ChinaDaily Briefs

China: Haidilao, China Machinery Engineering, Xpeng Motors, 361 Degrees International and more

In today’s briefing:

  • Haidilao (海底捞) Placement – Founders Back to Sell More
  • China Machinery Engineering (1829 HK): Possible Offer
  • Xpeng: The Next Xiaomi?
  • Asia HY Monthly – 2020 In Review And 2021 Outlook – Lucror Analytics

China Machinery Engineering (1829 HK): Possible Offer

By David Blennerhassett

China Machinery Engineering (1829 HK)‘s (CMEC) shares were suspended ahead of trading this morning  “pursuant to The Codes on Takeovers and Mergers which constitute inside information of the Company“.

CMEC is incorporated in the PRC, and as such, there are no rights to compulsorily acquire shares or to require an Offeror do so. The only mechanism available to privatise is via Merger by Absorption, incorporating a Scheme-like vote (≥ 75% for, ≤10% against) for the H shares. Such an Offer may or may not require an additional tendering acceptance condition.

CMEC’s ultimate controlling shareholder is state-owned Chinese National Machinery Industry Corporation, also known as SINOMACH, which holds 77.99% of shares out, via CMEC’s domestic shares. SINOMACH holds no H shares. 

CMEC is up 56.4% since the 29 December, on larger-than-average volume.

Funny that.

The most interesting facet attached to CMEC is that it has (adjusted) net cash of HK$8.8bn as at 30 June 2020, compared to market cap of HK$10.5bn.  Should a firm offer unfold, it is doubtful it will fully reflect the underlying business in addition to that cash pile.

More below the fold.

Xpeng: The Next Xiaomi?

By Victoria Li

If Tesla (TSLA US) is the Apple(AAPL US) of EV sector, Xpeng might be the Xiaomi(XIACY US), in our view. In the short term (before the launch of P5 ), lower prices of new Made in China Tesla Model 3 might have negative impact on P7 sales; but increasing client interest on Tesla would benefit Xpeng P7. On a 10 year view, Xpeng would be the winner among existing Top three Chinese emerging EV brands, by being a follower of Tesla (focusing on making EVs ‘smart’)

Xpeng might turn profitable in 2022 with increasing awareness and acceptance by the customers, launch of P5 and first B-segment SUV.

Reiterate BUY with 12M target price of US$71.

Asia HY Monthly – 2020 In Review And 2021 Outlook – Lucror Analytics

By Charles Macgregor

This month, we review the developments of 2020, an extraordinary year from an investor’s perspective, and give our outlook for the year ahead. 

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market. 

Before it’s here, it’s on Smartkarma