Daily Brief China: Vesync, DiDi Global, JNBY Design Ltd, Fu Shou Yuan, West China Cement and more

• On 27 December 2024, Vesync (2148 HK) disclosed a Cayman scheme privatisation offer from the Yang family at HK$5.60. On 28 January, the antitrust condition was satisfied.   
• Despite a light offer, the scheme vote is low-risk. No disinterested shareholder holds a blocking stake, there is a scrip option with no cap, and there is no retail opposition. 
• The scheme document will be despatched by 11 April. At the last close and for an end-of-May payment, the gross and annualised spread is 6.9% and 22.7%, respectively.  

• Back 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 US anti-trust condition has now been fulfilled. The Scheme Doc dispatch has been extended to the 11 April. I estimate payment under the Offer late May. 

• Didi Global Inc. is a prominent mobility technology platform offering ride hailing, taxi hailing, and ride sharing services
• The company dominates the market in China and Latin America, especially in Brazil and Mexico
• Didi also has other initiatives including E-bike sharing, energy and vehicle services, intra-city freight, autonomous driving, and financial services.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• We reviewed Lever Style’s (1346 HK)  positive profit alert and project a final dividend of 7-7.5 cents, an increase from 3 cents per share in H1 FY24.
• The overall dividend of 10-10.5 cents indicates a yield over 9%, with positive remarks on new customer additions and increased penetration within the existing customer base.
• Our top sector picks include JNBY Design Ltd (3306 HK) and Pacific Textiles (1382 HK), with a favorable mention of Nameson Holdings (1982 HK)  due to its attractive dividend yield.

• The special dividend actually exceeded investors’ expectations. As long as the dividend yield is higher than the risk-free rate, then Fu Shou Yuan is worth holding for the long term.
• Fu Shou Yuan’s 2024 full-year performance could fall short of expectations. As the business model is not as excellent as previously imagined, long-term growth rate would fall to single digit.
• Since high valuation is unsustainable without the support of strong future growth momentum, investors who pursue for capital gains could consider taking profits by taking advantage of share price rally.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: West China Cement, Adani Ports, Vedanta Resources, Softbank Group, Tata Motors, UPL Limited
• In the US, the December personal spending came in above estimates at 0.7% m-o-m (0.5% e / 0.6% revised p), while personal income inched up to 0.4% m-o-m (0.4% e / 0.3% p).
• Separately, the PCE price index climbed to 2.6% y-o-y (2.6% e / 2.4% p) and 0.3% m-o-m (0.3% e / 0.1% p). That said, the core PCE price index (the Fed’s preferred measure of inflation) was largely stable at 2.8% y-o-y (2.8% e / 2.8% p) and 0.2% m-o-m (0.2% e / 0.1% p).