BeijingWest Industries (2339 HK): Halted Pursuant To Takeover's Code

• Auto components play BeijingWest Industries (2339 HK) is suspended pursuant to the Hong Kong Code on Takeovers and Mergers.

• BeijingWest hasn’t returned a profit since FY19. Following a major restructuring (equity + CB) announced last November, primarily to shore up finances, the share price is up an eye-watering ~320%

• A big part of that euphoric price rise was controlling shareholder SOE-backed BWI Beijing backstopping the restructuring. But a privatisation tilt here at ~5x P/B? Unlikely.

The Trade:

• Shares are currently suspended, so there is nothing to be done as yet.

• Currently trading at 5x P/B. That’s a bubble.

• I cannot see BWI Beijing launching a privatisation anywhere near this share price.

• My bet is that BWI Beijing sells some shares - or the CB - to some third party.