Asia Flash: PW Medtech – the multi-bagger trade around CBPO’s potential delist and A-share relist

28 April 2020 - 11:12 am UTC

If it goes through, the USD 4.6bn take-private and likely future A-share relisting of China Biologic Products [NASDAQ:CBPO] could send the shares of PW Medtech (PWM) [HKG:1358] soaring.
 
As far back as June 2017, the Asia Flash wrote about how investors could piggy-back listed buyer groups that are seeking to take advantage of exchange arbitrage by delisting companies from the US and relisting them in China.
 
The market value of PW Medtech (PWM) [HKG:1358], which is part of the buyer group for the ongoing indicative USD 4.6bn take-private of China Biologic Products [NASDAQ:CBPO], is currently worth less than half its 13.83% stake in CBPO.
 
But, if the CBPO deal gets done, it could set in motion a series of catalysts that sees PWM’s shares trade at 7x their present level of around HKD 1.16.
 
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by Stephanie Hanna and Vivian Wong