Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>At a zero net debt zero net cash (securities liquidated) Adjusted Price/Earnings Ratio of 11.3x expected Net Income, the multiple offered <a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine (6135 JP)</a> is not a knock-out.</li>
<li>
<a href="https://www.smartkarma.com/entities/enn-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:316:1" rel="noopener">ENN Energy (2688 HK)</a> investors hoping for a clean (er) exit, or where the back-end terms were clearly defined, will be disappointed. And minorities are active in this name. Avoid</li>
<li>New Trump Tariffs are not based on any actual tariffs, or non-tariff measures. The simple/explicit assumption is that if you run a trade surplus with the US, you are cheating.</li>
</ul>


At a zero net debt zero net cash (securities liquidated) Adjusted Price/Earnings Ratio of 11.3x expected Net Income, the multiple offered Makino Milling Machine (6135 JP) is not a knock-out.

ENN Energy (2688 HK) investors hoping for a clean (er) exit, or where the back-end terms were clearly defined, will be disappointed. And minorities are active in this name. Avoid
New Trump Tariffs are not based on any actual tariffs, or non-tariff measures. The simple/explicit assumption is that if you run a trade surplus with the US, you are cheating.


Last Week in Event SPACE: Makino, ENN Energy, Trump Tariffs, HKBN

<ul>
<li>I tally 54 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma.</li>
<li>Two news new deals discussed this week: <a href="https://www.smartkarma.com/entities/reject-shop-ltd-the" target="_blank" data-smartkarma-citation="entities:272:1" rel="noopener">Reject Shop (TRS AU)</a> and <a href="https://www.smartkarma.com/entities/topcon-corp" target="_blank" data-smartkarma-citation="entities:738:1" rel="noopener">Topcon Corp (7732 JP)</a>. <a href="https://www.smartkarma.com/entities/jinke-smart-services-group-co" target="_blank" data-smartkarma-citation="entities:29214:1" rel="noopener">Jinke Smart Services (9666 HK)</a> also suspended pursuant to the Takeovers Code. </li>
<li>Key updates/news took place on <a href="https://www.smartkarma.com/entities/excalibur-mining-corp-ltd" target="_blank" data-smartkarma-citation="entities:3088:1" rel="noopener">Dropsuite  (DSE AU)</a>, <a href="https://www.smartkarma.com/entities/avjennings-ltd" target="_blank" data-smartkarma-citation="entities:12578:1" rel="noopener">AVJennings Ltd (AVJ AU)</a>, <a href="https://www.smartkarma.com/entities/domain-holdings-australia-ltd" target="_blank" data-smartkarma-citation="entities:26033:1" rel="noopener">Domain Holdings (DHG AU)</a>, <a href="https://www.smartkarma.com/entities/jamco-corp" target="_blank" data-smartkarma-citation="entities:14741:1" rel="noopener">Jamco (7408 JP)</a>, <a href="https://www.smartkarma.com/entities/shin-kong-financial-holding" target="_blank" data-smartkarma-citation="entities:15351:1" rel="noopener">Shin Kong Financial Holding (2888 TT)</a>, and <a href="https://www.smartkarma.com/entities/dada-nexus-ltd" target="_blank" data-smartkarma-citation="entities:28961:1" rel="noopener">Dada Nexus (DADA US)</a>.</li>
</ul>


I tally 54 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma.
Two news new deals discussed this week: Reject Shop (TRS AU) and Topcon Corp (7732 JP). Jinke Smart Services (9666 HK) also suspended pursuant to the Takeovers Code. 
Key updates/news took place on Dropsuite  (DSE AU), AVJennings Ltd (AVJ AU), Domain Holdings (DHG AU), Jamco (7408 JP), Shin Kong Financial Holding (2888 TT), and Dada Nexus (DADA US).


(Mostly) Asia-Pac M&A: Topcon, Jinke Smart Services, Dropsuite, Domain, Jamco, Shin Kong, Dada Nexus

<ul>
<li>Back on the 27th January, <a href="https://www.smartkarma.com/entities/dada-nexus-ltd" target="_blank" data-smartkarma-citation="entities:28961:1" rel="noopener">Dada Nexus (DADA US)</a>, a Chinese on-demand retail and delivery platform, announced a preliminary non-binding proposal from <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (9618 HK)</a>.</li>
<li>JD.com, a 63.2% shareholder, was offering US$0.50/share (US$2.00/ADS), a 42% premium to last close. Those terms are now firm and a <a href="https://ir.imdada.cn/static-files/76b0510f-d0c8-4d31-8eae-0c8d4bc000b6" target="_blank" rel="noopener">definitive agreement entered into</a>.</li>
<li>The merger is expected to close in the third quarter. Trading at 4.7%/15%, gross/annualised spread, assuming a four month off-ramp.</li>
</ul>


Back on the 27th January, Dada Nexus (DADA US), a Chinese on-demand retail and delivery platform, announced a preliminary non-binding proposal from JD.com (9618 HK).
JD.com, a 63.2% shareholder, was offering US$0.50/share (US$2.00/ADS), a 42% premium to last close. Those terms are now firm and a definitive agreement entered into.
The merger is expected to close in the third quarter. Trading at 4.7%/15%, gross/annualised spread, assuming a four month off-ramp.


Dada Nexus (DADA US): JD.Com's US$2/ADS Firm Offer

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Our list of HK-listed industrial companies indicated that the US generated an average of 22.9% of sales. With diversified production bases, higher tariffs may only affect ~10% of revenue.</li>
<li>
<a href="https://www.smartkarma.com/entities/vesync" target="_blank" data-smartkarma-citation="entities:31067:1" rel="noopener">Vesync (2148 HK)</a>, <a href="https://www.smartkarma.com/entities/chervon-holdings-limited" target="_blank" data-smartkarma-citation="entities:35309:1" rel="noopener">Chervon Holdings (2285 HK)</a>, and <a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies Holdings (2018 HK)</a> are more exposed given their significant US sales yet most production is still in China. </li>
<li>While the US generated over 50% of the revenue of <a href="https://www.smartkarma.com/entities/techtronic-industries-co-ltd" target="_blank" data-smartkarma-citation="entities:4561:1" rel="noopener">Techtronic Industries (669 HK)</a> and <a href="https://www.smartkarma.com/entities/nexteer-automotive-group-ltd" target="_blank" data-smartkarma-citation="entities:15483:1" rel="noopener">Nexteer Automotive (1316 HK)</a>, they are less exposed given their worldwide manufacturing presence. </li>
</ul>


Our list of HK-listed industrial companies indicated that the US generated an average of 22.9% of sales. With diversified production bases, higher tariffs may only affect ~10% of revenue.

Vesync (2148 HK), Chervon Holdings (2285 HK), and AAC Technologies Holdings (2018 HK) are more exposed given their significant US sales yet most production is still in China. 
While the US generated over 50% of the revenue of Techtronic Industries (669 HK) and Nexteer Automotive (1316 HK), they are less exposed given their worldwide manufacturing presence. 


China & HK Strategy: Stocks Exposed to the US and Higher Tariffs

<ul>
<li>For the month of March 2025, 13 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$14bn.</li>
<li>The average premium for the new transactions announced (or first discussed) in March was ~53%, with a year-to-date average also of 55%.</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 March 2025, 13 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$14bn.
The average premium for the new transactions announced (or first discussed) in March was ~53%, with a year-to-date average also of 55%.
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, Mar 2025 Wrap: ENN Energy, Gold Road, Spartan, Aeon Delight, Sinarmas, Topcon

China

Vesync Co Ltd develops smart home platform that connect air quality, health monitoring, kitchen, lighting, and outlet systems.The Company helps users to manage home, save energy, and bring remote items within handheld reach.

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Vesync (2148 HK)

Last Week in Event SPACE: Makino, ENN Energy, Trump Tariffs, HKBN

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

(Mostly) Asia-Pac M&A: Topcon, Jinke Smart Services, Dropsuite, Domain, Jamco, Shin Kong, Dada Nexus

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

Dada Nexus (DADA US): JD.Com's US$2/ADS Firm Offer

This is a clean deal. Just a question of timing. The spread is attractive. I'd look to enter around here and on any pullback.

David Blennerhassett

China & HK Strategy: Stocks Exposed to the US and Higher Tariffs

With the Trump administration announcing global reciprocal tariffs, even companies with manufacturing presence in other countries will suffer...

Osbert Tang, CFA

(Mostly) Asia M&A, Mar 2025 Wrap: ENN Energy, Gold Road, Spartan, Aeon Delight, Sinarmas, Topcon

For the month of March, 13 new deals were discussed on Smartkarma with an overall deal size of ~US$14bn. The average premium for the new deals...

David Blennerhassett

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