Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Nov 14th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were China Feihe (6186 HK), Cosco Shipping (1919 HK), Sinopec (386 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Xiaomi (1810 HK), China Feihe (6186 HK), Cosco Shipping (1919 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Nov 14th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were China Feihe (6186 HK), Cosco Shipping (1919 HK), Sinopec (386 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Xiaomi (1810 HK), China Feihe (6186 HK), Cosco Shipping (1919 HK).


Hong Kong Buybacks Weekly (Nov 14th): China Feihe, Cosco Shipping, Sinopec

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

China Shengmu Organic Milk / Equity Bottom-Up

<ul>
<li>Based on the Offer Price of HK$0.35, P/B is 0.69x. This valuation level is lower than the historical average and also has a certain discount compared to the industry average.</li>
<li>CSM's net profit may return to positive by 2026. After profitability returns to normal, its P/B ratio is expected to approach 0.8-1x at least. Then reasonable valuation level is HK$0.41-0.51/share.</li>
<li>Since minorities representing 18.74% of CSM outstanding shares needs to tender to hit the “50% hurdle”, this brings uncertainties as the Offer Price may not be attractive to some minorities.</li>
</ul>


Based on the Offer Price of HK$0.35, P/B is 0.69x. This valuation level is lower than the historical average and also has a certain discount compared to the industry average.
CSM's net profit may return to positive by 2026. After profitability returns to normal, its P/B ratio is expected to approach 0.8-1x at least. Then reasonable valuation level is HK$0.41-0.51/share.
Since minorities representing 18.74% of CSM outstanding shares needs to tender to hit the “50% hurdle”, this brings uncertainties as the Offer Price may not be attractive to some minorities.


China Modern Dairy (1117 HK) To Acquire China Shengmu (1432 HK) - The Offer Price Is Not Attractive

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

China Shengmu Organic Milk / Event-Driven

<ul>
<li>On 30 October, <a href="https://www.smartkarma.com/entities/china-modern-dairy-holdings" target="_blank" data-smartkarma-citation="entities:6785:1" rel="noopener">China Modern Dairy (1117 HK)</a> announced a conditional share purchase agreement to acquire 1.28% of outstanding <a href="https://www.smartkarma.com/entities/china-shengmu-organic-milk" target="_blank" data-smartkarma-citation="entities:12714:1" rel="noopener">China Shengmu Organic Milk (1432 HK)</a> shares at HK$0.35 per share. </li>
<li>The SPA is conditional on SAMR and independent CMD shareholder approval. SPA completion will trigger a mandatory conditional cash offer at HK$0.35 per share.</li>
<li>Post-Completion, CMD and concert parties will hold a 31.26% stake. The offer is conditional on a 50% minimum acceptance condition, which is problematic as the offer is not particularly attractive.  </li>
</ul>


On 30 October, China Modern Dairy (1117 HK) announced a conditional share purchase agreement to acquire 1.28% of outstanding China Shengmu Organic Milk (1432 HK) shares at HK$0.35 per share. 
The SPA is conditional on SAMR and independent CMD shareholder approval. SPA completion will trigger a mandatory conditional cash offer at HK$0.35 per share.
Post-Completion, CMD and concert parties will hold a 31.26% stake. The offer is conditional on a 50% minimum acceptance condition, which is problematic as the offer is not particularly attractive.  


China Shengmu (1432 HK): Possible Offer, Potentially Problematic 50% Min Acceptance Condition

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Nov 7th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Cosco Shipping (1919 HK), China Feihe (6186 HK), Sinopec (386 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Xiaomi (1810 HK), China Feihe (6186 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Nov 7th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Cosco Shipping (1919 HK), China Feihe (6186 HK), Sinopec (386 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Xiaomi (1810 HK), China Feihe (6186 HK).


Hong Kong Buybacks Weekly (Nov 7th): Cosco Shipping, China Feihe, Sinopec

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Oct 31st based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were HSBC (5 HK), China Feihe (6186 HK), Lianlian (2598 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Xiaomi (1810 HK), Linklogis (9959 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Oct 31st based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were HSBC (5 HK), China Feihe (6186 HK), Lianlian (2598 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Xiaomi (1810 HK), Linklogis (9959 HK).


Hong Kong Buybacks Weekly (Oct 31st): HSBC, China Feihe, Lianlian

Hong Kong

Mengniu Dairy is a leading Chinese dairy enterprise focused on manufacturing and distributing a wide range of nutritious, healthy, and delicious dairy products. Its product portfolio includes liquid milk, ice cream, milk powder, and cheese. The company is headquartered in Hohhot, Inner Mongolia, China, and was founded in 1999.

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Mengniu Dairy (2319 HK)

Hong Kong Buybacks Weekly (Nov 14th): China Feihe, Cosco Shipping, Sinopec

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were China Feihe (6186...

Ke Yan, CFA, FRM

China Modern Dairy (1117 HK) To Acquire China Shengmu (1432 HK) - The Offer Price Is Not Attractive

The Offer Price of HK$0.35 is low. Reasonable range is HK$0.41-0.51/share after CSM's profitability returns to normal by 2026. Uncertainties arise...

Xinyao (Criss) Wang

China Shengmu (1432 HK): Possible Offer, Potentially Problematic 50% Min Acceptance Condition

Post-Completion, CMD and concert parties will hold a 31.26% stake. The offer is conditional on a 50% minimum acceptance condition, which is...

Arun George

Hong Kong Buybacks Weekly (Nov 7th): Cosco Shipping, China Feihe, Sinopec

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Cosco Shipping...

Ke Yan, CFA, FRM

Hong Kong Buybacks Weekly (Oct 31st): HSBC, China Feihe, Lianlian

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were HSBC (5 HK), China...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)