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

Langham Hospitality Inv Ss / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/langham-hospitality-inv-ss" target="_blank" data-smartkarma-citation="entities:760:1" rel="noopener">Langham Hospitality Inv Ss (1270 HK)</a> received a notice from <a href="https://www.smartkarma.com/entities/great-eagle-holdings-ltd" target="_blank" data-smartkarma-citation="entities:758:1" rel="noopener">Great Eagle Holdings (41 HK)</a>, the largest unitholder, that it intends to present a detailed proposal for scheme privatisation.</li>
<li>The privatisation interest is unsurprising, as the unit price has declined by 43% over the last twelve months. A tough 2023 did not help the declining sentiment.</li>
<li>Our methodology for triangulating the potential offer price results in a range of HK$0.63-1.76. Our best guess is an offer of around HK$0.85, a 47% premium to the last close.</li>
</ul>



Langham Hospitality Inv Ss (1270 HK) received a notice from Great Eagle Holdings (41 HK), the largest unitholder, that it intends to present a detailed proposal for scheme privatisation.
The privatisation interest is unsurprising, as the unit price has declined by 43% over the last twelve months. A tough 2023 did not help the declining sentiment.
Our methodology for triangulating the potential offer price results in a range of HK$0.63-1.76. Our best guess is an offer of around HK$0.85, a 47% premium to the last close.


Langham Hospitality Investments (1270 HK): Great Eagle (41 HK)’s Possible Scheme Privatisation

China Vast Industrial Urban Development / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-vast-industrial-urban-development-company-limited" target="_blank" data-smartkarma-citation="entities:3212:1" rel="noopener">China Vast Industrial Urban Development (6166 HK)</a> announced that all the pre-conditions were fulfilled. <a href="https://www.smartkarma.com/entities/china-jinmao-holdings-group" target="_blank" data-smartkarma-citation="entities:35:1" rel="noopener">China Jinmao Holdings (817 HK)</a>’s offer is HK$2.40 per share.</li>
<li>The key condition is approval by at least 75% of disinterested shareholders (&lt;10% of disinterested shareholders rejection). Shareholders with blocking stakes will be supportive.</li>
<li>The offer is light, but the headcount test is not applicable. At last close and for a year-end payment, the gross and annualised spread is 0.8% and 4.0%, respectively.</li>
</ul>



China Vast Industrial Urban Development (6166 HK) announced that all the pre-conditions were fulfilled. China Jinmao Holdings (817 HK)’s offer is HK$2.40 per share.
The key condition is approval by at least 75% of disinterested shareholders (&lt;10% of disinterested shareholders rejection). Shareholders with blocking stakes will be supportive.
The offer is light, but the headcount test is not applicable. At last close and for a year-end payment, the gross and annualised spread is 0.8% and 4.0%, respectively.


China VAST: Pre-Condition Fulfilled for the China Jinmao Offer

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-vast-industrial-urban-development-company-limited" target="_blank" data-smartkarma-citation="entities:3212:1" rel="noopener">China Vast Industrial Urban Development (6166 HK)</a> announced a pre-conditional privatisation offer from <a href="https://www.smartkarma.com/entities/china-jinmao-holdings-group" target="_blank" data-smartkarma-citation="entities:35:1" rel="noopener">China Jinmao Holdings (817 HK)</a> at HK$2.40 per share, a 30.4% premium to the undisturbed price.</li>
<li>Key conditions include approval by at least 75% disinterested shareholders (&lt;10% of disinterested shareholders rejection). Shareholders with blocking stakes will be supportive.</li>
<li>The headcount test (if still applicable) is a key challenge as minorities are likely to be unimpressed. We would be buyers up to HK$2.26 per share (implies 75% deal probability).</li>
</ul>



China Vast Industrial Urban Development (6166 HK) announced a pre-conditional privatisation offer from China Jinmao Holdings (817 HK) at HK$2.40 per share, a 30.4% premium to the undisturbed price.
Key conditions include approval by at least 75% disinterested shareholders (&lt;10% of disinterested shareholders rejection). Shareholders with blocking stakes will be supportive.
The headcount test (if still applicable) is a key challenge as minorities are likely to be unimpressed. We would be buyers up to HK$2.26 per share (implies 75% deal probability).


China VAST’s Underwhelming Privatisation Bid from China Jinmao

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Shortly after <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel (KEP SP)</a> revised their Offer to ~S$2.35 and FINAL, Cuscaden has come over the top. This complicates things because of the <a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press (SPH SP)</a>/Keppel Agreement timing.</li>
<li>
<a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (19 HK)</a>'s discount to NAV of ~50% is bang in line with its 12-month average, as <a href="https://www.smartkarma.com/entities/cathay-pacific-airways-ltd" target="_blank" data-smartkarma-citation="entities:243:1" rel="noopener">Cathay Pacific (293 HK)</a> is close to operating cash breakeven.</li>
<li>Blackstone and affiliates are offering shareholders of <a href="https://www.smartkarma.com/entities/crown-resorts-ltd" target="_blank" data-smartkarma-citation="entities:808:1" rel="noopener">Crown Resorts (CWN AU)</a> A$12.50/share in cash, a 26.2% premium to last close.</li>
</ul>


Shortly after Keppel (KEP SP) revised their Offer to ~S$2.35 and FINAL, Cuscaden has come over the top. This complicates things because of the Singapore Press (SPH SP)/Keppel Agreement timing.

Swire Pacific (19 HK)'s discount to NAV of ~50% is bang in line with its 12-month average, as Cathay Pacific (293 HK) is close to operating cash breakeven.
Blackstone and affiliates are offering shareholders of Crown Resorts (CWN AU) A$12.50/share in cash, a 26.2% premium to last close.


Last Week in Event SPACE: Singapore Press, Swire, Crown Resorts, Royal Dutch, Toshiba, Hollysys

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hang-lung-group-ltd" target="_blank" data-smartkarma-citation="entities:50:1" rel="noopener">Hang Lung (10 HK)</a> is coming up "expensive" on my monitor, yet remains one of the cheapest property plays in Hong Kong on a P/B metric.</li>
<li>Preceding my comments on Hang Lung are the weekly setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market cap - &gt;20%.</li>
</ul>



Hang Lung (10 HK) is coming up "expensive" on my monitor, yet remains one of the cheapest property plays in Hong Kong on a P/B metric.
Preceding my comments on Hang Lung are the weekly setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market cap - &gt;20%.


StubWorld: Scion Adriel Likes Hang Lung Group Shares

Hong Kong

Wheelock And Company Limited, through its subsidiaries, develops and invests in properties, operates retail and distribution business, provides treasury management, and renders financial and commercial services.

Wheelock (1947529D HK)

Langham Hospitality Investments (1270 HK): Great Eagle (41 HK)’s Possible Scheme Privatisation

Our methodology for triangulating the potential offer price results in a range of HK$0.63-1.76. Our best guess is an offer of around HK$0.85, a 47%...

Arun George

China VAST: Pre-Condition Fulfilled for the China Jinmao Offer

The headcount test is not applicable, and this is a done deal. At the last close and for a year-end payment, the annualised spread is 4.0%.

Arun George

China VAST’s Underwhelming Privatisation Bid from China Jinmao

The offer price is unattractive to historical multiples and precedent transactions. We would be buyers up to HK$2.26 per share (implies 75% deal...

Arun George

Last Week in Event SPACE: Singapore Press, Swire, Crown Resorts, Royal Dutch, Toshiba, Hollysys

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

StubWorld: Scion Adriel Likes Hang Lung Group Shares

HLG remains very cheap here on a look-through basis. You're looking at 30-40% upside to HLG here to get back to a simple ratio of 1.45x, the ten...

David Blennerhassett