IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

Arun has over 15 years’ experience covering the Technology sector. During this time, he has worked with technology start-ups and as an equity analyst in investment banks and independent research firms. He was formerly a Technology Analyst for Canaccord Genuity, Altium Securities, Espirito Santo Investment Bank, Noble Group and Clear Capital. He has a dual Master’s degree in Financial Engineering and Industrial and Operations Engineering from the University of Michigan. He obtained his Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Bombay. He is also a CFA charterholder.

IPOs and Catalysts/Events

Weekly Deals Digest (13 Sep) - Base, Albis, Kakaku, Sharingtech, Changhong Jiahua, Public Financial

Merger Arb Mondays (14 Sep) - Public Financial, Skyworth, Changhong Jiahua, Z Fin, OFX, Cleanaway

Changhong Jiahua (3991 HK): Changhong Group’s Preconditional Scheme at HK$1.223

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Event-Driven

<ul>
<li>Almost a year in, Changhong Group has yet to secure the regulatory approvals for its HK$1.223 scheme offer for <a href="https://www.smartkarma.com/entities/changhong-jiahua-holdings-ltd" target="_blank" data-smartkarma-citation="entities:5849:1" rel="noopener">Changhong Jiahua (3991 HK)</a>.</li>
<li>The offer will be effectively blocked, not by a Sichuan NDRC/Commerce rejection with stated reasons, but by the approval process failing to conclude by the 20 September long stop date.</li>
<li>On a deal break, I expect little-to-no downside due to improving fundamentals, significant peer re-rating and significant discount to the undisturbed price. </li>
</ul>


Almost a year in, Changhong Group has yet to secure the regulatory approvals for its HK$1.223 scheme offer for Changhong Jiahua (3991 HK).
The offer will be effectively blocked, not by a Sichuan NDRC/Commerce rejection with stated reasons, but by the approval process failing to conclude by the 20 September long stop date.
On a deal break, I expect little-to-no downside due to improving fundamentals, significant peer re-rating and significant discount to the undisturbed price. 


China Traditional Chinese Medicine (570 HK)

Changhong Jiahua (3991 HK): The Upcoming Long Stop Date Sets the Pretext for a Deal Break