Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

China Machinery Engineering / Event-Driven

<div>
<div>
<p>On the 13 January 2021, <a href="https://www.smartkarma.com/entities/china-machinery-engineering-corp" target="_blank" data-smartkarma-citation="entities:10998:1" rel="noopener">China Machinery Engineering (1829 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0113/2021011300422.pdf" target="_blank" rel="noopener">announced</a> a pre-conditional Offer from its controlling shareholder, state-owned Chinese National Machinery Industry Corporation, also known as SINOMACH. The Offer price was HK$3.70/share, a 45.10% premium to last close. </p>
</div>
<div>
<p>A nervous 20 weeks later, CMEC <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0603/2021060300532.pdf" target="_blank" rel="noopener">announced</a> the preconditions - NDRC, MOFCOM &amp; SAFE - had been fulfilled.</p>
<p>The Circular is now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0706/2021070600007.pdf" target="_blank" rel="noopener">out</a>.  The H-class meeting will be held on the 28 July, and assuming all conditions are satisfied, the consideration under the Offer will be paid on or before the 17 August.</p>
<p>This is a low-balled Offer, although the IFA (Somerley) disagrees. Nevertheless, this deal is expected to get up and is currently trading tight to terms.</p>
</div>
</div>
<div>
<p>More below the fold. </p>
</div>



On the 13 January 2021, China Machinery Engineering (1829 HK) announced a pre-conditional Offer from its controlling shareholder, state-owned Chinese National Machinery Industry Corporation, also known as SINOMACH. The Offer price was HK$3.70/share, a 45.10% premium to last close. 


A nervous 20 weeks later, CMEC announced the preconditions - NDRC, MOFCOM &amp; SAFE - had been fulfilled.
The Circular is now out.  The H-class meeting will be held on the 28 July, and assuming all conditions are satisfied, the consideration under the Offer will be paid on or before the 17 August.
This is a low-balled Offer, although the IFA (Somerley) disagrees. Nevertheless, this deal is expected to get up and is currently trading tight to terms.



More below the fold. 


CMEC (1829 HK): Circ Out. H-Class Meeting Firmed. Looks Done

<p>On the 27 May, after <a href="https://www.smartkarma.com/entities/china-machinery-engineering-corp" target="_blank" data-smartkarma-citation="entities:10998:1" rel="noopener">China Machinery Engineering (1829 HK)</a>'s shares gained 4.3% to close at $3.62/share, on decent volume, it was speculated PRC regulatory approvals may be (finally) forthcoming.</p>
<p>And sure enough, yesterday after the close of trading CMEC <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0603/2021060300532.pdf" target="_blank" rel="noopener">announced</a> the preconditions - NDRC, MOFCOM &amp; SAFE - had been fulfilled.</p>
<p>CMEC added it needs more time to prepare the Composite Document with an expected despatch date on or before the 9 July. </p>
<p>More below the fold. </p>

On the 27 May, after China Machinery Engineering (1829 HK)'s shares gained 4.3% to close at $3.62/share, on decent volume, it was speculated PRC regulatory approvals may be (finally) forthcoming.
And sure enough, yesterday after the close of trading CMEC announced the preconditions - NDRC, MOFCOM &amp; SAFE - had been fulfilled.
CMEC added it needs more time to prepare the Composite Document with an expected despatch date on or before the 9 July. 
More below the fold. 

CMEC (1829 HK): Clarity On Timing As Pre-Cons Fulfilled

<div>
<p>On the 13 January, <a href="https://www.smartkarma.com/entities/china-machinery-engineering-corp" target="_blank" data-smartkarma-citation="entities:10998:1" rel="noopener">China Machinery Engineering (1829 HK)</a>'s (CMEC) <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0113/2021011300422.pdf" target="_blank" rel="noopener">announced</a> a pre-conditional Offer from its controlling shareholder, state-owned Chinese National Machinery Industry Corporation, also known as SINOMACH.</p>
</div>
<div>
<p>The Offer price was HK$3.70/share, a 45.10% premium to last close, and a 118.93% premium to the average closing price over the previous 30 trading days. The Offer Price was announced to be FINAL - it will NOT be increased. A concurrent Offer for CMEC's domestic shares at RMB3.082692/share was also tabled.</p>
<p>The pre-conditions, which cannot be waived, include approvals from NDRC, MoC, and SAFE.</p>
<p>Then nothing. Near-on four and half months have elapsed and the only disclosure - in the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0430/2021043000903.pdf" target="_blank" rel="noopener">monthly updates</a> - is that the pre-conditions have yet to be fulfilled.</p>
<p>Then yesterday shares gained 4.3% to close at $3.62/share, its highest level since the Offer was announced. The volume was also solid. </p>
<p>Perhaps regulatory approvals are (finally) forthcoming.</p>
<p>More below the fold.</p>
</div>
<div></div>
<div>
<p></p>
</div>
<div>
<p></p>
</div>


On the 13 January, China Machinery Engineering (1829 HK)'s (CMEC) announced a pre-conditional Offer from its controlling shareholder, state-owned Chinese National Machinery Industry Corporation, also known as SINOMACH.


The Offer price was HK$3.70/share, a 45.10% premium to last close, and a 118.93% premium to the average closing price over the previous 30 trading days. The Offer Price was announced to be FINAL - it will NOT be increased. A concurrent Offer for CMEC's domestic shares at RMB3.082692/share was also tabled.
The pre-conditions, which cannot be waived, include approvals from NDRC, MoC, and SAFE.
Then nothing. Near-on four and half months have elapsed and the only disclosure - in the monthly updates - is that the pre-conditions have yet to be fulfilled.
Then yesterday shares gained 4.3% to close at $3.62/share, its highest level since the Offer was announced. The volume was also solid. 
Perhaps regulatory approvals are (finally) forthcoming.
More below the fold.









China Machinery Engineering (1829 HK): Movement In The Works?

Sichuan Languang Justbon Services / Event-Driven

Sichuan Languang Justbon Services (2606 HK)

<div>
<p>On the 22 March, <a href="https://www.smartkarma.com/entities/sichuan-languang-justbon-service-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:28337:1" rel="noopener">Sichuan Languang Justbon Service Group (2606 HK)</a> ("Justbon") <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0322/2021032201066.pdf" target="_blank" rel="noopener">announced</a> its major shareholder (plus two other vendors) had entered into MOUs with <a href="https://www.smartkarma.com/entities/country-garden-services-holdings-company-limited" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services Holdings (6098 HK)</a> (CGS), such that 126,011,860 H shares AND 750,000 domestic shares or 71.17% of shares out would be acquired. Upon completion, CGS was obligated to make an unconditional mandatory general Offer (MGO) for the H shares (at HK$51.0571/share) and domestic shares (at RMB42.8547/share).</p>
<p>In addition, if a delisting resolution was approved by independent H-shareholders and a 90% acceptance condition (of independent H-shares)) was satisfied, H-shareholders will receive HK$54.30/share and domestic shareholders RMB45.5768/share.</p>
</div>
<div>
<div id="ember12748" data-smartkarma-discusison="95188">
<div data-ember-action="" data-ember-action-12749="12749">
<div>
<div>
<div>
<div>On the 19 April, Justbon said all three agreements had completed, giving CGS <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0419/2021041901491.pdf" target="_blank" rel="noopener">71.17%</a>.</div>
</div>
</div>
</div>
</div>
</div>
</div>
<div></div>
<div>The Composite Document has now been <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0502/2021050200153.pdf" target="_blank" rel="noopener">despatched</a>, and the Offer is open to acceptances. The H Share Class Meeting will be held on the 17 June, which is also the first closing date. </div>
<div></div>
<div>Assuming the delisting resolution is approved, the latest time for the acceptance condition to be satisfied is the 3 September, four months from now. </div>
<div></div>
<div>But as this is an unconditional MGO, this extended acceptance period tilts the deal in favour of CGS securing the 90% tendering condition.</div>
<div></div>
<div>More below the fold.</div>


On the 22 March, Sichuan Languang Justbon Service Group (2606 HK) ("Justbon") announced its major shareholder (plus two other vendors) had entered into MOUs with Country Garden Services Holdings (6098 HK) (CGS), such that 126,011,860 H shares AND 750,000 domestic shares or 71.17% of shares out would be acquired. Upon completion, CGS was obligated to make an unconditional mandatory general Offer (MGO) for the H shares (at HK$51.0571/share) and domestic shares (at RMB42.8547/share).
In addition, if a delisting resolution was approved by independent H-shareholders and a 90% acceptance condition (of independent H-shares)) was satisfied, H-shareholders will receive HK$54.30/share and domestic shareholders RMB45.5768/share.







On the 19 April, Justbon said all three agreements had completed, giving CGS 71.17%.







The Composite Document has now been despatched, and the Offer is open to acceptances. The H Share Class Meeting will be held on the 17 June, which is also the first closing date. 

Assuming the delisting resolution is approved, the latest time for the acceptance condition to be satisfied is the 3 September, four months from now. 

But as this is an unconditional MGO, this extended acceptance period tilts the deal in favour of CGS securing the 90% tendering condition.

More below the fold.

Languang Justbon (2606 HK): Offer Now Open - For Up To Four Months

Zhejiang Cangnan Instrument Group / Event-Driven

Zhejiang Cangnan Instrument Group (1743 HK)

<div>
<p>Back on the 5 February, gas meter manufacturer <a href="https://www.smartkarma.com/entities/zhejiang-cangnan-h" target="_blank" data-smartkarma-citation="entities:27212:1" rel="noopener">Zhejiang Cangnan Instrument (1743 HK)</a>  <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0205/2021020501022.pdf" target="_blank" rel="noopener">announced</a> the board of directors had resolved to repurchase all the issued H shares in the company at a minimum price of HK$22.00/share, a 15.18% premium to last close. The buyback was subject to approval from the local bureau of the State Administration of Foreign Exchange.</p>
<p>This was followed by a conditional cash offer on the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0312/2021031201722.pdf" target="_blank" rel="noopener">12 March</a>. The Offer is a "Merger by Absorption", incorporating a Scheme-like vote (≥ 75% for, ≤10% against); and a tendering condition of 90%. All H-shares are subject to the buy-back and the effective tendering % is 90%.</p>
<p>The Offer Document has been despatched with the IFA <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0401/2021040100071.pdf" target="_blank" rel="noopener">concluding</a> the Offer price to be fair and reasonable.</p>
<p>The EGM will take place on the 17 May and the first closing date is the 31 May.</p>
<p>Trading at a gross/annualised spread of 7.3%/57.2%. But the thorny issue is the 90% tendering condition.</p>
</div>
<div>
<p>More below the fold.</p>
</div>


Back on the 5 February, gas meter manufacturer Zhejiang Cangnan Instrument (1743 HK)  announced the board of directors had resolved to repurchase all the issued H shares in the company at a minimum price of HK$22.00/share, a 15.18% premium to last close. The buyback was subject to approval from the local bureau of the State Administration of Foreign Exchange.
This was followed by a conditional cash offer on the 12 March. The Offer is a "Merger by Absorption", incorporating a Scheme-like vote (≥ 75% for, ≤10% against); and a tendering condition of 90%. All H-shares are subject to the buy-back and the effective tendering % is 90%.
The Offer Document has been despatched with the IFA concluding the Offer price to be fair and reasonable.
The EGM will take place on the 17 May and the first closing date is the 31 May.
Trading at a gross/annualised spread of 7.3%/57.2%. But the thorny issue is the 90% tendering condition.


More below the fold.


Zhejiang Cangnan (1743 HK): H-Share Buyback

China

Huaneng Renewables develops, constructs, and operates wind and solar power plants, generating and selling electricity across various regions in China. The company focuses on both onshore and offshore wind farms, as well as solar power generating facilities. It was founded in 2002 and is headquartered in Beijing, China.

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

Huaneng Renewables (958 HK)

CMEC (1829 HK): Circ Out. H-Class Meeting Firmed. Looks Done

This is being done too cheaply, even before taking into account CMEC's large net cash pile. But no other suitor can (or will) will emerge. Not one...

David Blennerhassett

CMEC (1829 HK): Clarity On Timing As Pre-Cons Fulfilled

This is being done too cheaply, but no other Offeror will emerge. At $3.46/share, or 6.9%/34.3% gross/annualised, get involved. But this is a...

David Blennerhassett

China Machinery Engineering (1829 HK): Movement In The Works?

Shares are rightly off today. $3.62 was a 2.2% spread and <10% annualised with say, three months to go. At $3.47/share, where it is trading now, or...

David Blennerhassett

Languang Justbon (2606 HK): Offer Now Open - For Up To Four Months

Mindful of the four-month acceptance period, one in which shares tendred are not entitled (by my reckoning) to be withdrawn, I believe the...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

CMEC (1829 HK): Circ Out. H-Class Meeting Firmed. Looks Done

This is being done too cheaply, even before taking into account CMEC's large net cash pile. But no other suitor can (or will) will emerge. Not one...

David Blennerhassett

CMEC (1829 HK): Clarity On Timing As Pre-Cons Fulfilled

This is being done too cheaply, but no other Offeror will emerge. At $3.46/share, or 6.9%/34.3% gross/annualised, get involved. But this is a...

David Blennerhassett

China Machinery Engineering (1829 HK): Movement In The Works?

Shares are rightly off today. $3.62 was a 2.2% spread and <10% annualised with say, three months to go. At $3.47/share, where it is trading now, or...

David Blennerhassett

Languang Justbon (2606 HK): Offer Now Open - For Up To Four Months

Mindful of the four-month acceptance period, one in which shares tendred are not entitled (by my reckoning) to be withdrawn, I believe the...

David Blennerhassett

Zhejiang Cangnan (1743 HK): H-Share Buyback

Given the company's dubious price action and shareholder concentration, I would normally give this stock a wide birth. Bit it is precisely this...

David Blennerhassett