Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Hong Kong has pulled back this month as the U.S. trade war intensifies, however it remains in a Secular Bull Market.</li>
<li>Materials and Healthcare sectors continue to outperform YTD, with Technology coming in a distant 3rd place.</li>
<li>
<a href="https://www.smartkarma.com/entities/hengan-international-group-co-ltd" target="_blank" data-smartkarma-citation="entities:29:1" rel="noopener">Hengan International Group (1044 HK)</a>  had multiple breakouts relative to MSCI Asian indexes and on an absolute basis.  Analysts' recommendations are split as the shares trade at their target price.
</li>
</ul>


Hong Kong has pulled back this month as the U.S. trade war intensifies, however it remains in a Secular Bull Market.
Materials and Healthcare sectors continue to outperform YTD, with Technology coming in a distant 3rd place.

Hengan International Group (1044 HK)  had multiple breakouts relative to MSCI Asian indexes and on an absolute basis.  Analysts' recommendations are split as the shares trade at their target price.



Technically Speaking Breakouts & Breakdowns - HONG KONG (October 18)

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of August 1st.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for CCB, China Life, Tencent, Li Auto, China Mobile, Xiaomi, Pop Mart Intl, BYD, Anta, ABC.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of August 1st.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for CCB, China Life, Tencent, Li Auto, China Mobile, Xiaomi, Pop Mart Intl, BYD, Anta, ABC.


HK Connect Flows Weekly (Aug 1st): CCB, China Life, Tencent, Li Auto, China Mobile, Xiaomi

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/cpmc-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10427:1" rel="noopener">CPMC Holdings (906 HK)</a>’s offer from <a href="https://www.smartkarma.com/entities/org-technology-co-ltd-a" target="_blank" data-smartkarma-citation="entities:17510:1" rel="noopener">ORG Technology Co., Ltd. A (002701 CH)</a> is HK$7.21 with a 50% minimum acceptance condition. The first closing date is 10 January.  </li>
<li>CCASS data shows that Mr Wei has tendered (22.01% of outstanding shares). Including acceptances, ORG’s shareholding was 46.63% of outstanding shares as of 24 December.</li>
<li>The Board supports the offer, and it is close to being declared unconditional. At the last close and 25 January payment, the gross/annualized spread was 0.8%/10.9%.</li>
</ul>



CPMC Holdings (906 HK)’s offer from ORG Technology Co., Ltd. A (002701 CH) is HK$7.21 with a 50% minimum acceptance condition. The first closing date is 10 January.  
CCASS data shows that Mr Wei has tendered (22.01% of outstanding shares). Including acceptances, ORG’s shareholding was 46.63% of outstanding shares as of 24 December.
The Board supports the offer, and it is close to being declared unconditional. At the last close and 25 January payment, the gross/annualized spread was 0.8%/10.9%.


CPMC Holdings (906 HK): On the Cusp of Being Declared Unconditional

Greatview Aseptic Packaging / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" rel="noopener">China Mengniu Dairy Co (2319 HK)</a>, <a href="https://www.smartkarma.com/entities/greatview-aseptic-packaging" target="_blank" data-smartkarma-citation="entities:10802:1" rel="noopener">Greatview Aseptic Packaging (468 HK)</a>'s largest customer, has ceased to be a substantial shareholder. Mengniu opposes the Shandong Xinjufeng offer. </li>
<li>This development suggests that Mengniu has low confidence in a management competing offer and will likely shift its business away from GA Pack.</li>
<li>The stake sale will help the <a href="https://www.smartkarma.com/entities/shandong-xinjufeng-technology-packaging-co-ltd" target="_blank" data-smartkarma-citation="entities:36744:1" rel="noopener">Shandong Xinjufeng Technology Packaging (301296 CH)</a> offer turn unconditional as it will nudge minorities to tender, partly due to GA Pack’s uncertain outlook.  </li>
</ul>



China Mengniu Dairy Co (2319 HK), Greatview Aseptic Packaging (468 HK)'s largest customer, has ceased to be a substantial shareholder. Mengniu opposes the Shandong Xinjufeng offer. 
This development suggests that Mengniu has low confidence in a management competing offer and will likely shift its business away from GA Pack.
The stake sale will help the Shandong Xinjufeng Technology Packaging (301296 CH) offer turn unconditional as it will nudge minorities to tender, partly due to GA Pack’s uncertain outlook.  


GA Pack (468 HK): Shandong Xinjufeng’s Offer Gets a Boost as Mengniu Sells Down

<ul>
<li>On 20 December, <a href="https://www.smartkarma.com/entities/shandong-xinjufeng-technology-packaging-co-ltd" target="_blank" data-smartkarma-citation="entities:36744:1" rel="noopener">Shandong Xinjufeng Technology Packaging (301296 CH)</a> satisfied the precondition for its <a href="https://www.smartkarma.com/entities/greatview-aseptic-packaging" target="_blank" data-smartkarma-citation="entities:10802:1" rel="noopener">Greatview Aseptic Packaging (468 HK)</a> offer. The offer document will be despatched by 27 December.</li>
<li>Analysing the EGM vote on 18 October suggests that the 50% minimum acceptance condition will be met if no competing management offer is made. </li>
<li>Management will oppose the offer, but the last EGM protest votes suggest that many minorities will ignore management. At the last close, the gross/annualised spread was 2.3%/25.3%.</li>
</ul>


On 20 December, Shandong Xinjufeng Technology Packaging (301296 CH) satisfied the precondition for its Greatview Aseptic Packaging (468 HK) offer. The offer document will be despatched by 27 December.
Analysing the EGM vote on 18 October suggests that the 50% minimum acceptance condition will be met if no competing management offer is made. 
Management will oppose the offer, but the last EGM protest votes suggest that many minorities will ignore management. At the last close, the gross/annualised spread was 2.3%/25.3%.


Hong Kong

Lee & Man Paper Manufacturing Limited, through its subsidiaries, produces linerboard and corrugating medium.  The Company's linerboard and corrugating medium are divided into a range of grades with different specifications customized for different industrial and consumer packaging purposes.

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Lee & Man Paper Manufacturing (2314 HK)

Technically Speaking Breakouts & Breakdowns - HONG KONG (October 18)

Hong Kong has pulled back this month as the U.S. trade war intensifies, however it remains in a Secular Bull Market. Materials and Healthcare...

David Mudd

HK Connect Flows Weekly (Aug 1st): CCB, China Life, Tencent, Li Auto, China Mobile, Xiaomi

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for CCB, China Life, Tencent, Li Auto, China Mobile, Xiaomi,...

Ke Yan, CFA, FRM

CPMC Holdings (906 HK): On the Cusp of Being Declared Unconditional

Based on CCASS data, ORG’s shareholding, including acceptances, is 50.10% of outstanding shares as of 7 January. Therefore, the offer has become...

Arun George

GA Pack (468 HK): Shandong Xinjufeng’s Offer Gets a Boost as Mengniu Sells Down

The stake sale will help the Shandong Xinjufeng offer turn unconditional as it will nudge minorities to tender, partly due to GA Pack’s uncertain...

Arun George

GA Pack (468 HK): The State of Play

Management will oppose the offer, but the last EGM protest votes suggest that many minorities will ignore management. At the last close, the gross...

Arun George

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