HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>Through its 43.58% ownership in lithium carbonate producer Lanke Lithium Industry, <a href="https://www.smartkarma.com/entities/keda-industrial-group-co-ltd" target="_blank" data-smartkarma-citation="entities:20691:1" rel="noopener">Keda Industrial Group (600499 CH)</a> is well placed to benefit from the increase in lithium demand.</li>
<li>Lanke's capacity has recently been upgraded to 30,000 tonnes. Also, Keda is adding capacity to its own integrated anode materials factory in Fujian to capture the ever-rising demand. </li>
<li>Overseas ceramic business will see solid growth from key markets in Africa as Keda raises capacity by 65% by FY23. The stock's valuations are inexpensive relative to peers. </li>
</ul>


Through its 43.58% ownership in lithium carbonate producer Lanke Lithium Industry, Keda Industrial Group (600499 CH) is well placed to benefit from the increase in lithium demand.
Lanke's capacity has recently been upgraded to 30,000 tonnes. Also, Keda is adding capacity to its own integrated anode materials factory in Fujian to capture the ever-rising demand. 
Overseas ceramic business will see solid growth from key markets in Africa as Keda raises capacity by 65% by FY23. The stock's valuations are inexpensive relative to peers. 


Keda Industrial (600499 CH): Lithium Play Backed by Multi-Pronged Growth Strategies

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Smoore International Holdings / Event-Driven

<ul>
<li>The data in this insight is collated from the "shareholding disclosure" link on the HKEx website. </li>
<li>Often there is a corresponding HKEx announcement on the increase - or decrease - in the shareholding by directors. However, such disclosures are by no means an absolute. </li>
<li>Stocks mentioned below include <a href="https://www.smartkarma.com/entities/smoore-international" target="_blank" data-smartkarma-citation="entities:28241:1" rel="noopener">Smoore (6969 HK)</a>, <a href="https://www.smartkarma.com/entities/zhongsheng-group-holdings" target="_blank" data-smartkarma-citation="entities:10573:1" rel="noopener">Zhongsheng Group (881 HK)</a>, and <a href="https://www.smartkarma.com/entities/perennial-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:32219:1" rel="noopener">Perennial Energy Holdings Ltd (2798 HK)</a>. These insights may also flag those companies where shares have been pledged.</li>
</ul>


The data in this insight is collated from the "shareholding disclosure" link on the HKEx website. 
Often there is a corresponding HKEx announcement on the increase - or decrease - in the shareholding by directors. However, such disclosures are by no means an absolute. 
Stocks mentioned below include Smoore (6969 HK), Zhongsheng Group (881 HK), and Perennial Energy Holdings Ltd (2798 HK). These insights may also flag those companies where shares have been pledged.


Hong Kong CEO & Director Dealings: 15th Sept 2022 - Smoore, Zhongsheng, Perennial Energy

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Zhejiang Leapmotor Technologie / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zhejiang-leapmotor-technology" target="_blank" data-smartkarma-citation="entities:35968:1" rel="noopener">Leapmotor (2007699D HK)</a> is said to be looking to raise between US$1bn-US$1.5bn by selling 290.9m shares in its IPO. At the top end, the company will be valued at HK$53bn.</li>
<li>The performance of its peers over the last year leaves a lot to be desired and could lead to lower demand in the IPO.</li>
<li>
<a href="https://www.smartkarma.com/entities/zhejiang-leapmotor-technology" target="_blank" data-smartkarma-citation="entities:35968:1" rel="noopener">Leapmotor (2007699D HK)</a> should be added to the HSCI and the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index</a>, though timing depends on when the stock lists on the <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a>. </li>
</ul>



Leapmotor (2007699D HK) is said to be looking to raise between US$1bn-US$1.5bn by selling 290.9m shares in its IPO. At the top end, the company will be valued at HK$53bn.
The performance of its peers over the last year leaves a lot to be desired and could lead to lower demand in the IPO.

Leapmotor (2007699D HK) should be added to the HSCI and the Hang Seng Tech Index, though timing depends on when the stock lists on the HKEX (388 HK). 


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

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of August 26th. We estimate weekly outflows to be USD644m. </li>
<li>Information technology, financial and health care led the outflows while consumer staples, material and utilities led the inflows.</li>
<li>We highlight flows for Tongwei, Moutai, Yunan Energy New Material, Ganfeng Lithium, Longi Green and Xinjiang Goldwind.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of August 26th. We estimate weekly outflows to be USD644m. 
Information technology, financial and health care led the outflows while consumer staples, material and utilities led the inflows.
We highlight flows for Tongwei, Moutai, Yunan Energy New Material, Ganfeng Lithium, Longi Green and Xinjiang Goldwind.


Northbound Flows (Aug 27th): Longi Green, Xinjiang Goldwind

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Equity Capital Markets

China Tourism Group Duty Free / Equity Capital Markets

<ul>
<li>China Tourism Group Duty Free Corporation Limited (CDF) raised around US$2.4bn in its H-share listing in Hong Kong, after pricing its IPO at HKD158/share.</li>
<li>As per Frost &amp; Sullivan, CDF had 92.3% market share by retail revenue in China duty-free merchandise sales in 2020.</li>
<li>In this note, we talk about the deal pricing and the trading dynamics.</li>
</ul>


China Tourism Group Duty Free Corporation Limited (CDF) raised around US$2.4bn in its H-share listing in Hong Kong, after pricing its IPO at HKD158/share.
As per Frost &amp; Sullivan, CDF had 92.3% market share by retail revenue in China duty-free merchandise sales in 2020.
In this note, we talk about the deal pricing and the trading dynamics.


China Tourism Group A/H Trading - Decent Support from Long-Only but Minimal Retail Participation

China

Ganfeng Lithium Co Ltd researches and produces lithium products. The Company produces and sells lithium metal, lithium aluminum hydride, lithium fluoride, lithium chloride, and other chemical products of lithium. Jiangxi Ganfeng Lithium also exports lithium products.

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Ganfeng Lithium (1772 HK)

Keda Industrial (600499 CH): Lithium Play Backed by Multi-Pronged Growth Strategies

Keda is a relatively undervalued play on growing lithium demand. In addition to investment in lithium carbonate producer Lanke Lithium, it is also...

Osbert Tang, CFA

Hong Kong CEO & Director Dealings: 15th Sept 2022 - Smoore, Zhongsheng, Perennial Energy

The data in this insight is collated from the "shareholding disclosure" link on the HKEx website. These insights also flag those companies where...

David Blennerhassett

Leapmotor IPO - Index Inclusion Timeline

Leapmotor is said to be looking to raise between US$1-1.5bn by selling 290.9m shares in its IPO. At the top end, the company will be valued at...

Brian Freitas

Northbound Flows (Aug 27th): Longi Green, Xinjiang Goldwind

We highlight weekly northbound Shanghai/Shenzhen connect flows for Tongwei, Moutai, Yunan Energy New Material, Ganfeng Lithium, Longi Green and...

Ke Yan, CFA, FRM

China Tourism Group A/H Trading - Decent Support from Long-Only but Minimal Retail Participation

China Tourism Group Duty Free Corporation Limited (CDF) raised around US$2.4bn in its H-share listing in Hong Kong, after pricing its IPO at HKD158...

Sumeet Singh

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