In today’s briefing:
- ENN Energy (2688 HK): This Is An Avoid
- Dream International (1126 HK) FY24 Results and Concall Update: Margins Bounce Back
- HKBN (1310 HK): I Squared Inches Closer to a Competing Offer
- Duality Biotherapeutics (映恩生物) Pre-IPO: Valuation and the Trap
- Dada Nexus (DADA US): JD.Com’s US$2/ADS Firm Offer
- Xiamen Hithium Energy Storage Technology Pre-IPO Tearsheet
- Chagee Holdings IPO Preview
- Lucror Analytics – Morning Views Asia
- Asia Real Estate Tracker (03-Apr-2025): Warburg Pincus buys Tokyo office in life sciences JV.
ENN Energy (2688 HK): This Is An Avoid
- Back on the 26th March, ENN Energy (2688 HK) announced a cash/scrip Offer from ENN Natural Gas (600803 CH), its largest shareholder.
- Investors hoping for a clean (er) exit, or one where the back-end terms were clearly defined, will be disappointed. And minorities are active in this name.
- The Offer pivots on where the newly-listed H-shares trade. The IFA’s assessment on the theoretical value of these H-shares is unrealistic.
Dream International (1126 HK) FY24 Results and Concall Update: Margins Bounce Back
- Dream International (1126 HK) posted strong results, with revenues up 2% and profits down 11% YoY, demonstrating effective cost control in a challenging competitive environment.
- Net cash on the balance sheet ended at 1.52 bn HKD (vs 1.35 bn), representing 33% of market capitalization. The company rewarded shareholders with 60 cents of dividend (~8.9% yield).
- Trading at 6x/3x PE/EV-EBITDA FY24, with an 8.9% dividend yield and an average 10-year ROCE of 20%, the stock is worth exploring from here.
HKBN (1310 HK): I Squared Inches Closer to a Competing Offer
- Today’s HKBN Ltd (1310 HK) monthly update notes that I Squared has completed due diligence and is finalising the terms of a possible preconditional offer.
- The I Squared bid will likely be a modest premium to the China Mobile offer with a 50% minimum tendering condition. The key unknown is securing regulatory approvals.
- China Mobile (941 HK) will first react to an I Squared offer by maintaining terms. However, regardless of whether I Squared secures regulatory approvals, it is likely to match terms.
Duality Biotherapeutics (映恩生物) Pre-IPO: Valuation and the Trap
- Duality Biotherapeutics, a China-based clinical-stage biotechnology company, plans to raise up to US$250m via a Hong Kong listing.
- We look at the company’s valuation based on its core products, namely DB-1303, DB-1311, and DB-1305.
- We highlight key differences between our valuation and the broker valuation guidance.
Dada Nexus (DADA US): JD.Com’s US$2/ADS Firm Offer
- Back on the 27th January, Dada Nexus (DADA US), a Chinese on-demand retail and delivery platform, announced a preliminary non-binding proposal from JD.com (9618 HK).
- JD.com, a 63.2% shareholder, was offering US$0.50/share (US$2.00/ADS), a 42% premium to last close. Those terms are now firm and a definitive agreement entered into.
- The merger is expected to close in the third quarter. Trading at 4.7%/15%, gross/annualised spread, assuming a four month off-ramp.
Xiamen Hithium Energy Storage Technology Pre-IPO Tearsheet
- Xiamen Hithium Energy Storage Technology (XH) is looking to raise up to US$500m in its upcoming Hong Kong IPO. The deal will be run by Huatai, Citic, ABC, and BOC.
- XH is a leading pure-play global energy storage company, it’s ranked third in the global energy storage market in 2024, in terms of lithium-ion ESS battery shipments, as per CIC.
- With its integrated value chain and mainly in-house manufacturing, XH offers end-to-end energy storage solutions across various application scenarios, mainly collaborate with third-party system integrators in their main market, China.
Chagee Holdings IPO Preview
- Chagee Holdings (CHA US) is getting ready to complete its IPO on NASDAQ in the next several weeks. Chagee is one of the largest premium tea chains in China.
- The company’s sales and profits have been exploding higher in the past three years. Its sales jumped from 0.5 billion RMB in 2022 to 12.4 billion RMB in 2024.
- Chagee could raise more than $500 million in this IPO. However, this is subject to change.
Lucror Analytics – Morning Views Asia
- US President Donald Trump has announced a minimum 10% tariff on all exporters to the US, as well as additional reciprocal duties on c. 60 nations.
- Vietnam faces one of the steepest tariff increases at 46%, while China will be subject to an additional tariff hike of 34% (on top of an existing 20% duty tied to fentanyl trafficking).
- Meanwhile, India, South Korea and Japan have been hit with tariffs of 26%, 25% and 24%, respectively.
Asia Real Estate Tracker (03-Apr-2025): Warburg Pincus buys Tokyo office in life sciences JV.
- Warburg Pincus partners with Eastgate to acquire Tokyo office as part of Life Sciences joint venture, expanding their investment portfolio.
- Greystar purchases GIC-Wee Hur Aussie student housing for $1B, solidifying their presence in the Australian real estate market.
- Iron Mountain makes strategic move by acquiring Web Werks, an Indian data center group, enhancing their capabilities in the data management sector.
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