Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Thematic (Sector/Industry)

<ul>
<li>Seeing as though it is Chinese New Year week, I thought it might be appropriate to conduct a brief analysis of US-listed China plays.</li>
<li>According to a recent US-China Economic and Security Review Commission report, 265 Chinese companies were listed on the NYSE, Nasdaq and NYSE American exchanges in January 2024 worth US$848bn. </li>
<li>That's down from 252 companies worth US$1.03tn a year ago, a 17.5% decline. 91% of the total market capitalization of Chinese firms listed on U.S. exchanges use VIEs.</li>
</ul>


Seeing as though it is Chinese New Year week, I thought it might be appropriate to conduct a brief analysis of US-listed China plays.
According to a recent US-China Economic and Security Review Commission report, 265 Chinese companies were listed on the NYSE, Nasdaq and NYSE American exchanges in January 2024 worth US$848bn. 
That's down from 252 companies worth US$1.03tn a year ago, a 17.5% decline. 91% of the total market capitalization of Chinese firms listed on U.S. exchanges use VIEs.


Event-Driven

<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

Douyu International Holdings / Event-Driven

<ul>
<li>In a particularly altruistic move, live-streaming game platform play <a href="https://www.smartkarma.com/entities/douyu-international-hold-adr" target="_blank" data-smartkarma-citation="entities:28045:1" rel="noopener">Douyu International Holdings (DOYU US)</a>  <a href="https://ir.douyu.com/2024-07-03-DouYu-International-Holdings-Limited-Announces-Special-Cash-Dividend" target="_blank" rel="noopener">announced</a> a special cash dividend of US$9.76/share, vs. a last price of US$12.59.</li>
<li>The cash outlay is roughly US$308mn, and Douyu had cash (as at 1Q24) of <a href="https://ir.douyu.com/2024-06-05-DouYu-International-Holdings-Limited-Reports-First-Quarter-2024-Unaudited-Financial-Results" target="_blank" rel="noopener">US$936.6mn</a>. And no debt.  Founder/chairman/CEO Shaojie Chen (17.2% shareholder) will pocket a tidy ~US$53mn.</li>
<li>An outlier; or should we expect more of the same for other cash-rich US-listed China plays?</li>
</ul>


In a particularly altruistic move, live-streaming game platform play Douyu International Holdings (DOYU US)  announced a special cash dividend of US$9.76/share, vs. a last price of US$12.59.
The cash outlay is roughly US$308mn, and Douyu had cash (as at 1Q24) of US$936.6mn. And no debt.  Founder/chairman/CEO Shaojie Chen (17.2% shareholder) will pocket a tidy ~US$53mn.
An outlier; or should we expect more of the same for other cash-rich US-listed China plays?


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Equity Bottom-Up

<ul>
 <li>
<a href="https://smartkarma.com/entities/dada-nexus-ltd">Dada Nexus </a>operates as a key player in China's on-demand retail and delivery market, but faces a challenging path to profitability amidst intense competition and recent corporate governance issues.</li>
 <li>The company's strategic partnership with and majority ownership by JD.com provides a significant competitive advantage through ecosystem integration, offering access to a massive user base and logistical support.</li>
 <li>A recent internal audit revealing overstated revenues and costs has raised significant corporate governance concerns, leading to management changes, a stock price decline, and investor lawsuits, which will require time to rebuild trust.</li>
</ul>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.


  
Dada Nexus operates as a key player in China's on-demand retail and delivery market, but faces a challenging path to profitability amidst intense competition and recent corporate governance issues.
  The company's strategic partnership with and majority ownership by JD.com provides a significant competitive advantage through ecosystem integration, offering access to a massive user base and logistical support.
  A recent internal audit revealing overstated revenues and costs has raised significant corporate governance concerns, leading to management changes, a stock price decline, and investor lawsuits, which will require time to rebuild trust.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

<ul>
<li>With another US-listed China play subject to an Offer - <a href="https://www.smartkarma.com/entities/dada-nexus-ltd" target="_blank" data-smartkarma-citation="entities:28961:1" rel="noopener">Dada Nexus (DADA US)</a> - what exactly is the process for dissentient shareholders to dissent?</li>
<li>Do they need to vote Against, For, or Abstain? Or not at all? The short answer: in the Cayman Islands, there are no restrictions on how a dissenter can vote.</li>
<li>This insight is a bolt on to my ongoing series on appraisal rights in the privatisation of a Cayman Islands companies listed in the U.S.</li>
</ul>


With another US-listed China play subject to an Offer - Dada Nexus (DADA US) - what exactly is the process for dissentient shareholders to dissent?
Do they need to vote Against, For, or Abstain? Or not at all? The short answer: in the Cayman Islands, there are no restrictions on how a dissenter can vote.
This insight is a bolt on to my ongoing series on appraisal rights in the privatisation of a Cayman Islands companies listed in the U.S.


US-Listed China Plays: Thoughts On Dissention

China

Dada Nexus Limited operates a platform for local on-demand retail and delivery. The Company provides a digital solution leveraging the crowdsourcing model to address the challenge of frequent fluctuations brought forward by the nature of on-demand orders and to match the surging demand for delivery capacity with efficient supply. Dada Nexus serves customers in China.

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Dada Nexus (DADA US)

Musings On US-Listed China Plays

Investors in Chinese companies may be willing to support activities that are contrary to US national interests, including technology used for...

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Paragon REIT (PGNREIT SP)'s Privatisation Offer

Looks pretty clean. A 7% premium to NAV and a roughly two-year high. If payment on or around late May, I'd pay up to S$0.97/share for a gross...

David Blennerhassett

Screening For The Next Douyu (DOYU US)

In an altruistic move, Douyu announced a special dividend of US$9.76/share, vs. a last price of US$12.59. An outlier; or should we expect more of...

David Blennerhassett

Primer: Dada Nexus (DADA US) - Apr 2026

Dada Nexus operates as a key player in China's on-demand retail and delivery market, but faces a challenging path to profitability amidst...

αSK Primers

US-Listed China Plays: Thoughts On Dissention

Voting is irrelevant: A shareholder can vote “Yes,” “No,” abstain, or not vote at all and still dissent, as long as they follow the statutory process.

David Blennerhassett

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