HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>With the recent rally in the equity markets in Hong Kong and China, we think the asset play investment thesis for <a href="https://www.smartkarma.com/entities/china-dongxiang-group-co" target="_blank" data-smartkarma-citation="entities:1068:1" rel="noopener">China Dongxiang Group Co (3818 HK)</a> has revived.  </li>
<li>We estimate its investment portfolio value may have increased by HK$2bn since end-Sep, yet market capitalisation only rose HK$500m, suggesting still significant 77% discount. </li>
<li>Encouraging recent developments at <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> and Ant Financial, which both are its holdings, are positive. The reduction is losses for sportswear business is an added driver. </li>
</ul>


With the recent rally in the equity markets in Hong Kong and China, we think the asset play investment thesis for China Dongxiang Group Co (3818 HK) has revived.  
We estimate its investment portfolio value may have increased by HK$2bn since end-Sep, yet market capitalisation only rose HK$500m, suggesting still significant 77% discount. 
Encouraging recent developments at Alibaba Group (9988 HK) and Ant Financial, which both are its holdings, are positive. The reduction is losses for sportswear business is an added driver. 


China Dongxiang (3818 HK): Extremely Deep Discount to Cash and Investments

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 weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.</li>
<li>ECM developments - Quiet week as <a href="https://www.smartkarma.com/entities/vinfast" target="_blank" data-smartkarma-citation="entities:36550:1" rel="noopener">VinFast (1905332D VN)</a> continues to pre-market a US$1bn IPO.</li>
<li>Event-Driven developments - <a href="https://www.smartkarma.com/entities/acotec-scientific-holdings-limited" target="_blank" data-smartkarma-citation="entities:32176:1" rel="noopener">Acotec Scientific Holdings (6669 HK)</a>, <a href="https://www.smartkarma.com/entities/nitro-software-ltd" target="_blank" data-smartkarma-citation="entities:30943:1" rel="noopener">Nitro Software Ltd (NTO AU)</a>, <a href="https://www.smartkarma.com/entities/norwest-energy-nl" target="_blank" data-smartkarma-citation="entities:1433:1" rel="noopener">Norwest Energy NL (NWE AU)</a>, <a href="https://www.smartkarma.com/entities/warrego-energy-ltd-082ab214-f4bb-4224-b321-8977486cd661" target="_blank" data-smartkarma-citation="entities:7808:1" rel="noopener">Warrego Energy (WGO AU)</a>, <a href="https://www.smartkarma.com/entities/halcyon-agri-corp-ltd" target="_blank" data-smartkarma-citation="entities:18191:1" rel="noopener">Halcyon Agri (HACL SP)</a>. </li>
</ul>


A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments - Quiet week as VinFast (1905332D VN) continues to pre-market a US$1bn IPO.
Event-Driven developments - Acotec Scientific Holdings (6669 HK), Nitro Software Ltd (NTO AU), Norwest Energy NL (NWE AU), Warrego Energy (WGO AU), Halcyon Agri (HACL SP). 


Weekly Deals Digest (08 Jan) - Acotec, Halycon, Warrego, Nitro, Norwest, VinFast

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>On the 12 December, <a href="https://www.smartkarma.com/entities/acotec-scientific-holdings-limited" target="_blank" data-smartkarma-citation="entities:32176:1" rel="noopener">Acotec Scientific (6669 HK)</a> announced a HK$20/share partial Offer from Boston Scientific, a 31.6% premium to last close, but below August 2021's IPO price of HK$23.80/share.  </li>
<li>Boston Scientific will acquire at least 156.7mn shares (50.01%), up to 203.7mn (65%). Irrevocables total 60.14%, comprising shares held by CA Medtech/CPE Investment, Jing Li (chairman, CEO), and Bliss Way.</li>
<li>The Composite Doc is now out and the Offer is open for acceptances. This Offer is done. The key question is the final proration. </li>
</ul>


On the 12 December, Acotec Scientific (6669 HK) announced a HK$20/share partial Offer from Boston Scientific, a 31.6% premium to last close, but below August 2021's IPO price of HK$23.80/share.  
Boston Scientific will acquire at least 156.7mn shares (50.01%), up to 203.7mn (65%). Irrevocables total 60.14%, comprising shares held by CA Medtech/CPE Investment, Jing Li (chairman, CEO), and Bliss Way.
The Composite Doc is now out and the Offer is open for acceptances. This Offer is done. The key question is the final proration. 


Acotec (6669 HK): Boston Scientific's Partial Offer Open For Tendering

<ul>
<li>
<a href="https://www.smartkarma.com/entities/acotec-scientific-holdings-limited" target="_blank" data-smartkarma-citation="entities:32176:1" rel="noopener">Acotec Scientific Holdings (6669 HK)</a>’s partial offer from <a href="https://www.smartkarma.com/entities/boston-scientific-corp" target="_blank" data-smartkarma-citation="entities:11115:1" rel="noopener">Boston Scientific (BSX US)</a> at HK$20 per share is now open. The IFA opines it to be fair and reasonable.</li>
<li>The partial offer is conditional on the offeror hitting 50.01% voting rights. Irrevocables ensure that it will be declared unconditional on or before the first closing date (26 January).</li>
<li>Based on a minimum proration of 71.31% and at the current share price of HK$17.20 per share, the estimated breakeven price is HK$10.38 per share.</li>
</ul>



Acotec Scientific Holdings (6669 HK)’s partial offer from Boston Scientific (BSX US) at HK$20 per share is now open. The IFA opines it to be fair and reasonable.
The partial offer is conditional on the offeror hitting 50.01% voting rights. Irrevocables ensure that it will be declared unconditional on or before the first closing date (26 January).
Based on a minimum proration of 71.31% and at the current share price of HK$17.20 per share, the estimated breakeven price is HK$10.38 per share.


Acotec (6669 HK): Boston Scientific’s HK$20 Partial Offer Now Open

<ul>
<li>For the month of December, 10 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$6bn.</li>
<li>The average premium for the new deals announced (or first discussed) in December was ~46%, giving an average for 2022 of 41%.</li>
<li>This compares to the average premium for all deals in 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 33%, 31%, and 31.5% respectively.</li>
</ul>


For the month of December, 10 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$6bn.
The average premium for the new deals announced (or first discussed) in December was ~46%, giving an average for 2022 of 41%.
This compares to the average premium for all deals in 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 33%, 31%, and 31.5% respectively.


(Mostly) Asia M&A 2022 Roundup: Bigtincan, St Barbara/Genesis, Acotec, Conexio, ENEOS, Nidec OKK

China

Acotec Scientific is a medical technology company specializing in the research, development, and application of innovative solutions for vascular diseases. Its core products include drug-coated balloons (DCB) and percutaneous transluminal angioplasty (PTA) balloon catheters, such as AcoArt Orchid & Dhalia. The company was founded in 2008 and is headquartered in Beijing, China.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Acotec Scientific (6669 HK)

China Dongxiang (3818 HK): Extremely Deep Discount to Cash and Investments

Market rallies may have raised CNDX's cash and investment portfolio value by HK$2bn since end-Sep, but its market cap has only increased HK$500m,...

Osbert Tang, CFA

Weekly Deals Digest (08 Jan) - Acotec, Halycon, Warrego, Nitro, Norwest, VinFast

Last week, notable developments occurred in Event-Driven (Acotec, Nitro, Norwest, Warrego, Halcyon, Chip Eng Seng) and ECM (VinFast).

Arun George

Acotec (6669 HK): Boston Scientific's Partial Offer Open For Tendering

Proration will likely be higher than 71.31%. Boston Scientific views Acotec as a vehicle to strengthen its presence in China. There will be...

David Blennerhassett

Acotec (6669 HK): Boston Scientific’s HK$20 Partial Offer Now Open

Irrevocables ensure that it will be declared unconditional on or before the first closing date. Based on a minimum proration of 71.31% and at the...

Arun George

(Mostly) Asia M&A 2022 Roundup: Bigtincan, St Barbara/Genesis, Acotec, Conexio, ENEOS, Nidec OKK

For the month of December, 10 new deals were discussed on Smartkarma with an overall deal size of ~US$6bn. The average premium for the new deals...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)