ChinaDaily Briefs

China: Beijing Digital Telecom, Perfect Shape Medical, Razer Inc, Fuyao Glass Industry Group, iShares Barclays USD Asia High Yield Bond Index ETF and more

In today’s briefing:

  • Beijing Digital (6188 HK): Offer Now Open. IFA Says Fair
  • Recent Updates: Perfect Shape, Hermes Int’l, A2 Milk
  • Razer: Play On
  • Fuyao Glass Placement – Expected Deal but Expensive Valuation
  • Macro; Rating Changes; New Issues; Talking Heads; Top Gainers & Losers

Beijing Digital (6188 HK): Offer Now Open. IFA Says Fair

By David Blennerhassett

On the 1 February, Zhuhai Huafa, wholly-owned by Zhuhai SASAC, entered into a share purchase agreement (SPA) to acquire domestic shares in mobile device manufacturer Beijing Digital Telecom (6188 HK) from Di Er Tong and Digital Science & Technology, collectively the controlling shareholders of Beijing Digital. The SPA, which encompassed 37.99% of shares out, was completed. on the 7 April, and a mandatory general offer (MGO) was triggered with an Offer price of HK$3.8429 per H-Share.

The Composite Document has now been despatched and the Offer is open for acceptances. The IFA says fair and reasonable. The MGO has a 50% tendering condition – attached to ALL voting rights of Beijing Capital.

The first close is the 21 May. Trading wide to terms.  The question is whether this Offer will turn unconditional.

As always, more below the fold. 

Recent Updates: Perfect Shape, Hermes Int’l, A2 Milk

By Steven Chen

  • Perfect Shape: founder consistently increased his stake; management appears confident in expansion initiatives;
  • Hermes International: APAC has been gaining greater significance, as expected;
  • A2 Milk: more than half of the company is functioning brilliantly for shareholders; I presume a short-term glitch for the remaining.

Razer: Play On

By Arun George

Razer Inc (1337 HK) designs and builds a gamer-focused ecosystem of hardware, software, and services. It offers gaming peripherals and hardware, as well as virtual game payments (Razer Gold) and offline-to-online digital payment networks (Razer Fintech). 

Overall, we think the 2020 results underscored Razer’s transformation into a company that under-promises and over-delivers. The 2020 results delivered a consensus revenue and profit beat along with strong cash generation and a chunky net cash position. Looking ahead, we think that consensus remains cautious. An attractive valuation and ongoing share buyback programme lend support to the share price. Overall, we think that the shares are worth a closer look. 

Fuyao Glass Placement – Expected Deal but Expensive Valuation

By Zhen Zhou, Toh

Fuyao Glass Industry Group (3606 HK) is looking to raise about US$559m in its primary placement.

In this note, we will share our thoughts on deal dynamics, its valuation relative to peers and historical average, and discuss the scores on our ECM framework. 

Macro; Rating Changes; New Issues; Talking Heads; Top Gainers & Losers

By BondEvalue

S&P climbed 0.7% and Nasdaq was 0.2% higher. Macro data came in positive with US GDP printing a 6.4% annualized increase in 1Q2021, beating forecasts of a 6.1% rise. Initial jobless claims for the prior week fell by 13k to 553k. US 10Y Treasury yields pushed higher to 1.65%. European equities were more subdued with the FTSE and CAC almost flat while DAX fell 0.9%. Turkey’s  Central Bank raised its inflation forecast for this year with the new governor Sahap Kavciglou saying that the inflation outlook  would require him to keep policy rates above the “actual and expected rate of inflation” to maintain a strong, disinflationary impact. The central bank expects April CPI to come in at 12.2% YoY as compared to earlier forecasts of 9.4%. The Lira rallied 0.7% on the report. US IG CDS spreads were 0.8bp tighter and HY tightened 3.6bp. EU main CDS spreads were 0.5bp tighter and crossover spreads tightened 2.3bp. Asian equity markets are trading lower by 0.3% today and Asia ex-Japan CDS spreads were 1.1bp tighter.

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