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

China National Building Material / Event-Driven

<ul>
<li>The IFA opines that the <a href="https://www.smartkarma.com/entities/china-national-building-ma-h" target="_blank" data-smartkarma-citation="entities:184:1" rel="noopener">China National Building Material (3323 HK)</a> share buyback, which will acquire a maximum of 841.7 million H Shares at HK$4.03, is fair and reasonable.</li>
<li>The share buyback seems designed to enable the CNBM parent company to bypass the creeper rule and squeeze the shorts. </li>
<li>The fortuitous material derating of peers has helped make the buyback attractive. Therefore, the votes should pass, and the minimum acceptance condition should be met. </li>
</ul>


The IFA opines that the China National Building Material (3323 HK) share buyback, which will acquire a maximum of 841.7 million H Shares at HK$4.03, is fair and reasonable.
The share buyback seems designed to enable the CNBM parent company to bypass the creeper rule and squeeze the shorts. 
The fortuitous material derating of peers has helped make the buyback attractive. Therefore, the votes should pass, and the minimum acceptance condition should be met. 


China National Building Material (3323 HK): H Share Buyback Vote on 19 February

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Back on the 6th December, <a href="https://www.smartkarma.com/entities/china-national-building-ma-h" target="_blank" data-smartkarma-citation="entities:184:1" rel="noopener">China National Building Material (3323 HK)</a> (CNBM), China's leading building materials company, offered to buy back 841,749,304 H-shares at HK$4.03/share, a 15.1% premium to undisturbed.</li>
<li>As this elevates CNBM's parent's stake to 50.01% of total shares from 45.02% currently, independent H-shareholder will vote on a whitewash waiver on the 19th February. </li>
<li>Minimum pro-ration is 19.24%. It is likely to be higher. The question is whether to buy, and/or borrow, and tender; or simply short outright.</li>
</ul>


Back on the 6th December, China National Building Material (3323 HK) (CNBM), China's leading building materials company, offered to buy back 841,749,304 H-shares at HK$4.03/share, a 15.1% premium to undisturbed.
As this elevates CNBM's parent's stake to 50.01% of total shares from 45.02% currently, independent H-shareholder will vote on a whitewash waiver on the 19th February. 
Minimum pro-ration is 19.24%. It is likely to be higher. The question is whether to buy, and/or borrow, and tender; or simply short outright.


CNBM (3323 HK): A Closer Look At Proration

<ul>
<li>On the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1206/2024120601604.pdf" target="_blank" rel="noopener">6th December</a>, <a href="https://www.smartkarma.com/entities/china-national-building-ma-h" target="_blank" data-smartkarma-citation="entities:184:1" rel="noopener">China National Building Material (3323 HK)</a> (CNBM), a leading PRC building materials company, offered to buy back 841,749,304 H-shares at HK$4.03/share, a 15.1% premium to undisturbed.</li>
<li>The thrust of the buyback lifts the stake of CNBM's parent - the CNBM Parent Concert Group - to 50.01% of total shares from 45.02% currently, necessitating a whitewash waiver.</li>
<li>Pre-Cons were satisfied on the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0124/2025012401173.pdf" target="_blank" rel="noopener">24th Jan</a>. The independent H-class shareholders vote for the waiver is on the 19th Feb. Minimum pro-ration is 19.24%. Implied back-end price is well down. </li>
</ul>


On the 6th December, China National Building Material (3323 HK) (CNBM), a leading PRC building materials company, offered to buy back 841,749,304 H-shares at HK$4.03/share, a 15.1% premium to undisturbed.
The thrust of the buyback lifts the stake of CNBM's parent - the CNBM Parent Concert Group - to 50.01% of total shares from 45.02% currently, necessitating a whitewash waiver.
Pre-Cons were satisfied on the 24th Jan. The independent H-class shareholders vote for the waiver is on the 19th Feb. Minimum pro-ration is 19.24%. Implied back-end price is well down. 


CNBM (3323 HK): This Is An "Avoid" Ahead Of 19th Feb H-Class Shareholder Vote

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

China National Building Material / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-national-building-ma-h" target="_blank" data-smartkarma-citation="entities:184:1" rel="noopener">China National Building Material (3323 HK)</a> published the H-share offer document and if everything is smooth, the payment will be made on 14 Mar 2025. </li>
<li>Its two subsidiaries forecast poor profit/losses for FY24, suggesting a tough operating environment. The buyback valuation remains attractive relative to peer multiples.</li>
<li>For non-holders, at the current price of HK$3.59, we do not think the safety margin is good enough, assuming that most existing shareholders will accept and tender.</li>
</ul>



China National Building Material (3323 HK) published the H-share offer document and if everything is smooth, the payment will be made on 14 Mar 2025. 
Its two subsidiaries forecast poor profit/losses for FY24, suggesting a tough operating environment. The buyback valuation remains attractive relative to peer multiples.
For non-holders, at the current price of HK$3.59, we do not think the safety margin is good enough, assuming that most existing shareholders will accept and tender.


China National Building Material (3323 HK): Publication of Buyback Offer Document

Travis Lundy

<ul>
<li>AH Premia are lower over the last few weeks of holiday and this past week of heavy SOUTHBOUND buying on telcos, banks, brokers, insurers, tech, and airlines.</li>
<li>The average AH Premium across all pairs is now the lowest it has been in five years.</li>
<li>INFO TECH and FINANCIALS saw significant H outperformance vs As this week. Most others (other than perhaps MATERIALS) were limited in their volatility. No bias by premium tranche seen.  </li>
</ul>


AH Premia are lower over the last few weeks of holiday and this past week of heavy SOUTHBOUND buying on telcos, banks, brokers, insurers, tech, and airlines.
The average AH Premium across all pairs is now the lowest it has been in five years.
INFO TECH and FINANCIALS saw significant H outperformance vs As this week. Most others (other than perhaps MATERIALS) were limited in their volatility. No bias by premium tranche seen.  


A/H Premium Tracker (To 24 Jan 2025):  AH Premia Fall Yet Again, Lowest Avg Premium in 5yrs... Again

China

Anhui Conch Cement Company Limited manufactures cement products. The Company produces silicate cements, slag silicate cements, composite silicate cements, cement clinkers, and other products. Anhui Conch Cement Cement markets its products throughout China and worldwide.

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Anhui Conch Cement (600585 CH)

CNBM (3323 HK): A Closer Look At Proration

I'm estimate ~35% proration, implying a back-end breakeven price of HK$3.77/share. You could long tender here versus borrow and tender, IF the back...

David Blennerhassett

CNBM (3323 HK): This Is An "Avoid" Ahead Of 19th Feb H-Class Shareholder Vote

If ~45% of independent H-share class shareholders tenders, pro-ration would be ~42%, implying a back-end B/E price of HK$3.28/share.This is an...

David Blennerhassett

China National Building Material (3323 HK): Publication of Buyback Offer Document

CNBM faces a tough operating environment with poor FY24 profit for subsidiaries. Its buyback valuation stays attractive but the safety margin at...

Osbert Tang, CFA

A/H Premium Tracker (To 24 Jan 2025): AH Premia Fall Yet Again, Lowest Avg Premium in 5yrs... Again

Tech and Financials were big movers for the week in H/A spreads. AH Premia are, on average, at the tightest levels in 5yrs but there are still...

Travis Lundy

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China National Building Material (3323 HK): H Share Buyback Vote on 19 February

The vote comfortably passed, and the minimum tendering condition was met. Therefore, the buyback is unconditional. The current acceptances of...

Arun George

CNBM (3323 HK): A Closer Look At Proration

I'm estimate ~35% proration, implying a back-end breakeven price of HK$3.77/share. You could long tender here versus borrow and tender, IF the back...

David Blennerhassett

CNBM (3323 HK): This Is An "Avoid" Ahead Of 19th Feb H-Class Shareholder Vote

If ~45% of independent H-share class shareholders tenders, pro-ration would be ~42%, implying a back-end B/E price of HK$3.28/share.This is an...

David Blennerhassett

China National Building Material (3323 HK): Publication of Buyback Offer Document

​CNBM faces a tough operating environment with poor FY24 profit for subsidiaries. Its buyback valuation stays attractive but the safety margin at...

Osbert Tang, CFA

A/H Premium Tracker (To 24 Jan 2025): AH Premia Fall Yet Again, Lowest Avg Premium in 5yrs... Again

Tech and Financials were big movers for the week in H/A spreads. AH Premia are, on average, at the tightest levels in 5yrs but there are still...

Travis Lundy

CNBM faces a tough operating environment with poor FY24 profit for subsidiaries. Its buyback valuation stays attractive but the safety margin at...