In today’s briefing:
- Joy City (207 HK): 17th November Vote On COFCO’s Offer
- Joy City Property (207 HK): Wide Spread Ahead of the 17 November Scheme Vote
- Hong Kong Single Stock Options Weekly (Oct 20–24): Subdued Volumes Ahead of Busy Earnings Schedule
Joy City (207 HK): 17th November Vote On COFCO’s Offer
- On the 31sr July, Chinese property play Joy City (207 HK) announced a Scheme buyback, @ $0.62/share (declared final), a 67.57% premium; but arguably a 158% premium to undisturbed.
- Yes, this was a ~70% discount to NAV. However, Joy City had traded at P/B of 0.14x, on average, the past five years. Earnings have trended south in that timeframe.
- The Scheme Document’s now out, with a Court Meeting on the 17th November and expected payment around the 4th December. The IFA (Somerley) says “fair & reasonable”. It probably is.
Joy City Property (207 HK): Wide Spread Ahead of the 17 November Scheme Vote
- Joy City Property (207 HK)’s IFA opines that the share buyback by way of a scheme at HK$0.62 is fair and reasonable. The vote is on 17 November.
- While the offer implies a P/B of 0.29x, it is reasonable compared to peer multiples and historical trading ranges. No disinterested shareholder holds a blocking stake.
- Nevertheless, there remains vote risk and caution is warranted. At the current price and for a 4 December payment, the gross/annualised spread is 8.8%/103.6%.
Hong Kong Single Stock Options Weekly (Oct 20–24): Subdued Volumes Ahead of Busy Earnings Schedule
- Third straight week in which HSI recorded a weekly absolute price change greater than 3%.
- Breadth improved sharply, though single stock option volumes remained subdued. Strong North American market son Friday point to higher open for stocks on Monday.
- A heavy slate of earnings reporters awaits in the week ahead.
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