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 href="https://www.smartkarma.com/entities/dickson-concepts-intl-ltd" target="_blank" data-smartkarma-citation="entities:5052:1" rel="noopener">Dickson Concepts Intl (113 HK)</a> shareholders have voted against Sir Poon’s HK$7.20 per share offer. The vote marginally failed the &lt;10% of all disinterested shareholders' rejection threshold.</li>
<li>While painful, this deal break was arguably the correct outcome as the offer was below the net cash and Dickson is cash generative on an underlying basis. </li>
<li>Unlike the last HK deal break (Soundwill), the price action over the last two days indicated a done deal. My estimated break price is HK$5.00 (30% downside to last close).</li>
</ul>



Dickson Concepts Intl (113 HK) shareholders have voted against Sir Poon’s HK$7.20 per share offer. The vote marginally failed the &lt;10% of all disinterested shareholders' rejection threshold.
While painful, this deal break was arguably the correct outcome as the offer was below the net cash and Dickson is cash generative on an underlying basis. 
Unlike the last HK deal break (Soundwill), the price action over the last two days indicated a done deal. My estimated break price is HK$5.00 (30% downside to last close).


Dickson Concepts (113 HK): A Necessary HK Arbageddon

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>After <strong><a href="https://www.smartkarma.com/entities/goldlion-holdings-ltd" target="_blank" data-smartkarma-citation="entities:12359:1" rel="noopener">Goldlion (533 HK)</a></strong>'s spectacular Scheme fail, <strong><a href="https://www.smartkarma.com/entities/soundwill-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19318:1" rel="noopener">Soundwill  (878 HK)</a></strong> appeared destined to be the next failure as shares dipped hard ahead of the Scheme vote. And fail it did.</li>
<li>Just like for Goldlion, Soundwill's Offer was clearly light. The counter-argument was that terms were, arguably, as good as it gets. And no competing Offer would emerge. Minorities voiced otherwise.</li>
<li>Hong Kong has been the proverbial graveyard for arb deals of late. However, in a positive sense, minorities in Goldlion and Soundwill simply rejected opportunistic Offers. </li>
</ul>


After Goldlion (533 HK)'s spectacular Scheme fail, Soundwill  (878 HK) appeared destined to be the next failure as shares dipped hard ahead of the Scheme vote. And fail it did.
Just like for Goldlion, Soundwill's Offer was clearly light. The counter-argument was that terms were, arguably, as good as it gets. And no competing Offer would emerge. Minorities voiced otherwise.
Hong Kong has been the proverbial graveyard for arb deals of late. However, in a positive sense, minorities in Goldlion and Soundwill simply rejected opportunistic Offers. 


Soundwill (878 HK): Thoughts On The Latest Scheme Fail

<ul>
<li>
<a href="https://www.smartkarma.com/entities/soundwill-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19318:1" rel="noopener">Soundwill Holdings (878 HK)</a> shareholders have voted against the Foo family’s HK$8.50 per share offer. The minority participation rate was high, and the NO vote comfortably failed the value test.</li>
<li>Unlike the <a href="https://www.smartkarma.com/entities/goldlion-holdings-ltd" target="_blank" data-smartkarma-citation="entities:12359:1" rel="noopener">Goldlion Holdings (533 HK)</a> deal break, the price action over the last three days pointed to a deal break. Like previous deal breaks, this one offers hard lessons.</li>
<li>Soundwill has the fourth-highest premium of the pre-deal break price to the undisturbed price compared to previous deal breaks. My estimated deal-break price is HK$5.63, 13.2% below the last close.</li>
</ul>



Soundwill Holdings (878 HK) shareholders have voted against the Foo family’s HK$8.50 per share offer. The minority participation rate was high, and the NO vote comfortably failed the value test.
Unlike the Goldlion Holdings (533 HK) deal break, the price action over the last three days pointed to a deal break. Like previous deal breaks, this one offers hard lessons.
Soundwill has the fourth-highest premium of the pre-deal break price to the undisturbed price compared to previous deal breaks. My estimated deal-break price is HK$5.63, 13.2% below the last close.


Soundwill Holdings (878 HK): Hard Lessons from Another HK Arbageddon

<ul>
<li>
<a href="https://www.smartkarma.com/entities/goldlion-holdings-ltd" target="_blank" data-smartkarma-citation="entities:12359:1" rel="noopener">Goldlion Holdings (533 HK)</a> shareholders have voted against Mr Tsang’s HK$1.5232 per share offer. The minority participation rate was high, and the NO vote comfortably cleared the threshold.</li>
<li>The Goldlion deal break was unexpected, and the HKEx merger arb rulebook will be rewritten. This deal break offers several lessons.</li>
<li>Goldlion had the highest premium of the pre-deal break price to the undisturbed price compared to previous deal breaks. My estimated deal-break price is HK$0.953, 36.0% below last close.</li>
</ul>



Goldlion Holdings (533 HK) shareholders have voted against Mr Tsang’s HK$1.5232 per share offer. The minority participation rate was high, and the NO vote comfortably cleared the threshold.
The Goldlion deal break was unexpected, and the HKEx merger arb rulebook will be rewritten. This deal break offers several lessons.
Goldlion had the highest premium of the pre-deal break price to the undisturbed price compared to previous deal breaks. My estimated deal-break price is HK$0.953, 36.0% below last close.


Goldlion Holdings (533 HK): An Unexpected HK Arbageddon

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

China National Building Material / Equity Bottom-Up

China National Building Material (3323 HK)

<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>'s proposed H-share buyback has been approved. We continue to support existing shareholders to tender their holdings to accept the offer. </li>
<li>The buyback will enhance FY25 and FY26 EPS by 4.8% and 8.2%, respectively. Its book value will increase by 11% compared to without a buyback.</li>
<li>The post-buyback FY25 PER of 9.6x is at a premium to the sector median of 7.6x. The proposal has led to significant outperformance, and we anticipate downside risks on completion. </li>
</ul>



China National Building Material (3323 HK)'s proposed H-share buyback has been approved. We continue to support existing shareholders to tender their holdings to accept the offer. 
The buyback will enhance FY25 and FY26 EPS by 4.8% and 8.2%, respectively. Its book value will increase by 11% compared to without a buyback.
The post-buyback FY25 PER of 9.6x is at a premium to the sector median of 7.6x. The proposal has led to significant outperformance, and we anticipate downside risks on completion. 


China National Building Material (3323 HK): Buyback Approved and Implications

China

Asia Cement (China) Holdings Corporation is an investment holding company primarily engaged in the manufacture and sale of cement, concrete, and related products in the People's Republic of China. The company offers Portland cement clinker, various types of Portland cement, slag powder, limestone powder, ash powder, and ready-mixed concrete, alongside marketing and transportation services. It was incorporated in 2004 and is headquartered in Causeway Bay, Hong Kong.

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Asia Cement (China) (743 HK)

Dickson Concepts (113 HK): A Necessary HK Arbageddon

While painful, this deal break was arguably the correct outcome as the offer was below the net cash. My estimated break price is HK$5.00 (30%...

Arun George

Soundwill (878 HK): Thoughts On The Latest Scheme Fail

The outcome for Soundwill was not a big surprise. However, expect current and future illiquid small-cap arbs to trade wide(r) if there is a whiff...

David Blennerhassett

Soundwill Holdings (878 HK): Hard Lessons from Another HK Arbageddon

Like previous deal breaks, this one offers hard lessons and suggests that HK merger arb is increasingly fraught with risk. My estimated deal-break...

Arun George

Goldlion Holdings (533 HK): An Unexpected HK Arbageddon

The Goldlion deal break was unexpected, and the HKEx merger arb rulebook will be rewritten. My estimated deal-break price is HK$0.953, 36.0% below...

Arun George

China National Building Material (3323 HK): Buyback Approved and Implications

CNBM's H-share buyback will boost EPS by 4.8% in FY25, with an 11% increase in book value. Its above-sector PER and recent share price strengths...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Dickson Concepts (113 HK): A Necessary HK Arbageddon

While painful, this deal break was arguably the correct outcome as the offer was below the net cash. My estimated break price is HK$5.00 (30%...

Arun George

Soundwill (878 HK): Thoughts On The Latest Scheme Fail

The outcome for Soundwill was not a big surprise. However, expect current and future illiquid small-cap arbs to trade wide(r) if there is a whiff...

David Blennerhassett

Soundwill Holdings (878 HK): Hard Lessons from Another HK Arbageddon

Like previous deal breaks, this one offers hard lessons and suggests that HK merger arb is increasingly fraught with risk. My estimated deal-break...

Arun George

Goldlion Holdings (533 HK): An Unexpected HK Arbageddon

The Goldlion deal break was unexpected, and the HKEx merger arb rulebook will be rewritten. My estimated deal-break price is HK$0.953, 36.0% below...

Arun George

China National Building Material (3323 HK): Buyback Approved and Implications

​CNBM's H-share buyback will boost EPS by 4.8% in FY25, with an 11% increase in book value. Its above-sector PER and recent share price strengths...

Osbert Tang, CFA

CNBM's H-share buyback will boost EPS by 4.8% in FY25, with an 11% increase in book value. Its above-sector PER and recent share price strengths...