HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

China Conch Venture Holdings / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-conch-venture-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19943:1" rel="noopener">China Conch Venture Holdings (586 HK)</a> is now at negative stub value, the low-end since 2020. This is despite a 16.4% growth in 1H22 core earnings to Rmb542m.</li>
<li>The company's waste-to-energy (WTE) capacity will increase by 25% in FY23 and its internal target calls for an earnings CAGR of 33% between FY21 and FY25 for WTE segment.</li>
<li>We should not underestimate the potential from new business initiatives including cathode and anode materials and lithium battery recycling. They have good medium-to-long term exposure to China's new energy industry.</li>
</ul>



China Conch Venture Holdings (586 HK) is now at negative stub value, the low-end since 2020. This is despite a 16.4% growth in 1H22 core earnings to Rmb542m.
The company's waste-to-energy (WTE) capacity will increase by 25% in FY23 and its internal target calls for an earnings CAGR of 33% between FY21 and FY25 for WTE segment.
We should not underestimate the potential from new business initiatives including cathode and anode materials and lithium battery recycling. They have good medium-to-long term exposure to China's new energy industry.


Conch Venture (586 HK): An Overlooked Value Play

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-conch-venture-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19943:1" rel="noopener">China Conch Venture Holdings (586 HK)</a> is sitting on a steep discount of 59% to its NAV. Its holding in <a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd-094855ab-abec-4b71-956b-5bfc85e22fdd" target="_blank" data-smartkarma-citation="entities:389:1" rel="noopener">Anhui Conch Cement (600585 CH)</a> is already valued at HK$13.3/share.</li>
<li>Its waste-to-energy business has a value of Rmb4.4bn by assuming 5x PER, but this business has a net book value of Rmb10bn. Pipeline capacity equals 21.7% of operational capacity.</li>
<li>The new energy segment, including lithium battery recycling and the manufacture of positive and negative electrode materials, has solid prospects but is overlooked by the market.</li>
</ul>



China Conch Venture Holdings (586 HK) is sitting on a steep discount of 59% to its NAV. Its holding in Anhui Conch Cement (600585 CH) is already valued at HK$13.3/share.
Its waste-to-energy business has a value of Rmb4.4bn by assuming 5x PER, but this business has a net book value of Rmb10bn. Pipeline capacity equals 21.7% of operational capacity.
The new energy segment, including lithium battery recycling and the manufacture of positive and negative electrode materials, has solid prospects but is overlooked by the market.


Conch Venture (586 HK): Interesting Angles, yet Undervalued

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

China Conch Venture Holdings / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-conch-venture-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19943:1" rel="noopener">China Conch Venture (586 HK)</a> shares are down 20% the past two days. <a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd-094855ab-abec-4b71-956b-5bfc85e22fdd" target="_blank" data-smartkarma-citation="entities:389:1" rel="noopener">Anhui Conch Cement (600585 CH)</a> is down ~8% today. CCV's implied stub is toward the historical low-end.</li>
<li>Preceding my comments on China Conch/Anhui are the current setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>



China Conch Venture (586 HK) shares are down 20% the past two days. Anhui Conch Cement (600585 CH) is down ~8% today. CCV's implied stub is toward the historical low-end.
Preceding my comments on China Conch/Anhui are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: Both CCV (586 HK) And Anhui Conch Come Off The Boil

Canvest Environmental Protection Group / Event-Driven

<ul>
<li>Ahead of the 12th May shareholder to vote on Grandblue's Offer, recent price action in <a href="https://www.smartkarma.com/entities/canvest-environmental-protection-group-co-ltd" target="_blank" data-smartkarma-citation="entities:100:1" rel="noopener">Canvest (1381 HK)</a> has been odd, with considerable selling volume.</li>
<li>By all accounts, a chunk of that selling was brought about by an event desk in Singapore shutting down. Elsewhere, via numerous inquiries, I see nothing deal specific. </li>
<li>In recent positive developments, AEP (3.62% of shares out) is supportive; there are no material updates in s329 announcements; and I see nothing of note when inspecting the shareholder register. </li>
</ul>


Ahead of the 12th May shareholder to vote on Grandblue's Offer, recent price action in Canvest (1381 HK) has been odd, with considerable selling volume.
By all accounts, a chunk of that selling was brought about by an event desk in Singapore shutting down. Elsewhere, via numerous inquiries, I see nothing deal specific. 
In recent positive developments, AEP (3.62% of shares out) is supportive; there are no material updates in s329 announcements; and I see nothing of note when inspecting the shareholder register. 


Canvest (1381 HK): Buy Here, And On Weakness

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/canvest-environmental-protection-group-co-ltd" target="_blank" data-smartkarma-citation="entities:100:1" rel="noopener">Canvest Environmental Protection Group (1381 HK)</a>’s IFA opines that <a href="https://www.smartkarma.com/entities/grandblue-environment-co-a" target="_blank" data-smartkarma-citation="entities:17887:1" rel="noopener">Grandblue Environment Co A (600323 CH)</a>’s HK$4.90 offer is fair and reasonable. The vote is on 12 May. </li>
<li>Key conditions include approval by at least 75% of independent shareholders (&lt;10% of independent shareholders' rejection). Shareholders with blocking stakes will be supportive.</li>
<li>This is a done deal. At the last close and for a 10 June payment, the gross/annualised spread is 2.3%/18.3%. </li>
</ul>



Canvest Environmental Protection Group (1381 HK)’s IFA opines that Grandblue Environment Co A (600323 CH)’s HK$4.90 offer is fair and reasonable. The vote is on 12 May. 
Key conditions include approval by at least 75% of independent shareholders (&lt;10% of independent shareholders' rejection). Shareholders with blocking stakes will be supportive.
This is a done deal. At the last close and for a 10 June payment, the gross/annualised spread is 2.3%/18.3%. 


China

China Conch Venture Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides energy preservation and environmental protection solutions and offers environment-friendly building materials.

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China Conch Venture Holdings (586 HK)

Conch Venture (586 HK): An Overlooked Value Play

The market has deeply undervalued Conch Venture's waste-to-energy business as reflected by the negative stub value. New business initiatives and...

Osbert Tang, CFA

Conch Venture (586 HK): Interesting Angles, yet Undervalued

Conch Venture is undervalued at a 59% NAV discount, with a valuable holding in Anhui Conch Cement and promising new energy segments. It also...

Osbert Tang, CFA

StubWorld: Both CCV (586 HK) And Anhui Conch Come Off The Boil

I'm disinclined to set up the stub here. CCV's share price movement remains tethered to Anhui Conch. And I don't believe China's real estate...

David Blennerhassett

Canvest (1381 HK): Buy Here, And On Weakness

The Scheme comfortable got up - despite a last minute hiccup to adjourn the meeting. Seems one shareholder sought to postpone the meeting, which...

David Blennerhassett

Canvest (1381 HK): Scheme Vote on 12 May

This is a done deal as the vote is low-risk. At the last close and for a 10 June payment, the gross/annualised spread is 2.3%/18.3%.

Arun George

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Conch Venture (586 HK): An Overlooked Value Play

The market has deeply undervalued Conch Venture's waste-to-energy business as reflected by the negative stub value. New business initiatives and...

Osbert Tang, CFA

Conch Venture (586 HK): Interesting Angles, yet Undervalued

​Conch Venture is undervalued at a 59% NAV discount, with a valuable holding in Anhui Conch Cement and promising new energy segments. It also...

Osbert Tang, CFA

StubWorld: Both CCV (586 HK) And Anhui Conch Come Off The Boil

I'm disinclined to set up the stub here. CCV's share price movement remains tethered to Anhui Conch. And I don't believe China's real estate...

David Blennerhassett

Canvest (1381 HK): Buy Here, And On Weakness

The Scheme comfortable got up - despite a last minute hiccup to adjourn the meeting. Seems one shareholder sought to postpone the meeting, which...

David Blennerhassett

Canvest (1381 HK): Scheme Vote on 12 May

This is a done deal as the vote is low-risk. At the last close and for a 10 June payment, the gross/annualised spread is 2.3%/18.3%.

Arun George

Conch Venture is undervalued at a 59% NAV discount, with a valuable holding in Anhui Conch Cement and promising new energy segments. It also...