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 Hong Kong Connect flows with our data engine for holding position as of October 10th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Alibaba, SMIC, Xiaomi, Innovent Biologics, Meituan, HKEx, Ping An Insurance, CMB.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of October 10th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Alibaba, SMIC, Xiaomi, Innovent Biologics, Meituan, HKEx, Ping An Insurance, CMB.


Hong Kong Connect Flows (Oct 10th): Alibaba, SMIC, Xiaomi, Innovent Biologics, Meituan, HKEx

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Equity Capital Markets

<ul>
<li>Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.</li>
<li>On the IPO front, <a href="https://www.smartkarma.com/entities/midea-group-co-ltd-a" target="_blank" data-smartkarma-citation="entities:16185:1" rel="noopener">Midea Group Co Ltd A (000333 CH)</a> and <a href="https://www.smartkarma.com/entities/bajaj-housing-finance" target="_blank" data-smartkarma-citation="entities:43675:1" rel="noopener">Bajaj Housing Finance (BHF IN)</a> hogged much of the limelight this week as well.</li>
<li>On the placements front, there were a few large US$400m+ placements across the region this week.</li>
</ul>


Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, Midea Group Co Ltd A (000333 CH) and Bajaj Housing Finance (BHF IN) hogged much of the limelight this week as well.
On the placements front, there were a few large US$400m+ placements across the region this week.


ECM Weekly (23rd Sep 2024) - Tokyo Metro, Midea, Intermestic, Sagility, Belstar, Kuaishou, Bajaj HF

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Bottom-Up

<ul>
<li>Beijing-Based 4Paradigm shares have underperformed the Hang Seng Index (+4.3%) in 2024 with shares down ~20% year-to-date. IPO investors are down ~28%.</li>
<li>I expect near-term selling pressure on the stock as IPO lockup ends in September and at least 265M shares will be available for sale by the end of next month.</li>
<li>4Paradigm has made considerable progress and with a clear profitability trajectory, the stock looks undervalued relative to peers in Mainland China and worldwide.</li>
</ul>


Beijing-Based 4Paradigm shares have underperformed the Hang Seng Index (+4.3%) in 2024 with shares down ~20% year-to-date. IPO investors are down ~28%.
I expect near-term selling pressure on the stock as IPO lockup ends in September and at least 265M shares will be available for sale by the end of next month.
4Paradigm has made considerable progress and with a clear profitability trajectory, the stock looks undervalued relative to peers in Mainland China and worldwide.


4Paradigm: Near-Term Selling Pressure May Persist As IPO Lockup Ends Next Month

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

Event-Driven

<ul>
<li>The review cutoff date for the September rebalance of the HSIII was 28 June. The changes will be announced on 16 August and become effective after the close 6 September.</li>
<li>There could be 3 changes to the index with some inclusions driven by potential addition to the Hang Seng Composite Index. That could lead to buying via Southbound Stock Connect.</li>
<li>Capping will result in passives buying <a href="https://www.smartkarma.com/entities/kuaishou-technology" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> and <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (9618 HK)</a> while selling <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>.</li>
</ul>


The review cutoff date for the September rebalance of the HSIII was 28 June. The changes will be announced on 16 August and become effective after the close 6 September.
There could be 3 changes to the index with some inclusions driven by potential addition to the Hang Seng Composite Index. That could lead to buying via Southbound Stock Connect.
Capping will result in passives buying Kuaishou Technology (1024 HK) and JD.com (9618 HK) while selling Meituan (3690 HK) and Tencent (700 HK).


Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Three Adds/Deletes & Capping Changes

<ul>
<li>4Paradigm, China’s AI software company with focus on enterprise-level solutions, performed well and achieved solid growth in 2023 and Q1 2024. </li>
<li>In my insight, I discuss valuation framework for comparable company analysis and set a new 12-month PT for 4Paradigm.</li>
<li>The company’s management has set a clear goal of profitability. I like 4Paradigm’s leadership position and hyper-growth in revenue from the Sage AI Platform.</li>
</ul>


4Paradigm, China’s AI software company with focus on enterprise-level solutions, performed well and achieved solid growth in 2023 and Q1 2024. 
In my insight, I discuss valuation framework for comparable company analysis and set a new 12-month PT for 4Paradigm.
The company’s management has set a clear goal of profitability. I like 4Paradigm’s leadership position and hyper-growth in revenue from the Sage AI Platform.


4Paradigm: Sage AI Platform 5.0. Could Drive ~30% Y/Y Revenue Growth in 2024, PT Raised To HK$100

China

Beijing 4Paradigm Technology Co. Ltd. operates as an artificial intelligence technology service provider. The Company provides model self-learning, data cleaning free, interpreted complex model, human computer cooperation, and other services. Beijing 4Paradigm Technology applies its technology in financial, government, energy, manufacturing, retail, medical, and other fields.

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4Paradigm (6682 HK)

Hong Kong Connect Flows (Oct 10th): Alibaba, SMIC, Xiaomi, Innovent Biologics, Meituan, HKEx

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Alibaba, SMIC, Xiaomi, Innovent Biologics, Meituan, HKEx,...

Ke Yan, CFA, FRM

ECM Weekly (23rd Sep 2024) - Tokyo Metro, Midea, Intermestic, Sagility, Belstar, Kuaishou, Bajaj HF

Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.

Sumeet Singh

4Paradigm: Near-Term Selling Pressure May Persist As IPO Lockup Ends Next Month

4Paradigm, a Beijing-based enterprise AI company, completed its initial public offering in 2023. Pre-IPO investors and shareholders may sell the...

Andrei Zakharov

Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Three Adds/Deletes & Capping Changes

There could be 3 changes for the HSIII in September. The passive buying on the adds is small while selling on the deletes is much larger. Lock-up...

Brian Freitas

4Paradigm: Sage AI Platform 5.0. Could Drive ~30% Y/Y Revenue Growth in 2024, PT Raised To HK$100

In my insight, I discuss valuation for 4Paradigm and set a new PT for China’s AI software company coupled with RV analysis and highlights from...

Andrei Zakharov

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