Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Back on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02656122-6A1145856?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">19 April</a>,  <a href="https://www.smartkarma.com/entities/silk-laser-australia-ltd" target="_blank" data-smartkarma-citation="entities:33498:1" rel="noopener">Silk Laser Australia (SLA AU)</a>, an operator of specialist clinic networks across Australia, announced a $3.15/share NBIO from <a href="https://www.smartkarma.com/entities/wesfarmers-ltd" target="_blank" data-smartkarma-citation="entities:1104:1" rel="noopener">Wesfarmers Ltd (WES AU)</a>.</li>
<li>Wesfarmers was granted 30 business days to undertake due diligence on an exclusive basis. Ahead of that expiry, <a href="https://www.smartkarma.com/entities/ec-healthcare" target="_blank" data-smartkarma-citation="entities:22630:1" rel="noopener">EC Healthcare (2138 HK)</a> has crashed the party with a <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02668554-2A1450648?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">$3.35/share NBIO</a>.</li>
<li>Silk's board considers ECH's proposal to be superior. Wesfarmers has five business days to respond. I expect they will. </li>
</ul>


Back on the 19 April,  Silk Laser Australia (SLA AU), an operator of specialist clinic networks across Australia, announced a $3.15/share NBIO from Wesfarmers Ltd (WES AU).
Wesfarmers was granted 30 business days to undertake due diligence on an exclusive basis. Ahead of that expiry, EC Healthcare (2138 HK) has crashed the party with a $3.35/share NBIO.
Silk's board considers ECH's proposal to be superior. Wesfarmers has five business days to respond. I expect they will. 


Silk Laser: EC Healthcare's Superior Counter

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/silk-laser-australia-ltd" target="_blank" data-smartkarma-citation="entities:33498:1" rel="noopener">Silk Laser Australia (SLA AU)</a> disclosed a non-binding indicative offer from <a href="https://www.smartkarma.com/entities/ec-healthcare" target="_blank" data-smartkarma-citation="entities:22630:1" rel="noopener">EC Healthcare (2138 HK)</a> at A$3.35 per share, a 6.3% premium to <a href="https://www.smartkarma.com/entities/wesfarmers-ltd" target="_blank" data-smartkarma-citation="entities:1104:1" rel="noopener">Wesfarmers Ltd (WES AU)</a>’s offer of A$3.15.</li>
<li>The Board has concluded that EC Healthcare’s offer is superior. Wesfarmers has matching rights which expire on 30 May. </li>
<li>Wesfarmers has the balance sheet and synergies to bump its offer. However, it is uncertain if EC Healthcare can engage in a bidding war due to a modest balance sheet.</li>
</ul>



Silk Laser Australia (SLA AU) disclosed a non-binding indicative offer from EC Healthcare (2138 HK) at A$3.35 per share, a 6.3% premium to Wesfarmers Ltd (WES AU)’s offer of A$3.15.
The Board has concluded that EC Healthcare’s offer is superior. Wesfarmers has matching rights which expire on 30 May. 
Wesfarmers has the balance sheet and synergies to bump its offer. However, it is uncertain if EC Healthcare can engage in a bidding war due to a modest balance sheet.


Silk Laser Australia (SLA AU): David Vs Goliath Bidding Battle

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>EC Healthcare (ECH) expected the sales volume (i.e., contracted sales) to increase by no less than 24% YoY to HK$3.8bn for FY23 (ended in Mar 2023), with +21%/ +27% YoY growth for FY1H23/ FY2H23, respectively.</li><li>Specifically, sales volume of medical services maintained strong growth of 39% YoY in FY23 (+36%/ +41% YoY for FY1H23/ FY2H23); sales volume of aesthetic medical and wellness services in HK &amp; Macau slightly grew by 4% YoY in FY23 (-9%/ +18% YoY for FY1H23/ FY2H23) while that in Mainland China declined by 25% in FY23 (-15%/ -34% YoY for FY1H23/ FY2H23).</li><li>The sluggish sales volume growth in aesthetic medical and wellness services was caused by COVID disruptions in HK &amp; Macau and Mainland. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

EC Healthcare (ECH) expected the sales volume (i.e., contracted sales) to increase by no less than 24% YoY to HK$3.8bn for FY23 (ended in Mar 2023), with +21%/ +27% YoY growth for FY1H23/ FY2H23, respectively.Specifically, sales volume of medical services maintained strong growth of 39% YoY in FY23 (+36%/ +41% YoY for FY1H23/ FY2H23); sales volume of aesthetic medical and wellness services in HK &amp; Macau slightly grew by 4% YoY in FY23 (-9%/ +18% YoY for FY1H23/ FY2H23) while that in Mainland China declined by 25% in FY23 (-15%/ -34% YoY for FY1H23/ FY2H23).The sluggish sales volume growth in aesthetic medical and wellness services was caused by COVID disruptions in HK &amp; Macau and Mainland. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

EC Healthcare (2138 HK) – Rebound of cross-border consumption to fuel growth in FY24

<ul><li>EC Healthcare (ECH) reported FY1H23 revenue of HK$1,893mn, up by 31% YoY, in which revenue from aesthetic medical and beauty and wellness (collectively, consumer medical) segment declined by 2% YoY, caused by store closures in April and a gradual recovery thereafter in HK as well as regulatory headwinds and COVID disruptions in Mainland.</li><li>However, sales volume (generated from contracted sales) showed continuous recovery by quarter, up by 21%/11% QoQ in FY1Q23/FY2Q23, following a 19% QoQ decline in FY4Q22 due to COVID lockdowns in HK.</li><li>As HK-Mainland border reopening will be officially resumed on 8 Jan 2023, we expect ECH will directly benefit.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

EC Healthcare (ECH) reported FY1H23 revenue of HK$1,893mn, up by 31% YoY, in which revenue from aesthetic medical and beauty and wellness (collectively, consumer medical) segment declined by 2% YoY, caused by store closures in April and a gradual recovery thereafter in HK as well as regulatory headwinds and COVID disruptions in Mainland.However, sales volume (generated from contracted sales) showed continuous recovery by quarter, up by 21%/11% QoQ in FY1Q23/FY2Q23, following a 19% QoQ decline in FY4Q22 due to COVID lockdowns in HK.As HK-Mainland border reopening will be officially resumed on 8 Jan 2023, we expect ECH will directly benefit.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

EC Healthcare (2138 HK) – HK-Mainland Border Reopening to Revive Cross-Border Medical Consumption

<ul><li>EC Healthcare (ECH) reported FY1H23 revenue of HK$1,893mn, up by 31% YoY, and attributable net profit of HK$80mn, down by 50% YoY, accounting for 50%/ 19% of our full-year estimates, respectively.</li><li>Sales volume (generated from contracted sales) showed continuous recovery by quarter, up by 21%/11% QoQ in FY1Q23/FY2Q23, following a 19% QoQ decline in FY4Q22 due to COVID lock down in HK.</li><li>Medical service segment delivered a strong rebound, with revenue up by 48% YoY to HK$1,175mn in FY1H23, while revenue from aesthetic medical and beauty and wellness segment underwent a 2% YoY decline to HK$607mn, caused by store closures in April and a gradual recovery thereafter in HK as well as regulatory headwinds and COVID disruptions in the Mainland.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

EC Healthcare (ECH) reported FY1H23 revenue of HK$1,893mn, up by 31% YoY, and attributable net profit of HK$80mn, down by 50% YoY, accounting for 50%/ 19% of our full-year estimates, respectively.Sales volume (generated from contracted sales) showed continuous recovery by quarter, up by 21%/11% QoQ in FY1Q23/FY2Q23, following a 19% QoQ decline in FY4Q22 due to COVID lock down in HK.Medical service segment delivered a strong rebound, with revenue up by 48% YoY to HK$1,175mn in FY1H23, while revenue from aesthetic medical and beauty and wellness segment underwent a 2% YoY decline to HK$607mn, caused by store closures in April and a gradual recovery thereafter in HK as well as regulatory headwinds and COVID disruptions in the Mainland.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

EC Healthcare (2138 HK) – Strong Post-COVID Business Rebound

Hong Kong

EC Healthcare operates as a non-hospital medical service provider. The Company principally engages in the provision of medical, aesthetic medical, beauty and wellness services, and sale of skincare, healthcare and beauty products. EC Healthcare conducts businesses in Hong Kong, Macau, and Mainland China.

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EC Healthcare (2138 HK)

Silk Laser: EC Healthcare's Superior Counter

Wesfarmers has a 9.3% stake. They have been conducting DD for over a month. Unless there is something untoward in the accounts, they will counter....

David Blennerhassett

Silk Laser Australia (SLA AU): David Vs Goliath Bidding Battle

Wesfarmers has the balance sheet and synergies to bump its offer. However, it is uncertain if EC Healthcare can engage in a bidding war due to a...

Arun George