HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

Guotai Junan International / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/guotai-haitong-securities-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:23752:1" rel="noopener">Guotai Haitong Securities (2611 HK)</a> proposed to privatise <a href="https://www.smartkarma.com/entities/guotai-junan-international-holdings-limited" target="_blank" data-smartkarma-citation="entities:13438:1" rel="noopener">Guotai Junan International (1788 HK)</a> at HK$3.0, a 44.2% premium to the pre-suspension price, which looks good enough. </li>
<li>The proposed price equals 11.9x PER for FY26F, higher than the average of 10.1x since 2024. This is better than the sector's average PER of 10.3x.</li>
<li>It also equates to 1.6x 12-month forward P/B, or 1.3SD above the 5-year average, well reflecting a projected ROE recovery in the next two years.</li>
</ul>



Guotai Haitong Securities (2611 HK) proposed to privatise Guotai Junan International (1788 HK) at HK$3.0, a 44.2% premium to the pre-suspension price, which looks good enough. 
The proposed price equals 11.9x PER for FY26F, higher than the average of 10.1x since 2024. This is better than the sector's average PER of 10.3x.
It also equates to 1.6x 12-month forward P/B, or 1.3SD above the 5-year average, well reflecting a projected ROE recovery in the next two years.


Guotai Junan Intl (1788 HK): A Good Enough Privatisation Price

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

Equity Capital Markets

Jio Platforms Ltd / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jio-platforms-ltd" target="_blank" data-smartkarma-citation="entities:50269:1" rel="noopener">Jio Platforms</a> (JPL) is looking to raise up to US$3.75bn in its upcoming India IPO.</li>
<li>Jio Platforms Ltd (JPL) is a technology and digital services platform company promoted by Reliance Industries, built on a proprietary digital technology stack and pan-India connectivity infrastructure.</li>
<li>In this note, we talk about the not-so-positive aspects of the deal.</li>
</ul>



Jio Platforms (JPL) is looking to raise up to US$3.75bn in its upcoming India IPO.
Jio Platforms Ltd (JPL) is a technology and digital services platform company promoted by Reliance Industries, built on a proprietary digital technology stack and pan-India connectivity infrastructure.
In this note, we talk about the not-so-positive aspects of the deal.


Aequitas: Jio Platforms Pre-IPO - The Negatives - Lower ARPU, Related Party

Insurance & Central Asia-focused Analyst, KT Capital Group

Alec Tseung

Insurance & Central Asia-focused Analyst

Thematic (Sector/Industry)

This Original aims to identify the key investment opportunities among the listed brokers in the three major East Asian countries - China, Japan, and Korea. By looking at the development of the brokerage sectors in these three countries, we observe a general trend where upstart online brokers first compete against the more established brokers based on their cost and technological advantages. This then pushes the more established brokers to either focus on more lucrative wholesale businesses or adopt and invest in tech initiatives in order to stay competitive in the retail market.After further establishing themselves in the retail market, these upstart online brokers then also diversify and expand into the more lucrative wealth/asset management or even wholesale businesses.  By gauging at which phase the broker is in this cycle, investors can have a good understanding of its future outlook.In our opinion, Korean brokers currently offer the best value, while the Chinese pure-play online brokers offer the highest growth potential. As such, our pecking order, in terms of investment attractiveness, is <a href="https://www.smartkarma.com/entities/kiwoom-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:20418:1" rel="noopener">Kiwoom Securities (039490 KS)</a>, <a href="https://www.smartkarma.com/entities/east-money-information-co-a" target="_blank" data-smartkarma-citation="entities:8075:1" rel="noopener">East Money Information Co A (300059 CH)</a>, <a href="https://www.smartkarma.com/entities/futu-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27858:1" rel="noopener">Futu Holdings Ltd (FUTU US)</a>, <a href="https://www.smartkarma.com/entities/monex-group-inc" target="_blank" data-smartkarma-citation="entities:14211:1" rel="noopener">Monex Group Inc (8698 JP)</a> / <a href="https://www.smartkarma.com/entities/huatai-securities-co-ltd-h" target="_blank" data-smartkarma-citation="entities:449:1" rel="noopener">Huatai Securities Co Ltd (H) (6886 HK)</a>.  <h2>What is Original?</h2>In this Original, we look into the competitive landscape of the brokerage sectors in China, Japan, and Korea. 55 listed brokers from these three countries are included in this Original as the company universe for regression analysis. Among them, a total of 8 brokers are chosen, with their company profiles separately presented, to further showcase and contrast the impact of competition and technological disruption. Based on this, a pecking order is then developed, both on a country and a company basis.

This Original aims to identify the key investment opportunities among the listed brokers in the three major East Asian countries - China, Japan, and Korea. By looking at the development of the brokerage sectors in these three countries, we observe a general trend where upstart online brokers first compete against the more established brokers based on their cost and technological advantages. This then pushes the more established brokers to either focus on more lucrative wholesale businesses or adopt and invest in tech initiatives in order to stay competitive in the retail market.After further establishing themselves in the retail market, these upstart online brokers then also diversify and expand into the more lucrative wealth/asset management or even wholesale businesses.  By gauging at which phase the broker is in this cycle, investors can have a good understanding of its future outlook.In our opinion, Korean brokers currently offer the best value, while the Chinese pure-play online brokers offer the highest growth potential. As such, our pecking order, in terms of investment attractiveness, is Kiwoom Securities (039490 KS), East Money Information Co A (300059 CH), Futu Holdings Ltd (FUTU US), Monex Group Inc (8698 JP) / Huatai Securities Co Ltd (H) (6886 HK).  What is Original?In this Original, we look into the competitive landscape of the brokerage sectors in China, Japan, and Korea. 55 listed brokers from these three countries are included in this Original as the company universe for regression analysis. Among them, a total of 8 brokers are chosen, with their company profiles separately presented, to further showcase and contrast the impact of competition and technological disruption. Based on this, a pecking order is then developed, both on a country and a company basis.

Asian Brokers: A Competition Between Value and Growth

Bright Smart Securities & Commodities / Equity Bottom-Up

Bright Smart Securities & Commodities (1428 HK)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bright-smart-securities-commodities-group" target="_blank" data-smartkarma-citation="entities:20511:1" rel="noopener"></a>Ant Financial has essentially passed through all hurdles in its acquisition of a 50.55% stake in <a href="https://www.smartkarma.com/entities/bright-smart-securities-commodities-group" target="_blank" data-smartkarma-citation="entities:20511:1" rel="noopener">Bright Smart Securities (1428 HK)</a> from the current controlling shareholder.</li>
<li>With a 68.5% surge in share price YTD, it is now trading on 31.8x FY27F PER and 9.2x P/B. A lot of 'dream' or 'hope' value has already been discounted. </li>
<li>It is more expensive than <a href="https://www.smartkarma.com/entities/futu-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27858:1" rel="noopener">Futu Holdings Ltd (FUTU US)</a> and <a href="https://www.smartkarma.com/entities/up-fintech-holding-ltd" target="_blank" data-smartkarma-citation="entities:27957:1" rel="noopener">UP Fintech (TIGR US)</a>, so taking some money off the table is sensible. </li>
</ul>



Ant Financial has essentially passed through all hurdles in its acquisition of a 50.55% stake in Bright Smart Securities (1428 HK) from the current controlling shareholder.
With a 68.5% surge in share price YTD, it is now trading on 31.8x FY27F PER and 9.2x P/B. A lot of 'dream' or 'hope' value has already been discounted. 
It is more expensive than Futu Holdings Ltd (FUTU US) and UP Fintech (TIGR US), so taking some money off the table is sensible. 


APAC IPOs & Placements, Aequitas Research

Nicholas Tan

APAC IPOs & Placements

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hashkey-holdings-limited" target="_blank" data-smartkarma-citation="entities:40847:1" rel="noopener">HashKey (3887 HK)</a> is looking to raise up to US$215m in its upcoming Hong Kong IPO.</li>
<li>It operates the largest licensed crypto exchange in Hong Kong.</li>
<li>In this note, we examine the IPO dynamics, and look at the firm’s valuation.</li>
</ul>



HashKey (3887 HK) is looking to raise up to US$215m in its upcoming Hong Kong IPO.
It operates the largest licensed crypto exchange in Hong Kong.
In this note, we examine the IPO dynamics, and look at the firm’s valuation.


HashKey Holdings Pre-IPO: Ok-Ish Cornerstones but Too Expensive

United States

UP Fintech Holding Limited operates as a holding company. The Company, through its subsidiaries, provides online securities brokerage services. Up Fintech Holding serves customers in China.

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UP Fintech (TIGR US)

Guotai Junan Intl (1788 HK): A Good Enough Privatisation Price

Guotai Haitong proposes to privatise Guotai Junan International at HK$3.0, a 44.2% premium over the closing price, offering a higher-than-average...

Osbert Tang, CFA

Asian Brokers: A Competition Between Value and Growth

The Original looks into the current competitive landscape of the brokerage sectors in China, Japan, and Korea, with a view to developing a list of...

Alec Tseung

Bright Smart (1428 HK): Enough Is Enough

As expected, Ant Financial has put forward the Unconditional MGO at HK$3.28, or a 74% discount to its last close. This is a formality in the...

Osbert Tang, CFA

HashKey Holdings Pre-IPO: Ok-Ish Cornerstones but Too Expensive

HashKey Holdings (3887 HK) plans to raise up to US$215m in its Hong Kong IPO, boasting the largest licensed crypto exchange in the region. This...

Nicholas Tan

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Guotai Junan Intl (1788 HK): A Good Enough Privatisation Price

​Guotai Haitong proposes to privatise Guotai Junan International at HK$3.0, a 44.2% premium over the closing price, offering a higher-than-average...

Osbert Tang, CFA

Aequitas: Jio Platforms Pre-IPO - The Negatives - Lower ARPU, Related Party

Jio Platforms (JPL) is looking to raise up to US$3.75bn in its upcoming India IPO. In this note, we talk about the not-so-positive aspects of the...

Sumeet Singh

Asian Brokers: A Competition Between Value and Growth

The Original looks into the current competitive landscape of the brokerage sectors in China, Japan, and Korea, with a view to developing a list of...

Alec Tseung

Bright Smart (1428 HK): Enough Is Enough

As expected, Ant Financial has put forward the Unconditional MGO at HK$3.28, or a 74% discount to its last close. This is a formality in the...

Osbert Tang, CFA

HashKey Holdings Pre-IPO: Ok-Ish Cornerstones but Too Expensive

​HashKey Holdings (3887 HK) plans to raise up to US$215m in its Hong Kong IPO, boasting the largest licensed crypto exchange in the region. This...

Nicholas Tan

Guotai Haitong proposes to privatise Guotai Junan International at HK$3.0, a 44.2% premium over the closing price, offering a higher-than-average...

HashKey Holdings (3887 HK) plans to raise up to US$215m in its Hong Kong IPO, boasting the largest licensed crypto exchange in the region. This...