Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

China National Building Material / Event-Driven

<ul>
<li>On the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1206/2024120601604.pdf" target="_blank" rel="noopener">6th December</a>, <a href="https://www.smartkarma.com/entities/china-national-building-ma-h" target="_blank" data-smartkarma-citation="entities:184:1" rel="noopener">China National Building Material (3323 HK)</a> (CNBM), a leading PRC building materials company, offered to buy back 841,749,304 H-shares at HK$4.03/share, a 15.1% premium to undisturbed.</li>
<li>The thrust of the buyback lifts the stake of CNBM's parent - the CNBM Parent Concert Group - to 50.01% of total shares from 45.02% currently, necessitating a whitewash waiver.</li>
<li>Pre-Cons were satisfied on the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0124/2025012401173.pdf" target="_blank" rel="noopener">24th Jan</a>. The independent H-class shareholders vote for the waiver is on the 19th Feb. Minimum pro-ration is 19.24%. Implied back-end price is well down. </li>
</ul>


On the 6th December, China National Building Material (3323 HK) (CNBM), a leading PRC building materials company, offered to buy back 841,749,304 H-shares at HK$4.03/share, a 15.1% premium to undisturbed.
The thrust of the buyback lifts the stake of CNBM's parent - the CNBM Parent Concert Group - to 50.01% of total shares from 45.02% currently, necessitating a whitewash waiver.
Pre-Cons were satisfied on the 24th Jan. The independent H-class shareholders vote for the waiver is on the 19th Feb. Minimum pro-ration is 19.24%. Implied back-end price is well down. 


CNBM (3323 HK): This Is An "Avoid" Ahead Of 19th Feb H-Class Shareholder Vote

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

China National Building Material / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-national-building-ma-h" target="_blank" data-smartkarma-citation="entities:184:1" rel="noopener">China National Building Material (3323 HK)</a> published the H-share offer document and if everything is smooth, the payment will be made on 14 Mar 2025. </li>
<li>Its two subsidiaries forecast poor profit/losses for FY24, suggesting a tough operating environment. The buyback valuation remains attractive relative to peer multiples.</li>
<li>For non-holders, at the current price of HK$3.59, we do not think the safety margin is good enough, assuming that most existing shareholders will accept and tender.</li>
</ul>



China National Building Material (3323 HK) published the H-share offer document and if everything is smooth, the payment will be made on 14 Mar 2025. 
Its two subsidiaries forecast poor profit/losses for FY24, suggesting a tough operating environment. The buyback valuation remains attractive relative to peer multiples.
For non-holders, at the current price of HK$3.59, we do not think the safety margin is good enough, assuming that most existing shareholders will accept and tender.


China National Building Material (3323 HK): Publication of Buyback Offer Document

<ul>
<li>The prices of the construction materials stocks collapsed recently, with <a href="https://www.smartkarma.com/entities/china-national-building-ma-h" target="_blank" data-smartkarma-citation="entities:184:1" rel="noopener">China National Building Material (3323 HK)</a> holding firm, thanks to the buyback proposal.</li>
<li>A sustained drop in cement prices and continued weakness in fixed asset investment revealed the challenging demand environment, making CNBM's offer attractive.</li>
<li>The buyback price equals 25.7x and 10.8x PERs for FY24F and FY25F, representing a hefty premium over peers. We continue to believe this is a good exit opportunity. </li>
</ul>


The prices of the construction materials stocks collapsed recently, with China National Building Material (3323 HK) holding firm, thanks to the buyback proposal.
A sustained drop in cement prices and continued weakness in fixed asset investment revealed the challenging demand environment, making CNBM's offer attractive.
The buyback price equals 25.7x and 10.8x PERs for FY24F and FY25F, representing a hefty premium over peers. We continue to believe this is a good exit opportunity. 


China National Building Material (3323 HK): Buyback Getting Even More Convincing

Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>Box trades are gaining popularity on the Hong Kong Stock Exchange. These arbitrage strategies exploit price discrepancies in options markets for near risk-free profits.</li>
<li>Long box trades involve simultaneously buying bull call spreads and bear put spreads with identical strikes and expiration dates, creating a fixed payoff regardless of the underlying asset's price movement.</li>
<li>Box trades require careful execution consideration of spreads, commissions, margins, and fees, with risks primarily in execution and operations rather than market exposure.</li>
</ul>


Box trades are gaining popularity on the Hong Kong Stock Exchange. These arbitrage strategies exploit price discrepancies in options markets for near risk-free profits.
Long box trades involve simultaneously buying bull call spreads and bear put spreads with identical strikes and expiration dates, creating a fixed payoff regardless of the underlying asset's price movement.
Box trades require careful execution consideration of spreads, commissions, margins, and fees, with risks primarily in execution and operations rather than market exposure.


Box Trades Explained: How Traders Execute Near Risk-Free Arbitrage in Hong Kong's Options Market

<ul>
<li>Cuscaden Peak, the sponsor of <a href="https://www.smartkarma.com/entities/paragon-reit" target="_blank" data-smartkarma-citation="entities:5994:1" rel="noopener">Paragon REIT (PGNREIT SP)</a> and 61.5% shareholder, has offered S$0.98/unit, in cash; or S$1.003/unit, a 7% premium to NAV, when including FY24's S$0.0233/unit cash distribution.</li>
<li>The Offer is by way of a Scheme. The Offer price has NOT been declared final. A switch option into a voluntary Offer is afforded should a competing Offer emerge.</li>
<li>Looks pretty clean. Assuming mid-late May payment, pay up to S$0.97/share for a 4%/15% gross/annualised spread. It may trade tighter given the early distribution payment.</li>
</ul>


Cuscaden Peak, the sponsor of Paragon REIT (PGNREIT SP) and 61.5% shareholder, has offered S$0.98/unit, in cash; or S$1.003/unit, a 7% premium to NAV, when including FY24's S$0.0233/unit cash distribution.
The Offer is by way of a Scheme. The Offer price has NOT been declared final. A switch option into a voluntary Offer is afforded should a competing Offer emerge.
Looks pretty clean. Assuming mid-late May payment, pay up to S$0.97/share for a 4%/15% gross/annualised spread. It may trade tighter given the early distribution payment.


Paragon REIT (PGNREIT SP)'s Privatisation Offer

China

China National Building Material Company Limited manufactures cement products. The Company produces silica cements, commodity concretes, cement clinkers, and other products. China National Building Material also produces glass fibers, composite materials, and other products.

China National Building Material (3323 HK)

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China National Building Material (3323 HK)

CNBM (3323 HK): This Is An "Avoid" Ahead Of 19th Feb H-Class Shareholder Vote

If ~45% of independent H-share class shareholders tenders, pro-ration would be ~42%, implying a back-end B/E price of HK$3.28/share.This is an...

David Blennerhassett