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 statistics on top repurchases over one week, one month, one quarter and one year periods ended on Feb 9th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were HSBC (5 HK), Wuxi Biologics (2269 HK), AIA (1299 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Meituan (3690 HK), AIA (1299 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Feb 9th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were HSBC (5 HK), Wuxi Biologics (2269 HK), AIA (1299 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Meituan (3690 HK), AIA (1299 HK).


Hong Kong Buybacks Weekly (Feb 9th): Hsbc, Wuxi Biologics, Aia

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>We expect Meituan continue under pressure in the medium term due to the intensified competition with Douyin, and Meituan’s low price defending strategy in both food delivery and IHT businesses.</li>
<li>Our non-IFRS net profit is roughly in-line with consensus in 4Q23 but 20%/25% lower than consensus in 2024/25.</li>
<li>We downgrade the stock to SELL rating and cut TP to HK$57/share.</li>
</ul>


We expect Meituan continue under pressure in the medium term due to the intensified competition with Douyin, and Meituan’s low price defending strategy in both food delivery and IHT businesses.
Our non-IFRS net profit is roughly in-line with consensus in 4Q23 but 20%/25% lower than consensus in 2024/25.
We downgrade the stock to SELL rating and cut TP to HK$57/share.


[Meituan (3690 HK, SELL, TP HK$57) Rating Change]: No Quick Skip to the Near-Term Pressures

Greater China Equity Long/Short Analyst

Eric Chen

Thematic (Sector/Industry)

<ul>
<li>We argued in last follow-up note that property woes and challenging macro situation would keep pressuring China online marketplaces’ valuation despite their improving profitability and cashflow.</li>
<li>The sector’s brutal de-rating since last 4Q has been pricing in a dire growth outlook and it is closer to the end of tunnel in our view.</li>
<li>We expect a lackluster 4Q23 results season for the sector in general but also less share price volatility given extremely depressed valuation. Stay positive over 12-month time horizon.</li>
</ul>


We argued in last follow-up note that property woes and challenging macro situation would keep pressuring China online marketplaces’ valuation despite their improving profitability and cashflow.
The sector’s brutal de-rating since last 4Q has been pricing in a dire growth outlook and it is closer to the end of tunnel in our view.
We expect a lackluster 4Q23 results season for the sector in general but also less share price volatility given extremely depressed valuation. Stay positive over 12-month time horizon.


<ul>
<li>BABA/CPNG/PDD: AliExpress offering 0% commission to sellers of Korean brand products (+/-/-)</li>
<li>700 HK/NTES:NPPA has released the latest approvals for imported games, and Tencent’s highly anticipated &lt;DNF Mobile&gt; has received approval(+)</li>
<li>3690 HK: Meituan changed organizational structure by consolidating In-store and food delivery business(+)</li>
</ul>


BABA/CPNG/PDD: AliExpress offering 0% commission to sellers of Korean brand products (+/-/-)
700 HK/NTES:NPPA has released the latest approvals for imported games, and Tencent’s highly anticipated &lt;DNF Mobile&gt; has received approval(+)
3690 HK: Meituan changed organizational structure by consolidating In-store and food delivery business(+)


[Blue Lotus Daily - TMT Update]:BABA/CPNG/PDD/700 HK/NTES/3690 HK

<ul>
<li>Share price of Meituan has fallen by 25% since we flagged the name as high-conviction sell for 2024 last December, due in large to its weakening fundamental and earnings cut.</li>
<li>We believe its competitive positioning in food delivery remains rock solid and estimates Meituan will likely command over 2/3 market share in in-store business, at the expense of margin.</li>
<li>The company trades at 12x/8.6x 2024/25 consensus earnings. Current valuation already priced in rather bearish outlook amidst macro concerns and intensified competition in our view. We see value emerging.</li>
</ul>


Share price of Meituan has fallen by 25% since we flagged the name as high-conviction sell for 2024 last December, due in large to its weakening fundamental and earnings cut.
We believe its competitive positioning in food delivery remains rock solid and estimates Meituan will likely command over 2/3 market share in in-store business, at the expense of margin.
The company trades at 12x/8.6x 2024/25 consensus earnings. Current valuation already priced in rather bearish outlook amidst macro concerns and intensified competition in our view. We see value emerging.


Meituan (3690 HK): Turning Cautiously Positive

China

Meituan operates as a web based shopping platform for locally found consumer products and retail services. The Company offers deals of the day by selling vouchers on local services and entertainment, dining, delivery, and other services. Meituan provides its services throughout China.

Price Gauge
52-week Range	0.00 - 0.00
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Meituan (3690 HK)

Hong Kong Buybacks Weekly (Feb 9th): Hsbc, Wuxi Biologics, Aia

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were HSBC (5 HK), Wuxi...

Ke Yan, CFA, FRM

China Online Marketplaces: 4Q23 Preview

The sector's brutal de-rating since last 4Q already priced in a dire outlook. While we expect lackluster 4Q results season in general, we believe...

Eric Chen

[Blue Lotus Daily - TMT Update]:BABA/CPNG/PDD/700 HK/NTES/3690 HK

AliExpress is waiving commission fees for Korean brand sellers; NPPA has released the latest approvals for imported games; and Meituan...

Blue Lotus Research Institute

Meituan (3690 HK): Turning Cautiously Positive

Meituan has lost 25% market cap since we flagged it as high conviction sell last December. We consider risks largely priced in due to earnings cut...

Eric Chen

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Hong Kong Buybacks Weekly (Feb 9th): Hsbc, Wuxi Biologics, Aia

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were HSBC (5 HK), Wuxi...

Ke Yan, CFA, FRM

[Meituan (3690 HK, SELL, TP HK$57) Rating Change]: No Quick Skip to the Near-Term Pressures

​Meituan faces increased competition and challenges in the medium term with Douyin, and Meituan’s low price defending strategy in both food...

Blue Lotus Research Institute

China Online Marketplaces: 4Q23 Preview

The sector's brutal de-rating since last 4Q already priced in a dire outlook. While we expect lackluster 4Q results season in general, we believe...

Eric Chen

[Blue Lotus Daily - TMT Update]:BABA/CPNG/PDD/700 HK/NTES/3690 HK

​AliExpress is waiving commission fees for Korean brand sellers; NPPA has released the latest approvals for imported games; and Meituan...

Blue Lotus Research Institute

Meituan (3690 HK): Turning Cautiously Positive

Meituan has lost 25% market cap since we flagged it as high conviction sell last December. We consider risks largely priced in due to earnings cut...

Eric Chen

Meituan faces increased competition and challenges in the medium term with Douyin, and Meituan’s low price defending strategy in both food...

AliExpress is waiving commission fees for Korean brand sellers; NPPA has released the latest approvals for imported games; and Meituan...