Daily Briefs

Put trading as a percentage of total volume continues to increase and coupled with a shift in the skew highlights changing sentiment.
Volatile price action this week with Wednesday and Friday both moving ~3.50%.
Implied and historic volatilities were all up on the week and seasonal setup over next two weeks not favorble.

Pentamaster (1665 HK): Pricing WAS Fair As Offer Comfortably Gets Up

Pentamaster International (1665 HK)‘s Scheme overwhelmingly gets up after a wild week of trading.
After touching an intra-day low of HK$0.78/share on the 25th Feb – 28% adrift of the HK$1.00/share terms – shares closed at HK$0.97/share prior the results of the Scheme Meeting.
58.2% of disinterested shareholders opted to vote. Just 0.5% of those shareholders present voted against the Scheme; or just 0.29% of total disinterested shareholders. Not even close.

Hong Kong Single Stock Options Weekly (Feb 24 – 28): Broad Deterioration

Broad based weakness, less than ½ of optionable stocks were up on the week with the average size of losses larger than average size of gains.
Total single stock Put option volume the highest in the past 4 months pushing the Put/Call ratio to a local extreme.
Laggards from the rally holding on, rally leaders broadly weak.

HSI Index Options Weekly (Feb 24-28): Volatility Increases as Rally Reverses

By Research as a Service (RaaS)

HSI down 1.64% on the week but under the hood volatility was percolating with a larger weekly range and 2 daily moves > 3%.
Volatilities rise across the board and shift in the skew favoring Puts.
Trading dynamics between spot and implied vol continue to evolve and seasonal setup over the next two weeks not favourable for HSI.

Airtasker Ltd – Media deals drive positive revenue trends

Airtasker Limited (ASX:ART) is an online marketplace for local services, connecting people and businesses who need work done with people who want to work.
ART’s reported H1 FY25 results are messy, with a number of non-cash items including media capital spend distorting reported numbers.
On an adjusted basis revenue growth was 11%, with Airtasker marketplace growth closer to 15%.

Plover Bay (1523 HK): Brilliant FY24 Results/Growth To Continue

By Sameer Taneja

Plover Bay Technologies (1523 HK) reported FY24 revenues/profits up 23.9%/35.4% YoY. H2 FY24 revenue/profit growth was steady at 20%/20% YoY.
On the conference call, the company did not provide explicit guidance for FY25 but mentioned that growth has been healthy for the six weeks of FY25 and will continue.
Trading at 19x/16.4x FY24/25e (assuming 20% growth and flat margins), with a dividend yield of 5.8% and 10% of the market cap in net cash, the stock is worth exploring.

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Mar 03

Daily Brief Energy/Materials: JX Advanced Metals, Chifeng Jilong Gold Mining, Copper, Iron Ore and more

By Smartkarma Daily Briefs | Daily Briefs, Energy & Materials Sector

In today’s briefing:

JX Advanced Metals IPO Preview
Chifeng Jilong Gold Mining (6693 HK) IPO: H-Share Offering Details & Index Inclusion
Chifeng Jilong A/H Listing: Why Not Own International Peers Instead?
Copper Tracker 3rd March 2025: China TSF And PMI Rebound A Major Boost, All Eyes On the NPC
Iron Ore Tracker (04-Mar-2025): PMI Rebound And China TSF Looking Good, All Eyes On NPC

JX Advanced Metals IPO Preview

By Douglas Kim

JX Advanced Metals (5016 JP) is seeking to raise about ¥460 billion in the upcoming IPO on the Tokyo Stock Exchange. The indicative IPO price is ¥862 per share.
The final IPO pricing will be on 10 March. JX Advanced Metals will be listed on 19 March. Eneos is selling as many as 534.9 million shares in the IPO.
The company has a strong customer base. It is a key supplier to TSMC, Samsung, Intel, SK Hynix, and Micron for sputtering targets and high-purity metals.

Chifeng Jilong Gold Mining (6693 HK) IPO: H-Share Offering Details & Index Inclusion

By Brian Freitas

Chifeng Jilong Gold Mining (600988 CH) has launched an H-share offering that could raise up to US$554m if the offer size adjustment option and overallocation option are both exercised.
The price range of HK$13.72-HK$15.83/share is a discount of 18.7-29.5% to the A-shares and between 17-26% of the offering will be allocated to cornerstone investors.
The small issue size will result in the stock staying out the global indices for the foreseeable future. Inclusion in Southbound Stock Connect will take place in April.

Chifeng Jilong A/H Listing: Why Not Own International Peers Instead?

By Nicholas Tan

Chifeng Jilong Gold Mining (600988 CH) , a gold mining company in China, is now looking to raise up to US$419m in its H-share listing in Hong Kong.
It operates six gold mines in Asia and Africa and has been listed on the Shenzhen Stock Exchange since 2004.
We have covered the company and deal background in our previous notes. In this note, we talk about the IPO pricing.

Copper Tracker 3rd March 2025: China TSF And PMI Rebound A Major Boost, All Eyes On the NPC

By Sameer Taneja

Copper prices remained tepid last week, owing to a weak global market sentiment with Trump’s tariffs. Funds cut their bullish Comex positions as premiums crashed by 40% from the peak.
China’s Manufacturing PMI rose to 50.2 in February, surpassing the expected 49.9, while the record Total Social Financing in January also contributed significantly to this positive outlook.
The NPC 2025, taking place on March 5, will be closely watched for China’s fiscal policy roadmap, which is expected to influence commodity consumption.

Iron Ore Tracker (04-Mar-2025): PMI Rebound And China TSF Looking Good, All Eyes On NPC

By Sameer Taneja

The Trump administration’s announcement of a 60% tariff on Chinese steel imports affected the market sentiment, leading to a 3% decline in iron ore prices last week.
China’s Manufacturing PMI rose to 50.2 in February, surpassing the expected 49.9, while the record Total Social Financing in January also contributed significantly to this positive outlook.
Iron ore prices can remain rangebound (95-110 USD/ton), with the positive demand-side catalysts from China outweighing the long-term supply fears from Rio’s Simandou project.

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Mar 03

Daily Brief Financials: AEON Mall, Japan Post Bank, Nikkei 225 and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

Aeon Mall (8905 JP): Aeon (8267 JP)’s Potential Share Exchange Offer
ECM Weekly (3rd Mar 2025) – Japan Post Bank, JX Advance, Mixue, Chifeng, JSW Cement, Premier, Guzman
Nikkei Index Options Weekly (Feb 24 – 28): The Range Breaks

Aeon Mall (8905 JP): Aeon (8267 JP)’s Potential Share Exchange Offer

AEON Mall (8905 JP) and Aeon Co Ltd (8267 JP) announced a MoU for the potential privatisation of Aeon Mall through a share exchange offer.
The terms of the share exchange are expected to be announced in early April and be implemented in July.
Aeon’s 58.16% shareholding facilitates passing the Aeon Mall shareholder vote. My analysis suggests a potential share exchange (Aeon Mall/Aeon) ratio range of 0.60x-0.69x.

ECM Weekly (3rd Mar 2025) – Japan Post Bank, JX Advance, Mixue, Chifeng, JSW Cement, Premier, Guzman

By Sumeet Singh

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, Mixue Group (2097 HK) looks set to break the tea chain jinx in its listing today, while JX Advanced Metals (5016 JP) will set its pricing.
On the placements front, Japan Post Holdings (6178 JP) was back with a US$4bn+ deal in Japan Post Bank (7182 JP).

Nikkei Index Options Weekly (Feb 24 – 28): The Range Breaks

Sideways range finally breaks giving way to higher 1M implied vols, now above the 75th percentile.
Move lower potentially exacerbated by short gamma positions around the 38,000 strike.
Seasonals not favorable for Nikkei over the next two weeks.

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Mar 03

Daily Brief Industrials: Weichai Power Co Ltd H, Japan Post Holdings, Middleby Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

A/H Premium Tracker (To 28 Feb 2025): AH Premia Continue to Fall; Expect Widening
Weekly Deals Digest (02 Mar) – Japan Post Bank, 7&I, Aeon Delight, Tonami, Mixue, JXAM
Weekly Update (MIDD, SNDK, RHLD, SNRE)

A/H Premium Tracker (To 28 Feb 2025): AH Premia Continue to Fall; Expect Widening

AH Premia continue to fall. Spread curve torsion reverses again with narrow premia trades seeing Hs perform the best.
Warning signs are starting to flash on spreads. This week I have the biggest week of changes recommended that I have ever had. By a long ways.
This week threatens to be a very strange week geopolitically. Being smaller in crowded trades is probably a good thing.

Weekly Deals Digest (02 Mar) – Japan Post Bank, 7&I, Aeon Delight, Tonami, Mixue, JXAM

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: Mixue Group (2097 HK) andJX Advanced Metals (5016 JP) IPOs. Japan Post Bank (7182 JP) placement.
Event-Driven developments: Seven & I Holdings (3382 JP), Aeon Delight (9787 JP), Tonami Holdings (9070 JP), Sg Fleet (SGF AU).

Weekly Update (MIDD, SNDK, RHLD, SNRE)

By Richard Howe

On Monday, Western Digital (WDC) spun off its NAND flash business, Sandisk (SNDK).
On Friday, CompoSecure (CMPO) spun off its management company, Resolute Holdings (RHLD).
During the week, we got earnings from Howard Hughes (HHH) and Sunrise Communications (SNRE).

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Mar 03

Daily Brief Consumer: Alibaba Group Holding , Snt Corp, JD.com , Seven & I Holdings, Mixue Group, TSE Tokyo Price Index TOPIX, MercadoLibre and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

HK Connect SOUTHBOUND Flows (To 28 Feb 2025); Big Volumes, HUGE Net Buys on Blue Chips, Tech-Y Names
Sparx Launches Another Offensively Underpriced Takeover at a Fat Premium – SNT (6319) +94%
Box Trades Explained: How Traders Execute Near Risk-Free Arbitrage in Hong Kong’s Options Market
Merger Arb Mondays (03 Mar) – Seven & I, Makino, Aeon Delight, Tonami, Tam Jai, Vesync, Insignia
MIXUE IPO Trading – Strong Demand, Set to Break the Tea Chain Jinx
The Only Way to Know if a Company Are Improving in Real Terms Is if It Is Creating Value
Weekly News & Views – Feb 28, 2025

HK Connect SOUTHBOUND Flows (To 28 Feb 2025); Big Volumes, HUGE Net Buys on Blue Chips, Tech-Y Names

Gross SOUTHBOUND volumes cleared HK$800bn for the second week in a row. NET buying by SOUTHBOUND was HK$75bn which was perhaps a new record.
Notable again is the HUGE back-and-forth. If HK$865bn traded and SOUTHBOUND “only” bought HK$75bn, HK$395bn was round-tripped for short-term purposes.
Last week I flipped to short Alibaba Group Holding (9988 HK). Sentiment may worsen and there’s lots to sell later this week. Staying short Alibaba for now.

Sparx Launches Another Offensively Underpriced Takeover at a Fat Premium – SNT (6319) +94%

Sparx on Friday announced a Tender Offer at 0.55x book and an EV of less than inventory (<20% of revenue) for Snt Corp (6319 JP) – another metal monozukuri company.
Last year they did it on IJTT Co., Ltd. (7315 JP). That one got bumped. This one could too, but cross-holders own nearly 60%.
This kind of company has skill-sets which may be portable but the product line is tied to old Japan. The takeover

Box Trades Explained: How Traders Execute Near Risk-Free Arbitrage in Hong Kong’s Options Market

By Gaudenz Schneider

Box trades are gaining popularity on the Hong Kong Stock Exchange. These arbitrage strategies exploit price discrepancies in options markets for near risk-free profits.
Long box trades involve simultaneously buying bull call spreads and bear put spreads with identical strikes and expiration dates, creating a fixed payoff regardless of the underlying asset’s price movement.
Box trades require careful execution consideration of spreads, commissions, margins, and fees, with risks primarily in execution and operations rather than market exposure.

Merger Arb Mondays (03 Mar) – Seven & I, Makino, Aeon Delight, Tonami, Tam Jai, Vesync, Insignia

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: Tonami Holdings (9070 JP), Seven & I Holdings (3382 JP), Aeon Delight (9787 JP), Smart Share Global (EM US), Insignia Financial (IFL AU), Tam Jai International (2217 HK).
Lowest spreads: Millennium & Copthorne Hotels Nz (MCK NZ), Shibaura Electronics (6957 JP), Makino Milling Machine Co (6135 JP), Domain Holdings Australia (DHG AU), Proto Corp (4298 JP).

MIXUE IPO Trading – Strong Demand, Set to Break the Tea Chain Jinx

By Sumeet Singh

Mixue Group (2097 HK) raised around US$450m in its Hong Kong IPO.
MIXUE Group (MIXUE) is a freshly-made drinks company providing affordable products to consumers, including freshly-made fruit drinks, tea, ice cream and coffee, typically priced at around one USD per item.
We have covered various aspects of the deal in our previous notes. In this note, we will talk about the trading dynamics.

The Only Way to Know if a Company Are Improving in Real Terms Is if It Is Creating Value

By Aki Matsumoto

In Japan, where there’s strong peer pressure, people are reluctant to do something before someone else does, and tend to follow the trend once the majority of formality is known.
When numbers are specified and rules are established, Japanese companies tend to scramble to match the numbers. Thus, many companies have not voluntarily improved their board practices.
There’re companies that only have good board practices but aren’t generating value .Therefore, we should focus on whether they are doing actions that create value in addition to board practices.

Weekly News & Views – Feb 28, 2025

By Leandro Gubler

Vista Energy – Mercado Libre – Telecom Argentina – Suzano – Cemex
The LatAm Aggregate Index expanded by 14 bps to 331 bps in the week ending Friday, February 28, 2025.
U.S. Treasuries saw significant declines. The 10-year yield fell 22 bps to 4.21%, while the 5-year yield declined 25 bps to 4.02%.

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Mar 02

Daily Brief Quantitative Analysis: A-H Premium Weekly (Feb 28th): Anhui Conch Cement and more

By Smartkarma Daily Briefs | Daily Briefs, Quantitative Analysis

In today’s briefing:

A-H Premium Weekly (Feb 28th): Anhui Conch Cement, China Galaxy Securities, Pharmaron Beijing
HK Short Interest Weekly: BYD, HSTECH ETF, Kingdee Int’L
Hong Kong Connect Flows (Feb 28th): Alibaba, Tencent, Li Auto, Xiaomi, SMIC, CNOOC

A-H Premium Weekly (Feb 28th): Anhui Conch Cement, China Galaxy Securities, Pharmaron Beijing

By Ke Yan, CFA, FRM

We analyse the changes of A-H premium on 150 stocks over the last week. The average A-H premium was 87.7% as of Feb 28th.
The average A-H premium changed by -0.6ppt week-on-week, led by materials, information technology, energy and offset by consumer staples, utilities, financials.
We highlight weekly changes in A-H premium for Anhui Conch Cement, China Galaxy Securities, Pharmaron Beijing, Maanshan Iron & Steel and Air China.

HK Short Interest Weekly: BYD, HSTECH ETF, Kingdee Int’L

By Ke Yan, CFA, FRM

We analyzed the latest HK SFC report for aggregate short position as of Feb 21st.
Top short increases and decreases were tabulated for one week and four week period.
We highlight short changes in BYD, HSTECH ETF and Kingdee Int’L.

Hong Kong Connect Flows (Feb 28th): Alibaba, Tencent, Li Auto, Xiaomi, SMIC, CNOOC

By Ke Yan, CFA, FRM

We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of February 28th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Alibaba, Tencent, Li Auto, Xiaomi, SMIC, CNOOC.

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Mar 02

Daily Brief ESG: The Only Way to Know if a Company Are Improving in Real Terms Is if It Is Creating Value and more

By Smartkarma Daily Briefs | Daily Briefs, ESG

In today’s briefing:

The Only Way to Know if a Company Are Improving in Real Terms Is if It Is Creating Value

The Only Way to Know if a Company Are Improving in Real Terms Is if It Is Creating Value

By Aki Matsumoto

In Japan, where there’s strong peer pressure, people are reluctant to do something before someone else does, and tend to follow the trend once the majority of formality is known.
When numbers are specified and rules are established, Japanese companies tend to scramble to match the numbers. Thus, many companies have not voluntarily improved their board practices.
There’re companies that only have good board practices but aren’t generating value .Therefore, we should focus on whether they are doing actions that create value in addition to board practices.

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Mar 02

Daily Brief Thematic (Sector/Industry): APAC Healthcare Weekly (Mar 2)- Celltrion and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

APAC Healthcare Weekly (Mar 2)- Celltrion, Samsung Biologics, Biocon, Zydus Life, Healthcare Global
Overview #17 – Buckle Up, We’re Not in Kansas Anymore!

APAC Healthcare Weekly (Mar 2)- Celltrion, Samsung Biologics, Biocon, Zydus Life, Healthcare Global

By Tina Banerjee

Celltrion has received European Commission approval for Avtozma (CT-P47), a biosimilar referencing Actemra. Samsung Biologics and Biocon launched their respective Stelara biosimilars in the U.S.
KKR is acquiring up to 54% of equity in Healthcare Global Enterprises for INR445/share. The transaction is expected to close by 3Q25. The acquisition triggers an open offer from KKR.
Zydus Lifesciences is ready to launch India’s first vaccine against new strain of influenza virus (Southern Hemisphere 2025) in the 2025. Glenmark Pharmaceuticals has launched Epinephrine Injection in the U.S.

Overview #17 – Buckle Up, We’re Not in Kansas Anymore!

By Rikki Malik

A review of recent events/data impacting our investment themes or outlook
Is the OpenAI NVIDIA Artificial Intelligence driven bull market over?
The Japanese and Taiwanese stock markets are most at risk

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Mar 02

Daily Brief ECM: Seoul Guarantee Insurance IPO Bookbuilding Results Analysis and more

By Smartkarma Daily Briefs | Daily Briefs, ECM

In today’s briefing:

Seoul Guarantee Insurance IPO Bookbuilding Results Analysis
Ecopro Materials: Seeking 300 Billion Won in Additional Capital Raise

Seoul Guarantee Insurance IPO Bookbuilding Results Analysis

By Douglas Kim

The majority of the investors placed orders at 26,000 won, which is the lower end of the IPO price range (26,000 won to 31,800 won).
SGIC held internal discussions to set the public offering price at 26,000 won. The final price (which is likely to be 26,000 won) will be revealed on 4 March.
Our updated base case valuation of SGIC is base case target price of 28,925 won per share. Given the lack of upside, we have a negative view of this deal.

Ecopro Materials: Seeking 300 Billion Won in Additional Capital Raise

By Douglas Kim

It has been reported in the local media that EcoPro Materials (450080 KS) is seeking about 300 billion won in additional capital which represents about 5% of its market cap.
There could be concerns about dilution associated with this capital raise which could result in share price decline. The company is currently considering on issuing RCPS for this capital raise.
There could be additional concerns about potential dilution associated with this capital raise which could result in further share price decline for Ecopro Materials.

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Mar 02

Daily Brief Event-Driven: Aeon Tender Offer for Aeon Delight (9787) At ¥5 and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Aeon Tender Offer for Aeon Delight (9787) At ¥5,400/Share
Aeon (8267) And Aeon Mall (8905) To Be a Guess The Ratio Trade
Last Week in Event SPACE: Seven & I, Yangzijiang Shipbuilding, Pentamaster Int’l, T’Way Holdings
March Key Events in Asia-Pac: Tariffs, Rates, Earnings, and Indices in Focus
(Mostly) Asia M&A, Feb 2025 Wrap: Domain, Proto, Shibaura, Paragon REIT, Mayne Pharma, PointsBet
Aeon Delight (9787 JP): Aeon’s (8267 JP) JPY5,400 Tender Offer
(Mostly) Asia-Pac M&A: PointsBet, Tonami, CIC/China Galaxy, SG Fleet, Silk Logistics, Jamco, Makino

Aeon Tender Offer for Aeon Delight (9787) At ¥5,400/Share

Bowing before bureaucratic, governmental, societal, and perhaps finally shareholder pressure, Aeon Co Ltd (8267 JP) Friday announced it is rolling up two big subsidiaries.
Aeon Mall will be merged with Aeon in a share exchange and Aeon Delight (9787 JP) will be taken over via slightly long-dated Tender Offer which starts Monday.
This is probably the wrong price, but it isn’t egregiously wrong I expect. And it would be difficult to block. I expect it gets done easily.

Aeon (8267) And Aeon Mall (8905) To Be a Guess The Ratio Trade

On 28-Feb-25, the last day of their fiscal year, Aeon Co Ltd (8267 JP) signed a deal to acquire Aeon Delight via Tender Offer and Aeon Mall via scrip exchange.
For Aeon Mall, that means negotiation on the share exchange ratio over the next 5-6 weeks.
While I have an opinion on the fair ratio (explained below), I find “Guess The Ratio” trades fraught with bad governance outcomes. The 3-month average is often used.

Last Week in Event SPACE: Seven & I, Yangzijiang Shipbuilding, Pentamaster Int’l, T’Way Holdings

7&I (3382 JP)‘s MBO is off. Itochu has apparently not been able to agree with Ito-san on board composition/representation and management control. That the MBO is off isn’t surprising.
Yangzijiang Shipbuilding (YZJSGD SP) is sucking wind as United States Trade Representative’s (USTR) office proposed a raft of fees and other shipping restrictions on Chinese vessels
Pentamaster International (1665 HK)‘s Scheme comfortably gets up after a wild week of trading.

March Key Events in Asia-Pac: Tariffs, Rates, Earnings, and Indices in Focus

By Gaudenz Schneider

Several US tariffs are expected in March, but their implementation remains uncertain and is part of ongoing negotiations.
Central banks in India, Japan, and the US will announce rate decisions in March, with India possibly cutting rates by 0.25%.
Major HK stocks are set to announce earnings in March, and index changes will occur in the S&P 500, Nifty 50, S&P/ASX 200, and HSCEI indices.

(Mostly) Asia M&A, Feb 2025 Wrap: Domain, Proto, Shibaura, Paragon REIT, Mayne Pharma, PointsBet

For the month of February 2025, 14 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$5bn.
The average premium for the new transactions announced (or first discussed) in February was ~55%, with a year-to-date average also of 56%.
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% .

Aeon Delight (9787 JP): Aeon’s (8267 JP) JPY5,400 Tender Offer

Aeon Delight (9787 JP) has recommended a tender offer from Aeon Co Ltd (8267 JP) at JPY5,400 per share, a 15.3% premium to the last close.
Despite the skinny premium, the offer is reasonable compared to historical trading ranges and peer multiples. The offer represents an all-time high.
The offer aligns with the midpoint of the special committee IFA’s DCF valuation range and is marginally below the Board’s requested price. The required minority acceptance rate is attainable.

(Mostly) Asia-Pac M&A: PointsBet, Tonami, CIC/China Galaxy, SG Fleet, Silk Logistics, Jamco, Makino