In today’s briefing:
- Goldlion Holdings (533 HK): An Unexpected HK Arbageddon
- HSTECH Index Rebalance Preview: BYD (1211 HK) Could Replace China Literature (772 HK); Huge Trade
- Curator’s Cut: “Bubble” Tea, Japan M&A 🍿and TSMC from Different Lenses
- HSCEI Index Rebalance Preview: Pop Mart (9992 HK) Could Replace Sunny Optical (2382 HK)
- Goldlion Holdings (533 HK) Privatization – About the Deal Break and the Valuation Outlook
- Tam Jai Intl (2217 HK): A Relatively Decent 2H FY25
- Pre-IPO Green Tea Group – Thoughts on IPO Pricing and Valuation Outlook
- Seria Co Ltd (2782 JP): Full-year FY03/25 flash update
- Sundram Fasteners(SFL IN)–Long Term Drivers in Place, but Near-Term Valuation and Export Risks Weigh
- Gakken Holdings (9470 JP): 1H FY09/25 flash update
Goldlion Holdings (533 HK): An Unexpected HK Arbageddon
- Goldlion Holdings (533 HK) shareholders have voted against Mr Tsang’s HK$1.5232 per share offer. The minority participation rate was high, and the NO vote comfortably cleared the threshold.
- The Goldlion deal break was unexpected, and the HKEx merger arb rulebook will be rewritten. This deal break offers several lessons.
- Goldlion had the highest premium of the pre-deal break price to the undisturbed price compared to previous deal breaks. My estimated deal-break price is HK$0.953, 36.0% below last close.
HSTECH Index Rebalance Preview: BYD (1211 HK) Could Replace China Literature (772 HK); Huge Trade
- The review period for the June rebalance of the HSTECH INDEX ended on 31 March, the changes will be announced on 16 May and implemented on 6 June.
- Following the launch of the God’s Eye ADAS, BYD (1211 HK) could become eligible for index inclusion after meeting the Autonomous theme and Innovation screening.
- The inclusion of BYD (1211 HK) in the index could result in China Literature (772 HK) being deleted from the index in June.
Curator’s Cut: “Bubble” Tea, Japan M&A 🍿and TSMC from Different Lenses
- Welcome to Curator’s Cut, a fortnightly roundup of standout themes from the 1,200+ insights published over the past two weeks on Smartkarma
- In this cut, we look through the bubble in Chinese tea company listings, the recent entertainment provided by Japanese M&A situations and the varied ways analysts look at TSMC on Smartkarma
- Want to dig deeper? Comment or message with the themes you think should be highlighted next time
HSCEI Index Rebalance Preview: Pop Mart (9992 HK) Could Replace Sunny Optical (2382 HK)
- The review period for the June rebalance of the HSCEI ended on 31 March, the results will be announced on 16 May and will be implemented on 6 June.
- Pop Mart International Group L (9992 HK) could be added to the index while Sunny Optical Technology Group (2382 HK) could be deleted from the index.
- There are other stocks with big flows due to a change in the FreeFloat-Adjusted Factor (FAF) methodology for Secondary Listings that will be implemented from the rebalance in June.
Goldlion Holdings (533 HK) Privatization – About the Deal Break and the Valuation Outlook
- The privatization failed due to the inability to balance the interests of public shareholders. There is a gap between the current Offer and the expectations of small and medium-sized investors.
- Some shareholders may think Goldlion still has the potential for strategic adjustments/value reassessment, and are inclined to continue holding this stock. A cash reserve of HK$1.05 has given imagination space.
- We are not sure what strategies Goldlion will adopt to address the current negative situation. The outlook is vague. 9-14x P/E could be reasonable valuation due to the short-term headwinds.
Tam Jai Intl (2217 HK): A Relatively Decent 2H FY25
- Tam Jai International (2217 HK)‘s net profit dropped 32.7% in FY25, but the 2H earnings have seen a recovery to an 18.2% YoY growth, vs. -55.8% in 1H.
- Net cash stayed intact at HK$1.33bn, or 65.1% of its market capitalisation. Management looks cautiously optimistic in the outlook, and will push for expansion of two Japanese brands.
- There has been minimal further noise from the minority shareholders. With the privatisation PER at over 60% premium to the sector average, we think most shareholders will give in.
Pre-IPO Green Tea Group – Thoughts on IPO Pricing and Valuation Outlook
- The HK$7.19/share IPO pricing is attractive. The valuation safety margin reserved for the IPO of Green Tea may be mainly due to the management’s consideration of attracting long-term funds.
- If the market sentiment is positive, combined with conservative IPO pricing, Green Tea would still perform well after listing. For example, valuation has the potential to recover to 15x P/E.
- However, when scale expansion fails to bring efficiency improvement,“cracks” appear in the core logic of the capital story.So, taking profits when Green Tea’s valuation exceeds Xiaocaiyuan is a good option.
Seria Co Ltd (2782 JP): Full-year FY03/25 flash update
- Sales reached JPY236.3bn (+5.9% YoY) with operating profit at JPY16.8bn (+11.3% YoY) and net income JPY11.2bn (+14.2% YoY).
- For FY03/26, Seria forecasts sales of JPY242.9bn (+2.8% YoY) and net income of JPY10.2bn (-9.1% YoY).
- The company plans to open 120 directly managed stores and close 70, totaling 2,122 stores by FY03/26 end.
Sundram Fasteners(SFL IN)–Long Term Drivers in Place, but Near-Term Valuation and Export Risks Weigh
- Positioned for Long-Term Growth: Backed by strong industry tailwinds in EVs, clean energy, and exports, Sundram Fasteners (SF IN) is strategically expanding beyond its core auto portfolio into high-potential sectors.
- Near-Term Risk-Reward Balanced: With the stock trading at 33x P/E on FY26E earnings, valuations appear stretched, and near-term headwinds from tariff uncertainties may limit upside.
- Proven Management & Governance: Backed by the reputable TVS Group, the company’s disciplined execution and transparent governance inspire long-term investor confidence.
Gakken Holdings (9470 JP): 1H FY09/25 flash update
- Revenue increased by JPY5.3bn YoY, driven by Kirihara Shoten’s addition and increased study guide sales.
- Operating profit declined by JPY600mn due to rising costs in Healthcare and Welfare; Educational segment saw profit growth.
- Net income rose by JPY652mn, aided by absence of prior stock sale loss and step acquisition gain.
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