Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Back on the 19th July, online Q&amp;A play <a href="https://www.smartkarma.com/entities/zhihu-inc" target="_blank" data-smartkarma-citation="entities:36660:1" rel="noopener">Zhihu (2390 HK/</a><a href="https://www.smartkarma.com/entities/zhihu-technology-ltd" target="_blank" data-smartkarma-citation="entities:32185:1" rel="noopener">ZH US)</a> announced the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0719/2024071901181.pdf" target="_blank" rel="noopener">buyback</a> of 46.92mn ordinary A shares (15.9% of shares out) at HK$9.11/share (US$3.50/ADS). </li>
<li>Assuming the buyback is fully taken up, chairman Yuan Zhou's stake will increase to 44.4% from 42.9% currently (held via A shares and the weighted-voting B shares). </li>
<li>The key condition is a simple majority vote from independent shareholders. Zhihu is sitting on  net cash of US$764mn. A significantly larger buyback, or higher price, could have been initiated. </li>
</ul>


Back on the 19th July, online Q&amp;A play Zhihu (2390 HK/ZH US) announced the buyback of 46.92mn ordinary A shares (15.9% of shares out) at HK$9.11/share (US$3.50/ADS). 
Assuming the buyback is fully taken up, chairman Yuan Zhou's stake will increase to 44.4% from 42.9% currently (held via A shares and the weighted-voting B shares). 
The key condition is a simple majority vote from independent shareholders. Zhihu is sitting on  net cash of US$764mn. A significantly larger buyback, or higher price, could have been initiated. 


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<ul>
 <li>Hengdeli has undertaken a significant strategic pivot, ceasing its legacy watch retail operations in 2022 to focus on high-end consumer accessories manufacturing and international commodity trading.</li>
 <li>Financial performance has been highly volatile, with a sharp revenue decline and a return to a net loss position in the most recent fiscal year, driven by a 50% drop in commodity trading revenue.</li>
 <li>The company's valuation appears distressed, reflected in a very low price-to-book ratio, but this is set against a backdrop of severe operational challenges, a poor long-term growth track record, and the cessation of dividends.</li>
</ul>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.


  Hengdeli has undertaken a significant strategic pivot, ceasing its legacy watch retail operations in 2022 to focus on high-end consumer accessories manufacturing and international commodity trading.
  Financial performance has been highly volatile, with a sharp revenue decline and a return to a net loss position in the most recent fiscal year, driven by a 50% drop in commodity trading revenue.
  The company's valuation appears distressed, reflected in a very low price-to-book ratio, but this is set against a backdrop of severe operational challenges, a poor long-term growth track record, and the cessation of dividends.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Primer: Hengdeli Holdings (3389 HK) - Apr 2026

Leading Independent Investment Research, Morningstar, Inc.

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Leading Independent Investment Research

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Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Thematic (Sector/Industry)

Eighteen sales and marketing executives at Crown Resorts were reported as being detained in China, likely due to illegally soliciting Chinese to gamble in overseas casinos. Our contacts in the industry have already seen immediate termination of marketing efforts in mainland China by Macau casinos, which imply lower near-term gaming revenue in our view. A loss of higher-margin direct VIP business could also mean lower overall VIP margin for the Macau casinos, as junket VIP margins are one to two percentage points lower compared with direct VIP margins. Near-term sentiment will be unfavorable for the Macau gaming stocks. However, we gauge that marketing activities in mainland China will resurface as the dust settles, though casinos will take a lower-profile approach.To reflect the short-term impact, if we reduced 2016 full-year VIP, mass and slot revenue by 7.5% for our Macau gaming coverage, there would still be no impact on fair value estimates. Therefore, we maintain our long-term forecast and long-term-based, DCF-generated fair value estimates. Our narrow moat ratings also remain unchanged.Analyst: Chelsey Tam

Eighteen sales and marketing executives at Crown Resorts were reported as being detained in China, likely due to illegally soliciting Chinese to gamble in overseas casinos. Our contacts in the industry have already seen immediate termination of marketing efforts in mainland China by Macau casinos, which imply lower near-term gaming revenue in our view. A loss of higher-margin direct VIP business could also mean lower overall VIP margin for the Macau casinos, as junket VIP margins are one to two percentage points lower compared with direct VIP margins. Near-term sentiment will be unfavorable for the Macau gaming stocks. However, we gauge that marketing activities in mainland China will resurface as the dust settles, though casinos will take a lower-profile approach.To reflect the short-term impact, if we reduced 2016 full-year VIP, mass and slot revenue by 7.5% for our Macau gaming coverage, there would still be no impact on fair value estimates. Therefore, we maintain our long-term forecast and long-term-based, DCF-generated fair value estimates. Our narrow moat ratings also remain unchanged.Analyst: Chelsey Tam

Negative Near-Term Read-Throughs from the Detainment of Crown Resorts' Marketing Executives in China

<ul>
<li>This deal for <a href="https://www.smartkarma.com/entities/qube-holdings-ltd" target="_blank" data-smartkarma-citation="entities:958:1" rel="noopener">Qube Holdings (QUB AU)</a> from Macquarie should really get competitive. Scarce and strategic assets  - and nothing else like it that's listed. </li>
<li>As <a href="https://www.smartkarma.com/entities/digital-holdings-inc" target="_blank" data-smartkarma-citation="entities:1697:1" rel="noopener">Digital Holdings (2389 JP)</a> goes higher, "This is Japan" risk increases; but those who didn't sign up say "wait a minute, that's real money" also goes up.</li>
<li>
<a href="https://www.smartkarma.com/entities/wynn-resorts-ltd" target="_blank" data-smartkarma-citation="entities:606:1" rel="noopener">Wynn Resorts (WYNN US)</a> is at extreme levels vs. <a href="https://www.smartkarma.com/entities/wynn-macau-ltd" target="_blank" data-smartkarma-citation="entities:473:1" rel="noopener">Wynn Macau Ltd (1128 HK)</a>; yet consensus indicates considerably higher forward EBITDA growth for Resorts stub ops vs. Macau.</li>
</ul>


This deal for Qube Holdings (QUB AU) from Macquarie should really get competitive. Scarce and strategic assets  - and nothing else like it that's listed. 
As Digital Holdings (2389 JP) goes higher, "This is Japan" risk increases; but those who didn't sign up say "wait a minute, that's real money" also goes up.

Wynn Resorts (WYNN US) is at extreme levels vs. Wynn Macau Ltd (1128 HK); yet consensus indicates considerably higher forward EBITDA growth for Resorts stub ops vs. Macau.


Last Week In Event SPACE: Qube Holdings, Digital Holdings, Wynn Resorts/Macau, SNT/SMEC

<ul>
<li>I tally 35 - mostly firm, mostly Asia-Pac - arb transactions currently being discussed and analysed on Smartkarma. Those arbs metrics and upcoming events are detailed below.</li>
<li>Three new deals were  discussed on Smartkarma this week: <a href="https://www.smartkarma.com/entities/qube-holdings-ltd" target="_blank" data-smartkarma-citation="entities:958:1" rel="noopener">Qube Holdings (QUB AU)</a>, <a href="https://www.smartkarma.com/entities/monash-ivf-group-ltd" target="_blank" data-smartkarma-citation="entities:18130:1" rel="noopener">Monash IVF (MVF AU)</a>, and <a href="https://www.smartkarma.com/entities/national-storage-reit" target="_blank" data-smartkarma-citation="entities:13762:1" rel="noopener">National Storage REIT (NSR AU)</a>.</li>
<li>Key updates/news also took place on: <a href="https://www.smartkarma.com/entities/iress-ltd" target="_blank" data-smartkarma-citation="entities:15342:1" rel="noopener">Iress Ltd (IRE AU)</a>, <a href="https://www.smartkarma.com/entities/ane-cayman-inc" target="_blank" data-smartkarma-citation="entities:35025:1" rel="noopener">ANE Cayman Inc (9956 HK)</a>, <a href="https://www.smartkarma.com/entities/digital-holdings-inc" target="_blank" data-smartkarma-citation="entities:1697:1" rel="noopener">Digital Holdings Inc (2389 JP)</a>, and <a href="https://www.smartkarma.com/entities/grindr-inc" target="_blank" data-smartkarma-citation="entities:37106:1" rel="noopener">Grindr (GRND US)</a>.</li>
</ul>


I tally 35 - mostly firm, mostly Asia-Pac - arb transactions currently being discussed and analysed on Smartkarma. Those arbs metrics and upcoming events are detailed below.
Three new deals were  discussed on Smartkarma this week: Qube Holdings (QUB AU), Monash IVF (MVF AU), and National Storage REIT (NSR AU).
Key updates/news also took place on: Iress Ltd (IRE AU), ANE Cayman Inc (9956 HK), Digital Holdings Inc (2389 JP), and Grindr (GRND US).


Asia-Pac M&A Weekly Wrap: Mandom, Monash IVF, National Storage REIT, Iress, Digital Holdings, Grindr

Hong Kong

Hengdeli Holdings Limited primarily engages in the manufacturing and sale of high-end consuming accessories for watches, jewelry, and cosmetics. The company also provides commercial space design and decoration services, and is involved in international commodity trading of iron ore, thermal coal, and coking coal, along with related supply chain services. It is headquartered in Hong Kong and was founded in 1957.

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Hengdeli (3389 HK)

Zhihu (2390 HK/ZH US)'s Cheeky Buyback

This is an interesting, albeit illiquid, Partial Offer. The final pro-ration was ~45% in the partial for Hengdeli, in which the Offer price was...

David Blennerhassett

Primer: Hengdeli Holdings (3389 HK) - Apr 2026

Hengdeli has undertaken a significant strategic pivot, ceasing its legacy watch retail operations in 2022 to focus on high-end consumer...

αSK Primers

Negative Near-Term Read-Throughs from the Detainment of Crown Resorts' Marketing Executives in China

Eighteen sales and marketing executives at Crown Resorts were reported as being detained in China, likely due to illegally soliciting Chinese to...

Morningstar, Inc.

Last Week In Event SPACE: Qube Holdings, Digital Holdings, Wynn Resorts/Macau, SNT/SMEC

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

Asia-Pac M&A Weekly Wrap: Mandom, Monash IVF, National Storage REIT, Iress, Digital Holdings, Grindr

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

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