In today’s briefing:
- Canvest (1381 HK): Regulatory Precondition Satisfied
- MIXUE Pre-IPO – Updated Peer Comparison – Bigger, Faster, Stronger
- Quiddity Leaderboard CSI Medical Jun25: One Change to Expectations; Adjustment to the Trade
- Tam Jai International (2217 HK) Privatization – The Offer Price Is Good
- China Education Group (839 HK): A Large Disappointment
- Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – February 2025
- MIXUE Pre-IPO – Updated Thoughts on Valuation
- Beijing Geekplus Pre-IPO: Losses Narrowing but Revenue Concentration Is High
- Canvest (1381 HK): SAFE In The Bag, But Oddly, Still Not Free From Pre-Cons
- Pre-IPO MIXUE Group (PHIP Updates) – Some Points Worth the Attention
Canvest (1381 HK): Regulatory Precondition Satisfied
- The regulatory precondition concerning Canvest Environmental Protection Group (1381 HK)’s privatisation offer from Grandblue Environment Co A (600323 CH) has been satisfied.
- The sole remaining precondition concerns resolving loan guarantee issues. Canvest is taking steps to resolve these issues, and satisfying this precondition is low-risk.
- Despite peers’ re-rating, the offer remains attractive, and the vote is low-risk. At the last close, the gross/annualised spread was 4.5%/15.0% for a mid-June payment.
MIXUE Pre-IPO – Updated Peer Comparison – Bigger, Faster, Stronger
- MIXUE Group Mixue Group is now looking to raise around US$500m in its upcoming Hong Kong IPO.
- MIXUE Group (MIXUE) is a freshly-made drinks company providing affordable products to consumers, including freshly-made fruit drinks, tea, ice cream and coffee, typically priced at around one USD per item.
- In our earlier notes, we have looked at the past performance, undertaken a peer comparison and spoken about valuations. In this note, we refresh the peer comparison.
Quiddity Leaderboard CSI Medical Jun25: One Change to Expectations; Adjustment to the Trade
- CSI Medical Service represents the top 50 largest and most-liquid stocks involved in medical devices, medical care, medical informatization, and other medical theme from the Shanghai, Shenzhen and Beijing Exchanges.
- In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in June 2025.
- We expect up to three ADDs and three DELs for the CSI Medical Service index during this index review event based on the latest available data.
Tam Jai International (2217 HK) Privatization – The Offer Price Is Good
- Tam Jai’s performance in recent years has been consistently below expectations. Its fundamentals have undergone negative changes after IPO. Consumers’ preference change may disrupt Tam Jai’s business model.
- Based on our forecast and the Cancellation Price of HK$1.58/share, P/E will be higher than the industry average. Considering the low trading liquidity and concerns on outlook, HK$1.58/share is acceptable.
- The fundamentals/prospects of Tam Jai are different from the situation of Henlius’ privatization.We recommend investors not reject the privatization easily because internationalization won’t bring significant positive changes in short term.
China Education Group (839 HK): A Large Disappointment
- China Education Group (839 HK)‘s plunge in share price is due to management’s guidance for a 10-15% drop in adjusted net profit, significantly lower than the current consensus.
- Its decision to pause dividends for the foreseeable future on debt repayment burden and tight offshore refinancing environment for the sector has further disappointed the market.
- Based on guidance, its PER of 3.7x and nil dividend yield for FY25 make it unattractive relative to peers (1.7-2.9x PER). We shy away until things improve.
Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – February 2025
- We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
- Our top picks are Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
- We provide updates on Taste Gourmet (8371 HK) / Perfect Medical Health (1830 HK) ,the Philippine Stock Exchange (PSE PM), and Sai Gon Cargo Service (SCS VN) .
MIXUE Pre-IPO – Updated Thoughts on Valuation
- Mixue Group (MIX HK) is now looking to raise around US$500m in its upcoming Hong Kong IPO.
- MIXUE Group (MIXUE) is a freshly-made drinks company providing affordable products to consumers, including freshly-made fruit drinks, tea, ice cream and coffee, typically priced at around one USD per item.
- In our earlier notes, we have looked at the past performance, undertaken a peer comparison and spoken about valuations. In this note, we refresh our valuation.
Beijing Geekplus Pre-IPO: Losses Narrowing but Revenue Concentration Is High
- Geek+ (1678559D CH) is looking to raise up to US$200m in its upcoming Hong Kong IPO.
- It is a leader in the global autonomous mobile robots (AMR) market, offering a series of AMR solutions to empower warehouse fulfillment and industrial material transport.
- In this note, we look at the firm’s past performance.
Canvest (1381 HK): SAFE In The Bag, But Oddly, Still Not Free From Pre-Cons
- After Canvest Environmental Protection Group (1381 HK) announced on the 23rd Jan it had secured Mofcom approval, after securing NDRC earlier that month, that left SAFE. Or so I thought.
- SAFE has now been secured, yet two pre-cons concerning certain (internal) guarantees remain outstanding. It’s rare to see SAFE sign off with other pre-cons still hanging.
- The consolation here is that KM Lai (ED, DC) and Loretta Lee (ED, CL) are on the hook for a chunk of change if they cause the proposal to lapse.
Pre-IPO MIXUE Group (PHIP Updates) – Some Points Worth the Attention
- MIXUE’s supply chain advantages and economies of scale remain ahead of peers. This creates a unique barrier. When peers engage in price wars, MIXUE can still gain greater cost advantages.
- MIXUE’s performance growth depends significantly on its ability to expand franchised store network. But MIXUE may have reached the growth ceiling in China market based on its current expansion speed.
- The market prefers the franchise models. Despite declining growth rate in the whole industry, MIXUE’s valuation should still be higher than peers – e.g. P/E of 17-20x is comfortable range.
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