In today’s briefing:
- Jinke Smart Services (9666 HK): Boyu to Launch a Privatisation Offer?
- Vesync (2148 HK): Scheme Vote on 23 April
- Merger Arb Mondays (31 Mar) – ENN Energy, ESR, Vesync, Seven & I, Topcon, Sinarmas Land, Gold Road
- Vesync (2148 HK): 23rd April Scheme Vote. Done Deal
- HSI Index Options Weekly (Mar 24-28): Volatility Softens as HSI Takes a Breather
- CICC (3908 HK): Underestimated by the Market
- ECM Weekly (31st Mar 2025) – Xiaomi, NIO, FCT, Gigabyte, DN Sol, Nanshan Al, Zenergy, LXJ, Veeda
- Hong Kong Single Stock Options Weekly (March 24 – 28): Earnings Wrap as Breadth Deteriorates
- Mixue Vs Guming: Valuation Premium. Comparing Earnings Growth in 2024
- HSCEI Index Options Weekly (Mar 24-28): Call Volumes Rise as Market Digests Key Events
Jinke Smart Services (9666 HK): Boyu to Launch a Privatisation Offer?
- Jinke Smart Services (9666 HK) is in a trading halt “pending the release of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers which constitutes inside information.”
- It is likely that Boyu, the largest shareholder, is seeking to privatise Jinke. The privatisation of PRC-incorporated entities is usually done through a merger by absorption.
- I use several methods to triangulate the likely offer price, which suggests a price range of HK$10.00-16.86, with an average of HK$12.47, a 45% premium to the last close.
Vesync (2148 HK): Scheme Vote on 23 April
- Vesync (2148 HK)’s IFA opines that the Yang family’s HK$5.60 cash offer is fair and reasonable. The IFA does not recommend the scrip option. The vote is on 23 April.
- Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection). The offer price is final.
- The vote is low-risk due to a lack of opposition. At the last close and for the 15 May payment, the gross/annualised spread is 2.9%/28.7%.
Merger Arb Mondays (31 Mar) – ENN Energy, ESR, Vesync, Seven & I, Topcon, Sinarmas Land, Gold Road
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: ENN Energy (2688 HK), Seven & I Holdings (3382 JP), OneConnect Financial Technology (OCFT US), Insignia Financial (IFL AU), Smart Share Global (EM US), Soundwill Holdings (878 HK).
- Lowest spreads: Makino Milling Machine Co (6135 JP), Shibaura Electronics (6957 JP), PointsBet Holdings (PBH AU), Millennium & Copthorne Hotels Nz (MCK NZ), Tonami Holdings (9070 JP).
Vesync (2148 HK): 23rd April Scheme Vote. Done Deal
- On the 27th December, Vesync (2148 HK), a manufacturer of small home appliances, announced an Offer, by way of a Scheme, from the Yang family controlling ~69.04% of Vesync.
- The Cancellation Price of $5.60/share – declared final – was a 33.3% premium to undisturbed, and above the 2020 IPO price of HK$5.52/share.
- The Scheme Doc is now out, with a Court Meeting on the 23rd April, and expected payment on or before the 15th May. The IFA (Somerley) says “fair & reasonable”.
HSI Index Options Weekly (Mar 24-28): Volatility Softens as HSI Takes a Breather
- A weekly recap of volatility and price metrics, covering option volumes, volatility trends, the spot/implied relationship, and open interest statistics
- Implied vol softened this week—we examine the trend and its potential implications.
- HSI’s performance vs. SP500 is highlighted against a backdrop of tariffs and global shifts.
CICC (3908 HK): Underestimated by the Market
- China International Capital Corporation (3908 HK)‘s 2H24 net profit surged 33.6% in 2H24, reversing the downtrend in 1H24. It has benefited from lower staff and other operating costs.
- Better 1Q25 market turnover and activities, more IPOs and placements and improved cost dynamics imply that the consensus forecasts are too conservative.
- Its 0.55x P/B cannot adequately reflect better profitability. Despite the denial, CICC’s potential merger with China Galaxy Securities (H) (6881 HK) cannot be completely ruled out.
ECM Weekly (31st Mar 2025) – Xiaomi, NIO, FCT, Gigabyte, DN Sol, Nanshan Al, Zenergy, LXJ, Veeda
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, DN Solutions (298440 KS)‘s range looks a little pricey, while Eco-Shop Marketing (ECO MY) could trade ahead of its listed peers, in our view.
- On the placements front, Xiaomi Corp (1810 HK) matched BYD (1211 HK) in size, but couldn’t do so in returns.
Hong Kong Single Stock Options Weekly (March 24 – 28): Earnings Wrap as Breadth Deteriorates
- Weekly recap of key option metrics across single stocks, including most active names and strikes, largest volume increases, biggest movers, and key earnings reports.
- Breadth continues to deteriorate against an increasingly hostile global backdrop.
- Both price and implied volatility declined on average, with the typical stock still well below its 52-week high.
Mixue Vs Guming: Valuation Premium. Comparing Earnings Growth in 2024
- The comparison between Mixue Group (2097 HK) and Guming (1364 HK)’s 2024 annual results highlight how their financial and operational performance diverged sharply.
- Mixue’s vertically integrated operations provide it a strong competitive edge and superior margins while Guming, operating in the mid-priced segment faced fierce competition
- Mixue’s high-quality earnings growth underscores a robust business model that attracts premium valuation multiples.
HSCEI Index Options Weekly (Mar 24-28): Call Volumes Rise as Market Digests Key Events
- A weekly recap of volatility and price metrics, covering option volumes, volatility trends, the spot/implied relationship, and open interest statistics.
- HSCEI price and implied vols both softer on the week after digesting large share sale and key earnings reports.
- We highlight the performance of HSCEI vs SP500 and note that this is a relationship to monitor in the rapidly changing political climate.
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