Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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Third-party service provider <a href="https://www.smartkarma.com/entities/huifu-payment-ltd" target="_blank" data-smartkarma-citation="entities:27145:1" rel="noopener">Huifu Payment Limited (1806 HK)</a> was <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1218/2020121800101.pdf" target="_blank" rel="noopener">suspended</a> ahead of trading this previous Friday "pursuant to the Hong Kong Code on Takeovers and Mergers". Shares last changed hands at HK$2.76/share. 
An Offer by way of a Scheme has now been <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1223/2020122300031.pdf" target="_blank" rel="noopener">announced</a>. Scheme shares will be cancelled in exchange for either:
a) $3.50/share cash, a 26.8% premium to last close; or b) 2.709677 new shares in the Offeror.
Neither the cash nor the scrip consideration will be increased.
The Offeror is an unlisted vehicle owned as to 70.7030%, 24.6620%, and 4.6350% by Zhou Ye, Mu Haijie, and Jin Yuan, who are directors of Huifu. 
These directors and concert parties hold 17.61% of shares out, and will be required to abstain from voting at the Scheme Meeting. 
Key Scheme conditions include at least 75% of Disinterested Shares voting FOR &amp; not more than 10% of the votes attached to ALL the Disinterested Shares against.
Irrevocables totaling 828.738mn shares out or 63.59% have been received. That satisfies the 75% limb.
The headcount test applies as Huifu is Cayman incorporated. 
The irrevocables shareholders - Sampoerna, Bain, Keystone, FIL/Eight Roads, Pacven, and Bright Journey - are all pre-IPO investors. All irrevocables will elect the scrip alternative.
The Offer Price is 53% below where Huifu was listed in June 2018. Yet no single shareholder has the requisite blocking stake, nor do I expect one to emerge.
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More below the fold.
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Third-party service provider Huifu Payment Limited (1806 HK) was suspended ahead of trading this previous Friday "pursuant to the Hong Kong Code on Takeovers and Mergers". Shares last changed hands at HK$2.76/share. 
An Offer by way of a Scheme has now been announced. Scheme shares will be cancelled in exchange for either:
a) $3.50/share cash, a 26.8% premium to last close; or b) 2.709677 new shares in the Offeror.
Neither the cash nor the scrip consideration will be increased.
The Offeror is an unlisted vehicle owned as to 70.7030%, 24.6620%, and 4.6350% by Zhou Ye, Mu Haijie, and Jin Yuan, who are directors of Huifu. 
These directors and concert parties hold 17.61% of shares out, and will be required to abstain from voting at the Scheme Meeting. 
Key Scheme conditions include at least 75% of Disinterested Shares voting FOR &amp; not more than 10% of the votes attached to ALL the Disinterested Shares against.
Irrevocables totaling 828.738mn shares out or 63.59% have been received. That satisfies the 75% limb.
The headcount test applies as Huifu is Cayman incorporated. 
The irrevocables shareholders - Sampoerna, Bain, Keystone, FIL/Eight Roads, Pacven, and Bright Journey - are all pre-IPO investors. All irrevocables will elect the scrip alternative.
The Offer Price is 53% below where Huifu was listed in June 2018. Yet no single shareholder has the requisite blocking stake, nor do I expect one to emerge.

More below the fold.




Third-party service provider <a href="https://www.smartkarma.com/entities/huifu-payment-ltd" target="_blank" data-smartkarma-citation="entities:27145:1" rel="noopener">Huifu Payment Limited (1806 HK)</a> was listed on the 15 June 2018 at <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2018/0614/01806_3366860/e102.pdf" target="_blank" rel="noopener">HK$7.50</a>/share. The IPO was discussed in <a href="https://www.smartkarma.com/profiles/zhen-zhou-toh" target="_blank" data-smartkarma-citation="accounts:673" rel="noopener">Zhen Zhou, Toh</a>'s insight <a href="https://skr.ma/9JNGu" target="_blank" rel="noopener">Huifu Payment IPO Review - Regulation May Take Away a Major Source of Income</a>. He recommended avoiding the issue - that was a great call.
Shares were <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1218/2020121800101.pdf" target="_blank" rel="noopener">suspended</a> ahead of trading this past Friday "pursuant to the Hong Kong Code on Takeovers and Mergers". Shares last changed hands at HK$2.76/share. 
At the time of listing, Huifu had about 2% market share of third-party payment in China. Its market share compared to <a href="https://www.smartkarma.com/entities/ant-financial-services-group" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Group (6688 HK)</a> and Tenpay's 34.7% and 25.1% respectively at the time, according to the prospectus (<a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2018/0601/ltn20180601025.pdf" target="_blank" rel="noopener">page 88</a>).  
The eleventh-hour failure to list Ant has been copiously discussed here on Smartkarma, including my two kuai worth in <a href="https://skr.ma/X4WWM" target="_blank" rel="noopener">Party Poopers: Reining In China's Internet</a>. Huifu would also be captured under this increased regulatory oversight on tech companies and micro-lending.
At the time of Huyifu's listing, the most commonly asked question was how does Huifu compete against other third-party payment service providers such as Tenpay and Ant.
That remains the key question.
More below the fold.

Third-party service provider Huifu Payment Limited (1806 HK) was listed on the 15 June 2018 at HK$7.50/share. The IPO was discussed in Zhen Zhou, Toh's insight Huifu Payment IPO Review - Regulation May Take Away a Major Source of Income. He recommended avoiding the issue - that was a great call.
Shares were suspended ahead of trading this past Friday "pursuant to the Hong Kong Code on Takeovers and Mergers". Shares last changed hands at HK$2.76/share. 
At the time of listing, Huifu had about 2% market share of third-party payment in China. Its market share compared to Ant Group (6688 HK) and Tenpay's 34.7% and 25.1% respectively at the time, according to the prospectus (page 88).  
The eleventh-hour failure to list Ant has been copiously discussed here on Smartkarma, including my two kuai worth in Party Poopers: Reining In China's Internet. Huifu would also be captured under this increased regulatory oversight on tech companies and micro-lending.
At the time of Huyifu's listing, the most commonly asked question was how does Huifu compete against other third-party payment service providers such as Tenpay and Ant.
That remains the key question.
More below the fold.

Huifu Payment (1806 HK): Early Withdrawal?

APAC IPOs & Placements

Zhen Zhou, Toh

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/yeahka-limited" target="_blank" data-smartkarma-citation="entities:28436:1" rel="noopener">Yeahka Limited (9923 HK)</a> is looking to raise about US$100m from a top-up placement and, concurrently, Longwood Capital is looking to sell 3.8m shares. This is likely a cleanup trade for Longwood Capital.In total, the deal size is about US$125m and the total shares offered represents 5.5% of total enlarged outstanding shares.We have previously covered the IPO in:<ul>
<li><a href="https://www.smartkarma.com/insights/yeahka-pre-ipo-review-growing-in-an-increasingly-competitive-space" target="_blank" rel="noopener">Yeahka (移卡) Pre-IPO Review - Growing in an Increasingly Competitive Space</a></li>
<li>
<a href="https://www.smartkarma.com/insights/yeahka-pre-ipo-phip-updates-and-peer-valuation" target="_blank" data-smartkarma-citation="insights:39253" rel="noopener">Yeahka (移卡) Pre-IPO - PHIP Updates and Peer Valuation</a> </li>
<li><a href="https://www.smartkarma.com/insights/yeahka-pre-ipo-peer-analysis-and-early-thoughts-on-valuation" target="_blank" rel="noopener">Yeahka (移卡) Pre-IPO - Peer Analysis and Early Thoughts on Valuation</a></li>
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<a href="https://www.smartkarma.com/insights/yeahka-ipo-expensive-small-payments-player" target="_blank" data-smartkarma-citation="insights:39566" rel="noopener">Yeahka (移卡) IPO - Expensive Small Payments Player</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/yeahka-trading-update-max-claw-back-triggered-again" target="_blank" data-smartkarma-citation="insights:39867" rel="noopener">Yeahka (移卡) Trading Update - Max Claw Back Triggered Again</a> </li>
</ul>

Yeahka Limited (9923 HK) is looking to raise about US$100m from a top-up placement and, concurrently, Longwood Capital is looking to sell 3.8m shares. This is likely a cleanup trade for Longwood Capital.In total, the deal size is about US$125m and the total shares offered represents 5.5% of total enlarged outstanding shares.We have previously covered the IPO in:
Yeahka (移卡) Pre-IPO Review - Growing in an Increasingly Competitive Space

Yeahka (移卡) Pre-IPO - PHIP Updates and Peer Valuation 
Yeahka (移卡) Pre-IPO - Peer Analysis and Early Thoughts on Valuation

Yeahka (移卡) IPO - Expensive Small Payments Player 

Yeahka (移卡) Trading Update - Max Claw Back Triggered Again 


Yeahka (移卡) Placement - Selling Just as Lock-Up Expires

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.

<a href="https://www.smartkarma.com/entities/ant-financial-services-group" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial (1051260D CH)</a>/Ant Group is the leading digital payments provider and leading digital finance platform in China based on total payment volume and transaction volume, respectively, according to iResearch and Oliver Wyman. Ant has submitted its IPO applications for simultaneous dual-listing in Hong Kong and on the Shanghai stock exchange’s STAR board. Ant is floating no less than 10% of its total share capital to raise around $30 billion, at a valuation of $200-300 billion, according to various press reports.  <div class="content-highlight">We <a href="https://www.smartkarma.com/insights/ant-group-ipo-first-look-swarming-to-market" target="_blank" rel="noopener">previously assessed</a> Ant’s history, operating segments and financial performance based on the disclosure in <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a>’s reports. <a href="https://www.smartkarma.com/profiles/rickin-thakrar" target="_blank" data-smartkarma-citation="accounts:1486" rel="noopener">Rickin Thakrar</a> provided <a href="https://www.smartkarma.com/insights/ant-financial-a-major-payment-ipo" target="_blank" rel="noopener">a quick take review</a> of Ant’s headline financial metrics based on the application proof. In this note, we take a deeper dive to examine the key revenue drivers of each business segment, margin levers and underlying cash generation. Overall, we think that Ant is a unique market-leading asset with attractive fundamentals.</div>

Ant Financial (1051260D CH)/Ant Group is the leading digital payments provider and leading digital finance platform in China based on total payment volume and transaction volume, respectively, according to iResearch and Oliver Wyman. Ant has submitted its IPO applications for simultaneous dual-listing in Hong Kong and on the Shanghai stock exchange’s STAR board. Ant is floating no less than 10% of its total share capital to raise around $30 billion, at a valuation of $200-300 billion, according to various press reports.  We previously assessed Ant’s history, operating segments and financial performance based on the disclosure in Alibaba Group (BABA US)’s reports. Rickin Thakrar provided a quick take review of Ant’s headline financial metrics based on the application proof. In this note, we take a deeper dive to examine the key revenue drivers of each business segment, margin levers and underlying cash generation. Overall, we think that Ant is a unique market-leading asset with attractive fundamentals.

Ant Group IPO Initiation: It's a Bug's Life

<a href="https://www.smartkarma.com/entities/ant-financial-services-group" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial (1051260D CH)</a>/Ant Group is a technology company that provides digital payment services and digital financial services to consumers and small and micro businesses (SMBs) in China and across the world. Ant said last week it would pursue a simultaneous dual-listing in Hong Kong and on the Shanghai stock exchange’s STAR board. The Hong Kong share sale alone could raise about $10 billion at a $200 billion valuation, according to press reports. <div class="content-highlight">In this note, we take a first look at Ant and run through its history, industry and operating segments. We then take a closer look at the rumoured $200 billion valuation in the context of Ant’s financial performance. Based on available disclosure, our estimates and peer group multiples, the $200 billion valuation is justifiable, in our view.  </div>

Ant Financial (1051260D CH)/Ant Group is a technology company that provides digital payment services and digital financial services to consumers and small and micro businesses (SMBs) in China and across the world. Ant said last week it would pursue a simultaneous dual-listing in Hong Kong and on the Shanghai stock exchange’s STAR board. The Hong Kong share sale alone could raise about $10 billion at a $200 billion valuation, according to press reports. In this note, we take a first look at Ant and run through its history, industry and operating segments. We then take a closer look at the rumoured $200 billion valuation in the context of Ant’s financial performance. Based on available disclosure, our estimates and peer group multiples, the $200 billion valuation is justifiable, in our view.  

Ant Group IPO First Look: Swarming to Market

China

Huifu Payment Limited provides third party payment services. The Company offers merchant payment solutions and fintech enabling services to Internet finance providers and commercial banks. Huifu Payment also offers related artificial intelligence, big data, and cloud services.

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Huifu Payment Limited (1806 HK)

Huifu Payment (1806 HK): Scheme Offer

This transaction looks done. I'd buy here - $3.32 - around a 5.4%/14.8% gross/annualised spread, assuming completion mid-May.

David Blennerhassett

Huifu Payment (1806 HK): Early Withdrawal?

Shares are currently suspended, so there's nothing to be done as such. An Offer, possibly from the CEO, may be on the cards.

David Blennerhassett

Yeahka (移卡) Placement - Selling Just as Lock-Up Expires

Yeahka is looking to raise about US$100m from a top-up placement. Concurrently, Longwood Capital is looking to sell 3.8m shares. This is likely a...

Zhen Zhou, Toh

Ant Group IPO Initiation: It's a Bug's Life

Ant Financial (1051260D CH)/Ant Group is the leading digital payments provider and leading digital finance platform in China based on total payment...

Arun George

Ant Group IPO First Look: Swarming to Market

Ant Financial (1051260D CH)/Ant Group is a technology company that provides digital payment services and digital financial services to consumers...

Arun George

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