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

Haitong Securities Co Ltd (H) / Event-Driven

<ul>
<li>The exchange ratio for the merger between <a href="https://www.smartkarma.com/entities/guotai-junan-securities-co-ltd-5dfaf2c5-76d3-4f34-a77d-118787fd7091" target="_blank" data-smartkarma-citation="entities:23752:1" rel="noopener">Guotai Junan Securities (2611 HK)</a> and <a href="https://www.smartkarma.com/entities/haitong-securities-co-ltd-h" target="_blank" data-smartkarma-citation="entities:5665:1" rel="noopener">Haitong Securities Co Ltd (H) (6837 HK)</a> is 0.62x. </li>
<li>The merger closing is subject to several effectiveness and implementation conditions. The latest update suggests that the remaining conditions are CSRC and HKEx approvals.</li>
<li>The satisfaction of the remaining conditions is a formality. At the last close and for an end February payment, the gross/annualised spread is 3.2%/26.4%. </li>
</ul>


The exchange ratio for the merger between Guotai Junan Securities (2611 HK) and Haitong Securities Co Ltd (H) (6837 HK) is 0.62x. 
The merger closing is subject to several effectiveness and implementation conditions. The latest update suggests that the remaining conditions are CSRC and HKEx approvals.
The satisfaction of the remaining conditions is a formality. At the last close and for an end February payment, the gross/annualised spread is 3.2%/26.4%. 


Haitong Securities (6837 HK)/GTJA (2611 HK) Merger: The Home Stretch

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha (3391 JP)</a> and <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia (3141 JP)</a> may merge quicker than expected. Meaning a one-year "guess the price" ratio. Expect Tsuruha to gain against Welcia from here.</li>
<li>PUSUs exist in Hong Kong. In its bid for <a href="https://www.smartkarma.com/entities/greatview-aseptic-packaging" target="_blank" data-smartkarma-citation="entities:10802:1" rel="noopener">GAPack (468 HK)</a>, XJF should sound out the SFC to put Bi/Hong on notice. </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 (1381 HK)</a> effectively ticks off another pre-con. This transaction continues to trade too wide to terms. </li>
</ul>



Tsuruha (3391 JP) and Welcia (3141 JP) may merge quicker than expected. Meaning a one-year "guess the price" ratio. Expect Tsuruha to gain against Welcia from here.
PUSUs exist in Hong Kong. In its bid for GAPack (468 HK), XJF should sound out the SFC to put Bi/Hong on notice. 

Canvest Environmental (1381 HK) effectively ticks off another pre-con. This transaction continues to trade too wide to terms. 


Last Week in Event SPACE: Tsuruha/Welcia, GAPack, Canvest, HKBN

<ul>
<li>I tally 51 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.</li>
<li>One new deal was discussed this week: <a href="https://www.smartkarma.com/entities/sun-art-retail-group-ltd" target="_blank" data-smartkarma-citation="entities:401:1" rel="noopener">Sun Art Retail (6808 HK)</a>'s (expected) unconditional MGO. A <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a>/<a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> merger was also discussed. </li>
<li>Key updates/news took place on: <a href="https://www.smartkarma.com/entities/avjennings-ltd" target="_blank" data-smartkarma-citation="entities:12578:1" rel="noopener">AVJennings (AVJ AU)</a>,  <a href="https://www.smartkarma.com/entities/greatview-aseptic-packaging" target="_blank" data-smartkarma-citation="entities:10802:1" rel="noopener">GAPack (468 HK)</a>, <a href="https://www.smartkarma.com/entities/shandong-hi-speed-new-energy-g" target="_blank" data-smartkarma-citation="entities:6927:1" rel="noopener">Shandong Hi-Speed New Energy (1250 HK)</a>, <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>, <a href="https://www.smartkarma.com/entities/china-boqi-environmental-hol" target="_blank" data-smartkarma-citation="entities:26771:1" rel="noopener">China Boqi Environmental (2377 HK)</a>, and <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN (1310 HK)</a>.
</li>
</ul>


I tally 51 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
One new deal was discussed this week: Sun Art Retail (6808 HK)'s (expected) unconditional MGO. A Tsuruha Holdings (3391 JP)/Welcia Holdings (3141 JP) merger was also discussed. 
Key updates/news took place on: AVJennings (AVJ AU),  GAPack (468 HK), Shandong Hi-Speed New Energy (1250 HK), Canvest (1381 HK), China Boqi Environmental (2377 HK), and HKBN (1310 HK).



(Mostly) Asia-Pac M&A: Sun Art Retail, AVJennings, Shandong Hi-Speed New Energy, Boqi, Get Nice

Shandong Hi-Speed New Energy G / Event-Driven

<ul>
<li>Back on the 27th November, <a href="https://www.smartkarma.com/entities/shandong-hi-speed-holdings-gro" target="_blank" data-smartkarma-citation="entities:10356:1" rel="noopener">Shandong Hi-Speed Holdings (412 HK)</a> (SDHG) <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1127/2024112700199.pdf" target="_blank" rel="noopener">entered into SPAs</a> with two <a href="https://www.smartkarma.com/entities/citic-securities-h" target="_blank" data-smartkarma-citation="entities:463:1" rel="noopener">Citic Securities (6030 HK)</a>-backed funds, holding 13.52% in <a href="https://www.smartkarma.com/entities/shandong-hi-speed-new-energy-g" target="_blank" data-smartkarma-citation="entities:6927:1" rel="noopener">Shandong Hi-Speed New Energy (1250 HK)</a>. 
</li>
<li>The SPAs were completed on the 27th December, elevating SDHG's stake to 56.97%, triggering an unconditional MGO. The Offer Price is HK$1.78/share, the same as that under the SPAs.</li>
<li>The premium to last close is just 7.23%. But don't expect a bump in terms. SDHG intends to maintain Shandong Hi-Speed New Energy's listing. </li>
</ul>


Back on the 27th November, Shandong Hi-Speed Holdings (412 HK) (SDHG) entered into SPAs with two Citic Securities (6030 HK)-backed funds, holding 13.52% in Shandong Hi-Speed New Energy (1250 HK). 

The SPAs were completed on the 27th December, elevating SDHG's stake to 56.97%, triggering an unconditional MGO. The Offer Price is HK$1.78/share, the same as that under the SPAs.
The premium to last close is just 7.23%. But don't expect a bump in terms. SDHG intends to maintain Shandong Hi-Speed New Energy's listing. 


Shandong Hi-Speed New Energy (1250 HK)'s Unconditional MGO. It Is What It Is

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li>Hong Kong Alpha portfolio lost 2.9% in November, but has outperformed its benchmark by 4.9% since inception on October 1st.  It has outperformed HSI, HSCI and HSCEI by 9%.</li>
<li>Hong Kong Alpha has generated idiosyncratic returns during the market correction.  The portfolio has no exposure to energy, healthcare and property sectors. </li>
<li>We exit 4 positions at the end of the month and add positions in software, tech components, travel and restaurant sectors.</li>
</ul>


Hong Kong Alpha portfolio lost 2.9% in November, but has outperformed its benchmark by 4.9% since inception on October 1st.  It has outperformed HSI, HSCI and HSCEI by 9%.
Hong Kong Alpha has generated idiosyncratic returns during the market correction.  The portfolio has no exposure to energy, healthcare and property sectors. 
We exit 4 positions at the end of the month and add positions in software, tech components, travel and restaurant sectors.


HONG KONG ALPHA PORTFOLIO (November 2024)

China

CITIC Securities Co., Ltd. provides securities brokerage, trading, underwriting, investment banking, asset management, and investment consulting services.

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Citic Securities (H) (6030 HK)

Haitong Securities (6837 HK)/GTJA (2611 HK) Merger: The Home Stretch

The latest update notes that CSRC approval has been obtained. Therefore, the remaining condition is HKEx approval, which is a formality. At the...

Arun George

Last Week in Event SPACE: Tsuruha/Welcia, GAPack, Canvest, HKBN

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

(Mostly) Asia-Pac M&A: Sun Art Retail, AVJennings, Shandong Hi-Speed New Energy, Boqi, Get Nice

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

Shandong Hi-Speed New Energy (1250 HK)'s Unconditional MGO. It Is What It Is

Assuming around mid-Feb payment, pay up to HK$1.75/share. BUT - if you can get in at the last close (HK$1.73), do so. Don't expect a bump in...

David Blennerhassett

HONG KONG ALPHA PORTFOLIO (November 2024)

Hong Kong Alpha portfolio continues to outperform during the market correction in HK/China stocks. We continue to like the consumer discretionary...

David Mudd

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