In today’s briefing:
- Yashili (1230 HK)’s Pre-Conditional Offer From Mengniu
- Index Rebalance & ETF Flow Recap: KOSPI200, KQ150, CSI300, STAR50, SET50, China A50, HSCI, SenseTime
- Yashili’s HK$1.20 Privatisation Offer from Mengniu
- JCET (600584.CH): 2022 Outlook Should Be Better than Fear
- Yunkang Group IPO – Futile to Try and Gauge Its Post-COVID Performance
Yashili (1230 HK)’s Pre-Conditional Offer From Mengniu
- Yashili International Holdings (1230 HK) has announced a pre-conditional Offer, by way of a Scheme, from China Mengniu Dairy Co (2319 HK).
- The cancellation price of HK$1.20/share, a 31.9% premium to last close, and a 161% premium to the undisturbed price, is in line with the 16 March announcement.
- Conditions involve various business disposals and the exit of Danone SA (BN FP)‘s stake in Yashili; yet apart from timing, which is contingent on regulatory approvals, this looks done.
Index Rebalance & ETF Flow Recap: KOSPI200, KQ150, CSI300, STAR50, SET50, China A50, HSCI, SenseTime
- The review cutoff for the FTSE All-World/All-Cap June QIR is 11 May. The changes to the MSCI indices for the May SAIR will be announced on 13 May Asia time.
- The review period for the KOSPI2 INDEX, KOSDAQ 150 Index, Shanghai Shenzhen CSI 300 Index, STAR50 INDEX and the SENSEX INDEX ended last week and there are changes.
- ETF inflows were larger than outflows for nearly all Asian markets. The largest inflows were in the Hang Seng H Share Index ETF (2828) and Vanguard Aust Shares Etf (VAS).
Yashili’s HK$1.20 Privatisation Offer from Mengniu
- Danone SA (BN FP) will sell to China Mengniu Dairy Co (2319 HK) its 25% Yashili stake for HK$1.20 per share. Post-completion, Mengniu will launch a privatisation offer at HK$1.20.
- The privatisation is subject to several pre-conditions, which carry low risk in our view. The key conditions are the headcount test and rejections by <10% of all disinterested shareholders.
- The offer for Yashili International Holdings (1230 HK) is attractive. At the last close, the gross spread to the offer is 30.4%. Buy up to HK$1.09 (implies an 85% deal probability).
JCET (600584.CH): 2022 Outlook Should Be Better than Fear
- JCET reported revenue/GM RMB$8,138mn/10.7% in 1Q22, which grew 21.2% YoY and 0.5% QoQ.
- We expect that its growth would continue and likely reach to revenue/GM for about RMB$8,234.5mn/10.8% in 2Q22.
- Although the mainland China insists in the Zero Policy against COVID-19, the GDP growth was targeting at ~5.5% in 2022.
Yunkang Group IPO – Futile to Try and Gauge Its Post-COVID Performance
- Yunkang Group (2325 HK) is looking to raise US$139m in its Hong Kong IPO.
- Yunkang Group has grown its on-site diagnostics centers and has grand plans to add new centers with the IPO proceeds.
- However, its business performance had been largely impacted by COVID, where COVID-related tests amounted to 83.6% of total tests performed in FY21, while contributing 58.1% to total revenue.
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