IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

China Traditional Chinese Medicine / Event-Driven

China Traditional Chinese Medicine Co. Limited, through its subsidiaries, manufactures and sells medicine and pharmaceutical products in China.

China Traditional Chinese Medicine (570 HK)

<ul>
<li>We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.</li>
<li>Highest spreads: <a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation Technologies (HOLI US)</a>, <a href="https://www.smartkarma.com/entities/qv-equities-ltd" target="_blank" data-smartkarma-citation="entities:24284:1" rel="noopener">QV Equities Ltd (QVE AU)</a>, <a href="https://www.smartkarma.com/entities/southern-cross-media-group-ltd" target="_blank" data-smartkarma-citation="entities:10374:1" rel="noopener">Southern Cross Media (SXL AU)</a>, <a href="https://www.smartkarma.com/entities/qantm-intellectual-property" target="_blank" data-smartkarma-citation="entities:24317:1" rel="noopener">Qantm Intellectual Property (QIP AU)</a>, <a href="https://www.smartkarma.com/entities/probiotec-ltd" target="_blank" data-smartkarma-citation="entities:12047:1" rel="noopener">Probiotec Ltd (PBP AU)</a>, China TCM.
</li>
<li>Lowest spreads: <a href="https://www.smartkarma.com/entities/chilled-frozen-logistics-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:40987:1" rel="noopener">Chilled &amp; Frozen Logistics Holdings (9099 JP)</a>, <a href="https://www.smartkarma.com/entities/roland-dg-corp" target="_blank" data-smartkarma-citation="entities:10653:1" rel="noopener">Roland DG Corp (6789 JP)</a>, <a href="https://www.smartkarma.com/entities/mma-offshore-ltd" target="_blank" data-smartkarma-citation="entities:594:1" rel="noopener">Mma Offshore (MRM AU)</a>, <a href="https://www.smartkarma.com/entities/pact-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:692:1" rel="noopener">Pact Group Holdings (PGH AU)</a>, <a href="https://www.smartkarma.com/entities/jastec-co-ltd" target="_blank" data-smartkarma-citation="entities:9201:1" rel="noopener">Jastec Co Ltd (9717 JP)</a>. 
</li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Hollysys Automation Technologies (HOLI US), QV Equities Ltd (QVE AU), Southern Cross Media (SXL AU), Qantm Intellectual Property (QIP AU), Probiotec Ltd (PBP AU), China TCM.

Lowest spreads: Chilled &amp; Frozen Logistics Holdings (9099 JP), Roland DG Corp (6789 JP), Mma Offshore (MRM AU), Pact Group Holdings (PGH AU), Jastec Co Ltd (9717 JP). 



Merger Arb Mondays (06 May) - China TCM, L'Occitane, Hollysys, Shinko, QV Equities, Qantm IP, Adbri

Equity Capital Markets

ZEEKR Intelligent Technology Holding Limited operates as a holding company. The Company, through its subsidiaries, principally engages in commercialization and sales of electric vehicles and battery, and provision of automotive related research and development services. ZEEKR Intelligent Technology Holding serves customers worldwide.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zeekr-intelligent-technology-holding" target="_blank" data-smartkarma-citation="entities:36785:1" rel="noopener">ZEEKR (ZK US)</a>, a premium Chinese BEV manufacturer and a subsidiary of <a href="https://www.smartkarma.com/entities/geely-automobile-holdings-ltd" target="_blank" data-smartkarma-citation="entities:127:1" rel="noopener">Geely Auto (175 HK)</a>, has launched an IPO to raise up to US$368 million.  </li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/zeekr-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:117508" rel="noopener">ZEEKR IPO: The Bull Case</a>, <a href="https://www.smartkarma.com/insights/zeekr-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:117721" rel="noopener">ZEEKR IPO: The Bear Case</a> and <a href="https://www.smartkarma.com/insights/zeekr-ipo-latest-updates-as-the-ipo-process-restarts" target="_blank" data-smartkarma-citation="insights:136469" rel="noopener">ZEEKR IPO: Latest Updates as the IPO Process Restarts</a>. </li>
<li>The IPO price range values ZEEKR at a material discount to peers' multiples. We would be inclined to participate in the IPO. </li>
</ul>



ZEEKR (ZK US), a premium Chinese BEV manufacturer and a subsidiary of Geely Auto (175 HK), has launched an IPO to raise up to US$368 million.  
We previously discussed the IPO in ZEEKR IPO: The Bull Case, ZEEKR IPO: The Bear Case and ZEEKR IPO: Latest Updates as the IPO Process Restarts. 
The IPO price range values ZEEKR at a material discount to peers' multiples. We would be inclined to participate in the IPO. 


Hollysys Automation Technologies / Event-Driven

Hollysys Automation Technologies Ltd. manufactures automation and control systems.  The Company produces process, industrial, rail and subway, and nuclear power plant automation equipment.

Hollysys Automation Technologies (HOLI US)

<ul>
<li>I have received several questions from readers on Ascendent’s binding proposal for <a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation Technologies (HOLI US)</a> in the context of the current gross spread of 12.1%. </li>
<li>The questions primarily concerned the Capital Forum article, NSR approvals, timelines, auditor resignation and deal break risks. </li>
<li>Most of the questions concerned regulatory approval risk. The delay in closing is mainly procedural (government red tape) rather than an indication that regulators will block the deal. </li>
</ul>


I have received several questions from readers on Ascendent’s binding proposal for Hollysys Automation Technologies (HOLI US) in the context of the current gross spread of 12.1%. 
The questions primarily concerned the Capital Forum article, NSR approvals, timelines, auditor resignation and deal break risks. 
Most of the questions concerned regulatory approval risk. The delay in closing is mainly procedural (government red tape) rather than an indication that regulators will block the deal. 


Hollysys (HOLI US): Further Thoughts on the Widening Spread

L'Occitane International S.A. is a global, natural and organic ingredient based cosmetics and well-being products enterprise.  The Company designs, manufactures and markets a wide range of cosmetics and well-being products based on natural and organic ingredients sourced principally from or near Provence.

<ul>
<li>A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.</li>
<li>ECM developments: <a href="https://www.smartkarma.com/entities/hd-hyundai-marine-solution-co" target="_blank" data-smartkarma-citation="entities:41002:1" rel="noopener">HD Hyundai Marine Solution (443060 KS)</a> and <a href="https://www.smartkarma.com/entities/zeekr-intelligent-technology-holding" target="_blank" data-smartkarma-citation="entities:36785:1" rel="noopener">ZEEKR (ZK US)</a> IPOs.</li>
<li>Event-Driven developments: <a href="https://www.smartkarma.com/entities/l-occitane-international-sa" target="_blank" data-smartkarma-citation="entities:6772:1" rel="noopener">L'Occitane (973 HK)</a>, <a href="https://www.smartkarma.com/entities/chilled-frozen-logistics-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:40987:1" rel="noopener">Chilled &amp; Frozen Logistics Holdings (9099 JP)</a>, <a href="https://www.smartkarma.com/entities/kfc-holdings-japan-ltd" target="_blank" data-smartkarma-citation="entities:12358:1" rel="noopener">Kfc Holdings Japan (9873 JP)</a>, <a href="https://www.smartkarma.com/entities/mimasu-semiconductor-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:5531:1" rel="noopener">Mimasu Semiconductor Industry (8155 JP)</a>, <a href="https://www.smartkarma.com/entities/austal-ltd" target="_blank" data-smartkarma-citation="entities:14420:1" rel="noopener">Austal Ltd (ASB AU)</a>. </li>
</ul>


A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: HD Hyundai Marine Solution (443060 KS) and ZEEKR (ZK US) IPOs.
Event-Driven developments: L'Occitane (973 HK), Chilled &amp; Frozen Logistics Holdings (9099 JP), Kfc Holdings Japan (9873 JP), Mimasu Semiconductor Industry (8155 JP), Austal Ltd (ASB AU). 


Weekly Deals Digest (05 May) - L'Occitane, C&F Logistics, KFC Japan, Austal, Hyundai Marine, ZEEKR

Austal Limited is an emerging global defence prime contractor. The Group supplies vessel platforms such as the Littoral Combat Ship and the Joint High Speed Vessel to the United States Navy, an extensive range of patrol and auxiliary vessels to defence forces around the world, and installs and maintains military communications, radar and command and control systems.

<ul>
<li>On 2 April, <a href="https://www.smartkarma.com/entities/austal-ltd" target="_blank" data-smartkarma-citation="entities:14420:1" rel="noopener">Austal Ltd (ASB AU)</a> rejected a non-binding proposal from <a href="https://www.smartkarma.com/entities/hanwha-ocean-co-ltd" target="_blank" data-smartkarma-citation="entities:12531:1" rel="noopener">Hanwha Ocean (042660 KS)</a> at A$2.825 due to concerns about obtaining Australian and US regulatory approvals. </li>
<li>The Board’s claims are on shaky grounds. On 1 May, the AFR reported that Australian Defence Minister Richard Marles had no concerns with Hanwha’s privatisation bid. </li>
<li>The Board’s rejection is a clumsy attempt to negotiate better terms, such as a bump, ticking fees, or significant break fees. At the last close, the gross spread was 21.8%. </li>
</ul>


On 2 April, Austal Ltd (ASB AU) rejected a non-binding proposal from Hanwha Ocean (042660 KS) at A$2.825 due to concerns about obtaining Australian and US regulatory approvals. 
The Board’s claims are on shaky grounds. On 1 May, the AFR reported that Australian Defence Minister Richard Marles had no concerns with Hanwha’s privatisation bid. 
The Board’s rejection is a clumsy attempt to negotiate better terms, such as a bump, ticking fees, or significant break fees. At the last close, the gross spread was 21.8%. 


Austal (ASB AU): Spurned Suitor, Hanwha Ocean, Gets a Vote of Confidence

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.

Arun George
IPOs and Catalysts/Events
• Global Equity Research Ltd

Merger Arb Mondays (06 May) - China TCM, L'Occitane, Hollysys, Shinko, QV Equities, Qantm IP, Adbri

This week, the highest gross spreads are Hollysys (12.1%), QV Equities (11.4%), Southern Cross (9.0%), Qantm IP (8.2%), Probiotec (7.4%), China TCM...

Arun George

ZEEKR (ZK US) IPO: Valuation Insights

The IPO price range values ZEEKR at a material discount to peers' multiples. We would be inclined to participate in the IPO.

Arun George

Hollysys (HOLI US): Further Thoughts on the Widening Spread

Readers have asked me several questions about the widening spread. This piece outlines my answers to these questions. It remains a case of when,...

Arun George

Weekly Deals Digest (05 May) - L'Occitane, C&F Logistics, KFC Japan, Austal, Hyundai Marine, ZEEKR

Last week, notable developments occurred in Event-Driven (L'Occitane, CF Logistics, KFC Japan, Mimasu Sem, Austal) and ECM (HD Hyundai Marine, ZEEKR).

Arun George

Austal (ASB AU): Spurned Suitor, Hanwha Ocean, Gets a Vote of Confidence

The Board’s rejection is based on shaky grounds and may be an attempt to negotiate better terms, such as a bump, ticking fees, or significant break...

Arun George