Yuanxi Zhang
Long/short equity, value, special situations

Great Wall Technology: 6.0% Gross Return In 2 Months

(Editor's Note: This ticker trades with more liquidity on the Hong Kong Exchange under ticker 0074.)

Recommendation: Long Great Wall Technology (OTC:GWTCF), (0074: HKSE) at HKD 3.00

Target Price: HKD 3.18


Great Wall Technology is likely to fulfill the conditions of the merger by mid-March. The timeline is clear for both the regulatory approval and the shareholder meeting. Shareholders are expected to vote for the deal given the generous premium and the regulatory approval will not be difficult to obtain. We expect the merger to fulfill these requirements by the shareholder meeting in mid-March. Exiting the position after the shareholder meeting will probably generate a 6% gross return in two months, or 36% annualized return. Therefore, we...

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