ChinaDaily Briefs

China: Cloud Village, Tencent, Cp Pokphand, JS Global Lifestyle, So-Young, Xiaomi Corp, Asymchem Laboratories, ByteDance and more

In today’s briefing:

  • Cloud Village (NetEase Music) IPO – Cornered Deal but Offers Limited Upside
  • Riot Games – Arcane Topples Squid Game and Wave’s Virtual Justin Bieber
  • C.P. Pokphand (43 HK): Scheme Doc Out. Meeting on 15 December
  • JS Global Lifestyle (JS 环球生活) Placement – More Selling to Come
  • Cloud Village (NetEase Music) IPO: Valuation Insights
  • So-Young’s Low-Balled Proposal
  • Xiaomi (1810 HK): 3Q21, Stagnant Smartphone Sales
  • Asymchem Laboratories H Share Listing: On-Demand Science
  • Cloud Village IPO: Peer Comparison and Valuation
  • A Late Starter, ByteDance Begins to Accelerate Its Effort in Healthcare

Cloud Village (NetEase Music) IPO – Cornered Deal but Offers Limited Upside

By Sumeet Singh

  • Cloud Village Inc. (CVI), also known as NetEase Music, plans to raise around US$450m in its Hong Kong IPO.
  • The company has also obtained investments from Baidu and Alibaba, along with other investors.
  • In this note, we will run the deal through our ECM framework and talk about valuations.

Riot Games – Arcane Topples Squid Game and Wave’s Virtual Justin Bieber

By Mio Kato

  • Riot has been busy this month as its animated series Arcane based on League of Legends dethroned Squid Game’s long reign on Netflix.
  • It also assisted Wave in noticeably improving its virtual concerts, this time featuring Justin Bieber.
  • Thus, Riot could be Tencent’s best metaverse asset, but is it enough?

C.P. Pokphand (43 HK): Scheme Doc Out. Meeting on 15 December

By David Blennerhassett

  • The Scheme Document for Cp Pokphand (43 HK) (CPP) has been dispatched. The Scheme Meeting will take place on the 15 December. 
  • CP FOODS (CPF TB) and Itochu Corp (8001 JP) with 49.74% and 25% of shares out respectively are offering HK$1.15/share for CPP, a leading agri-food conglomerate in China and Vietnam. 
  • The Independent Financial Adviser (Ballas Capital) considers the Scheme to be fair and reasonable. Assuming the Scheme gets up, payment is the 25 January, on or before.

JS Global Lifestyle (JS 环球生活) Placement – More Selling to Come

By Zhen Zhou, Toh

  • CM Kinder Education II is looking to sell 75.5m shares of JS Global Lifestyle (1691 HK) for US$151m. 
  • Post share-sale, the shareholder will still have about 4.3% stake left. Remaining shares represent 17 days ADV.
  • CDH’s shares with CM Kinder’s remaining shareholding represents 42 days ADV. Overhang will put pressure on share price in the near-term.

Cloud Village (NetEase Music) IPO: Valuation Insights

By Arun George


So-Young’s Low-Balled Proposal

By David Blennerhassett

  • So-Young (SY US) has announced a preliminary non-binding proposal from its chairman, Xing Jin, of $5.30/ADS – a 22.7% premium to last close. 
  • Xing Jin controls 83.9% of the voting power. If a firm Offer unfolds, which should involve a long-form merger, this is effectively done. 
  • The pressure on Chinese stocks in the US to go private or change listing venue by 2024 is still on.

Xiaomi (1810 HK): 3Q21, Stagnant Smartphone Sales

By Ming Lu

  • Smartphone revenue stopped growing in 3Q21 and we believe the situation will continue in 2022.
  • We believe the margin is not a concern, as the company close its sales in rural area.
  • We believe the stock has a downside of 30% for the end of 2022.

Asymchem Laboratories H Share Listing: On-Demand Science

By Arun George

  • Asymchem Laboratories (002821 CH) is a global contract development manufacturing organisation (CDMO). Asymchem is pre-marketing an H Share listing to raise $1.5 billion, according to press reports.
  • Asymchem has delivered strong growth and margin progression (on a constant currency basis) over the track record period.
  • The forward indicators suggest that the near-term prospects remain solid. Overall, we think that Asymchem has robust fundamentals.  

Cloud Village IPO: Peer Comparison and Valuation

By Shifara Samsudeen, ACMA, CGMA

  • Cloud Village (CLV HK) has announced the terms for its IPO where it plans to issue 16m shares at an indicative IPO price range of HK$190-220 per share.
  • At the midpoint of HK$205 per share, the company will raise net proceeds of HK$3.1bn (approx. US$406m) at a market capitalisation of HK$42.6bn and post-money EV of HK$34.5bn
  • Cornerstone investors have agreed to subscribe for approx. US$350m worth of IPO shares which accounts for about 83.15% of the total no. of shares offered at the IPO (excl. over-allotment).

A Late Starter, ByteDance Begins to Accelerate Its Effort in Healthcare

By Immanuel Nama

  • ByteDance’s ambition in healthcare – According to EqualOcean data, ByteDance has invested in 56 companies in 2021 only
  • Expanding in adjacent fields – It is generally easier to invest in areas that are more compatible with a company’s core businesses.
  • Still, a long way to go – Online healthcare is a domain full of risks. 

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