In today’s briefing:
- Alibaba Health Placement – Delta Placement for EB, but Track Record Isn’t Great
- Fengxiang (9977 HK): Precondition Satisfied
- Geekplus Technology IPO (2590 HK): Valuation Insights
- Leads Biolabs (维立志生物) Pre-IPO: Valuation
- Anjoy Foods Group A/H Trading – Cheap Price but Sluggish Demand
- Boxihe Outdoor Sports Pre-IPO – Scaling Fast in China’s Outdoor Boom
- Jilin Jiutai RCB (6122 HK): A Conditional VGO Puts Minorities Between a Rock and a Hard Place
- China and Japan Breaking Out — Buy; Bullish Outlook Intact; U.S. Dollar (DXY) Remains Weak
- China Travel Intl Inv (308 HK): What’s UP?
- Eacon Group Co., Ltd Pre-IPO Tearsheet
Alibaba Health Placement – Delta Placement for EB, but Track Record Isn’t Great
- Banks are offering US$500m of Alibaba Health Information Tec (241 HK) stock in order to allow Exchangeable Bond investors to hedge their exposure.
- Alibaba Health (AH) stock has been heading in the wrong direction for the past few years and it remains unclear if the EB offering was well flagged.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Fengxiang (9977 HK): Precondition Satisfied
- The precondition for the PAG privatisation offer for Shandong Fengxiang (9977 HK) is satisfied. The composite document will be despatched by 11 July.
- Despite being a 39.9% discount to the IPO price, the offer is attractive compared to precedent transactions and peer multiples.
- The scheme vote remains low-risk due to the irrevocables, the lack of protest votes at the recent AGM, and the signalling from PAG’s decision not to introduce a scrip offer.
Geekplus Technology IPO (2590 HK): Valuation Insights
- Geekplus Technology (2590 HK) is a leader in the global autonomous mobile robot (AMR) market. It is seeking to raise US$300 million.
- I discussed the investment case in Geekplus Technology IPO (2590 HK): The Investment Case.
- In this note, I present my forecasts and valuation. My analysis suggests that the IPO price is unattractive.
Leads Biolabs (维立志生物) Pre-IPO: Valuation
- Leads Biolabs, a China-based clinical-stage biotech, is looking to raise at least USD 100 million via a Hong Kong listing. The joint book runners are MS and CITIC.
- In our previous insight, we looked at the company’s core products and its management team, as well as investor backing, as well as PHIP updates.
- In this note we will provide an rNPV-based valuation for the company.
Anjoy Foods Group A/H Trading – Cheap Price but Sluggish Demand
- Anjoy Foods Group (2648 HK), a quick-frozen food company in China, raised around US$350m in its H-share listing.
- AFG was the largest quick-frozen food company in China in terms of revenue in 2023, with a market share of 6.2%, according to the Frost & Sullivan report.
- We have looked at the past performance and likely A/H premium in our previous note. In this note, we talk about the trading dynamics.
Boxihe Outdoor Sports Pre-IPO – Scaling Fast in China’s Outdoor Boom
- Boxihe Outdoor Sports (BOS) is looking to raise at least US$100m in its upcoming Hong Kong IPO.
- BOS has delivered impressive growth, with a 122% revenue CAGR (FY22–24) led by its core Pelliot brand.
- Its shift from a pure online DTC model to include offline and distributor channels has broadened reach, while improving gross margins reflect strong pricing and cost control.
Jilin Jiutai RCB (6122 HK): A Conditional VGO Puts Minorities Between a Rock and a Hard Place
- Jilin Jiutai Rural Comm Bank (6122 HK) has disclosed a voluntary conditional offer and delisting proposal by Jilin Province at HK$0.70 per H Share, a 70.7% premium to the undisturbed price.
- The key conditions are H Shareholder approval of the delisting proposal and a minimum acceptance condition (50% of outstanding and 90% of H shares).
- Minorities are caught between a rock and a hard place, as the offer is unattractive, but the timeline for lifting the trading suspension is uncertain.
China and Japan Breaking Out — Buy; Bullish Outlook Intact; U.S. Dollar (DXY) Remains Weak
- We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass).
- We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 5700-5785 and $119-$121.
- $125-$126 and $123-$123.50 are short-term supports to watch on ACWI-US; we will maintain our near-term bullish outlook as long as $123 support holds.
China Travel Intl Inv (308 HK): What’s UP?
- China Travel International Investment Hong Kong (308 HK)‘s 1-week share price rally was driven by restructuring speculations. Yet, underlying operations have improved in 2H24.
- Tourist attractions and hotel operations will stay decent in FY25, and more projects will come on stream to fuel profitability.
- Asset-Based valuation should be the focus, and its 0.49x P/B is inexpensive. Net cash now equals 8.2% of the share price.
Eacon Group Co., Ltd Pre-IPO Tearsheet
- Eacon Group Co., Ltd (EG) is looking to raise about US$100m in its upcoming Hong Kong IPO. The deal will be run by Haitong.
- EG ranks first among all L4 autonomous driving companies globally by revenue in 2024, as per Frost & Sullivan.
- EG had 11 end-customer groups. Its technology has been deployed across 24 mining sites of leading mining groups like CHN Energy, SPIC, TBEA, Zijin Mining, Shougang Group, and Baowu Group.
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