Market Perspective | Three Hong Kong Stocks Remain Undervalued, Potentially Revisit Privatization

The shadow of war lingers, and the author currently has little enthusiasm, with the most confidence placed in some small-cap Hong Kong companies. Yes, everyone can start treasure hunting again in the wave of privatizations. Daisan Holdings (00113), Jinhuilai (00533), and Jinchao Yang (00878) previously proposed privatization, all of which were rejected by minority shareholders. A year later, major shareholders may return for another attempt. The saying goes, “once you try, you can’t turn back.” After the major shareholder’s failed attempt at privatization, they may raise the price and try again, which has often happened in the past; even if they can’t wait for the major shareholder’s privatization, the valuations of these three companies are still low, providing some risk protection, and there isn’t much downside potential.

Daisan, a high-end retail company, is well-known thanks to the Pan Daisan family, the major shareholders, and there’s no need for further introduction. The privatization attempt failed in mid-July last year, and they could try again by mid-July this year at the earliest. As for Jinhuilai, in the “world of men,” the brand seems to be aging, but operations are still good, and most importantly, the valuation remains low. The company proposed privatization at the end of the year before last, was rejected in May last year, and could return for another attempt by early May this year.

Finally, there’s Jinchao Yang, which most readers probably know because of the “Jinchao Yang Center.” The major shareholder, the Fu Jinzhu family, proposed privatization in mid-March last year, was rejected at the end of May, and they could propose again by the end of May this year at the earliest.

(Excerpt)

Li Shengyang, The Tenth Man in Finance

For the original text, please refer to today’s Hong Kong Economic Journal.