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

Canvest Environmental Protection Group / Event-Driven

Canvest Environmental Protection Group (0XC SW)

<ul>
<li>
<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> continues to make steady progress in satisfying the precondition for its HK$4.90 privatisation offer for <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>. </li>
<li>Two of the five preconditions are satisfied, and another will be satisfied by 20 January. The long stop date of 17 July provides ample time to satisfy the remaining two. </li>
<li>Although the peers have materially re-rated, the offer implies a premium compared to peer multiples. Vote risk remains low, aided by selling by a shareholder with a blocking stake. </li>
</ul>



Grandblue Environment Co A (600323 CH) continues to make steady progress in satisfying the precondition for its HK$4.90 privatisation offer for Canvest Environmental Protection Group (1381 HK). 
Two of the five preconditions are satisfied, and another will be satisfied by 20 January. The long stop date of 17 July provides ample time to satisfy the remaining two. 
Although the peers have materially re-rated, the offer implies a premium compared to peer multiples. Vote risk remains low, aided by selling by a shareholder with a blocking stake. 


Canvest (1381 HK): Attractive Spread with Steady Progress in Precondition Satisfaction

HK/China Equity Long-Short

Osbert Tang, CFA

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 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

China Everbright Environment Group / Equity Bottom-Up

China Everbright Environment Group (257 HK)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-everbright-environment-group-limited" target="_blank" data-smartkarma-citation="entities:15946:1" rel="noopener">China Everbright Environment (257 HK)</a> will benefit immensely from the lower debt burden of local governments as the central government rolls out more fiscal support measures.</li>
<li>We anticipate an acceleration in receivable collection to improve its cash flow while the new projects pipeline may speed up. Its FCF has positively turned around in 1H24.</li>
<li>Despite recent outperformance, it remains a laggard since 2022. Still, it trades on an undemanding 5.5x PER and an appealing 6.3% yield on a higher dividend payout. </li>
</ul>



China Everbright Environment (257 HK) will benefit immensely from the lower debt burden of local governments as the central government rolls out more fiscal support measures.
We anticipate an acceleration in receivable collection to improve its cash flow while the new projects pipeline may speed up. Its FCF has positively turned around in 1H24.
Despite recent outperformance, it remains a laggard since 2022. Still, it trades on an undemanding 5.5x PER and an appealing 6.3% yield on a higher dividend payout. 


China Everbright Env (257 HK): An Underappreciated Beneficiary

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

<ul>
<li>
<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> upcoming inclusion in the Southbound Stock Connect  (SSC) platform could provide a tailwind to its share price and the Hong Kong market.
</li>
<li>
<a href="https://www.smartkarma.com/entities/tuhu-car-inc" target="_blank" data-smartkarma-citation="entities:36012:1" rel="noopener">Tuhu Car (9690 HK)</a> reported good 1H 2024 results with an increase of 23% in new store openings.  <a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies Holdings (2018 HK)</a> target price was increased after 1H2024 earnings.
</li>
<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> ratings were cut after reporting lower 1H24 earnings.  The company omitted its interim dividend.
</li>
</ul>



Alibaba Group Holding (9988 HK) upcoming inclusion in the Southbound Stock Connect  (SSC) platform could provide a tailwind to its share price and the Hong Kong market.


Tuhu Car (9690 HK) reported good 1H 2024 results with an increase of 23% in new store openings.  AAC Technologies Holdings (2018 HK) target price was increased after 1H2024 earnings.


Canvest Environmental Protection Group (1381 HK) ratings were cut after reporting lower 1H24 earnings.  The company omitted its interim dividend.



BUY/SELL/HOLD: Hong Kong Stock Updates (August 28)

<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> disclosed a pre-conditional Cayman scheme privatisation from <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> at HK$4.90 per share, an 11.6% premium to the last close price.</li>
<li>The precondition relates to the completion of capital injection into the offeror, Grandblue shareholder, and regulatory approvals. The heavy presence of SOE entities makes this a formality.</li>
<li>While not a knockout bid, the offer (which is final) is reasonable. Shareholders with blocking stakes will be supportive. Timing is the key risk as the offer is long-dated.</li>
</ul>



Canvest Environmental Protection Group (1381 HK) disclosed a pre-conditional Cayman scheme privatisation from Grandblue Environment Co A (600323 CH) at HK$4.90 per share, an 11.6% premium to the last close price.
The precondition relates to the completion of capital injection into the offeror, Grandblue shareholder, and regulatory approvals. The heavy presence of SOE entities makes this a formality.
While not a knockout bid, the offer (which is final) is reasonable. Shareholders with blocking stakes will be supportive. Timing is the key risk as the offer is long-dated.


Canvest Environmental (1381 HK): Grandblue’s Pre-Condition Privatisation at HK$4.90

Hong Kong

China Everbright Environment Group is a global leader in environmental protection, specializing in integrated environmental solutions. It is recognized as the world's largest waste-to-energy investor and operator, also providing waste management, water treatment, and renewable energy services. The company was founded in 1993 and is headquartered in Hong Kong.

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China Everbright Environment Group (257 HK)

Canvest (1381 HK): Attractive Spread with Steady Progress in Precondition Satisfaction

Grandblue continues to progress toward satisfying the precondition, having secured NDRC approval. The remaining regulatory approvals required are...

Arun George

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

China Everbright Env (257 HK): An Underappreciated Beneficiary

CEE is poised to benefit from a lower local government debt burden on increased fiscal support, with improved cash flow, accelerated project...

Osbert Tang, CFA

BUY/SELL/HOLD: Hong Kong Stock Updates (August 28)

Alibaba inclusion in the SB connect platform could be a positive market catalyst. Tuhu reported a large increase in new stores in 1H2024. AAC saw...

David Mudd

Canvest Environmental (1381 HK): Grandblue’s Pre-Condition Privatisation at HK$4.90

While not a knockout bid, the offer (which is final) is reasonable. Shareholders with blocking stakes will be supportive. Timing is the key risk as...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Canvest (1381 HK): Attractive Spread with Steady Progress in Precondition Satisfaction

Grandblue continues to progress toward satisfying the precondition, having secured NDRC approval. The remaining regulatory approvals required are...

Arun George

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

China Everbright Env (257 HK): An Underappreciated Beneficiary

​CEE is poised to benefit from a lower local government debt burden on increased fiscal support, with improved cash flow, accelerated project...

Osbert Tang, CFA

BUY/SELL/HOLD: Hong Kong Stock Updates (August 28)

Alibaba inclusion in the SB connect platform could be a positive market catalyst. Tuhu reported a large increase in new stores in 1H2024. AAC saw...

David Mudd

Canvest Environmental (1381 HK): Grandblue’s Pre-Condition Privatisation at HK$4.90

While not a knockout bid, the offer (which is final) is reasonable. Shareholders with blocking stakes will be supportive. Timing is the key risk as...

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...

CEE is poised to benefit from a lower local government debt burden on increased fiscal support, with improved cash flow, accelerated project...