In today’s briefing:
- Henlius (2696 HK): Musings on the Deal Break Price
- Shanghai Henlius Biotech (2696 HK)- These Are the Reasons Why LVC May Vote Against the Privatization
- Asia Real Estate Tracker (15-Jan-2025): Santarli, Apex $368M top bid for West Singapore site
- Orient Overseas Intl (316 HK): Initial Warning Signs?
- Geek+ IPO Preview: Extending Leadership in Warehouse Automation Sector, New Robotic IPO in Hong Kong
- Health And Happiness – Event Flash – Launches Tender Offer And Concurrent Notes Issuance
- SDA: SunCar expands business with multiple new partnerships and collaborations. The company also appoints a new Chief Strategy Officer. We maintain our price target of 20.00.
Henlius (2696 HK): Musings on the Deal Break Price
- Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is heading for a deal break. LVC has not changed its shareholding since amassing a blocking stake.
- In the absence of a last-ditch effort by Shanghai Fosun Pharmaceutical (Group) (2196 HK) to rescue the deal, the key question is the potential deal break price.
- Based on four methods, the potential deal break price is HK$17.28, 12% below the last close price of HK$19.58.
Shanghai Henlius Biotech (2696 HK)- These Are the Reasons Why LVC May Vote Against the Privatization
- Fosun hopes to privatize Henlius at a low price. As usual, it does not consider the interests of long-term investors, who may express their “dissatisfaction” by opposing the privatization.
- Lin Lijun clearly has bargaining chips. He may ask Fosun to provide a clear plan for future relisting/asset restructuring, and how the Share Alternative will be linked to this plan.
- There is a possibility this privatization may fail. Such possibility is not low, because investors will only support the privatization if they can be sure that their interests are protected.
Asia Real Estate Tracker (15-Jan-2025): Santarli, Apex $368M top bid for West Singapore site
- Santarli and Apex make joint bid worth $368M for a site in Western Singapore, expanding their real estate portfolio.
- CVC-backed chain competes for First REIT’s Indonesian assets valued at $599M, increasing their presence in the market.
- EdgeConneX ventures into Japan with a 140MW data center project in Greater Osaka, showcasing their global growth strategy.
Orient Overseas Intl (316 HK): Initial Warning Signs?
- Lower average freight rate momentum and deceleration in 4Q24 load factor expansions for Orient Overseas International (316 HK) have raised alarm for a weaker industry outlook.
- Spot freight rate has come down by 6.8% in the last two weeks. The potential ease of conflicts in Ukraine and the Middle East may induce a capacity return.
- The consensus forecasts for FY25-26 have been downgraded by 5-9%, suggesting caution in the market. Its dividend yield will lower from 14.0% in FY24 to just 4.3% in FY26.
Geek+ IPO Preview: Extending Leadership in Warehouse Automation Sector, New Robotic IPO in Hong Kong
- Geek+, a Beijing-based autonomous mobile robots (AMRs) unicorn with focus on smart logistics, filed to go public in Hong Kong.
- The AI & robotics company was backed by Warburg Pincus, GGV Capital, D1 Capital Partners, Intel Capital, Vertex Ventures, and Gaorong Capital, among others.
- Beijing Geekplus IPO comes after another robotics unicorn, a leading manufacturer of collaborative robots Shenzhen Dobot, raised ~HK$681M in its HK IPO in December.
Health And Happiness – Event Flash – Launches Tender Offer And Concurrent Notes Issuance
- Health and Happiness’ (H&H) proposed tender offer and new notes issuance will extend its debt maturity profile and alleviate debt repayment pressure in FY 2026.
- In our view, the high tender offer price of 109.8 is to incentivise bondholders to tender and subscribe to the new notes.
- We see fair value for the proposed notes at c. 8%.
SDA: SunCar expands business with multiple new partnerships and collaborations. The company also appoints a new Chief Strategy Officer. We maintain our price target of 20.00.
- SunCar Technology Group ((NASDAQ: SDA) is a leading Chinese cloud-based provider of digital enterprise auto services and auto eInsurance services in China.
- The company offers one-stop, fully digital, on-demand automotive service systems to help enterprise clients build up their customer base and serve their end customers (auto owners).
- The company has grown revenues rapidly in recent years, which we expect to continue in the near-to-midterm.
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