China

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads: Arcadium Lithium (LTM AU), Seven & I Holdings (3382 JP), Insignia Financial (IFL AU), Shanghai Henlius Biotech (2696 HK), Get Nice Financial Group Ltd (1469 HK). 
• Lowest spreads: Renewable Japan (9522 JP), Lifestyle China (2136 HK), Macromill, Inc (3978 JP), Fuji Soft Inc (9749 JP), Nec Networks & System Integr (1973 JP), Nishimoto (9260 JP). 

• Fosun Tourism has emerged from its difficulties and started an upward trend.If it remains listed, it’s only a matter of time before its share price returns to the IPO price.
• Temasek was once in talks to buy a minority stake in Club Med from Fosun International for €500 million, based on which reasonable valuation for Fosun Tourism is RMB12.6 billion.
• Fosun has continued its style- When performance recovery hasn’t been reflected in stock price, it’s the right time to privatize valuable assets at cheap price. A share alternative is expected.

• Beijing Capital Grand (1329 HK)’s IFA opines that Beijing Capital Land Ltd H (2868 HK)’s HK$0.85 privatisation offer is fair and reasonable. The vote is on 10 January. 
• Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection). The offer price is final.
• The Sino-Ocean Group (3377 HK) receivers, which hold a blocking stake, should support the transaction. At the last close and for the 6 February payment, the gross/annualised spread was 3.7%/22.2%.

• This Insight analyzes Hang Seng Index (HSI INDEX) tailor-made option strategies traded between December 9-13, covering strategy analysis, trends, highlights, and volatility context.
• Last week saw high activity with over 5,000 option contracts traded as combinations; the Iron Condor was notably popular, particularly on Monday and Tuesday.
• The highest premium earned was for a January ’25 Iron Condor. The largest trade was a December ’24 Bull Call Spread, reflecting the popularity of bullish and long volatility strategies.

• Shenzhen Dobot, a CICC-backed robotics unicorn, aims to raise up to HK$830M (~$107M) in the initial public offering in Hong Kong.
• The offering is expected to be between HK$18.80 and HK$20.80, implying a market cap of ~HK$8B or ~$1B at the midpoint of the price range.  
• Given Shenzhen Dobot’s long-term growth opportunities and high TAM, they are likely to get a premium valuation, and the company could trade like UBTech Robotics and Doosan Robotics.

• Management of China Tobacco International (HK) (6055 HK) is bullish on earnings in the next two years, with tobacco leaf import and cigarette export being the key drivers.
• Elevated tobacco leaf price is positive to CTI while more re-opening of duty-free shops (currently only 50% of pre-COVID level) will add to revenue momentum.
• A light gearing of just 2% and potentially more parent asset injection are CTI’s strengths. The company plans to maintain a steady uptrend on absolute DPS annually. 

• Back on the 28th October, SOE Beijing Capital Group launched an Offer by way of a Scheme for Beijing Capital Grand (1329 HK) (BCG), a commercial property developer in China.
• The Cancellation Price of HK$0.85/Share (best & final) was a 46.55% premium to undisturbed. Irrevocables were secured from 8.13% of the 37.92% held by disinterested shareholders. This looked done. 
• The Scheme Document is now out, with a Court Meeting to be held on the 10th Jan. Expected payment on or before the 6th Feb. IFA says fair & reasonable.

• NEV retail volume increased by 51% YoY in November and 41% YoY for first eleven months.
• Jiyue Auto, as a car maker subsidiary of Baidu, is dismissing employees.
• Hisense, a home appliance producer, lays off 30,000 employees of its total 110,000.

• The decline of new home sales was narrowed in the past ten months.
• New home, rental, and furnishing businesses grew strongly in 3Q24.
• We believe the operating margin will improve in 2025 and 2026.

• Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
• On the IPO front, a number of offerings were live in India, in a bid to beat the year-end lull.
• On the placements front, there was a large placement for SenseTime Group (20 HK) and a number of smaller deals in India.

• SOUTHBOUND gross trading activity rebounded about 33% this week vs the previous week. Net buying was a little lower but still strong. Market volumes overall in HK rebounded.
• Alibaba Group Holding (9988 HK) was again the top buy and Tencent (700 HK) and Meituan (3690 HK) the top two sells. Tech is having a mixed outing now.
• Gross SOUTHBOUND volumes back up this week to levels seen just off the autumn peak. An interesting week as stocks popped Monday, opened high Tuesday, then fell all week.

• Alibaba Group’s September Quarter 2024 results reveal a balance of positive developments and ongoing challenges.
• The company has shown resilience in its core business segments, leveraging an AI-driven strategy to enhance user engagement and operational efficiency.
• Steady growth has been noted in both domestic and international e-commerce segments, with Alibaba International Digital Commerce recording a substantial 29% revenue growth.

• Mainland share market volumes continue to be better than HK and SOUTHBOUND volumes, but SB volumes rebounded, tech saw limited net buying, BABA was bought but other major tech sold.
• The first leg of China’s retaliatory acts against US trade measures appeared with export bans on gallium, germanium, antimony, graphite products, etc. These will not be lifted soon.
• China is also retaliating against the Phils, Vietnam, Taiwan and changing tack in Europe. The next couple of years threatens to be “interesting times.

• My conversation with the FA earlier this week largely put to rest a number of concerns, specifically on regulatory approvals, surrounding the Offer for CPMC Holdings (906 HK). 
• As announced on the 13th December, the last pre-condition, SAFE, has been satisfied. All pre-cons have been fulfilled.  The Offer Doc will be dispatched on or before the 20th December
• This could turn unconditional before year-end, depending on whether Zhang Wei promptly tenders. Expect the share price to trade tight (er) to terms Monday morning.

• The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
• In this insight, we take a look at the rankings of potential ADDs and potential DELs for the March 2025 index rebal event.
• Based on the latest available data, we see four ADDs and four DELs for HSIII in March 2025.

• The 10th national VBP released results. The average price reduction was about 70%. CSPC, Kelun, Fosun Pharma, Sino Biopharmaceutical are the “main force” and their performance would be affected.
• WuXi Shares surge due to the absence of BIOSECURE Act from the proposed amendments to US NDAA. However, the rally could be short-term as the Bill may return next year.
• Pre-Conditions of Newjf have been smooth so far. We think investors can directly consider Newjf’s Offer. Based on the current situation, we are optimistic that Newjf will finally be successful.

• The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
• In this insight, we take a look at the final rankings for the HSCEI potential ADDs and potential DELs for the index rebal event in March 2025.
• At present, we see one change based on the 13th December 2024 data but the rankings can change until 31st December 2024.

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments: Kioxia Holdings (285A JP) priced its IPO at JPY1,455, the midpoint of the IPO price range.
• Event-Driven developments: Fosun Tourism (1992 HK), CPMC Holdings (906 HK), Fuji Soft Inc (9749 JP), Nec Networks & System Integr (1973 JP), Topcon Corp (7732 JP), Insignia Financial (IFL AU). 

• Sinopharm will benefit from the strong expected growth in China’s healthcare spend.
• There is scope to increase its distribution which will continue to shield the company from short-term volatility.
• Pricing pressure in drug prices creates opportunity to optimise range and improve profitability.

• SF’s revenue base is far larger, and in Q324 SF’s revenue also grew faster than JD Logistics
• SF and JD Log reported similar EBITDA margins in Q324, & both enjoyed Y/Y improvement
• JD Log appears far cheaper on EV/Revenue, perhaps due to its reliance on parent JD.com

• Vesync (2148 HK), a manufacturer of small home appliance, is currently suspended pursuant to the Takeovers Code. 
• FY23 was Vesync’s best result since its December 2020 listing; and FY24E is on track to go one better.  Yet the share price is 24% adrift of the IPO price.
• The Yang family, led by chairman/CEO, control ~69.26% of Vesync. An Offer price around the IPO price may be enough to take Vesync private.

• ORG Technology Co., Ltd. A (002701 CH)’s offer for CPMC Holdings (906 HK) has received SAFE approval. Therefore, the precondition is satisfied. 
• The offer and response document will be despatched by 20 December and 3 January 2025, respectively. The Board will recommend the offer. 
• The offer should be declared unconditional by the first closing date. At the last close and late-January 2025 payment, the gross/annualized spread was 7.3%/88.0%.

• JD.com is a profitable Chinese e-commerce company trading below its cash value
• Despite challenges in China’s retail market and competition from rivals, JD.com offers a potential 2x-3x upside over the next two years
• Stock has fallen approximately 20% since last write-up, presenting a good opportunity for investors

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Vesync (2148 HK) is in a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers which contains inside information of the Company.” 
• The Yang family is likely seeking to privatise Vesync through a Cayman scheme. The shares are trading 24% below the HK$5.52 IPO price.
• We use several methods to triangulate the likely offer price, which suggests a price range of HK$5.09-10.30 per share, with an average of HK$6.71, a 59.8% premium to last close.

• VCredit Holdings Ltd (2003 HK), a provider of consumer financial services in China, was listed on the 21st June 2018 at HK$20/share. Shares are currently down 90%.
• Ma Ting Hung, VCredit’s chairman, held 35.6% at the time of listing, and currently holds 39.85%.  
• VCredit was suspended this morning pursuant to the Takeovers Code. Now might be the time for Ma to take VCredit back into the fold. 

• As discussed in PA Gooddoctor (1833 HK) – The Arb Is To Take The Stock, Ping An increased its stake in Lufax (6623 HK) to 56.82% via a scrip dividend.
• This triggered a zero-premium MGO, which closed on the 28 October 2024 with negligible tendering.
• Via an amendment to a tri-party agreement, Ping An subsequently lifted its stake to 66.85%. It’s worth understanding how Ping An has taken its stake >50% and beyond. 

• The financial data for 2024 has already shown investors weak growth signal.After IPO, Xiaocaiyuan may face stricter scrutiny from investors and the market in terms of its sustainable performance growth.
• It’s not easy for Xiaocaiyuan to find new growth points. Catering companies commonly face problems such as performance fluctuations and uncertain profitability, which has left their share price underperforming.
• Post investment valuation has already reached RMB10 billion, which far exceeds the market value of A-share peers. Due to concerns on the outlook, valuation performance after IPO could be lower-than-expected.

• The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
• In this insight, we take a look at the rankings of potential ADDs and potential DELs for the March 2025 index rebal event.
• We see two index changes based on the latest available data. However, the reference period is not complete which means our expectations can change over the next few weeks.

• Welcome back to our weekly editorial on everything commodity and energy-related!This week is all about China as the Politburo and PBoC have announced new (undefined) stimulus measures aimed at simultaneously countering tariffs from the Trump administration in 2025 and bolstering the economy, regaining confidence as China battles structural issues.
• This naturally raises the question of how this will impact commodities.
• As the world’s largest importer of commodities by a significant margin, China’s injection of capital into its economy could provide a substantial boost.

• If ORG cannot obtain the SAFE approval by the end of December, this indicates something is wrong in the process. Then the success rate of this transaction is greatly reduced.
• Acquiring CPMC is in line with Baosteel’s strategic goals and CPMC is important to Baosteel.So, the possibility of state-owned capital to agree to withdraw completely from CPMC is not high.
• It’s unclear whether Zhang Wei will continue to side with ORG, or whether he still want to exit. This actually depends on the renegotiations between Baosteel/China Foods/COFCO and Zhang Wei.

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• We provide updates on results for our HK-listed universe and highlights from our recent management visits to Hong Kong. 

• REPT BATTERO Energy raised around US$270m in its Hong Kong IPO in Dec 2023. Its pre-IPO investors holding around US$1.2bn worth of shares will be released from their lockup soon.
• REPT is a lithium-ion battery manufacturer in China, focusing on R&D, production, and sales of EV/ESS lithium-ion battery products such as battery cells, modules and packs.
• In this note, we will talk about the lockup dynamics and possible placement.

• Pou Sheng, the second-largest sporting goods retailer in China, is facing challenges like declining sales
• The company is trading at an undervalued price with a negative EV but remains profitable
• Despite concerns about China’s geopolitical situation and low cash returns, Pou Sheng offers a high dividend yield and has a strong balance sheet with significant net tangible asset value, indicating potential for upside if sales performance improves.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• The author presents an analysis of TAL Education Group, highlighting its low valuation and steady growth among Chinese ADRs
• TAL has a current market cap of $4.5B, net cash of $3.8B, and generated $200m in operating cash flow in the last quarter
• The company is projected to have $4.5B in net cash by the end of 2025, with revenue expected to grow at a 30% CAGR and reach over $2.5B with a 15% operating margin by 2026

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Back on the 29th August 2024, CPMC Holdings (906 HK) announced  ORG Technology Co., Ltd. A (002701 CH) had secured SAMR approval.  Mofcom and NDRC approvals subsequently followed. 
• The pre-condition long stop date is the 6th January. SAFE is the outstanding pre-condition. Separately, Zhang Wei’s 22.01% irrevocable expired on the 5th December – with no HKEx announcement.
• Quite a lot to pack in with 16 business days to the pre-con long stop. Sounding out people involved with the transaction would be ideal.  So that’s what I did. 

• Fosun Tourism (1992 HK) disclosed a share buyback of the company through a scheme of arrangement at HK$7.80, a 95.0% premium to the last close price of HK$4.00. 
• The key condition is the scheme be approved by at least 75% of disinterested shareholders (rejection by <10% of disinterested shareholders).
• The timing is arguably opportunistic, as the shares are down 31% YTD. Nevertheless, the high takeover premium and a potential scrip option lower the vote risk.    

• When Fosun Tourism (1992 HK), a leisure-focused integrated tourism group, was suspended pursuant to the Takeovers Code, the obvious Offeror, by way of a Scheme, was Fosun International (656 HK)
• Not quite. We do have a Scheme, but it’s being enacted by way of a buyback. Fosun Int’l still abstains from voting, but will control 100% if the Scheme completes.
• The Cancellation Price is $7.80/share (not declared final), a punchy 95% premium to undisturbed. I previously speculated a 100% premium was not out of the question.  Clean deal.

• For the first time in 2024, Prosus NV (PRX NA) lodges a substantial shareholder notice,  as its stake in Tencent (700 HK) dips below 24%. 
• Preceding my comments on Prosus, Tencent and Naspers (NPN SJ), are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Consistent compounders, stocks with steady earnings growth and excess returns over a long period of time, are difficult to find. It’s even more difficult to find reasonably valued compounders.
• From the universe of large Asian companies, we screen those with steady profit growth (>10%) and excess returns in each of last 10 years and over next three forecast years.
• Our list of 20 inexpensive compounders comprises 10 from onshore China, 5 from HK, 3 from India and 1 each from Japan and the Philippines.

• Geely’s sales volume grew by 27% YoY in November 2024.
• BEV delivery growth rate accelerated to 173% YoY in November from 26% YoY in July.
• Geely’s forward financial ratios are lower than its major competitors.

• Long Beijing Capital International Airport (BCIA) (694 HK), and short Air China Ltd (H) (753 HK) strategy should bring in good sector-neutral returns over the next 12 months. 
• BCIA will return to profit next year, fuelling the rebound of its share price. Air China, however, may face uncertainties related to stronger USD and higher-than-expected US interest rates.
• Higher duty-free sales for BCIA should propel earnings outlook. BCIA’s P/B is well below the 5-year average, while Air China has already returned to the historical average level.

• Based on the new announcement released by CR Sanjiu, due diligence, auditing, evaluation, valuation and verification of material assets reorganization are in progress. Approvals by the SASAC/SAMR haven’t been obtained.
• Sanjiu is now facing performance headwinds due to VBP. So, Sanjiu needs new/stable performance increments to alleviate future performance pressure, and completing the acquisition of Tasly becomes even more urgent.
• China Resources excels in M&As and has strong internal business integration capabilities.We’re optimistic about the future synergies after the merger. Valuation for Tasly is expected to reach P/E of 30.

• TAL Education Group’s second quarter fiscal year 2025 results provide an insightful look into the company’s current trajectory, presenting both promising developments and areas to watch cautiously.
• On the positive side, TAL Education’s robust year-over-year growth in net revenues stands out, with reported figures of USD 619.4 million, marking an impressive increase of over 50%.
• This growth is largely backed by the company’s strategic expansion in its learning services, particularly the enrichment learning programs like Peiyou small classes.

• Viomi has undergone a radical transformation to shed unprofitable business lines and focus on the home water systems market which is poised to experience steady growth in China in coming years.
• The company is hoping to expand into fairly mature international markets including the US with new home water systems that offer advantages over current offerings.
• The company’s investment in a largely automated manufacturing facility should help the company achieve above average margins in the Chinese market as utilization rates improve.

• ORG Technology Co., Ltd. A (002701 CH)’s offer for CPMC Holdings (906 HK) has one remaining precondition: SAFE approval.
• Mr Wei’s irrevocable was terminated. Nevertheless, as a seller, he will accept the offer, as the shares trade below the offer price, and there is no competing offer. 
• The precondition long stop date is 6 January, sufficient time to satisfy the precondition. It would be highly unusual to secure MOFCOM and NDRC approval but not SAFE approval.

• BYD’s deliveries grew by 68% YoY in November 2024, which provides a positive signal for the whole NEV (New Energy Vehicle) industry.
• In November, Seres’ sales volume increased by 27% YoY with NEV up by 55% YoY.
• Arawana, the top cooking oil producer, finished acquiring 11% of Lihua’s stock.

• Mao Geping Cosmetics raised around US$345m in its Hong Kong IPO.
• Mao Geping Cosmetics (MGC) operates in the premium beauty segment. Operating via its two brands, MAOGEPING and Love Keeps, MGC offers a wide range of color cosmetics and skincare products.
• We have looked at the company’s past performance in our previous notes. In this note, we will talk about the trading dynamics.

• China National Building Material (3323 HK) (CNBM), a leading PRC building materials company, is offering to buy back 841,749,304 H-shares at HK$4.03/share, a 15.1% premium to undisturbed.
• CNBM’s parent – the CNBM Parent Concert Group – will not participate in the tender, therefore elevating its stake to 50.01% of total shares from 45.02% currently. 
• That % increase necessitates a whitewash waiver so as to not make a mandatory general Offer. 

• Fosun Pharma is just “a platform” and its performance mainly relies on the contributions of subsidiaries. However, such investment-driven business model has led to the current performance difficulties.
• Although the motivation/underlying logic for Fosun Pharma to privatize Henlius are solid, we don’t know how this privatization ranks in terms of strategic significance of capital operations within Fosun’s system.
• If, for example, Fosun Pharma finds more important acquisitions/capital expenditures, the priority of Henlius’ privatization could fall. So, we think if it takes too long, there may be more uncertainties.

• Strong price action across the market this week coupled with implied vols having caught down to historic vols has put a floor on implied vols.
• Tencent sees strong call buying in December 410 and 420 Calls with month end 400 strike Put buying for December and January.
• Cathay Pacific, +21% over past 3 weeks, HSBC, at 52-week high plus up 38% on the year and BABA, down 21% from Oct 02 high all active names.

• Although vols have stabilized this week both HSI and HSCEI are still trading about 3-4 vol above where they were pre-stimulus and are still not monetizing.
• Strong price action this wek helped keep a floor under implied vols. 
• Positions were added in both HSI and HSCEI with demand tilted towards up-strike Calls given the rally on the week.

• QuantumPharm (2228 HK) listed in Hong Kong after raising US$126m towards the bottom end of its IPO price range. Its six-month lockup will expire on 12th Dec 2024.
• QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• In the US, the November nonfarm payrolls came in marginally above expectations at 227 k (220 k e), and were up significantly from the upwardly revised 36 k figure for October (which was impacted by two hurricanes and a strike at Boeing).
• Still, the three-month average payroll growth slowed from earlier in the year to 173 k.
• Meanwhile, the unemployment rate inched up to 4.2% (4.1% e / 4.1% p). Average hourly earnings growth remained steady at 0.4% m-o-m (0.3% e / 0.4% p) and 4.0% y-o-y (3.9% e / 4.0% p).

• We met with the management of Dream International (1126 HK) on our trip to Hong Kong and summarize our major takeaways. 
• The Plush Toy segment continues to experience growth driven by Disney revenues, but the Plastic Toys segment continues to be plagued by destocking. 
• Despite a 15% YoY earnings decline on our numbers, the stock trades at 5x FY24 PE with an 11.0% dividend yield and 40% of the market cap in net cash. 

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads: Lifestyle China (2136 HK), Arcadium Lithium (ALTM US), Shanghai Henlius Biotech (2696 HK), ESR Group (1821 HK), Get Nice Financial Group Ltd (1469 HK), Canvest.
• Lowest spreads: Renewable Japan (9522 JP), Macromill, Inc (3978 JP), Fuji Soft Inc (9749 JP), Nec Networks & System Integr (1973 JP), Capitol Health (CAJ AU), Elematec Corp (2715 JP). 

• Mainland share market volumes continue to be better than HK and SOUTHBOUND volumes, but SB volumes rebounded, tech saw limited net buying, BABA was bought but other major tech sold.
• The first leg of China’s retaliatory acts against US trade measures appeared with export bans on gallium, germanium, antimony, graphite products, etc. These will not be lifted soon.
• China is also retaliating against the Phils, Vietnam, Taiwan and changing tack in Europe. The next couple of years threatens to be “interesting times.

• SOUTHBOUND gross trading activity rebounded about 20% this week vs the previous week. Net buying was a little lower but still strong. Market volumes overall in HK remain weak.
• Alibaba Group Holding (9988 HK) was again the top buy and EV names XPeng (9868 HK) and BYD (1211 HK) were bought, but tech as a whole was sold.
• I continue to expect HK-listed tech to see ongoing buying. Alibaba, Tencent, Xiaomi, etc are safe havens against Trump tariffs as they don’t compete in the US. 

• China National Building Material (3323 HK) has launched a conditional share buyback to acquire a maximum of 841.7 million H Shares (18.47% of H Shares) at HK$4.03.
• The share buyback seems designed to enable the CNBM parent company to bypass the creeper rule and squeeze the shorts. 
• The buyback is unattractive and will leave minorities short-changed, weakening a stretched balance sheet. Nevertheless, while potentially tricky, the votes should pass. 

• We view China National Building Material (3323 HK)‘s proposal to buy back 9.98% of H-shares as a good opportunity for the shareholders to cash out in their position.
• Without further significant government stimulus, CNBM will find it difficult to return to the HK$4.03 offer price. Potential weak FY24 results also mean downside risks.
• Other companies with high gearing and low P/B may follow CNBM’s move. We single out the infrastructure construction companies as the likely candidates.

• After Lifestyle China (2136 HK) was suspended pursuant to then Takeovers Code, the takeaway was that Thomas Lau with 74.91% of shares out would table a Scheme.
• Which is exactly what unfolded. What was not expected was a stingy 21.7% premium to last close. 
• The Offer Price has not been declared final. Lifestyle China is trading at 0.11x P/B. This Offer deserves a bump. Otherwise minorities should vote this down.

• Innovent did a good job in 24Q3. The 2024 full-year revenue is estimated to reach above RMB8 billion. Peak sales to reach the level of RMB20 billion is entirely possible.
• It’s a mistake for Innovent to sell a minority stake in Fortvita to Lostrancos. Alhough the Subscription Agreement has been terminated, the confidence in long-term holding this stock has decreased.
• Innovent’s internationalization needs to be based on the parent company as the main body, which is the most suitable and in line with the interests of shareholders/investors/management/employees of the Company.

• Lifestyle China (2136 HK) disclosed a Cayman scheme privatisation offer from Mr Thomas Lau at HK$0.913 per share, a 21.7% premium to the last close price of HK$0.75. 
• The offer is unattractive compared to precedent transactions, peer multiples, and historical trading ranges. It has not been declared final. 
• While no shareholder holds a blocking stake, the high AGM minority participation rates and emerging retail opposition suggest a high chance of a deal break. Therefore, a bump is probable.

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments: Kioxia Holdings (285A JP) IPO, Hulic Co Ltd (3003 JP) and Sanrio (8136 JP) placements.
• Event-Driven developments: ESR Group (1821 HK), HKBN Ltd (1310 HK), Lifestyle China (2136 HK), Seven & I Holdings (3382 JP), De Grey Mining (DEG AU), Sg Fleet (SGF AU). 

• The Medical Insurance Bureau of Hubei Province issued two documents on the VBP of TCM patent medicines.Shineway’s core product Qing Kai Ling is included, which would bring pressure on performance.
• It’s time to be cautious about the outlook for GLP-1s. We may need to be mentally prepared in advance that the actual market size of GLP-1s is only US$100 billion.
• Recent changes at the top of CNPGC have left some investors hopeful that China TCM will resolve horizontal competition as scheduled next year,but current bet on shares reversal isn’t wise.

• I tally 52 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Five new deals this week: De Grey Mining (DEG AU)‘s scrip merger; and cash Offers for ESR (1821 HK), HKBN (1310 HK), Lifestyle China (2136 HK), and Suntec (SUN SP).
• Key updates/news took place on: Latin Resources (LRS AU), Hotel Property Investments (HPI AU), Sg Fleet (SGF AU), Malaysia Airports (MAHB MK), Greatview Aseptic Packaging (468 HK), and MPHB (MPHB MK).

• Last week, the Hang Seng Index (HSI INDEX) gained 2.3% an increase while volatility slightly declined by 0.2%. The volatility surface provides the context for last week’s most popular strategies, 
• Low implied volatility and a flat term structure support long volatility strategies and Calendar Spreads. In a bullish sentiment shift, almost half the strategies reflect a bullish view.
• The largest volume trade, an Iron Condor, is a rare example of a strategy generating premium income. This insight provides both aggregate data analysis and drill-down into individual trade parameters.

• BYD’ deliveries continued to grow strongly by 68% in November.
• BYD required its suppliers to reduce prices by 10% for 2025.
• We believe BYD will continue the price war in 2025.