Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Thematic (Sector/Industry)

<ul>
<li>The Global Emerging Markets Weekly summarises the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.</li>
<li>
<em><strong> Macro data points:</strong></em> Chinese PMI data, South Korean exports and inflation data.</li>
<li>
<em><strong> Companies mentioned:</strong></em><a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-douyin-information-service-co-ltd-bytedance" target="_blank" data-smartkarma-citation="entities:27936:1" rel="noopener">ByteDance (1439927D CH)</a>
</li>
</ul>


The Global Emerging Markets Weekly summarises the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.

 Macro data points: Chinese PMI data, South Korean exports and inflation data.

 Companies mentioned:Alibaba Group Holding (9988 HK), ByteDance (1439927D CH)



GEMWeekly (6 Sep 2024): Mixed China Activity Data; South Korea Macro; Alibaba Group, ByteDance

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Back on the <a href="https://investor.chindatagroup.com/static-files/cb5912cf-662a-4900-8c41-751c53513ef4" target="_blank" rel="noopener">11 August</a>, Chinese data center provider <strong><a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a></strong> and major shareholder Bain Capital entered into a definitive agreement at US$8.60/ADS.</li>
<li>The EGM was held yesterday, the 4 December, and the merger was approved by 97.75% of the total votes cast. No specific PRC regulatory approval is needed for this merger. </li>
<li>All good right? Not quite. There's still the nagging issue involving 22.79% of shares out objecting to the deal, exceeding the 12% dissenting threshold, a condition to the merger. </li>
</ul>


Back on the 11 August, Chinese data center provider Chindata Group (CD US) and major shareholder Bain Capital entered into a definitive agreement at US$8.60/ADS.
The EGM was held yesterday, the 4 December, and the merger was approved by 97.75% of the total votes cast. No specific PRC regulatory approval is needed for this merger. 
All good right? Not quite. There's still the nagging issue involving 22.79% of shares out objecting to the deal, exceeding the 12% dissenting threshold, a condition to the merger. 


Dissenters Mobilise As Chindata (CD US)'s Shareholders Approve Bain's Offer

<p>Back on the 10 February 2021, private hospitals and medical centers operator <a href="https://www.smartkarma.com/entities/new-frontier-health-corp" target="_blank" data-smartkarma-citation="entities:28429:1" rel="noopener">New Frontier Corporation (NFH US)</a> made an <a href="https://d18rn0p25nwr6d.cloudfront.net/CIK-0001737422/16f0d15b-2a3a-4ad0-9ad3-85d84f2c7485.pdf" target="_blank" rel="noopener">announcement</a> it had received a preliminary non-proposal binding letter from a buyer-group, including President Carl Wu, Carnival Investments, Vivo Capital Fund IX, Max Rising International Ltd (a company affiliated with Carl Wu) - among others.</p>
<p>The group offered to acquire shares of New Frontier for $12 in cash, a 27.9% premium to last close.</p>
<div>
<p>New Frontier has now entered into a <a href="https://d18rn0p25nwr6d.cloudfront.net/CIK-0001737422/4394dbb2-ca20-48cd-9bf2-2c1f323694a6.pdf" target="_blank" rel="noopener">definitive merger agreement</a>, also at US$12/share.</p>
</div>
<div>
<p>The merger is conditional on an affirmative vote from shareholders representing at least two-thirds of the shares out, and that the aggregate quantity of dissenting shares shall be less than 10% of shares out.</p>
</div>
<div>
<p>The announcement is silent on the buyer consortium's % holding, but I estimate it to be at least 37%.</p>
</div>
<div>
<p>This looks pretty clean. Possible completion late 4Q21.</p>
</div>
<div>
<p>More below the fold.</p>
</div>

Back on the 10 February 2021, private hospitals and medical centers operator New Frontier Corporation (NFH US) made an announcement it had received a preliminary non-proposal binding letter from a buyer-group, including President Carl Wu, Carnival Investments, Vivo Capital Fund IX, Max Rising International Ltd (a company affiliated with Carl Wu) - among others.
The group offered to acquire shares of New Frontier for $12 in cash, a 27.9% premium to last close.

New Frontier has now entered into a definitive merger agreement, also at US$12/share.


The merger is conditional on an affirmative vote from shareholders representing at least two-thirds of the shares out, and that the aggregate quantity of dissenting shares shall be less than 10% of shares out.


The announcement is silent on the buyer consortium's % holding, but I estimate it to be at least 37%.


This looks pretty clean. Possible completion late 4Q21.


More below the fold.


New Frontier (NYSE: NFH): Healthcare Homecoming

<div>
<p>Nine months after IR solutions provider <a href="https://www.smartkarma.com/entities/51-job-inc-adr" target="_blank" data-smartkarma-citation="entities:532:1" rel="noopener">51 Job Inc Adr (JOBS US)</a> first announced it had received a preliminary non-binding <a href="https://sec.report/Document/0001104659-20-105912/" target="_blank" rel="noopener">Proposal</a> from DCP Capital Partners to acquire all of its shares for US$79.05/common share, 51job <a href="https://sec.report/Document/0001193125-21-195283/" target="_blank" rel="noopener">announced</a> yesterday it has entered into a definitive privatisation agreement. </p>
<p>The price remains unchanged, which is also in keeping with the non-binding proposal <a href="https://ir.51job.com/ir/php/2021/PreRelease20210504.php?0504" target="_blank" rel="noopener">announced</a> on the 4 May, wherein Ocean Link and CEO Rick Yan joined DCP in the consortium to take the company private.</p>
<p>The big news is that <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a>, 51job's largest shareholder with 34.8%, has now joined the consortium. </p>
<p>The merger requires the approval of two-thirds of all shareholders at an EGM, and the consortium has 54.9% in the bag. </p>
<p>This deal is by no means a sure thing. But even if the EGM resolution passes, minorities are afforded dissension rights. And as recently seen in the recent privatisations of <a href="https://www.smartkarma.com/entities/sina-corp-china" target="_blank" data-smartkarma-citation="entities:22691:1" rel="noopener">Sina Corp (Class A) (SINA US)</a> and <a href="https://www.smartkarma.com/entities/china-biologic-products-hold" target="_blank" data-smartkarma-citation="entities:22633:1" rel="noopener">China Biologic Products (CBPO US)</a>, shareholders have taken up that cause. </p>
</div>
<div>
<p>More below the fold.</p>
</div>


Nine months after IR solutions provider 51 Job Inc Adr (JOBS US) first announced it had received a preliminary non-binding Proposal from DCP Capital Partners to acquire all of its shares for US$79.05/common share, 51job announced yesterday it has entered into a definitive privatisation agreement. 
The price remains unchanged, which is also in keeping with the non-binding proposal announced on the 4 May, wherein Ocean Link and CEO Rick Yan joined DCP in the consortium to take the company private.
The big news is that Recruit Holdings (6098 JP), 51job's largest shareholder with 34.8%, has now joined the consortium. 
The merger requires the approval of two-thirds of all shareholders at an EGM, and the consortium has 54.9% in the bag. 
This deal is by no means a sure thing. But even if the EGM resolution passes, minorities are afforded dissension rights. And as recently seen in the recent privatisations of Sina Corp (Class A) (SINA US) and China Biologic Products (CBPO US), shareholders have taken up that cause. 


More below the fold.


51job’s Privatisation: Firm Offer Is Still The Wrong Price

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> has been a shining example of what can be achieved through both Operating- and Financial leverage as a business scales up. This has been a commendable performance by its management team over the past nearly a decade, balancing gains from operating and financial leverage, whilst prudently, yet aggressively, investing in growth. Over the past 8 years it has delivered expansion at the Gross margin level (through mix change to advertising revenue and scale in 1P), the Operating margin level (lower losses in 3P), and the net margin level (cash generation and lower losses from associates). </p><p>With lingering concerns around short-term margin expansion, as the group invests more aggressively in group purchasing aimed at the fresh food segment, in this insight, I analyse the potential for long-term margin expansion and what that implies for current valuation levels for China’s largest direct retailer.</p>

JD.com Inc. (9618 HK) has been a shining example of what can be achieved through both Operating- and Financial leverage as a business scales up. This has been a commendable performance by its management team over the past nearly a decade, balancing gains from operating and financial leverage, whilst prudently, yet aggressively, investing in growth. Over the past 8 years it has delivered expansion at the Gross margin level (through mix change to advertising revenue and scale in 1P), the Operating margin level (lower losses in 3P), and the net margin level (cash generation and lower losses from associates). With lingering concerns around short-term margin expansion, as the group invests more aggressively in group purchasing aimed at the fresh food segment, in this insight, I analyse the potential for long-term margin expansion and what that implies for current valuation levels for China’s largest direct retailer.

JD.com: A Detailed Look at Long-Term Margins and Valuation

China

Bitauto Holdings Ltd. operates Internet websites.  The websites offer consumers new and used automobile pricing information, specifications, reviews, and consumer feedback.  The Company also places data from its dealer customers on partner websites.

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

Bitauto Holdings (BITA US)

GEMWeekly (6 Sep 2024): Mixed China Activity Data; South Korea Macro; Alibaba Group, ByteDance

The Global Emerging Markets Weekly summarises the key news and related developments impacting the largest countries and constituents of the Global...

Wium Malan, CFA

Dissenters Mobilise As Chindata (CD US)'s Shareholders Approve Bain's Offer

This is done. Trading at a 2% gross spread to terms, or ~14% annualised assuming late-Jan completion. Not bad. Not great. It was certainly more...

David Blennerhassett

New Frontier (NYSE: NFH): Healthcare Homecoming

I see the gross/annualised spread at 7.4%/19.8%, assuming late December completion. This looks like a pretty clean deal for around five months of...

David Blennerhassett

51job’s Privatisation: Firm Offer Is Still The Wrong Price

I'd buy here. Given recent Cayman petitions, I would expect this pushback on pricing to continue here, which may avail smaller investors the...

David Blennerhassett

JD.com: A Detailed Look at Long-Term Margins and Valuation

In this insight, I analyse the potential for long-term margin expansion and what that implies for current valuation levels for China’s largest...

Wium Malan, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)