Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

China Logistics Property Holdings / Equity Bottom-Up

China Logistics Property Holdings (1589 HK)

<p><a href="https://www.smartkarma.com/entities/china-logistics-property-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:22799:1" rel="noopener">China Logistics Property Holdings (1589 HK)</a> (CLPH) has <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1229/2020122901322.pdf" target="_blank" rel="noopener">announced</a> its two largest shareholders - Li Shifa (chairman, holding ~28.2%) and RRJ Capital (~22.8%) - are "<em>conducting a preliminary strategic review of their stakes in the Company, which involves up to approximately 51.5% shareholding of the Company.</em>"</p>
<p>The media is reporting these two shareholders are seeking a 20% premium to the unaffected price or around ~$4.70/share, roughly a four-year high.</p>
<p>A sale could potentially trigger an unconditional mandatory general offer; or it may be structured by way of a Scheme in which Li/RRJ provide irrevocables to vote in favour of the delisting resolutions.</p>
<p>This insight briefly looks at potential takeover scenarios. For some historical context and comparative analysis of CLPH to that of <a href="https://www.smartkarma.com/entities/global-logistic-properties-ltd" target="_blank" data-smartkarma-citation="entities:2894:1" rel="noopener">Global Logistic Properties (GLP SP)</a> when it was privatised back in 2017, please read <a href="https://www.smartkarma.com/profiles/daniel-hellberg" target="_blank" data-smartkarma-citation="accounts:605" rel="noopener">Daniel Hellberg</a>'s insight <em><a href="https://skr.ma/q45i6" target="_blank" rel="noopener">Major Shareholders of CLPH (1589:HK) Selling! Revisiting Narrative &amp; Valuations</a>.</em></p>
<p>More below the fold. </p>

China Logistics Property Holdings (1589 HK) (CLPH) has announced its two largest shareholders - Li Shifa (chairman, holding ~28.2%) and RRJ Capital (~22.8%) - are "conducting a preliminary strategic review of their stakes in the Company, which involves up to approximately 51.5% shareholding of the Company."
The media is reporting these two shareholders are seeking a 20% premium to the unaffected price or around ~$4.70/share, roughly a four-year high.
A sale could potentially trigger an unconditional mandatory general offer; or it may be structured by way of a Scheme in which Li/RRJ provide irrevocables to vote in favour of the delisting resolutions.
This insight briefly looks at potential takeover scenarios. For some historical context and comparative analysis of CLPH to that of Global Logistic Properties (GLP SP) when it was privatised back in 2017, please read Daniel Hellberg's insight Major Shareholders of CLPH (1589:HK) Selling! Revisiting Narrative &amp; Valuations.
More below the fold. 

China Logistics (1589 HK): Possible Offer As Major Shareholders Seek Exit

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Event-Driven

China Logistics Property Holdings / Event-Driven

<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/180/424/original/BANNER-TTOtherDec20_GreyOrange.png?1609259067" class="editor-image img-responsive" data-smartkarma-image-id="180424"></figure></section><p>On Tuesday <a href="https://www.smartkarma.com/entities/china-logistics-property-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:22799:1" rel="noopener">China Logistics Property Holdings (1589 HK)</a> released a statement that confirmed chatter indicating two major shareholders are considering a sale of their stakes, which total 51.5%.</p><p>In this note we attempt to put the potential sale of controlling stakes in CLPH (or the entire company) into context by looking at the 2017 privatization of <a href="https://www.smartkarma.com/entities/global-logistic-properties-ltd" target="_blank" data-smartkarma-citation="entities:2894:1" rel="noopener">Global Logistic Properties (GLP SP)</a>, still the largest single owner of modern warehouse space in China. </p><p>We also provide a list of potential acquirers of the CLPH stakes, assuming a sale occurs eventually. In our view, there are at least seven companies that feature the financial might and the relationships needed to acquire CLPH's warehouse assets in China. </p><p>CLPH's shares are up about 35% YTD, but compared to GLP's EV/Portfolio and EV/Completed SQM multiples at the time of its privatization, valuations do not appear stretched. We believe suitors eager to add scarce Chinese warehouse assets could bid shares up above HK$5.0. </p>

On Tuesday China Logistics Property Holdings (1589 HK) released a statement that confirmed chatter indicating two major shareholders are considering a sale of their stakes, which total 51.5%.In this note we attempt to put the potential sale of controlling stakes in CLPH (or the entire company) into context by looking at the 2017 privatization of Global Logistic Properties (GLP SP), still the largest single owner of modern warehouse space in China. We also provide a list of potential acquirers of the CLPH stakes, assuming a sale occurs eventually. In our view, there are at least seven companies that feature the financial might and the relationships needed to acquire CLPH's warehouse assets in China. CLPH's shares are up about 35% YTD, but compared to GLP's EV/Portfolio and EV/Completed SQM multiples at the time of its privatization, valuations do not appear stretched. We believe suitors eager to add scarce Chinese warehouse assets could bid shares up above HK$5.0. 

Major Shareholders of CLPH (1589:HK) Selling! Revisiting Narrative & Valuations

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/11009" target="_blank" data-smartkarma-citation="entities:11009:1" rel="noopener">GLP J-REIT (3281 JP)</a> plans to raise up to US$192m in order to partly fund the acquisition of four assets.</p><p>We have covered two prior deals for the JREIT, both of which did well:</p><ul>
<li><a href="https://www.smartkarma.com/insights/glp-j-reit-placement-accretive-acquisition-past-deals-have-done-well" target="_blank" rel="noopener">GLP J-REIT Placement - Accretive Acquisition, past Deals Have Done Well</a></li>
<li><a href="https://www.smartkarma.com/insights/glp-j-reit-placement-a-large-but-accretive-acquisition" target="_blank" rel="noopener">GLP J-REIT Placement - A Large but Accretive Acquisition</a></li>
</ul><p>In this insight, we'll run the deal through our ECM framework and comment on deal dynamics.</p>

GLP J-REIT (3281 JP) plans to raise up to US$192m in order to partly fund the acquisition of four assets.We have covered two prior deals for the JREIT, both of which did well:
GLP J-REIT Placement - Accretive Acquisition, past Deals Have Done Well
GLP J-REIT Placement - A Large but Accretive Acquisition
In this insight, we'll run the deal through our ECM framework and comment on deal dynamics.

GLP J-REIT Placement - Setting a New Trend for JREITs

<div>
<p>On the 20 March, <a href="https://www.smartkarma.com/entities/li-fung-ltd" target="_blank" data-smartkarma-citation="entities:6290:1" rel="noopener">Li &amp; Fung Ltd (494 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0320/2020032000519.pdf" target="_blank" rel="noopener">announced</a> a privatisation Offer from Golden Lincoln (a vehicle owned by the Fung family and Singapore's <a href="https://www.smartkarma.com/entities/global-logistic-properties-ltd" target="_blank" data-smartkarma-citation="entities:2894:1" rel="noopener">Global Logistic Properties (GLP SP)</a>), by way of a Scheme, at a Scheme Offer Price of HK$1.25, a 150% premium to last close. The Offer Price is final. No final FY19 dividend was declared.</p>
</div>
<div>
<p>Disinterested Shareholders comprise 5.701bn shares, or 66.77% of shares out. Therefore the blocking stake at the Scheme Meeting is 570.1mn shares or 6.677% of shares out. The 10% blocking stake is attached to ALL of the Scheme Shares held by the Disinterested Shareholders. </p>
<p>Silchester, with 10.9% of shares out, has the ability to torpedo the deal. </p>
<p>This is the key risk to the transaction. But I'm amending my prior conviction.</p>
<p>If concluding Li &amp; Fung is structurally, and permanently impaired, or facing ephemeral challenges (I would choose the former), this Offer Price is looking attractive.</p>
<p>As always, more below the fold.</p>
</div>
<div>
<p></p>
</div>


On the 20 March, Li &amp; Fung Ltd (494 HK) announced a privatisation Offer from Golden Lincoln (a vehicle owned by the Fung family and Singapore's Global Logistic Properties (GLP SP)), by way of a Scheme, at a Scheme Offer Price of HK$1.25, a 150% premium to last close. The Offer Price is final. No final FY19 dividend was declared.


Disinterested Shareholders comprise 5.701bn shares, or 66.77% of shares out. Therefore the blocking stake at the Scheme Meeting is 570.1mn shares or 6.677% of shares out. The 10% blocking stake is attached to ALL of the Scheme Shares held by the Disinterested Shareholders. 
Silchester, with 10.9% of shares out, has the ability to torpedo the deal. 
This is the key risk to the transaction. But I'm amending my prior conviction.
If concluding Li &amp; Fung is structurally, and permanently impaired, or facing ephemeral challenges (I would choose the former), this Offer Price is looking attractive.
As always, more below the fold.





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.

<p><a href="https://www.smartkarma.com/entities/li-fung-ltd" target="_blank" data-smartkarma-citation="entities:6290:1" rel="noopener">Li &amp; Fung Ltd (494 HK)</a> is a global merchandise supply chain manager. It assists retail brands source products from manufacturers in Asia along with managing production and logistics processes. On 20 March, it announced a privatisation bid of HK$1.25 per scheme share from the Fung family and <a href="https://www.smartkarma.com/entities/global-logistic-properties-ltd" target="_blank" data-smartkarma-citation="entities:2894:1" rel="noopener">Global Logistic Properties (GLP SP)</a>, a logistics warehouse operator and investor.</p><div class="content-highlight"><p>The forward P/E implied by the privatisation price is attractive in comparison to historical and peer P/E multiples. However, the privatisation proposal also looks like an attempt to take advantage of the share price weakness caused in part due to the US-China trade tensions and covid-19 outbreak. Notwithstanding the 150% premium to last close, we think that the privatisation bid has a good chance of not getting shareholder approval. </p></div>

Li &amp; Fung Ltd (494 HK) is a global merchandise supply chain manager. It assists retail brands source products from manufacturers in Asia along with managing production and logistics processes. On 20 March, it announced a privatisation bid of HK$1.25 per scheme share from the Fung family and Global Logistic Properties (GLP SP), a logistics warehouse operator and investor.The forward P/E implied by the privatisation price is attractive in comparison to historical and peer P/E multiples. However, the privatisation proposal also looks like an attempt to take advantage of the share price weakness caused in part due to the US-China trade tensions and covid-19 outbreak. Notwithstanding the 150% premium to last close, we think that the privatisation bid has a good chance of not getting shareholder approval. 

Li & Fung’s Opportunistic Privatisation Bid?

Singapore

GLP is a global investment manager and business builder specializing in logistics real estate, digital infrastructure, and renewable energy. The company develops, owns, and operates modern logistics facilities, data centers, and renewable energy solutions, serving e-commerce, logistics, and manufacturing clients. Headquartered in Singapore, GLP was founded in 2009.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

GLP (GBTZF US)

China Logistics (1589 HK): Possible Offer As Major Shareholders Seek Exit

The company is very much in play, one that is likely to garner considerable interest from prospective suitors given the scarcity of logistic asset...

David Blennerhassett

Major Shareholders of CLPH (1589:HK) Selling! Revisiting Narrative & Valuations

China Logistics Property Holdings isn't cheap, but the potential sale of controlling stakes in the company could draw strong interest from JD.com...

Tracking Traffic

GLP J-REIT Placement - Setting a New Trend for JREITs

GLP J-REIT (3281 JP) plans to raise up to US$192m in order to partly fund the acquisition of four assets.We have covered two prior deals for the...

Sumeet Singh

Li & Fung: Another Think About The Offer

On the 20 March, Li & Fung Ltd (494 HK) announced a privatisation Offer from Golden Lincoln (a vehicle owned by the Fung family and...

David Blennerhassett

Li & Fung’s Opportunistic Privatisation Bid?

Li & Fung Ltd (494 HK) is a global merchandise supply chain manager. It assists retail brands source products from manufacturers in Asia along...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)