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.

Equity Capital Markets

SBI Sumishin Net Bank  / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sbi-sumishin-net-bank" target="_blank" data-smartkarma-citation="entities:34572:1" rel="noopener">SBI Sumishin Net Bank (7163 JP)</a>, an online bank in Japan, has revived its listing plans to raise up to US$440 million (vs the 2022 target of US$1 billion).</li>
<li>We previously discussed the IPO in <em><strong><a href="https://www.smartkarma.com/insights/sbi-sumishin-net-bank-ipo-the-investment-case" target="_blank" data-smartkarma-citation="insights:96979" rel="noopener">SBI Sumishin Net Bank IPO: The Investment Case</a></strong></em>. The shares will be listed on 29 March.</li>
<li>In this note, we discuss valuation. Our analysis suggests that SBI Sumishin Net Bank is fairly valued at the IPO reference price of JPY1,260. We would participate in the IPO.</li>
</ul>



SBI Sumishin Net Bank (7163 JP), an online bank in Japan, has revived its listing plans to raise up to US$440 million (vs the 2022 target of US$1 billion).
We previously discussed the IPO in SBI Sumishin Net Bank IPO: The Investment Case. The shares will be listed on 29 March.
In this note, we discuss valuation. Our analysis suggests that SBI Sumishin Net Bank is fairly valued at the IPO reference price of JPY1,260. We would participate in the IPO.


SBI Sumishin Net Bank IPO: Valuation Insights

Event-Driven

Dongzheng Automotive Finance / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/saic-motor-corp-ltd-a" target="_blank" data-smartkarma-citation="entities:20833:1" rel="noopener">SAIC Motor (600104 CH)</a> completed the auction procedures for acquiring a 71.04% stake in <a href="https://www.smartkarma.com/entities/shanghai-dongzheng-automotive-finance-co-ltd" target="_blank" data-smartkarma-citation="entities:27984:1" rel="noopener">Dongzheng Automotive Finance (2718 HK)</a>. This will trigger an unconditional MGO at HK$1.2430 per H Share.</li>
<li>The offeror and Dongzheng are required to issue the composite document on or before 11 August jointly. However, an application has been made to the Executive to extend the deadline. </li>
<li>At last close and for an end of September completion, the gross and annualised spread to the MGO price is 3.6% and 20.9%, respectively.</li>
</ul>



SAIC Motor (600104 CH) completed the auction procedures for acquiring a 71.04% stake in Dongzheng Automotive Finance (2718 HK). This will trigger an unconditional MGO at HK$1.2430 per H Share.
The offeror and Dongzheng are required to issue the composite document on or before 11 August jointly. However, an application has been made to the Executive to extend the deadline. 
At last close and for an end of September completion, the gross and annualised spread to the MGO price is 3.6% and 20.9%, respectively.


SAIC Completes Dongzheng Stake Acquisition, Unconditional MGO

<ul>
<li>The potential MGO price is HK$1.2430 per H Share vs <a href="https://www.smartkarma.com/entities/shanghai-dongzheng-automotive-finance-co-ltd" target="_blank" data-smartkarma-citation="entities:27984:1" rel="noopener">Dongzheng Automotive Finance (2718 HK)</a>’s previously noted HK$1.294 per H Share due to the change in RMB/HK$ rates.</li>
<li>The completion procedures for the auction will take place within six months. Approvals have low risk as the <a href="https://www.smartkarma.com/entities/saic-motor-corp-ltd-a" target="_blank" data-smartkarma-citation="entities:20833:1" rel="noopener">SAIC Motor (600104 CH)</a>’s controlling shareholder is owned by the Shanghai SASAC.</li>
<li>At the last close and for a 1 November completion, the gross and annualised spread to the MGO price is 5.3% and 12.7%, respectively.</li>
</ul>


The potential MGO price is HK$1.2430 per H Share vs Dongzheng Automotive Finance (2718 HK)’s previously noted HK$1.294 per H Share due to the change in RMB/HK$ rates.
The completion procedures for the auction will take place within six months. Approvals have low risk as the SAIC Motor (600104 CH)’s controlling shareholder is owned by the Shanghai SASAC.
At the last close and for a 1 November completion, the gross and annualised spread to the MGO price is 5.3% and 12.7%, respectively.


Dongzheng’s Potential MGO Price from SAIC at HK$1.2430

<ul>
<li>On 19 May, <a href="https://www.smartkarma.com/entities/saic-motor-corp-ltd-a" target="_blank" data-smartkarma-citation="entities:20833:1" rel="noopener">SAIC Motor (600104 CH)</a> emerged as the successful bidder for <a href="https://www.smartkarma.com/entities/china-zhengtong-auto-services" target="_blank" data-smartkarma-citation="entities:17001:1" rel="noopener">China Zhengtong Auto Services Hldg (1728 HK)</a>’s 71.04% stake in <a href="https://www.smartkarma.com/entities/shanghai-dongzheng-automotive-finance-co-ltd" target="_blank" data-smartkarma-citation="entities:27984:1" rel="noopener">Dongzheng Automotive Finance (2718 HK)</a>.</li>
<li>As SAIC will hold 30%+ of the voting rights, it will result in an MGO at a price not less than the auction price of HK$1.294 per H Share.</li>
<li>Dongzheng shares remain in a trading halt. The equity interest will transfer to SAIC and the MGO launched when the Shanghai Financial Court issues an auction sale judgment. </li>
</ul>


On 19 May, SAIC Motor (600104 CH) emerged as the successful bidder for China Zhengtong Auto Services Hldg (1728 HK)’s 71.04% stake in Dongzheng Automotive Finance (2718 HK).
As SAIC will hold 30%+ of the voting rights, it will result in an MGO at a price not less than the auction price of HK$1.294 per H Share.
Dongzheng shares remain in a trading halt. The equity interest will transfer to SAIC and the MGO launched when the Shanghai Financial Court issues an auction sale judgment. 


SAIC Wins the Auction for the 71.04% Stake in Dongzheng, MGO Upcoming

<ul>
<li>On 16 April, the Shanghai Financial Court <a href="https://paimai.jd.com/287421325" target="_blank" rel="noopener">published</a> the details for the auction of <a href="https://www.smartkarma.com/entities/china-zhengtong-auto-services" target="_blank" data-smartkarma-citation="entities:17001:1" rel="noopener">China Zhengtong Auto Services Hldg (1728 HK)</a>’s 71.04% stake in <a href="https://www.smartkarma.com/entities/shanghai-dongzheng-automotive-finance-co-ltd" target="_blank" data-smartkarma-citation="entities:27984:1" rel="noopener">Dongzheng Automotive Finance (2718 HK)</a>. </li>
<li>If the auction is successful and results in any person and a group of persons acting in concert holding 30%+ of the voting rights, it will result in an MGO.</li>
<li>The base bid implies an MGO price of HK$1.294 per H Share, a 112.1% premium to the last close. The auction will be held from 18 May to 19 May.</li>
</ul>


On 16 April, the Shanghai Financial Court published the details for the auction of China Zhengtong Auto Services Hldg (1728 HK)’s 71.04% stake in Dongzheng Automotive Finance (2718 HK). 
If the auction is successful and results in any person and a group of persons acting in concert holding 30%+ of the voting rights, it will result in an MGO.
The base bid implies an MGO price of HK$1.294 per H Share, a 112.1% premium to the last close. The auction will be held from 18 May to 19 May.


Auction of China ZhengTong’s Dongzheng Stake Set for 18 May; Potential MGO

United States

Ally Financial Inc. is a automotive financial services company powered by a direct banking franchise. The Company operates as a financial holding company.

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Ally Financial (ALLY US)

SBI Sumishin Net Bank IPO: Valuation Insights

In this note, we discuss valuation. Our analysis suggests that SBI Sumishin Net Bank is fairly valued at the IPO reference price of JPY1,260. We...

Arun George

SAIC Completes Dongzheng Stake Acquisition, Unconditional MGO

At last close and for an end of September completion, the gross and annualised spread to the MGO price is 3.6% and 20.9%, respectively.

Arun George

Dongzheng’s Potential MGO Price from SAIC at HK$1.2430

The completion procedures for the auction will take place within six months. At the last close and for a 1 November completion, the annualised...

Arun George

SAIC Wins the Auction for the 71.04% Stake in Dongzheng, MGO Upcoming

SAIC, the successful bidder, will hold 30%+ of the voting rights, requiring an MGO at a price not less than the auction price of HK$1.294. Shares...

Arun George

Auction of China ZhengTong’s Dongzheng Stake Set for 18 May; Potential MGO

The auction of China Zhengtong’s 71.04% stake in Dongzheng will be held from 18 to 19 May. A successful auction will imply an MGO price (at the...

Arun George

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