Rongzun (1780 HK): Halted Pursuant To Takeover’s Code

• Construction contractor play Rongzun (1780 HK) is suspended pursuant to the Hong Kong Code on Takeovers and Mergers.

• I discussed Rongzun last November after the key shareholder placed out a 60% stake, leaving it with 15%.

• The remaining 15% was sold on the 30th March, and Jingyao Yang emerged with 19.84%. Xia Liping, an INED at Future World Holdings (572 HK), also holds 13.71%.

Rongzun is illiquid - look away now if this is not your bag

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The Trade:

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

• I don’t see a full takeover (from Jingyao Yang) - not with the share price up 92% since he bought shares.

• My bet is that Yang enters into a SPA, lifting his stake >30%, triggering an MGO - possibly via a takeunder.

This insight is labelled bullish as it has to be labelled something