In today’s briefing:
- Shengjing Bank (2066 HK): Another Rural Commercial Bank Delisting
- Shengjing Bank (2066 HK): Privatisation on the Cards?
- Playing Korea’s Hot Secondary Battery Sector Rotation
- Dentium – Cancellation of 2.44 Million Treasury Shares (22% of Outstanding Shares)
Shengjing Bank (2066 HK): Another Rural Commercial Bank Delisting
- In Chinese RCBs: Two Bailouts. How Many More At Risk?, I concluded Shengjing Bank (2066 HK) was one bank I would avoid. It’s now suspended pursuant to the Takeovers code.
- Shengjing Bank had one of the largest P/B and net income declines in recent years. It had borderline allowance/provision coverage. It also had the lowest net interest margin.
- Shengjing Bank is PRC-incorporated, therefore any delisting proposal would involve a Merger by Absorption, incorporating a Scheme-like vote. And probably a tendering condition.
Shengjing Bank (2066 HK): Privatisation on the Cards?
- Shengjing Bank Co Ltd H (2066 HK) entered a trading halt “pending the publication of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers.”
- It is likely that the SASAC of Shenyang Municipal People’s Government, the largest shareholder, is seeking to privatise Shengjing.
- Precedents point to a voluntary conditional offer and delisting proposal. My estimated offer price range is HK$2.00-HK$2.80, a 75.4%-145% premium to the last close.
Playing Korea’s Hot Secondary Battery Sector Rotation
- Battery-Sector rotation is heating up in Korea as active ETFs sharply boost LG Energy Solution and Samsung SDI, signaling renewed sector focus amid ESS growth and easing valuation pressures.
- Watch for supply-demand dislocations during battery-sector ETF rebalances; top-heavy names may see concentrated flows, amplifying trading intensity and driving larger-than-normal price swings.
- The 25% cap reversion could move LG Energy Solution down and SK Innovation up ~5pp, with flows hitting -0.2x/+0.6x DTV, potentially amplified by aggressive sector inflows.
Dentium – Cancellation of 2.44 Million Treasury Shares (22% of Outstanding Shares)
- Dentium announced that it has decided to cancel all of its 2.44 million treasury shares (22% of its outstanding shares).
- This is massive and should have a positive impact on Dentium’s share price.
- Although the company reported a disappointing results in 2Q 2025 and its exports to China are slowing down, the company still generates healthy operating margins (18.9% in 2Q 2025).
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