estimated value is HK$7.83, a 17.6% upside to the last close.


Midea Real Estate (3990 HK): An In-Specie Distribution to Unlock Value

<ul><li>Greentown Service’s core operating profit/revenue both went up 20% YoY in 1H23, in-line with the market expectation.</li><li>GP margin declined 0.6 ppts to 18.7% but hedged by improving SG&amp;A fee rate (-0.6 ppts to 10.0%).</li><li>We saw visible recovery on home living services, housing brokerage and education services which will be proved to be a good VAS exploration in our view. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Greentown Service’s core operating profit/revenue both went up 20% YoY in 1H23, in-line with the market expectation.GP margin declined 0.6 ppts to 18.7% but hedged by improving SG&amp;A fee rate (-0.6 ppts to 10.0%).We saw visible recovery on home living services, housing brokerage and education services which will be proved to be a good VAS exploration in our view. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Greentown Service (2869 HK) – 1H23 Results In-Line, Visible Recovery in Owner VAS

China

Greentown Service Group Co. Ltd. is a leading property management and services company. It provides comprehensive property management, community living, consulting, and technology services. The company was established in 1998 and is headquartered in Xihu District, Hangzhou, China.

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Greentown Service Group (2869 HK)

Evergrande Services (6666 HK): Liquidation of Evergrande’s Stake to Trigger an Unconditional MGO?

The trading halt likely relates to Evergrande liquidators’ efforts to sell Evergrande Group’s majority interest in Evergrande Services, which could...

Arun George

Greentown Service (2869 HK) - Solid Growth Driven by Notable Efficiency Gains

Greentown Service’s 1H25 net profit (NP) rose 22.6% YoY and core operating profit (=GP-SG&A) lifted 25.3% YoY, far exceeding the 15% full-year...

CMB International

Greentown Service (2869 HK) - Solid 1H24 Against Industry Headwinds

Core OPM expanded 1.2ppt YoY to 9.8%, resulting from a +0.6ppt GP margin hike and a 0.6ppt decrease in SG&A ratio attributable to efficient cost...

CMB International

Midea Real Estate (3990 HK): An In-Specie Distribution to Unlock Value

After the distribution of the asset-heavy business, Midea RE will remain listed as an asset-light business, estimated to be worth HK$1.93. The...

Arun George

Greentown Service (2869 HK) – 1H23 Results In-Line, Visible Recovery in Owner VAS

We saw visible recovery on home living services, housing brokerage and education services which will be proved to be a good VAS exploration in our...

CMB International

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