In today’s briefing:
- ENN Energy (2688 HK): ENN Natural Gas’ Preconditional Cash/Scrip Offer
- Changes to Hang Seng Methodology – Early Doors but $3bn a Side Across Major Indices
- Alibaba (9988 HK): Top Trades – Strategies That Stand Out.
- ENN Energy (2688 HK): Our Initial View on the Privatisation – Valuation and Fundamentals
- Hang Seng Index FAF Calculation Change: Buy The Dip!
- ENN Energy (2688 HK) Privatization: Details & Index Implications
- BYD’s 5-Minute Charge to Global EV Supremacy: Is Tesla Already Left Behind?
- Is PDD the Silent Giant That Could Crush Alibaba? Here’s What the Data Says!
- Shenzhen Intl (152 HK): Delivered as Promised
- China Construction Bank (939 HK/601939 CH) Earnings on 28 Mar: Anticipated Price Move and Strategy
ENN Energy (2688 HK): ENN Natural Gas’ Preconditional Cash/Scrip Offer
- ENN Energy (2688 HK) announced a pre-conditional privatisation from ENN Natural Gas (600803 CH)/ENN-NG comprising HK$24.50 cash per share + 2.9427 ENN-NG H Shares per ENN share.
- The appraised offer value is HK$80.00 (HK$82.35, including the 2024 dividend), which is a tad optimistic. My calculations suggest a realistic offer value range of HK$71.47-76.32.
- The offer is final. The precondition satisfaction is low-risk. A high AGM minority participation is a risk, but the scheme vote should pass as the offer terms are reasonable.
Changes to Hang Seng Methodology – Early Doors but $3bn a Side Across Major Indices
- Janaghan Jeyakumar, CFA put out June rebal predictions on HSCEI, HSTECH, and Hang Seng Internet & Infotech on 17-Mar-25 (and 7 mainland indices 19-21 March) and…
- …the Quiddity team put out its regular predictions of all 7 major HS indices and 11 mainland indices, but on 21-March after the close, the Hang Seng team updated methodology.
- They changed the way float is calculated for Secondary Listings in Hang Seng indices. It affects only a few names, but this adds US$2.7bn of buying to three names.
Alibaba (9988 HK): Top Trades – Strategies That Stand Out.
- This Insight analyses Alibaba Group Holding (9988 HK) multi-leg option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility context are provided.
- These traders tailor structures to risk budgets and take calculated bets. With implied volatility below its median and below realized volatility, all strategies reviewed are long volatility.
- Almost 20% of all strategies are Calendar or Diagonal Spreads. Diagonal spreads can even earn premium in the current volatility environment. A live strategy is examined.
ENN Energy (2688 HK): Our Initial View on the Privatisation – Valuation and Fundamentals
- The proposed privatisation price for ENN Energy (2688 HK) appears reasonable, which is estimated to be 1.73x P/B and 11.5x PER on a 12-month forward basis.
- The valuations are both at a good premium over the average since 2024. ENN Energy is also being put at the top of the sector’s PER range.
- Scheme shareholders will hold new H-shares of ENN Natural Gas (600803 CH), which historically has a more volatile earnings record, but its A-share has been doing well.
Hang Seng Index FAF Calculation Change: Buy The Dip!
- As reported by Travis Lundy , the Hang Seng Index (HSI INDEX) Committee changed the way float is calculated for Secondary Listings in Hang Seng indices.
- This action is expected to add US$2.7bn of buying to some names- read Travis Lundy’s insight for more details on this.
- The HSI INDEX is currently down 3 weeks, and quite OVERSOLD, buying the dip, at this point makes a lot of sense.
ENN Energy (2688 HK) Privatization: Details & Index Implications
- ENN Natural Gas has made a pre-conditional proposal to privatise ENN Energy (2688 HK). For each ENN share, shareholders will receive 2.9427 ENN Natural Gas shares and HK$24.5 in cash.
- The ENN Natural Gas H-shares will be listed on the HKEX. The value received by ENN Energy shareholders depends on ENN Natural Gas stock performance and the H-share discount.
- The ENN Natural Gas (600803 CH) H-shares are likely to replace ENN Energy (2688 HK) in global indices and the Hang Seng Index (HSI INDEX).
BYD’s 5-Minute Charge to Global EV Supremacy: Is Tesla Already Left Behind?
- Chinese EV giant BYD has kicked off 2025 with an aggressive push that’s shaking up the global electric vehicle landscape.
- From launching EVs that can charge in just five minutes to a soaring share price and record sales, BYD is not just catching up with Tesla — it’s pulling ahead on nearly every front.
- In recent weeks, BYD’s stock surged to a record high following the announcement of its ultra-fast-charging Super e-Platform.
Is PDD the Silent Giant That Could Crush Alibaba? Here’s What the Data Says!
- PDD Holdings, Inc. presented its financial results for the fourth quarter and full fiscal year of 2024, showcasing a strategy focused on high-quality development and ecosystem advancement.
- The company reported stable financial performance in the last quarter, closing with a revenue increase to RMB 110.6 billion, a 24% year-over year gain.
- For the entire year, revenues climbed 59% to a total of RMB 393.8 billion, marking a moderation from previous growth rates.
Shenzhen Intl (152 HK): Delivered as Promised
- While Shenzhen International (152 HK)‘s FY24 result is at the low end of the positive profit alert range, its 2H24 net profit has still grown by 22.7%.
- Better outlook at Shenzhen Expressway (548 HK) and margin improvement for logistics hubs will drive FY25. Upside will come from further gains at South China Logistics Park.
- SZI’s valuations of 5.9x PER, 8.4% yield, and 0.5x P/B for FY25F are attractive. As more deals are sealed to realise its asset value, its P/B discount will narrow.
China Construction Bank (939 HK/601939 CH) Earnings on 28 Mar: Anticipated Price Move and Strategy
- China Construction Bank H (939 HK) / China Construction Bank (601939 CH) is scheduled to report its annual 2024 financial results on 28 March 2025, 17:00-18:15, Beijing time.
- Expected Price Movement: Option implied movement and historically recorded movement both indicate muted price action after earnings.
- Dividend Outlook: CCB has switched to semi-annual dividends, with current yields at 6.4% for H shares and 4.7% for A shares. The bank has a history of dividend increases.
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