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.

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

High Quality Stock Setups, Weekly Stock Bull Finder

Weekly Stock Bull Finder

High Quality Stock Setups

Finding high potential stock setups on quality companies

Equity Bottom-Up

Melco Resorts & Entertainment / Equity Bottom-Up

<ul><li>As investors we are faced with a deluge of noisy breaking news, business media talking heads, and what has felt like non-stop Fed speakers offering their differing views on the economy and the path of rate hikes going in 2023. </li><li>This week was no different. Fed Chair Jay Powell was front and center suggesting that interest rate hikes will likely be stepped down to 50bps in the upcoming December Fed meeting in a few weeks. </li><li>This was already discounted and expected by the market and effectively didn’t offer much of anything Wall St. didn’t already know.</li></ul>

As investors we are faced with a deluge of noisy breaking news, business media talking heads, and what has felt like non-stop Fed speakers offering their differing views on the economy and the path of rate hikes going in 2023. This week was no different. Fed Chair Jay Powell was front and center suggesting that interest rate hikes will likely be stepped down to 50bps in the upcoming December Fed meeting in a few weeks. This was already discounted and expected by the market and effectively didn’t offer much of anything Wall St. didn’t already know.

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/magic-empire-global" target="_blank" data-smartkarma-citation="entities:36219:1" rel="noopener">Magic Empire Global (MEGL US)</a> shares are currently up 45x since its listing at US$4.00 per share on 5 August. Its market cap currently stands at US$3.6 billion.</li>
<li>Just like <a href="https://www.smartkarma.com/entities/amtd-digital" target="_blank" data-smartkarma-citation="entities:36214:1" rel="noopener">AMTD Digital (HKD US)</a>, it is hard to pinpoint the real reason for MEGL’s share price surge. MEGL’s financials are uninspiring and cannot justify the share price ramp.</li>
<li>MEGL has no unique competitive advantage which could justify it's current large premium multiple compared to larger and better-established peers.    </li>
</ul>



Magic Empire Global (MEGL US) shares are currently up 45x since its listing at US$4.00 per share on 5 August. Its market cap currently stands at US$3.6 billion.
Just like AMTD Digital (HKD US), it is hard to pinpoint the real reason for MEGL’s share price surge. MEGL’s financials are uninspiring and cannot justify the share price ramp.
MEGL has no unique competitive advantage which could justify it's current large premium multiple compared to larger and better-established peers.    


Magic Empire Global: More Trick than Treat

Forensic Analyst

Jason Yap, CFA

Forensic Accounting

<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>  is China’s largest online brokerage, both by revenue and market cap, and backed by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>. <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>, also known as Tiger Brokers, is backed by veteran American investor Jim Rogers, smartphone giant <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>, and U.S. brokerage giant Interactive Brokers Group Inc. Both had looked to cash in on the growing amount of Chinese retail investor money pouring into U.S. stocks following a banner year in 2020.
On 14 October 2021, the People's Daily <a href="http://sh.people.com.cn/n2/2021/1014/c139965-34956684.html" target="_blank" rel="noopener">stated</a> that online brokerages, naming Futu and Up Fintech specifically, that operate across borders run the risk of violating data privacy rules and personal information protection laws, the latter taking effect from 1 November 2021. 
On the same day, Futu’s shares plummeted more than 13% to USD73.11, down 62% from the peak in February. UP Fintech fell more than 20% to USD8.19, down 78% from its February high. 
The additional regulatory scrutiny compounds the woes of China's online brokerages following a torrid 2 quarters, where investor appetite and trading volumes slumped, particularly for US ADRs and HK tech stocks, amidst a weak market environment.
In statements issued last Friday (15 Oct), both firms affirmed that they have pro-actively complied with relevant regulations and addressed issues raised by the Special Task Force on the Regulation of Apps since July 2019, seeking to quell investor concerns following the People's Daily Report. 
In this Insight, we discuss the following: 
<ol>
<li>What are the Relevant Data Laws?</li>
<li>What was new in the People's Daily report? </li>
<li>How have the Online Brokerages sought to mitigate Data Regulations?</li>
<li>Can Online Brokerages Allow Mainland Investors to Trade Offshore Assets in the First Place? </li>
</ol>
More details below the fold.

Futu Holdings Ltd (FUTU US)  is China’s largest online brokerage, both by revenue and market cap, and backed by Tencent (700 HK). UP Fintech (TIGR US), also known as Tiger Brokers, is backed by veteran American investor Jim Rogers, smartphone giant Xiaomi Corp (1810 HK), and U.S. brokerage giant Interactive Brokers Group Inc. Both had looked to cash in on the growing amount of Chinese retail investor money pouring into U.S. stocks following a banner year in 2020.
On 14 October 2021, the People's Daily stated that online brokerages, naming Futu and Up Fintech specifically, that operate across borders run the risk of violating data privacy rules and personal information protection laws, the latter taking effect from 1 November 2021. 
On the same day, Futu’s shares plummeted more than 13% to USD73.11, down 62% from the peak in February. UP Fintech fell more than 20% to USD8.19, down 78% from its February high. 
The additional regulatory scrutiny compounds the woes of China's online brokerages following a torrid 2 quarters, where investor appetite and trading volumes slumped, particularly for US ADRs and HK tech stocks, amidst a weak market environment.
In statements issued last Friday (15 Oct), both firms affirmed that they have pro-actively complied with relevant regulations and addressed issues raised by the Special Task Force on the Regulation of Apps since July 2019, seeking to quell investor concerns following the People's Daily Report. 
In this Insight, we discuss the following: 

What are the Relevant Data Laws?
What was new in the People's Daily report? 
How have the Online Brokerages sought to mitigate Data Regulations?
Can Online Brokerages Allow Mainland Investors to Trade Offshore Assets in the First Place? 

More details below the fold.

China Online Brokerages - "No Critical and Sensitive Personal Data to See Here!"

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

East Money Information / Equity Bottom-Up

East Money is the most actively traded A-share stock in 2020. It just reported its 1H2021 results. Unlike the traditional broker, it has a strong leverage on its online information platform which is well reflected in its latest financial results. As an unconventional broker and a member stock of the MSCI China A50 index, we think investors should follow the company closely.

East Money is the most actively traded A-share stock in 2020. It just reported its 1H2021 results. Unlike the traditional broker, it has a strong leverage on its online information platform which is well reflected in its latest financial results. As an unconventional broker and a member stock of the MSCI China A50 index, we think investors should follow the company closely.

East Money 1H21: The Most Active A-Share that Beat the Market

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)

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

Weekly Stock Bullfinder - Week of 12/5

As investors we are faced with a deluge of noisy breaking news, business media talking heads, and what has felt like non-stop Fed speakers offering...

Weekly Stock Bull Finder

Magic Empire Global: More Trick than Treat

It is hard to pinpoint the real reason for MEGL’s share price surge. While it is difficult to predict when the share price will reflect...

Arun George

China Online Brokerages - "No Critical and Sensitive Personal Data to See Here!"

China's online brokerages risk running afoul of new data privacy rules and personal information protection laws. This is compounded by poor trading...

Jason Yap, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

Weekly Stock Bullfinder - Week of 12/5

As investors we are faced with a deluge of noisy breaking news, business media talking heads, and what has felt like non-stop Fed speakers offering...

Weekly Stock Bull Finder

Magic Empire Global: More Trick than Treat

It is hard to pinpoint the real reason for MEGL’s share price surge. While it is difficult to predict when the share price will reflect...

Arun George

China Online Brokerages - "No Critical and Sensitive Personal Data to See Here!"

China's online brokerages risk running afoul of new data privacy rules and personal information protection laws. This is compounded by poor trading...

Jason Yap, CFA

East Money 1H21: The Most Active A-Share that Beat the Market

We highlight the strong set of results for East Money. As an unconventional broker and a member stock of the MSCI China A50 index, we think...

Ke Yan, CFA, FRM