Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

Wood flooring manufacturer <a href="https://www.smartkarma.com/entities/nature-home-holding-company" target="_blank" data-smartkarma-citation="entities:20543:1" rel="noopener">Nature Home Holding Company (2083 HK)</a> is currently <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0719/2021071900227.pdf" target="_blank" rel="noopener">suspended</a> "pursuant to the Code of Takeovers and Mergers".
On the 13 July, Nature Home <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0713/2021071300706.pdf" target="_blank" rel="noopener">announced</a> a positive profit alert, in which it expects 1H21 profit to match or exceed that of 1H19's.
As discussed in <a href="https://skr.ma/dft2W" target="_blank" rel="noopener"> Squeeze Box: The Port Congestion Contagion</a>, after the Covid fallout entrenched itself, people stuck at home in the US and elsewhere started buying stuff. Lots of it.
Nature Home's revenue is still predominantly sourced from China, But there has been a noticeable shift since FY18, with exports taking up a larger percentage. 
More below the fold.

Wood flooring manufacturer Nature Home Holding Company (2083 HK) is currently suspended "pursuant to the Code of Takeovers and Mergers".
On the 13 July, Nature Home announced a positive profit alert, in which it expects 1H21 profit to match or exceed that of 1H19's.
As discussed in  Squeeze Box: The Port Congestion Contagion, after the Covid fallout entrenched itself, people stuck at home in the US and elsewhere started buying stuff. Lots of it.
Nature Home's revenue is still predominantly sourced from China, But there has been a noticeable shift since FY18, with exports taking up a larger percentage. 
More below the fold.

Nature Home (2083 HK): Possible Takeover Target

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

<a href="https://www.smartkarma.com/entities/bestway-global-holding-inc" target="_blank" data-smartkarma-citation="entities:26012:1" rel="noopener">Bestway Global Holding (3358 HK)</a> is one of the leading and one of the most well-established branded companies in the global water leisure products market. Bestway listed on the HKEx on 16 November 2017 at HK$4.38 per share to raise net proceeds of HK$1,094.1 million ($141 million).After market close on Friday, Bestway announced a privatisation offer by way of a scheme of arrangement from Mr Zhu Qiang, who is the Founder, Chairman &amp; CEO. The offeror will offer HK$4.38 per scheme share. The bid represents a premium of 27.0% over the closing price of HK$3.45 per share on the last trading day (22 June 2021 prior to the trading halt). The privatisation price of HK$4.38 is in line with the IPO price.<div class="content-highlight">The key condition precedents are the headcount test along with the scheme approved by at least 75% disinterested shareholders and &lt;10% rejection by all disinterested shareholders. As disinterested scheme shareholders represent 234.9 million shares or 22.19% of shares outstanding, the 10% blocking stake is 23.5 million shares or 2.22% of shares outstanding. Fidelity holds a blocking stake of 2.46% of shares outstanding (source: CapitalIQ) but will likely support the privatisation offer, in our view. While not a knockout offer, we believe that the privatisation bid will be successful. </div>

Bestway Global Holding (3358 HK) is one of the leading and one of the most well-established branded companies in the global water leisure products market. Bestway listed on the HKEx on 16 November 2017 at HK$4.38 per share to raise net proceeds of HK$1,094.1 million ($141 million).After market close on Friday, Bestway announced a privatisation offer by way of a scheme of arrangement from Mr Zhu Qiang, who is the Founder, Chairman &amp; CEO. The offeror will offer HK$4.38 per scheme share. The bid represents a premium of 27.0% over the closing price of HK$3.45 per share on the last trading day (22 June 2021 prior to the trading halt). The privatisation price of HK$4.38 is in line with the IPO price.The key condition precedents are the headcount test along with the scheme approved by at least 75% disinterested shareholders and &lt;10% rejection by all disinterested shareholders. As disinterested scheme shareholders represent 234.9 million shares or 22.19% of shares outstanding, the 10% blocking stake is 23.5 million shares or 2.22% of shares outstanding. Fidelity holds a blocking stake of 2.46% of shares outstanding (source: CapitalIQ) but will likely support the privatisation offer, in our view. While not a knockout offer, we believe that the privatisation bid will be successful. 

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

Man Wah Holdings / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/man-wah-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15846:1" rel="noopener">Man Wah Holdings (1999 HK)</a> plans to raise around US$260m to expand manufacturing facilities in China and open stores.The stock has been doing well this year on the back of planned domestic retail expansion and analyst continue to remain bullish on the stock.

Man Wah Holdings (1999 HK) plans to raise around US$260m to expand manufacturing facilities in China and open stores.The stock has been doing well this year on the back of planned domestic retail expansion and analyst continue to remain bullish on the stock.

Man Wah Placement - Riding High on Planned Store Expansion

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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.
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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.
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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.





Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

Hong Kong Exchange publishes share repurchases by listed companies on a daily basis. In our weekly note, we will provide statistics on top repurchases over one week, one month, one quarter and one year periods.In the past 7 days, the top 3 companies that repurchased the most shares from the market were <a href="https://www.smartkarma.com/entities/new-world-development" target="_blank" data-smartkarma-citation="entities:7037:1" rel="noopener">New World Development (17 HK)</a> (HKD 110.0 million worth of buybacks), <a href="https://www.smartkarma.com/entities/man-wah-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15846:1" rel="noopener">Man Wah Holdings (1999 HK)</a> (HKD 26.0 million worth of buybacks), <a href="https://www.smartkarma.com/entities/pacific-textiles-holdings" target="_blank" data-smartkarma-citation="entities:12638:1" rel="noopener">Pacific Textiles (1382 HK)</a> (HKD 19.7 million worth of buybacks). There were 29 companies that repurchased shares in the market. These repurchases amounted to HKD 212.8 million.

Hong Kong Exchange publishes share repurchases by listed companies on a daily basis. In our weekly note, we will provide statistics on top repurchases over one week, one month, one quarter and one year periods.In the past 7 days, the top 3 companies that repurchased the most shares from the market were New World Development (17 HK) (HKD 110.0 million worth of buybacks), Man Wah Holdings (1999 HK) (HKD 26.0 million worth of buybacks), Pacific Textiles (1382 HK) (HKD 19.7 million worth of buybacks). There were 29 companies that repurchased shares in the market. These repurchases amounted to HKD 212.8 million.

HK Buyback League Table: New World Dev, Man Wah, Pacific Textiles

Hong Kong

Man Wah Holdings Limited is an investment holding company specializing in the research, development, production, and sale of home furnishings. It is a global leader in designing and manufacturing sofas, mattresses, panel furniture, and various furniture accessories. The company was founded in 1992 and is headquartered in Hong Kong.

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Man Wah Holdings (1999 HK)

Nature Home (2083 HK): Possible Takeover Target

Nothing to do yet as shares are suspended. With Bestway (3358 HK) recently subject to an Offer, it is worthwhile running a ruler over other home...

David Blennerhassett

Bestway Global’s Privatisation Bid

Bestway announced a privatisation offer from Mr Zhu Qiang (the Founder, Chairman & CEO) at HK$4.38 per scheme share. While not a knockout offer, we...

Arun George

Man Wah Placement - Riding High on Planned Store Expansion

Man Wah Holdings (1999 HK) plans to raise around US$260m to expand manufacturing facilities in China and open new stores. The stock has nearly...

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

HK Buyback League Table: New World Dev, Man Wah, Pacific Textiles

Hong Kong Exchange publishes share repurchases by listed companies on a daily basis. In our weekly note, we will provide statistics on top...

Ke Yan, CFA, FRM

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