Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<strong><a href="https://www.smartkarma.com/entities/rakuten-bank-ltd" target="_blank" data-smartkarma-citation="entities:35638:1" rel="noopener">Rakuten Bank (5838 JP)</a></strong>'s TOPIX inclusion is this week. And the Real World Float has gotten smaller since the offering. And some of those people aren't going to sell near-term.</li>
<li>
<a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener"><strong>Swire Pacific (A) (19 HK)</strong></a>'s P/B is back down to 0.31x as <strong><a href="https://www.smartkarma.com/entities/cathay-pacific-airways-ltd" target="_blank" data-smartkarma-citation="entities:243:1" rel="noopener">Cathay Pacific Airways (293 HK)</a></strong> tackles alleged language bias by flight attendants. </li>
<li>Understanding real money demand on the <strong><a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a></strong> story is key. If there is any, that makes deal overhang smaller than it looks. </li>
</ul>



Rakuten Bank (5838 JP)'s TOPIX inclusion is this week. And the Real World Float has gotten smaller since the offering. And some of those people aren't going to sell near-term.

Swire Pacific (A) (19 HK)'s P/B is back down to 0.31x as Cathay Pacific Airways (293 HK) tackles alleged language bias by flight attendants. 
Understanding real money demand on the Rakuten (4755 JP) story is key. If there is any, that makes deal overhang smaller than it looks. 


Last Week In Event SPACE: Rakuten Bank/Group, Cathay/Swire Pacific, Japan Post

Equity Bottom-Up

<ul>
<li>A "<em>valuation system with Chinese characteristics</em>" has the media, ostensibly, discussing whether this implies a premium for SOEs and companies aligned with national goals.</li>
<li>In early 2020, SOE-backed clean energy play <strong><a href="https://www.smartkarma.com/entities/cgn-new-energy-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:4295:1" rel="noopener">CGN New Energy Holdings (1811 HK)</a></strong> was subject to a potential privatisation from its parent; but it failed to materialise. </li>
<li>During the 14th and 15th Five-Year Plans (2021-30) period, China's installed capacity for wind and solar power is expected double.</li>
</ul>


A "valuation system with Chinese characteristics" has the media, ostensibly, discussing whether this implies a premium for SOEs and companies aligned with national goals.
In early 2020, SOE-backed clean energy play CGN New Energy Holdings (1811 HK) was subject to a potential privatisation from its parent; but it failed to materialise. 
During the 14th and 15th Five-Year Plans (2021-30) period, China's installed capacity for wind and solar power is expected double.


CGN New Energy Holdings: Character Building

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.

Shandong Hi-Speed New Energy Group / Event-Driven

Shandong Hi-Speed New Energy Group (1250 HK)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beijing-enterprises-clean-energy-grp-ltd" target="_blank" data-smartkarma-citation="entities:6927:1" rel="noopener">Beijing Enterprises Clean Energy Grp (1250 HK)</a> and <a href="https://www.smartkarma.com/entities/china-shandong-hi-speed-financial-group-limited" target="_blank" data-smartkarma-citation="entities:10356:1" rel="noopener">China Shandong Hi-Speed Financial Group (412 HK)</a>/CSFG have simultaneously entered trading halts today. CSFG is likely a suitor for BE Clean Energy.</li>
<li>There is a track record of SOE privatisations of clean energy companies – <a href="https://www.smartkarma.com/entities/huadian-fuxin-energy-corp-ltd" target="_blank" data-smartkarma-citation="entities:59:1" rel="noopener">Huadian Fuxin Energy Corp (816 HK)</a>,  <a href="https://www.smartkarma.com/entities/huaneng-renewables-corp-h" target="_blank" data-smartkarma-citation="entities:7542:1" rel="noopener">Huaneng Renewables Corp H (958 HK)</a> and CP Clean Energy</li>
<li>In this note, we look at CSFG’s recent failed attempt at acquiring a 22.78% stake at a price of HK$0.088, along with BE Clean Energy's trading updates and peer multiples.   </li>
</ul>



Beijing Enterprises Clean Energy Grp (1250 HK) and China Shandong Hi-Speed Financial Group (412 HK)/CSFG have simultaneously entered trading halts today. CSFG is likely a suitor for BE Clean Energy.
There is a track record of SOE privatisations of clean energy companies – Huadian Fuxin Energy Corp (816 HK),  Huaneng Renewables Corp H (958 HK) and CP Clean Energy
In this note, we look at CSFG’s recent failed attempt at acquiring a 22.78% stake at a price of HK$0.088, along with BE Clean Energy's trading updates and peer multiples.   


BE Clean Energy Back in the Cross Hairs of China Shandong Hi-Speed Financial Group?

<div>
<p>Back on the 9 July, <a href="https://www.smartkarma.com/entities/beijing-capital-land-ltd-h" target="_blank" data-smartkarma-citation="entities:4543:1" rel="noopener">Beijing Capital Land Ltd H (2868 HK)</a> (BCL) <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0709/2021070901284.pdf" target="_blank" rel="noopener">announced</a> a pre-conditional Offer from its controlling shareholder, state-owned Beijing Capital Group, otherwise known as the Capital Group. The Offer price of HK$2.80/share was a 62.79% premium to last close, and a 150% premium to the average closing price over the previous 60 trading days. The Offer price would NOT be increased. No dividends are expected to be declared. A concurrent Offer for BCL's domestic shares at RMB2.334080/share was also tabled.</p>
</div>
<div>
<p>The pre-conditions, which cannot be waived, included approvals from NDRC, MoC, SAFE, and if applicable, SASAC.</p>
</div>
<div>
<p>As BCL is PRC incorporated and compulsory acquisition is not afforded under PRC law,  this delisting proposal is by way of a Merger by Absorption, which involves a Scheme-like vote from disinterested shareholders.</p>
<p>Unlike a number of PRC-incorporated privatisations, there is no tendering acceptance condition attached to this delisting.</p>
<p>Typically Merger by Absorption transactions complete in around four months.</p>
</div>
<div>
<p>This <em>appeared</em> a relatively clean deal although from the onset, it traded wide to terms, at an average gross spread to terms of ~13%, up to and including yesterday.</p>
<p>The dispatch of the Composite Doc was, as expected, <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0729/2021072901655.pdf" target="_blank" rel="noopener">delayed</a> to the 9 September (officially granted by the SFC on the  2 August) from the 29 July. </p>
<p>A profit warning was announced on the <a href="https://www1.hkexnews.hk/search/titlesearch.xhtml?lang=en" target="_blank" rel="noopener">30 July</a>. </p>
<p>Last night, BCL said the Pre-Condition has been <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0818/2021081801497.pdf" target="_blank" rel="noopener">satisfied</a>. There was no further application to the SFC to extend the dispatch of the Composite Doc.</p>
<p>This is a positive development. Expect the spread to tighten when shares begin trading this morning. </p>
</div>
<div>
<p>More below the fold.</p>
</div>


Back on the 9 July, Beijing Capital Land Ltd H (2868 HK) (BCL) announced a pre-conditional Offer from its controlling shareholder, state-owned Beijing Capital Group, otherwise known as the Capital Group. The Offer price of HK$2.80/share was a 62.79% premium to last close, and a 150% premium to the average closing price over the previous 60 trading days. The Offer price would NOT be increased. No dividends are expected to be declared. A concurrent Offer for BCL's domestic shares at RMB2.334080/share was also tabled.


The pre-conditions, which cannot be waived, included approvals from NDRC, MoC, SAFE, and if applicable, SASAC.


As BCL is PRC incorporated and compulsory acquisition is not afforded under PRC law,  this delisting proposal is by way of a Merger by Absorption, which involves a Scheme-like vote from disinterested shareholders.
Unlike a number of PRC-incorporated privatisations, there is no tendering acceptance condition attached to this delisting.
Typically Merger by Absorption transactions complete in around four months.


This appeared a relatively clean deal although from the onset, it traded wide to terms, at an average gross spread to terms of ~13%, up to and including yesterday.
The dispatch of the Composite Doc was, as expected, delayed to the 9 September (officially granted by the SFC on the  2 August) from the 29 July. 
A profit warning was announced on the 30 July. 
Last night, BCL said the Pre-Condition has been satisfied. There was no further application to the SFC to extend the dispatch of the Composite Doc.
This is a positive development. Expect the spread to tighten when shares begin trading this morning. 


More below the fold.


Beijing Capital Land (2868 HK): Pre-Cons Satisfied. This Should Trade Tight

<div>
<p><a href="https://www.smartkarma.com/entities/beijing-capital-land-ltd-h" target="_blank" data-smartkarma-citation="entities:4543:1" rel="noopener">Beijing Capital Land Ltd H (2868 HK)</a> (BCL) has <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0709/2021070901284.pdf" target="_blank" rel="noopener">announced</a> a pre-conditional Offer from its controlling shareholder, state-owned Beijing Capital Group, otherwise known as the Capital Group.</p>
</div>
<div>
<p>The Offer price is HK$2.80/share, a 62.79% premium to last close, and a 150% premium to the average closing price over the previous 60 trading days. The Offer price will NOT be increased. No dividends are expected to be declared. A concurrent Offer for BCL's domestic shares at RMB2.334080/share is also tabled.</p>
</div>
<div>
<p>The pre-conditions, which cannot be waived, include approvals from NDRC, MoC, and SAFE.</p>
</div>
<div>
<p>As BCL is PRC incorporated, this delisting proposal is by way of a Merger by Absorption, which involves a Scheme-like vote from disinterested shareholders. There is no tendering acceptance condition attached to this delisting.</p>
</div>
<div>
<p>This appears a relatively clean deal. The Long Stop date for the pre-cons is the 9 July 2022, although these approvals <em>should</em> be wrapped up well before then.</p>
<p>Merger by Absorption transactions <em>typically</em> complete in around four months.</p>
</div>
<div>
<p>More below the fold.</p>
</div>


Beijing Capital Land Ltd H (2868 HK) (BCL) has announced a pre-conditional Offer from its controlling shareholder, state-owned Beijing Capital Group, otherwise known as the Capital Group.


The Offer price is HK$2.80/share, a 62.79% premium to last close, and a 150% premium to the average closing price over the previous 60 trading days. The Offer price will NOT be increased. No dividends are expected to be declared. A concurrent Offer for BCL's domestic shares at RMB2.334080/share is also tabled.


The pre-conditions, which cannot be waived, include approvals from NDRC, MoC, and SAFE.


As BCL is PRC incorporated, this delisting proposal is by way of a Merger by Absorption, which involves a Scheme-like vote from disinterested shareholders. There is no tendering acceptance condition attached to this delisting.


This appears a relatively clean deal. The Long Stop date for the pre-cons is the 9 July 2022, although these approvals should be wrapped up well before then.
Merger by Absorption transactions typically complete in around four months.


More below the fold.


Beijing Capital Land (2868 HK): Delisting Offer From Parent

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
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Huaneng Renewables (958 HK)

Last Week In Event SPACE: Rakuten Bank/Group, Cathay/Swire Pacific, Japan Post

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

CGN New Energy Holdings: Character Building

During the 14th and 15th Five-Year Plans (2021-30) period, China's installed capacity for wind and solar power is expected double. CGNNE appears...

David Blennerhassett

BE Clean Energy Back in the Cross Hairs of China Shandong Hi-Speed Financial Group?

BE Clean Energy and CSFG have simultaneously entered trading halts today. CSFG is likely a suitor for BE Clean Energy. CSFG recently failed to...

Arun George

Beijing Capital Land (2868 HK): Pre-Cons Satisfied. This Should Trade Tight

This looks done - play the spread here. Assuming payment late-Oct, I would expect BCL to trade around $2.72 today, or a 3%/15% gross/annualised...

David Blennerhassett

Beijing Capital Land (2868 HK): Delisting Offer From Parent

This looks done - play the spread here. Assuming payment late-Nov, I would expect BCL to trade around $2.65 on Monday, or a 5.6%/15% gross...

David Blennerhassett

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