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/goldlion-holdings-ltd" target="_blank" data-smartkarma-citation="entities:12359:1" rel="noopener">Goldlion Holdings (533 HK)</a> shareholders have voted against Mr Tsang’s HK$1.5232 per share offer. The minority participation rate was high, and the NO vote comfortably cleared the threshold.</li>
<li>The Goldlion deal break was unexpected, and the HKEx merger arb rulebook will be rewritten. This deal break offers several lessons.</li>
<li>Goldlion had the highest premium of the pre-deal break price to the undisturbed price compared to previous deal breaks. My estimated deal-break price is HK$0.953, 36.0% below last close.</li>
</ul>



Goldlion Holdings (533 HK) shareholders have voted against Mr Tsang’s HK$1.5232 per share offer. The minority participation rate was high, and the NO vote comfortably cleared the threshold.
The Goldlion deal break was unexpected, and the HKEx merger arb rulebook will be rewritten. This deal break offers several lessons.
Goldlion had the highest premium of the pre-deal break price to the undisturbed price compared to previous deal breaks. My estimated deal-break price is HK$0.953, 36.0% below last close.


Goldlion Holdings (533 HK): An Unexpected HK Arbageddon

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>There are 29 adds and 41 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents down to 505.</li>
<li>We expect 27 of the 29 HSCI inclusions to be added to Stock Connect from the open on 10 March while <a href="https://www.smartkarma.com/entities/horizon-robotics-inc" target="_blank" data-smartkarma-citation="entities:35637:1" rel="noopener">Horizon Robotics (9660 HK)</a> should be added in May.</li>
<li>We expect 28 of the 41 HSCI deletions will be removed from Stock Connect and there has been increased Southbound holding in a lot of the stock this calendar year.</li>
</ul>


There are 29 adds and 41 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents down to 505.
We expect 27 of the 29 HSCI inclusions to be added to Stock Connect from the open on 10 March while Horizon Robotics (9660 HK) should be added in May.
We expect 28 of the 41 HSCI deletions will be removed from Stock Connect and there has been increased Southbound holding in a lot of the stock this calendar year.


HSCI Index Rebalance: 29 Adds, 41 Deletes & Changes to Southbound Stock Connect

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Shinko Electric Industries / Event-Driven

<ul>
<li>For the month of January 2025, 14 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$6bn.</li>
<li>The average premium for the new transactions announced (or first discussed) in January was ~57%, excluding <a href="https://www.smartkarma.com/entities/sun-art-retail-group-ltd" target="_blank" data-smartkarma-citation="entities:401:1" rel="noopener">Sun Art Retail (6808 HK)</a>'s massive takeunder.</li>
<li>The average premiums for transactions in 2024 (129 transactions), (2023 (117), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) were 43%, 39%, 41%, 33%, 31%, and 31% .</li>
</ul>


For the month of January 2025, 14 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$6bn.
The average premium for the new transactions announced (or first discussed) in January was ~57%, excluding Sun Art Retail (6808 HK)'s massive takeunder.
The average premiums for transactions in 2024 (129 transactions), (2023 (117), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) were 43%, 39%, 41%, 33%, 31%, and 31% .


(Mostly) Asia M&A, Jan 2025: Sun Art, Sanyo Special Steel, Jamco, Ascot, Dropsuite, Smart Share

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a> shareholders have voted against <a href="https://www.smartkarma.com/entities/shanghai-fosun-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:8045:1" rel="noopener">Shanghai Fosun Pharmaceutical (Group) (2196 HK)</a>’s HK$24.60 offer. The minority participation rate was high, and the NO vote comfortably cleared the threshold.</li>
<li>The <a href="https://www.smartkarma.com/entities/china-traditional-chinese-medicine" target="_blank" data-smartkarma-citation="entities:351:1" rel="noopener">China Traditional Chinese Medicine (570 HK)</a> and Henlius deal breaks have rewritten the HKEx merger arb rulebook. The Henlius deal break offers several lessons.</li>
<li>The 27.5% share price decline since 9 January points to a well-flagged deal break. Nevertheless, precedent deal-breaks suggest that the shares remain vulnerable and could touch HK$15.  </li>
</ul>



Shanghai Henlius Biotech (2696 HK) shareholders have voted against Shanghai Fosun Pharmaceutical (Group) (2196 HK)’s HK$24.60 offer. The minority participation rate was high, and the NO vote comfortably cleared the threshold.
The China Traditional Chinese Medicine (570 HK) and Henlius deal breaks have rewritten the HKEx merger arb rulebook. The Henlius deal break offers several lessons.
The 27.5% share price decline since 9 January points to a well-flagged deal break. Nevertheless, precedent deal-breaks suggest that the shares remain vulnerable and could touch HK$15.  


Henlius (2696 HK): Deal Break as HKEx Merger Arb Rulebooks Are Rewritten

<ul>
<li>LVC sits a blocking stake ahead of <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a>'s shareholder vote on the 22nd Janaury. I've yet to see a solid rationality why they would block.</li>
<li>
<a href="https://www.smartkarma.com/entities/malaysia-airports-holdings-bhd" target="_blank" data-smartkarma-citation="entities:117:1" rel="noopener">Malaysia Airports Holdings (MAHB MK)</a>extends the closing date to the 24th January. Shares held plus tendering is currently 86.18%. This is done.</li>
<li>
<a href="https://www.smartkarma.com/entities/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai Electric (6525 JP)</a> was IPOed in September 2023. Lockup expiry is next week, and there is a likely large index event in ~10 weeks</li>
</ul>


LVC sits a blocking stake ahead of Shanghai Henlius Biotech (2696 HK)'s shareholder vote on the 22nd Janaury. I've yet to see a solid rationality why they would block.

Malaysia Airports Holdings (MAHB MK)extends the closing date to the 24th January. Shares held plus tendering is currently 86.18%. This is done.

Kokusai Electric (6525 JP) was IPOed in September 2023. Lockup expiry is next week, and there is a likely large index event in ~10 weeks


Last Week In Event SPACE: Shanghai Henlius, Malaysia Airports, Kokusai Electric, Smart Share

China

Soho China Ltd. is a property developer. The Company develops properties in central Beijing and Shanghai. Soho China collaborates with internationally recognized architects, translating their designs into real estate which possesses strong appeal to property investors and the local businesses and customer bases they serve.

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Soho China (410 HK)

Goldlion Holdings (533 HK): An Unexpected HK Arbageddon

The Goldlion deal break was unexpected, and the HKEx merger arb rulebook will be rewritten. My estimated deal-break price is HK$0.953, 36.0% below...

Arun George

HSCI Index Rebalance: 29 Adds, 41 Deletes & Changes to Southbound Stock Connect

There are 29 adds/ 41 deletes for the HSCI in March. We expect 27 inclusions and 28 deletions for Southbound Stock Connect. There are big holdings...

Brian Freitas

Henlius (2696 HK): Deal Break as HKEx Merger Arb Rulebooks Are Rewritten

The 27.5% share price decline since 9 January points to a well-flagged deal break. Nevertheless, precedent deal-breaks suggest that the shares...

Arun George

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Goldlion Holdings (533 HK): An Unexpected HK Arbageddon

The Goldlion deal break was unexpected, and the HKEx merger arb rulebook will be rewritten. My estimated deal-break price is HK$0.953, 36.0% below...

Arun George

HSCI Index Rebalance: 29 Adds, 41 Deletes & Changes to Southbound Stock Connect

There are 29 adds/ 41 deletes for the HSCI in March. We expect 27 inclusions and 28 deletions for Southbound Stock Connect. There are big holdings...

Brian Freitas

(Mostly) Asia M&A, Jan 2025: Sun Art, Sanyo Special Steel, Jamco, Ascot, Dropsuite, Smart Share

For the month of January, 14 new deals were discussed on Smartkarma with an overall deal size of just ~US$6bn. The average premium for the new...

David Blennerhassett

Henlius (2696 HK): Deal Break as HKEx Merger Arb Rulebooks Are Rewritten

The 27.5% share price decline since 9 January points to a well-flagged deal break. Nevertheless, precedent deal-breaks suggest that the shares...

Arun George

Last Week In Event SPACE: Shanghai Henlius, Malaysia Airports, Kokusai Electric, Smart Share

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett