Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

In our weekly HK Connect Ideas series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as analyzed by our proprietary data engine, and highlight interesting trade ideas. We split the stocks eligible for the Hong Kong Connect trade into three groups: component stocks in the HSCEI index, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.In this insight, we will highlight that inflows into <a href="https://www.smartkarma.com/entities/1119" target="_blank" data-smartkarma-citation="entities:1119:1">ICBC (H) (1398 HK)</a> were particularly strong last week, and inflow into Tencent still sustained from the prior week, thanks to newsflows pertaining to the strong sales of its newly approved mobile game.

In our weekly HK Connect Ideas series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as analyzed by our proprietary data engine, and highlight interesting trade ideas. We split the stocks eligible for the Hong Kong Connect trade into three groups: component stocks in the HSCEI index, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.In this insight, we will highlight that inflows into ICBC (H) (1398 HK) were particularly strong last week, and inflow into Tencent still sustained from the prior week, thanks to newsflows pertaining to the strong sales of its newly approved mobile game. 

HK Connect Ideas: ICBC and Tencent (2019-05-17)

This is a monthly version of our HK Connect Ideas weekly note, in which I highlight Hong Kong-listed companies leading the southbound flow on a weekly basis. Over the past month, we have seen a stronger inflow vs a month ago. Chinese investors were buying WH Group and Ping An Insurance stocks and selling Geely.<h2>Our April Coverage of Hong Kong Connect southbound flow</h2><ul>
<li><a href="https://www.smartkarma.com/insights/hk-connect-discovery-weekly-air-china-and-great-wall-motor-2019-04-04" target="_blank">HK Connect Discovery Weekly: Air China and Great Wall Motor (2019-04-04)</a></li>
<li><a href="https://www.smartkarma.com/insights/hk-connect-ideas-tencent-inflows-not-sustained-after-game-approval-2019-04-12" target="_blank">HK Connect Ideas: Tencent Inflows Not Sustained After Game Approval (2019-04-12)</a></li>
<li><a href="https://www.smartkarma.com/insights/hk-connect-ideas-longest-streak-of-weekly-inflows-ytd-2019-04-18" target="_blank">HK Connect Ideas: Longest Streak of Weekly Inflows YTD (2019-04-18)</a></li>
</ul>

This is a monthly version of our HK Connect Ideas weekly note, in which I highlight Hong Kong-listed companies leading the southbound flow on a weekly basis. Over the past month, we have seen a stronger inflow vs a month ago. Chinese investors were buying WH Group and Ping An Insurance stocks and selling Geely.Our April Coverage of Hong Kong Connect southbound flow
HK Connect Discovery Weekly: Air China and Great Wall Motor (2019-04-04)
HK Connect Ideas: Tencent Inflows Not Sustained After Game Approval (2019-04-12)
HK Connect Ideas: Longest Streak of Weekly Inflows YTD (2019-04-18)


HK Connect Ideas - April Snapshot (WH Group, Ping An, Geely)

Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/10795" target="_blank" data-smartkarma-citation="entities:10795:1">China Meidong Auto (1268 HK)</a> has been a great success story for its investors in the last two years. I first wrote about the company in May 2017 when shares were trading at 1.53 HKD. This week shares traded over 4.7 HKD. While the share price has gyrated wildly the past 24 months the underlying earnings of the company have been increasing steadily and shareholders have been rewarded with solid dividends.FY18 results were released last month which showed strong growth in revenues (+44%) and net profits (+31%). With the importance of Lexus and Porsche increasing, FY19 should be another year of growth. The performance of BMW remains a wild card.With the stock up 59% YTD shares are now fairly valued and trading at a 30% premium to its peers. Meidong remains a long-term favorite but has now exceeded my fair value estimate of 4.4 HKD (10x 2019 EPS). I suggest waiting for a better entry point.

China Meidong Auto (1268 HK) has been a great success story for its investors in the last two years. I first wrote about the company in May 2017 when shares were trading at 1.53 HKD. This week shares traded over 4.7 HKD. While the share price has gyrated wildly the past 24 months the underlying earnings of the company have been increasing steadily and shareholders have been rewarded with solid dividends.FY18 results were released last month which showed strong growth in revenues (+44%) and net profits (+31%). With the importance of Lexus and Porsche increasing, FY19 should be another year of growth. The performance of BMW remains a wild card.With the stock up 59% YTD shares are now fairly valued and trading at a 30% premium to its peers. Meidong remains a long-term favorite but has now exceeded my fair value estimate of 4.4 HKD (10x 2019 EPS). I suggest waiting for a better entry point.

China Meidong (1268 HK): +59% YTD After Strong FY18 Results and Positive Outlook; Now Fairly Valued

In our Discover HK Connect series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as analyzed by our proprietary data engine. We will discuss the stocks that experienced the most inflow and outflow by mainland investors in the past seven days.We split the stocks eligible for the Hong Kong Connect trade into three groups: component stocks in the HSCEI index, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.In this insight, we will provide an analysis of the performance of selected stocks that just joined the Stock Connect last week.

In our Discover HK Connect series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as analyzed by our proprietary data engine. We will discuss the stocks that experienced the most inflow and outflow by mainland investors in the past seven days.We split the stocks eligible for the Hong Kong Connect trade into three groups: component stocks in the HSCEI index, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.In this insight, we will provide an analysis of the performance of selected stocks that just joined the Stock Connect last week. 

HK Connect Discovery Weekly: Eligibility Adjustment (2019-03-15)

APAC IPOs & Placements

Zhen Zhou, Toh

Equity Capital Markets

Dongzheng Automotive Finance / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/27984" target="_blank" data-smartkarma-citation="entities:27984:1">Dongzheng Automotive Finance (2718 HK)</a> is looking to raise approximately US$300 - 500m in its upcoming IPO. 
DAF is a fast growing auto finance company which acquires customers through a network of dealership around China. Its net interest income grew by 66% CAGR from FY2016 to FY2018 while net fees/comms income and profit grew by 39.6% and 61% CAGR over the same period.
However, most of its growth originated from ZhengTong dealers and joint promotion arrangement. Excluding loans from joint promotion arrangement, gross outstanding loan had only grown by 12% CAGR.
In this insight, we will look at the company's business, analyze the competitive landscape, provide thoughts on valuation, and some questions for management.

Dongzheng Automotive Finance (2718 HK) is looking to raise approximately US$300 - 500m in its upcoming IPO. 
DAF is a fast growing auto finance company which acquires customers through a network of dealership around China. Its net interest income grew by 66% CAGR from FY2016 to FY2018 while net fees/comms income and profit grew by 39.6% and 61% CAGR over the same period.
However, most of its growth originated from ZhengTong dealers and joint promotion arrangement. Excluding loans from joint promotion arrangement, gross outstanding loan had only grown by 12% CAGR.
In this insight, we will look at the company's business, analyze the competitive landscape, provide thoughts on valuation, and some questions for management.

Dongzheng Auto Finance (东正汽车金融) Pre-IPO Review - Dependent on Dealership Network for Growth

China

Grand Baoxin Auto Group Limited operates as a automobile sales and service company. The Company focuses on selling mid-and-high end branded cars. Grand Baoxin Auto Group also offers used car sale, after-sales maintenance, and other services.

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