Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/111-inc" target="_blank" data-smartkarma-citation="entities:27412:1" rel="noopener">111 Inc (YI US)</a>, an online healthcare platform operator in China, announced an unsolicited preliminary non-binding proposal from Gang Yu and Junling Liu - both co-founders and co-chairmans.</li>
<li>Yu and Liu are offering US$3.66/ADS, a 20% premium to the undisturbed price. </li>
<li>Yu and Liu control 92.1% of the votes. There is no shareholder vote on this transaction should a firm Offer unfold.</li>
</ul>



111 Inc (YI US), an online healthcare platform operator in China, announced an unsolicited preliminary non-binding proposal from Gang Yu and Junling Liu - both co-founders and co-chairmans.
Yu and Liu are offering US$3.66/ADS, a 20% premium to the undisturbed price. 
Yu and Liu control 92.1% of the votes. There is no shareholder vote on this transaction should a firm Offer unfold.


111 Inc's Low-Balled Homecoming Is A Done Deal

Bright Scholar Education Holdi / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bright-scholar-education" target="_blank" data-smartkarma-citation="entities:24126:1" rel="noopener">Bright Scholar Education (BEDU US)</a> (BSE), an operator of schools across China, the UK, and the US, received an Offer earlier this year from Huiyan Yang, the chairperson.</li>
<li>Yang is offering US$3.32/ADS - adjusted for the recent reverse split - a 44% premium to the undisturbed price. </li>
<li>Yang controls 92.5% of the votes. There is no shareholder vote on this transaction should a firm Offer unfold.</li>
</ul>



Bright Scholar Education (BEDU US) (BSE), an operator of schools across China, the UK, and the US, received an Offer earlier this year from Huiyan Yang, the chairperson.
Yang is offering US$3.32/ADS - adjusted for the recent reverse split - a 44% premium to the undisturbed price. 
Yang controls 92.5% of the votes. There is no shareholder vote on this transaction should a firm Offer unfold.


Bright Scholar: Cheap Homecoming, Yet Limited Downside

Glory Star New Media Group Holdings / Event-Driven

Glory Star New Media Group Holdings (GSMG US)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/glory-star-new-media-group-h" target="_blank" data-smartkarma-citation="entities:33080:1" rel="noopener">Glory Star New Media Group H (GSMG US)</a> (GSMG), a leading digital media platform and content-driven e-commerce company in China, has <a href="https://www.sec.gov/Archives/edgar/data/0001738758/000121390022038380/ea162668ex99-1_glorystar.htm" target="_blank" rel="noopener">entered</a> a definitive privatisation transaction with Cheers Inc.</li>
<li>Cheers is offering US$1.55/share, in cash, a 76% premium to GSMG's undisturbed price, and a 22% premium to the US$1.27/share proposal from GSMG's CEO Bing Zhang. </li>
<li>The buyer consortium owns ~72.8% of shares out and this Offer requires a two-thirds vote from shareholders. This looks done with expected completion this year. But it's a low-balled Offer.</li>
</ul>



Glory Star New Media Group H (GSMG US) (GSMG), a leading digital media platform and content-driven e-commerce company in China, has entered a definitive privatisation transaction with Cheers Inc.
Cheers is offering US$1.55/share, in cash, a 76% premium to GSMG's undisturbed price, and a 22% premium to the US$1.27/share proposal from GSMG's CEO Bing Zhang. 
The buyer consortium owns ~72.8% of shares out and this Offer requires a two-thirds vote from shareholders. This looks done with expected completion this year. But it's a low-balled Offer.


Offensively Cheap Homecoming For Glory Star New Media

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Equity Bottom-Up

<ul>
<li>Tencent’s increase in investment acquisition activity has coincided with a general weakness in equity prices and valuation levels.</li>
<li>Tencent management’s assessment of the fair value of its listed investee holdings, of RMB982.8bn on 31 December 2021, equates to roughly 27.4% of its market cap.</li>
<li>The market value of Tencent’s investee holdings in more-mature, Chinese-listed, internet-orientated holdings equates to roughly 9% of its current market cap.</li>
</ul>


Tencent’s increase in investment acquisition activity has coincided with a general weakness in equity prices and valuation levels.
Tencent management’s assessment of the fair value of its listed investee holdings, of RMB982.8bn on 31 December 2021, equates to roughly 27.4% of its market cap.
The market value of Tencent’s investee holdings in more-mature, Chinese-listed, internet-orientated holdings equates to roughly 9% of its current market cap.


Tencent: Investments up as Valuations Drop, Room for Another Significant Special in Specie Dividend

<ul>
<li>The SEC has finalised the Holding Foreign Companies Accountable Act rules. Under the current timeframe, the SEC may force the delisting of foreign companies in three years if in contravention.</li>
<li>Amid <a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Global (DIDI US)</a>'s intention to delist from the US, the CSRC refutes it is pushing for VIEs to drop their listings in the United States.</li>
<li>Expect continued volatility as the ~248 US-listed China plays seek to avoid delisting if they don’t comply with auditing rules.</li>
</ul>


The SEC has finalised the Holding Foreign Companies Accountable Act rules. Under the current timeframe, the SEC may force the delisting of foreign companies in three years if in contravention.
Amid DiDi Global (DIDI US)'s intention to delist from the US, the CSRC refutes it is pushing for VIEs to drop their listings in the United States.
Expect continued volatility as the ~248 US-listed China plays seek to avoid delisting if they don’t comply with auditing rules.


Delisting Chinese ADRs: High Foreign-Holding, With No Fixed Abode, Most At Risk

United States

Sogou Inc. operates as a Chinese online search engine. The Company develops Internet applications such as map, voice search, and smart phone assistant, as well as web directory and browser. Sogou serves clients in China.

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Sogou Inc (SOGO US)

111 Inc's Low-Balled Homecoming Is A Done Deal

Trading at a 9.3% gross spread to terms. That's okay for an illiquid arb. One that is neither firm, nor optically reasonable. The downside is...

David Blennerhassett

Bright Scholar: Cheap Homecoming, Yet Limited Downside

Trading tight at a 1.8% gross spread to terms. However, your downside is probably limited here as operations recover. And Yang may still bump terms.

David Blennerhassett

Offensively Cheap Homecoming For Glory Star New Media

Trading at a 17.4%/40.9% gross/annualised spread, assuming late December completion. That's attractive. Get involved if you've read this far.

David Blennerhassett

Tencent: Investments up as Valuations Drop, Room for Another Significant Special in Specie Dividend

In this insight, we analyse Tencent’s recent investment activity and notable investee holdings to evaluate the potential for another meaningful...

Wium Malan, CFA

Delisting Chinese ADRs: High Foreign-Holding, With No Fixed Abode, Most At Risk

This does not strike me as the time to be bargain hunting. Not when there remains confusion as to how and when delistings will unfold. The focus...

David Blennerhassett

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