Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>After watch accessory play <a href="https://www.smartkarma.com/entities/hengdeli-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15178:1" rel="noopener">Hengdeli Holdings (3389 HK)</a> was suspended on the 17th June pursuant to the Takeovers Code, I didn't hold out high hopes of a knock-out Offer.</li>
<li>And on cue, CEO Tony Cheung (16%), son of founder Zhang Yuping (holding 17%), has <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0620/2024062001397.pdf" target="_blank" rel="noopener">made a Partial Offer</a> (for 15% of shares outstanding) at HK$0.16/share, towards gaining majority control.</li>
<li>That's a 18.5% premium to last close ... and a 80% discount to NAV, and a 47% discount to Hengdeli's net cash as at 31 December 2023.</li>
</ul>


After watch accessory play Hengdeli Holdings (3389 HK) was suspended on the 17th June pursuant to the Takeovers Code, I didn't hold out high hopes of a knock-out Offer.
And on cue, CEO Tony Cheung (16%), son of founder Zhang Yuping (holding 17%), has made a Partial Offer (for 15% of shares outstanding) at HK$0.16/share, towards gaining majority control.
That's a 18.5% premium to last close ... and a 80% discount to NAV, and a 47% discount to Hengdeli's net cash as at 31 December 2023.


Hengdeli Holdings (3389 HK)'s Pitiful Partial Offer

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

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of June 2nd.</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 Meituan, China Construction Bank, and Cnooc.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of June 2nd.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Meituan, China Construction Bank, and Cnooc.


Hong Kong Connect Flows (Jun 2nd): Meituan, China Construction Bank, Cnooc

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of May 19th.</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 Tencent, China Construction Bank, China Mobile, Li Auto.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of May 19th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Tencent, China Construction Bank, China Mobile, Li Auto.


Hong Kong Connect Flows (May 19th): Tencent, China Construction Bank, China Mobile, Li Auto

<ul>
<li>Expect some upset on <a href="https://www.smartkarma.com/entities/sbi-shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">SBI Shinsei Bank (8303 JP)</a>'s Offer, the possibility of some activism, but it all plays out in the back end. Not the front end.</li>
<li>
<a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a> is doing a large equity offering to get the monkey off its back with regard to over-leverage, near-term debt refinancing, and WC for Rakuten Mobile.</li>
<li>Fund manager <a href="https://www.smartkarma.com/entities/china-everbright-ltd" target="_blank" data-smartkarma-citation="entities:167:1" rel="noopener">China Everbright (165 HK)</a>'s implied stub and simple ratio (CEL / <a href="https://www.smartkarma.com/entities/everbright-securitie-co-a" target="_blank" data-smartkarma-citation="entities:15343:1" rel="noopener">Everbright Securities Co (A) (601788 CH)</a>) are at multi-year lows.</li>
</ul>


Expect some upset on SBI Shinsei Bank (8303 JP)'s Offer, the possibility of some activism, but it all plays out in the back end. Not the front end.

Rakuten (4755 JP) is doing a large equity offering to get the monkey off its back with regard to over-leverage, near-term debt refinancing, and WC for Rakuten Mobile.
Fund manager China Everbright (165 HK)'s implied stub and simple ratio (CEL / Everbright Securities Co (A) (601788 CH)) are at multi-year lows.


Last Week in Event SPACE: Shinsei Bank, China Everbright, Rakuten, Sony Corp

<ul>
<li>Back on the 23 December, <a href="https://www.smartkarma.com/entities/skyworth-group-limited" target="_blank" data-smartkarma-citation="entities:10941:1" rel="noopener">Skyworth Group (751 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2022/1223/2022122301066.pdf" target="_blank" rel="noopener">announced</a> another partial buyback - this time for 100mn shares (3.87% of shares out), at HK$3.80/share, a 20.25% premium to undisturbed.  </li>
<li>On the 28 March, terms were <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0328/2023032800861.pdf" target="_blank" rel="noopener">bumped</a> to $5.00/share. Independent shareholders approved the whitewash waiver on the 5 May.</li>
<li>The Offer closes on the 18 May. The minimum proration is 7.8%. Expect the final proration to be higher. </li>
</ul>


Back on the 23 December, Skyworth Group (751 HK) announced another partial buyback - this time for 100mn shares (3.87% of shares out), at HK$3.80/share, a 20.25% premium to undisturbed.  
On the 28 March, terms were bumped to $5.00/share. Independent shareholders approved the whitewash waiver on the 5 May.
The Offer closes on the 18 May. The minimum proration is 7.8%. Expect the final proration to be higher. 


Hong Kong

Skyworth Group Limited is a Chinese holding company that designs, manufactures, and sells smart household appliances, including televisions, white goods, and audio-visual products. The company also operates in smart systems technology, new energy (photovoltaics), and modern services. It was founded in 1988 and is headquartered in Shenzhen, China.

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Skyworth (751 HK)

Hengdeli Holdings (3389 HK)'s Pitiful Partial Offer

It will be interesting to see if Cheung even gets the necessary 15%. This is being done waaay too cheaply. It may get bumped. It's a disappointing...

David Blennerhassett

Hong Kong Connect Flows (Jun 2nd): Meituan, China Construction Bank, Cnooc

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for Meituan, China Construction Bank, Cnooc.

Ke Yan, CFA, FRM

Hong Kong Connect Flows (May 19th): Tencent, China Construction Bank, China Mobile, Li Auto

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for Tencent, China Construction Bank, China Mobile, Li Auto.

Ke Yan, CFA, FRM

Last Week in Event SPACE: Shinsei Bank, China Everbright, Rakuten, Sony Corp

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

Skyworth (751 HK): Thoughts On Proration

Independent shareholders approved the whitewash waiver on the 5 May. The Offer closes on the 18 May. The minimum proration is 7.8%. Expect the...

David Blennerhassett

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