20220427-招银国际-雷蛇-01337.HK-Proposed_privatization_deal_approved__Expected_withdrawal_of_listing_on_13_May_2022_2页_423kb

Razer (1337 HK) Privatization Summary

Core Content

Razer (1337 HK) has successfully secured approval for its proposed privatization deal. The approval was obtained at the Court Meeting and General Meeting held on 26 April 2022, with 94.74% of the shares voted by disinterested shareholders in favor, surpassing the required threshold of 75% in favor and 10% against. The privatization is expected to take effect on 13 May 2022, with the listing of shares on the Hong Kong Stock Exchange withdrawing from that date.

Key Information

• Privatization Price: HK$2.82 (same as previous target price)
• Expected timetable:
  • Last trading day: 4:10pm on 27 April 2022
  • Deadline for share transfers: 4:30pm on 3 May 2022
  • Effective withdrawal date: 9:00am on 13 May 2022
  • Cash payment dispatch: On or before 20 May 2022

Main Views

The privatization is viewed as a positive outcome for current shareholders, driven by the following considerations:

1. Challenging Macroeconomic Environment: Rising interest rates, currency fluctuations, and geopolitical risks have negatively impacted market sentiment.
2. Weaker Market Expectations: Post-pandemic, there is a reduced expectation for peripheral spending, affecting the company's valuation.
3. Component Shortages: Potential ongoing supply chain issues may hinder growth and operational efficiency.
4. High Freight Costs: Increased logistics expenses are affecting profitability.
5. Peer Valuation Decline: The recent underperformance of peers, such as Corsair, which missed analyst estimates due to declining consumer confidence in Europe, has contributed to the decision.

Share Performance

• 1-month: +10.7% (Absolute) / +19.3% (Relative)
• 3-months: +15.0% (Absolute) / +40.3% (Relative)
• 6-months: +46.4% (Absolute) / +92.6% (Relative)

Shareholding Structure

• Chen Family Hivemind Holdings: 32.15%
• Voyager Equity: 15.21%
• Primerose Ventures: 3.75%

Market Position

• CMBIG Ratings: HOLD
• Industry Outlook:
  • OUTPERFORM: Industry is expected to outperform the broad market benchmark.
  • MARKET-PERFORM: Industry is expected to perform in line with the broad market benchmark.
  • UNDERPERFORM: Industry is expected to underperform the broad market benchmark.

Legal & Regulatory Information

• Auditor: KPMG
• Related Reports:
  • FY21 result is solid: 18 March 2022
  • Proposed privatization update: 22 February 2022

Disclosures & Disclaimers

• Analyst Certification: The views expressed in this report accurately reflect the analyst's personal views and are not influenced by compensation.
• Trading Restrictions: The analyst has not traded in the stock covered in the report within 30 days prior to its issue, nor will they trade within 3 business days after.
• Conflict of Interest: CMBIGM may have investment banking relationships with the companies discussed, which could affect the objectivity of the report.
• Usage Restrictions: This report is for the use of intended recipients only and cannot be reproduced or distributed without prior written consent.

Important Disclosures

• Investment Risks: Securities transactions involve risks. Past performance does not guarantee future results.
• No Investment Advice: This report is for informational purposes only and does not constitute investment advice.
• Liability Disclaimer: CMBIGM is not liable for any loss or damage resulting from reliance on the information in this report.
• Information Accuracy: The information is based on publicly available data and is not guaranteed for accuracy or completeness.

Distribution Restrictions

• United Kingdom: Available only to persons falling within Article 19(5) or Article 49(2)(a) to (d) of the Financial Promotion Order 2005.
• United States: Intended solely for "major US institutional investors" and must not be distributed to others.
• Singapore: Distributed by CMBISG, an Exempt Financial Adviser, and regulated by the Monetary Authority of Singapore. Legal responsibility is limited to what is required by law for non-accredited investors.