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/yanzhou-coal-mining-company-limited-h" target="_blank" data-smartkarma-citation="entities:384:1" rel="noopener">Yanzhou Coal Mining Company Limited H (1171 HK)</a>/Yankuang, a 62.26% shareholder, aims to offer H Share convertible bonds for US$3.60 (HK$28.26 or A$5.07) per <a href="https://www.smartkarma.com/entities/yancoal-australia-ltd" target="_blank" data-smartkarma-citation="entities:4145:1" rel="noopener">Yancoal Australia (YAL AU)</a> share.</li>
<li>Yankuang’s implied offer price is -16.6% and -14.5% below the last close price on the ASX and HKEx, respectively. At first glance, the offer seems to be a non-starter.  </li>
<li>Yankuang’s end game is likely to provide large shareholders with a liquidity event to hit the 90% compulsory acquisition threshold. This ploy could work subject to FIRB approval. </li>
</ul>



Yanzhou Coal Mining Company Limited H (1171 HK)/Yankuang, a 62.26% shareholder, aims to offer H Share convertible bonds for US$3.60 (HK$28.26 or A$5.07) per Yancoal Australia (YAL AU) share.
Yankuang’s implied offer price is -16.6% and -14.5% below the last close price on the ASX and HKEx, respectively. At first glance, the offer seems to be a non-starter.  
Yankuang’s end game is likely to provide large shareholders with a liquidity event to hit the 90% compulsory acquisition threshold. This ploy could work subject to FIRB approval. 


Yancoal’s Unusual Low Bid from Yankuang Energy

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/yanzhou-coal-mining-company-limited-h" target="_blank" data-smartkarma-citation="entities:384:1" rel="noopener">Yankuang Energy Group Company (1171 HK)</a> is considering an Offer for dual-listed coal-miner <a href="https://www.smartkarma.com/entities/yancoal-australia-ltd" target="_blank" data-smartkarma-citation="entities:4145:1" rel="noopener">Yancoal Australia (YAL AU / 3668 HK)</a> via the issuance of H-share convertible bonds.</li>
<li>The potential consideration of US$3.60 (~A$5.07/~HK$28.26) per Yancoal share, in the form of H-Share CBs, compares to the last close A$6.08 and HK$33.05. Perhaps an attractive yield will be dangled. </li>
<li>Yankuang Energy has 62.26%. Cinda, Glencore, and China Shandong collectively hold 27.7%. You need all three to support the Offer terms, and then some, to force compulsory acquisition. </li>
</ul>



Yankuang Energy Group Company (1171 HK) is considering an Offer for dual-listed coal-miner Yancoal Australia (YAL AU / 3668 HK) via the issuance of H-share convertible bonds.
The potential consideration of US$3.60 (~A$5.07/~HK$28.26) per Yancoal share, in the form of H-Share CBs, compares to the last close A$6.08 and HK$33.05. Perhaps an attractive yield will be dangled. 
Yankuang Energy has 62.26%. Cinda, Glencore, and China Shandong collectively hold 27.7%. You need all three to support the Offer terms, and then some, to force compulsory acquisition. 


Yancoal (YAL AU, 3668 HK): Potential Offer From Parent In H-Share CBs

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Equity Bottom-Up

Tsingshan Holding Group / Equity Bottom-Up

<ul>
<li>A Chinese metal giant is scrambling to manage massive losses from shorting nickel futures after the metal went on an unprecedented rally.</li>
<li>Tsingshan Holding Group Ltd., one of the world’s biggest nickel and stainless steel producers, came under mounting pressure to meet margin calls for its short position</li>
<li>The price of the metal, used in stainless steel and electric-vehicle batteries, surged as much as 250% in two days</li>
</ul>


A Chinese metal giant is scrambling to manage massive losses from shorting nickel futures after the metal went on an unprecedented rally.
Tsingshan Holding Group Ltd., one of the world’s biggest nickel and stainless steel producers, came under mounting pressure to meet margin calls for its short position
The price of the metal, used in stainless steel and electric-vehicle batteries, surged as much as 250% in two days


Chinese Metal Giant Faces Heavy Losses on Wild Nickel Ride

<a href="https://www.smartkarma.com/entities/z-energy-ltd" target="_blank" data-smartkarma-citation="entities:9838:1" rel="noopener">Z Energy Ltd (ZEL NZ)</a> is a fuel distribution and retailing business which owns and manages over 300 fuel stations in New Zealand under the Z and Caltex brands. Z Energy revealed a non-binding indicative proposal from <a href="https://www.smartkarma.com/entities/ampol-ltd" target="_blank" data-smartkarma-citation="entities:345:1" rel="noopener">Caltex Australia (ALD AU)</a>/Ampol to acquire it via a scheme of arrangement. Ampol is offering NZ$3.78 per share. The bid represents a 22% premium to the share price on 12 August (prior to receipt of the announced proposal), a 35% premium to the share price on 26 July (prior to media speculation regarding a bid) and a 47% premium to the share price on 1 June (prior to Ampol’s first rejected proposal).Z Energy has agreed to grant Ampol a four-week exclusivity period to conduct due diligence. The indicative offer permits Z Energy to pay dividends up to NZ 10 cents on the scheme implementation to accommodate any regulatory-driven delays. Subject to discussions, Ampol’s offer may include a scrip component and a secondary New Zealand listing.  Pushing for a better price is part of the M&amp;A game. The Board had rejected Ampol’s previous three offers as they did not represent compelling value. The Board was able to secure a sweetened bid which offers a 12.8% bump to Ampol’s first offer of NZ$3.35 per share.  Ampol’s offer is a premium to Z Energy's historical EV/EBITDA multiples but a discount to pre-COVID-19 share prices. Z Energy’s CEO opines that Ampol’s bid could be a catalyst for other bidders that had previously signalled interest to make a move for Z Energy. Potential bidders could be <a href="https://www.smartkarma.com/entities/chevron-corp" target="_blank" data-smartkarma-citation="entities:11091:1" rel="noopener">Chevron Corp (CVX US)</a>, Vitol, <a href="https://www.smartkarma.com/entities/glencore-plc" target="_blank" data-smartkarma-citation="entities:764:1" rel="noopener">Glencore Plc (GLEN LN)</a>, Trafigura and Japanese refiners.<div class="content-highlight">Overall, we think Ampol’s offer is a good starting point to lay down a valuation benchmark and suspect that there is some upside to the final offer price. At the last close price of NZ$3.48, Z Energy’s shares are trading at an 8.6% gross spread to the indicative offer.</div>

Z Energy Ltd (ZEL NZ) is a fuel distribution and retailing business which owns and manages over 300 fuel stations in New Zealand under the Z and Caltex brands. Z Energy revealed a non-binding indicative proposal from Caltex Australia (ALD AU)/Ampol to acquire it via a scheme of arrangement. Ampol is offering NZ$3.78 per share. The bid represents a 22% premium to the share price on 12 August (prior to receipt of the announced proposal), a 35% premium to the share price on 26 July (prior to media speculation regarding a bid) and a 47% premium to the share price on 1 June (prior to Ampol’s first rejected proposal).Z Energy has agreed to grant Ampol a four-week exclusivity period to conduct due diligence. The indicative offer permits Z Energy to pay dividends up to NZ 10 cents on the scheme implementation to accommodate any regulatory-driven delays. Subject to discussions, Ampol’s offer may include a scrip component and a secondary New Zealand listing.  Pushing for a better price is part of the M&amp;A game. The Board had rejected Ampol’s previous three offers as they did not represent compelling value. The Board was able to secure a sweetened bid which offers a 12.8% bump to Ampol’s first offer of NZ$3.35 per share.  Ampol’s offer is a premium to Z Energy's historical EV/EBITDA multiples but a discount to pre-COVID-19 share prices. Z Energy’s CEO opines that Ampol’s bid could be a catalyst for other bidders that had previously signalled interest to make a move for Z Energy. Potential bidders could be Chevron Corp (CVX US), Vitol, Glencore Plc (GLEN LN), Trafigura and Japanese refiners.Overall, we think Ampol’s offer is a good starting point to lay down a valuation benchmark and suspect that there is some upside to the final offer price. At the last close price of NZ$3.48, Z Energy’s shares are trading at an 8.6% gross spread to the indicative offer.

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

As long as market dynamics remain largely positive and the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US) indexes are above their respective intermediate-term support levels we believe a constructive outlook is warranted. To reiterate, support levels to watch include $90 on ACWI-US, $53 on ACWX-US, and $52 on EEM-US. Open the attached file to read our complete International Strategy document, and to find links to detailed comments and recommendations for each of our 12 Sectors.

As long as market dynamics remain largely positive and the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US) indexes are above their respective intermediate-term support levels we believe a constructive outlook is warranted. To reiterate, support levels to watch include $90 on ACWI-US, $53 on ACWX-US, and $52 on EEM-US. Open the attached file to read our complete International Strategy document, and to find links to detailed comments and recommendations for each of our 12 Sectors.

Global Equity Strategy: Constructive Pullback; Overweight Value

Switzerland

Glencore Plc is a diversified natural resources company. The Company operates in three groups: Metals and Minerals, Energy Products, and Agricultural Products. Glencore Plc offers its products and services around the world.

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Glencore Plc (GLEN LN)

Yancoal’s Unusual Low Bid from Yankuang Energy

Yankuang’s implied offer price is materially below the last close price on both the ASX and HKEx. The strategy is likely to secure large...

Arun George

Chinese Metal Giant Faces Heavy Losses on Wild Nickel Ride

A Chinese metal giant is scrambling to manage massive losses from shorting nickel futures after the metal went on an unprecedented rally.

Caixin Global

Ampol Lobs an Offer for Z Energy

Z Energy revealed a non-binding indicative proposal from Ampol at NZ$3.78 per share. We suspect that there is some upside to the final offer price....

Arun George

Global Equity Strategy: Constructive Pullback; Overweight Value

As long as the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US) indexes are above their respective intermediate-term support levels we...

Vermilion Research

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52-week Range

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Yancoal’s Unusual Low Bid from Yankuang Energy

Yankuang’s implied offer price is materially below the last close price on both the ASX and HKEx. The strategy is likely to secure large...

Arun George

Yancoal (YAL AU, 3668 HK): Potential Offer From Parent In H-Share CBs

The headline CB price doesn't look like it will cut it. But it will help provide support near term. The focal point will be the fixed interest on...

David Blennerhassett

Chinese Metal Giant Faces Heavy Losses on Wild Nickel Ride

A Chinese metal giant is scrambling to manage massive losses from shorting nickel futures after the metal went on an unprecedented rally.

Caixin Global

Ampol Lobs an Offer for Z Energy

Z Energy revealed a non-binding indicative proposal from Ampol at NZ$3.78 per share. We suspect that there is some upside to the final offer price....

Arun George

Global Equity Strategy: Constructive Pullback; Overweight Value

As long as the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US) indexes are above their respective intermediate-term support levels we...

Vermilion Research