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/yashili-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3397:1" rel="noopener">Yashili International Holdings (1230 HK)</a> announced that the pre-condition is satisfied - around 10 months since the 6 May 2022 announcement of <a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a>’s HK$1.20 offer. </li>
<li>Yashili has received an extension for the despatch of the scheme document to a date no later than 31 August. We think the scheme document is despatched by early April.</li>
<li>The scheme risk is low. At the current price and for a late May payment, the gross and annualised spread is 2.6% and 12.2%, respectively.</li>
</ul>



Yashili International Holdings (1230 HK) announced that the pre-condition is satisfied - around 10 months since the 6 May 2022 announcement of China Mengniu Dairy Co (2319 HK)’s HK$1.20 offer. 
Yashili has received an extension for the despatch of the scheme document to a date no later than 31 August. We think the scheme document is despatched by early April.
The scheme risk is low. At the current price and for a late May payment, the gross and annualised spread is 2.6% and 12.2%, respectively.


Yashili (1230 HK): It’s Taken a While - Pre-Condition Satisfied

<ul>
<li>
<a href="https://www.smartkarma.com/entities/yashili-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3397:1" rel="noopener">Yashili International Holdings (1230 HK)</a> announced that the Dumex China Disposal was completed. The completion will result in the satisfaction of the last pre-condition, likely within five business days.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a>’s offer is HK$1.20 per share. Due to the upcoming release of full-year results, the scheme document will be likely despatched by early April. </li>
<li>This is a done deal and timing is the key risk. At the current price and for a late-May payment, the gross and annualised spread is 2.6% and 11.3%, respectively.</li>
</ul>



Yashili International Holdings (1230 HK) announced that the Dumex China Disposal was completed. The completion will result in the satisfaction of the last pre-condition, likely within five business days.

China Mengniu Dairy Co (2319 HK)’s offer is HK$1.20 per share. Due to the upcoming release of full-year results, the scheme document will be likely despatched by early April. 
This is a done deal and timing is the key risk. At the current price and for a late-May payment, the gross and annualised spread is 2.6% and 11.3%, respectively.


Yashili (1230 HK): Pre-Condition Satisfaction Likely Within 5 Business Days

<ul>
<li>
<a href="https://www.smartkarma.com/entities/yashili-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3397:1" rel="noopener">Yashili International Holdings (1230 HK)</a> latest monthly update notes that Dumex Key Condition 2 is satisfied paving the way towards completing the Dumex China Disposal. </li>
<li>The completion of the remaining pre-condition, the 25% Yashili acquisition, depends on the completion of the Dumex China Disposal, which now looks imminent.</li>
<li>We think the pre-condition will be satisfied by the end of February and the scheme document will be despatched by early April. At the last close, the spread is 6.2%.</li>
</ul>



Yashili International Holdings (1230 HK) latest monthly update notes that Dumex Key Condition 2 is satisfied paving the way towards completing the Dumex China Disposal. 
The completion of the remaining pre-condition, the 25% Yashili acquisition, depends on the completion of the Dumex China Disposal, which now looks imminent.
We think the pre-condition will be satisfied by the end of February and the scheme document will be despatched by early April. At the last close, the spread is 6.2%.


Yashili (1230 HK): Pre-Condition Finally to Be Satisfied?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/yashili-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3397:1" rel="noopener">Yashili International Holdings (1230 HK)</a>'s latest monthly update suggests that the remaining pre-condition, the 25% Yashili acquisition, is entering the final stages towards being satisfied. </li>
<li>The wording “<em>in the course of processing the relevant application</em>” suggests that the government authorities will grant the new registration certificate, which should be received shortly.</li>
<li>The gross spread is 6.2%. The downside is low as both <a href="https://www.smartkarma.com/entities/danone-sa" target="_blank" data-smartkarma-citation="entities:21403:1" rel="noopener">Danone SA (BN FP)</a> and <a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a> can waive conditions to satisfy the pre-condition.</li>
</ul>



Yashili International Holdings (1230 HK)'s latest monthly update suggests that the remaining pre-condition, the 25% Yashili acquisition, is entering the final stages towards being satisfied. 
The wording “in the course of processing the relevant application” suggests that the government authorities will grant the new registration certificate, which should be received shortly.
The gross spread is 6.2%. The downside is low as both Danone SA (BN FP) and China Mengniu Dairy Co (2319 HK) can waive conditions to satisfy the pre-condition.


Yashili (1230 HK): Monthly Update Suggests that Pre-Condition Satisfaction in the Final Leg

<ul>
<li>
<a href="https://www.smartkarma.com/entities/yashili-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3397:1" rel="noopener">Yashili International Holdings (1230 HK)</a>'s spread to <a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a>’s offer (HK$1.20) has widened to 10.1% due to doubts about the satisfaction of the remaining pre-condition.</li>
<li>We think the delay in satisfying Dumex Key Condition is due to the glacial bureaucratic process. The pre-conditions long stop date is 31 July 2023, which provides sufficient time.</li>
<li>Both <a href="https://www.smartkarma.com/entities/danone-sa" target="_blank" data-smartkarma-citation="entities:21403:1" rel="noopener">Danone SA (BN FP)</a> and Mengniu can waive conditions to satisfy the pre-condition. Both have the motivation to complete the transaction as it facilitates the unwinding of their partnership.</li>
</ul>



Yashili International Holdings (1230 HK)'s spread to China Mengniu Dairy Co (2319 HK)’s offer (HK$1.20) has widened to 10.1% due to doubts about the satisfaction of the remaining pre-condition.
We think the delay in satisfying Dumex Key Condition is due to the glacial bureaucratic process. The pre-conditions long stop date is 31 July 2023, which provides sufficient time.
Both Danone SA (BN FP) and Mengniu can waive conditions to satisfy the pre-condition. Both have the motivation to complete the transaction as it facilitates the unwinding of their partnership.


Yashili’s Widening Spread Is an Opportunity

China

China Modern Dairy is a leading dairy farming operator and raw milk producer in China. The company also engages in the production and sale of animal feed, forage cultivation, dairy cow breeding, and provides digital intelligence platform services. It was founded in 2005 and is headquartered in Ma'anshan City, Anhui Province, China.

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China Modern Dairy (1117 HK)

Yashili (1230 HK): It’s Taken a While - Pre-Condition Satisfied

The scheme meeting is likely in early May. The scheme risk is low. At the current price and for a late May payment, the gross and annualised spread...

Arun George

Yashili (1230 HK): Pre-Condition Satisfaction Likely Within 5 Business Days

This is a done deal and timing is the key risk. At the current price and for a late-May payment, the gross and annualised spread is 2.6% and 11.3%,...

Arun George

Yashili (1230 HK): Pre-Condition Finally to Be Satisfied?

It's been a glacial pace but it finally looks like the satisfaction of the pre-condition is close. At the last close and for a late May payment,...

Arun George

Yashili (1230 HK): Monthly Update Suggests that Pre-Condition Satisfaction in the Final Leg

The wording of the update suggests that the pre-condition should be satisfied soon. The downside is low as both Danone and Mengniu can waive...

Arun George

Yashili’s Widening Spread Is an Opportunity

While the pre-condition should be satisfied, both Danone and Mengniu have the incentive and the ability to waive conditions to satisfy the pre...

Arun George

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