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/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

<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

<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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a> shareholders have voted against <a href="https://www.smartkarma.com/entities/shanghai-fosun-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:8045:1" rel="noopener">Shanghai Fosun Pharmaceutical (Group) (2196 HK)</a>’s HK$24.60 offer. The minority participation rate was high, and the NO vote comfortably cleared the threshold.</li>
<li>The <a href="https://www.smartkarma.com/entities/china-traditional-chinese-medicine" target="_blank" data-smartkarma-citation="entities:351:1" rel="noopener">China Traditional Chinese Medicine (570 HK)</a> and Henlius deal breaks have rewritten the HKEx merger arb rulebook. The Henlius deal break offers several lessons.</li>
<li>The 27.5% share price decline since 9 January points to a well-flagged deal break. Nevertheless, precedent deal-breaks suggest that the shares remain vulnerable and could touch HK$15.  </li>
</ul>



Shanghai Henlius Biotech (2696 HK) shareholders have voted against Shanghai Fosun Pharmaceutical (Group) (2196 HK)’s HK$24.60 offer. The minority participation rate was high, and the NO vote comfortably cleared the threshold.
The China Traditional Chinese Medicine (570 HK) and Henlius deal breaks have rewritten the HKEx merger arb rulebook. The Henlius deal break offers several lessons.
The 27.5% share price decline since 9 January points to a well-flagged deal break. Nevertheless, precedent deal-breaks suggest that the shares remain vulnerable and could touch HK$15.  


Henlius (2696 HK): Deal Break as HKEx Merger Arb Rulebooks Are Rewritten

<ul>
<li>Fosun Pharma’s HK$24.60 offer for <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a> is heading for a deal break. LVC has not changed its shareholding since amassing a blocking stake.</li>
<li>In the absence of a last-ditch effort by <a href="https://www.smartkarma.com/entities/shanghai-fosun-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:8045:1" rel="noopener">Shanghai Fosun Pharmaceutical (Group) (2196 HK)</a> to rescue the deal, the key question is the potential deal break price. </li>
<li>Based on four methods, the potential deal break price is HK$17.28, 12% below the last close price of HK$19.58.</li>
</ul>


Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is heading for a deal break. LVC has not changed its shareholding since amassing a blocking stake.
In the absence of a last-ditch effort by Shanghai Fosun Pharmaceutical (Group) (2196 HK) to rescue the deal, the key question is the potential deal break price. 
Based on four methods, the potential deal break price is HK$17.28, 12% below the last close price of HK$19.58.


Henlius (2696 HK): Musings on the Deal Break Price

China

Asia Cement China Holdings Corporation manufactures cement in China. The Company excavates the raw materials for, and produces, clinker and different types of cement.

Price Gauge
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Asia Cement China (743 HK)

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

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

Henlius (2696 HK): Deal Break as HKEx Merger Arb Rulebooks Are Rewritten

The 27.5% share price decline since 9 January points to a well-flagged deal break. Nevertheless, precedent deal-breaks suggest that the shares...

Arun George

Henlius (2696 HK): Musings on the Deal Break Price

In the absence of a last-ditch effort by Fosun Pharma to rescue the deal, the key question is the potential deal break price. I use four methods to...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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

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

Henlius (2696 HK): Deal Break as HKEx Merger Arb Rulebooks Are Rewritten

The 27.5% share price decline since 9 January points to a well-flagged deal break. Nevertheless, precedent deal-breaks suggest that the shares...

Arun George

Henlius (2696 HK): Musings on the Deal Break Price

In the absence of a last-ditch effort by Fosun Pharma to rescue the deal, the key question is the potential deal break price. I use four methods to...

Arun George

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...

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