In today’s briefing:
- (Mostly) Asia-Pac M&A: Evergrande Property Services, Mandom, Digital Hold., Topcon, Furukawa Battery
- Hong Kong Single Stock Options Weekly (Sept 08 – 12): Alibaba Surge Helps Push HSI to Four-Year High
- Overview #34 – China Rocks On: Bull Market Rules
- Shengjing Bank (2066 HK): Revised and Final Offer Remains Light
- New Oriental Education Power Shift: How Will Non-Academic Tutoring Redefine Growth?
- China Healthcare Weekly (Sep.14) – Trump to Put Restrictions on Chinese Drugs, Sihuan Is Undervalued
(Mostly) Asia-Pac M&A: Evergrande Property Services, Mandom, Digital Hold., Topcon, Furukawa Battery
- I tally 43 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma.
- Two new deals were discussed on Smartkarma this week: Mandom Corp (4917 JP) and Digital Holdings (2389 JP). Also, Evergrande Property Services (6666 HK) suspended pursuant to the Takeovers Code.
- Key updates/news took place on PointsBet Holdings (PBH AU), Jilin Jiutai Rural Comm Bank (6122 HK), Topcon Corp (7732 JP), and Furukawa Battery (6937 JP).
Hong Kong Single Stock Options Weekly (Sept 08 – 12): Alibaba Surge Helps Push HSI to Four-Year High
- HSI broke out to fresh four-year highs, driven by Alibaba’s surge, with broad-based gains and rising single stock option activity.
- Market breadth strengthened across both price action and single stock options flows.
- Spot-Up/Vol-Up dynamics defined the week, as sectors with strong gains also posted the largest implied vol increases.
Overview #34 – China Rocks On: Bull Market Rules
- A review of recent events/data impacting our investment themes and outlook
- Change of mindset needed for HK/China as the bull markets broadens out
- Signs of excess are rife in many global markets, but no top yet signalled.
Shengjing Bank (2066 HK): Revised and Final Offer Remains Light
- Shenyang SASAC increased its Shengjing Bank Co Ltd H (2066 HK) offer by 21.2% from HK$1.32 to HK$1.60 per H Share, a 40.4% premium to the undisturbed price.
- The revised offer has been declared final. The revised terms signal that at least one of the substantial H shareholders would not accept the previous offer.
- While the revised terms should ensure the support of key shareholders, the terms remain light. Therefore, there remains a risk around the 90% minimum acceptance condition.
New Oriental Education Power Shift: How Will Non-Academic Tutoring Redefine Growth?
- New Oriental Education & Technology Group Ltd reported a strong performance in the fourth quarter of its fiscal year 2025, highlighting both positive advancements and some challenges that may impact their future outlook.
- The company announced an 18.7% year-over-year revenue increase, excluding contributions from its East Buy segment, primarily driven by the expansion of new business ventures.
- These ventures include overseas test preparation, which grew by 15%, and adult and university student services, expanding by 17%.
China Healthcare Weekly (Sep.14) – Trump to Put Restrictions on Chinese Drugs, Sihuan Is Undervalued
- The Trump administration is considering putting “severe restrictions” on the drugs from China, which would negative for China biotech that mainly relies on licensing-out model. We share our views below.
- The key to assessing the future profitability of innovative drugs in China lies in their ability to control costs, not just in the growth of product sales.
- Sihuan achieved a turnaround and is undervalued. Just “medical aesthetics + cash” worth RMB15.3 billion valuation. The innovative drug business will provide decent upside potential, but with some concerns behind.
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