Dongfeng (489 HK): Questioning The EV Listing Valuation

• Back on the 22nd August, SOE-backed Dongfeng Motor (489 HK) announced a privatisation; together with a concurrent listing of its EV arm, VOYAH.

• The share price closed up 54% on the first day, ~15% adrift of the independently valued cash + scrip (into VOYAH) under the privatisation.

• Shares have pared back 5% since. VOYAH's peer basket has fallen ~15% on average. The market is implying a price-to-trailing-sales of 1x for VOYAH versus the basket average of 1.9x.

The Trade:

• Tricky.

• I might have been overly bullish in my initial note.

• The gross spread (to my implied price) is perhaps ~11%.

• If not in, I might be inclined to sit tight for now. This is a long dated arb play.