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.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shengjing-bank-co-ltd-h" target="_blank" data-smartkarma-citation="entities:96:1" rel="noopener">Shengjing Bank Co Ltd H (2066 HK)</a> entered a trading halt “pending the publication of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers.”</li>
<li>It is likely that the SASAC of Shenyang Municipal People’s Government, the largest shareholder, is seeking to privatise Shengjing.</li>
<li>Precedents point to a voluntary conditional offer and delisting proposal. My estimated offer price range is HK$2.00-HK$2.80, a 75.4%-145% premium to the last close.</li>
</ul>



Shengjing Bank Co Ltd H (2066 HK) entered a trading halt “pending the publication of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers.”
It is likely that the SASAC of Shenyang Municipal People’s Government, the largest shareholder, is seeking to privatise Shengjing.
Precedents point to a voluntary conditional offer and delisting proposal. My estimated offer price range is HK$2.00-HK$2.80, a 75.4%-145% premium to the last close.


Shengjing Bank (2066 HK): Privatisation on the Cards?

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Chongqing Rural Commercial Bank / Event-Driven

<ul>
<li>Last week, CICC Hong Kong and SOE Jilin Financial Holding Group tabled a rescue offer for <a href="https://www.smartkarma.com/entities/jilin-jiutai-rural-comm-bank" target="_blank" data-smartkarma-citation="entities:23735:1" rel="noopener">Jilin Bank (6122 HK)</a>, as discussed in<a href="https://skr.ma/UL5z1" target="_blank" rel="noopener"> Jilin Bank (6122 HK): Another Hobson's Choice</a>
</li>
<li>This follows a similar bailout of <a href="https://www.smartkarma.com/entities/bank-of-jinzhou-co-ltd" target="_blank" data-smartkarma-citation="entities:21014:1" rel="noopener">Bank Of Jinzhou (416 HK)</a> in early 2024, as detailed in <a href="https://skr.ma/N19a2" target="_blank" rel="noopener">Bank of Jinzhou (416 HK) To Be Taken Private.</a>
</li>
<li>Tarring the sector with same brush is potentially oversimplifying the situation. But the issues faced by Jilin Bank and BoJ are unlikely to be isolated. Below I dig deeper.  </li>
</ul>


Last week, CICC Hong Kong and SOE Jilin Financial Holding Group tabled a rescue offer for Jilin Bank (6122 HK), as discussed in Jilin Bank (6122 HK): Another Hobson's Choice

This follows a similar bailout of Bank Of Jinzhou (416 HK) in early 2024, as detailed in Bank of Jinzhou (416 HK) To Be Taken Private.

Tarring the sector with same brush is potentially oversimplifying the situation. But the issues faced by Jilin Bank and BoJ are unlikely to be isolated. Below I dig deeper.  


Chinese RCBs: Two Bailouts. How Many More At Risk?

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 analyzed the latest HK SFC report for aggregate short position as of Feb 4th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short interest increases in HKEx and Country Garden in the past four weeks. </li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Feb 4th.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short interest increases in HKEx and Country Garden in the past four weeks. 


Financials Credit Analyst

Hank Calenti, CFA

CreditContinuum

Credit

Asia’s high yield market outperformed as US credit momentum remained more measured. A declining US dollar and investor reach for non-US yield aided Asia’s high yield performance Some investors have suggested that Asia’s market is beginning to look overbought. We disagree. Room remains for additional high yield performance in Asia. The US index fluctuated over the week as uncertainties regarding the next round of federal stimulus limited the positive impact of the continued job recovery and continued flows into non-investment grade credit.  Concurrently, in rate markets, one-month HIBOR continued to set multi-year lows despite rising Sino-US tensions. This is frothy and aided, in part, by continued Hong Kong Monetary Authority’s (HKMA) FX interventions over the last few weeks. The FX interventions result in an increase in HK$ liquidity and we expect the HKMA to continue to support the local currency through this difficult time-period.In the US, three-month Treasuries rose 1 basis points during the week and remained a safe-haven shelter from simmering risks. These include rising U.S.-China geo-political tensions, resurgent virus activity in Asia, Europe and several U.S. states, global growth concerns and the outcome of the US election. In this background, concerns began to be voiced on the potentially unsettling bond market impact from a successful coronavirus vaccine. We expect the Fed’s moves to have a more lasing affect. In fact, as we move through the US election, downward moves in US Treasury rates may occur, given potential investor uncertainty on policy direction, post-election. One cannot rule out a return to negative short-term US$ interest rates, as occurred in mid-March.In-line with Asia's more risk-on sentiment, sixteenAsia bank bonds tightened for every one that widened during the weeksetting a year high for the tightening versus widening spread ratio. India- headquartered and Hong Kong-centric banks were, once again, prevalent amongst those tightening most. In bank debt capital markets, <a href="https://www.smartkarma.com/entities/huntington-bancshares-inc" target="_blank" data-smartkarma-citation="entities:9166:1" rel="noopener">Huntington Bancshares (HBAN US)</a> brought an AT1 bond with a coupon lower than the yield on its shorter callable debt, following similar issuance by <a href="https://www.smartkarma.com/entities/chong-hing-bank-ltd" target="_blank" data-smartkarma-citation="entities:344:1" rel="noopener">Chong Hing Bank (1111 HK)</a> and <a href="https://www.smartkarma.com/entities/fifth-third-bancorp" target="_blank" data-smartkarma-citation="entities:152:1" rel="noopener">Fifth Third Bank (FITB US)</a> last week. We explain the mechanics of this in <a href="https://www.smartkarma.com/insights/chong-hing-bank-at1-alchemy" target="_blank" data-smartkarma-citation="insights:41645" rel="noopener">Chong Hing Bank: AT1 Alchemy</a>. The shorter-callable bonds rallied following issuance by each of these banks. We have modelled the pricing of these securities and will shortly publish a note identifying other bonds that may benefit from this AT1 alchemy.Market Outlook: Strong positive market technicals and unconventional monetary policy stimulus should help to avoid a substantial credit sell-off and continue to push risk asset prices higher. Tactically, cross-over senior unsecured may be best for defensive positioning; however, given the improved environment, higher beta senior unsecured as well as longer duration high yield and cross-over subordinated debt are better positioned for additional risk taking.Inside: In this weekly, we review global credit index levels, interest rates and fund flows as well as bank bond spread moves and recent debt issuance to identify possible investment opportunities and potential pitfalls in Asia-headquartered bank bonds.

Asia’s high yield market outperformed as US credit momentum remained more measured. A declining US dollar and investor reach for non-US yield aided Asia’s high yield performance Some investors have suggested that Asia’s market is beginning to look overbought. We disagree. Room remains for additional high yield performance in Asia. The US index fluctuated over the week as uncertainties regarding the next round of federal stimulus limited the positive impact of the continued job recovery and continued flows into non-investment grade credit.  Concurrently, in rate markets, one-month HIBOR continued to set multi-year lows despite rising Sino-US tensions. This is frothy and aided, in part, by continued Hong Kong Monetary Authority’s (HKMA) FX interventions over the last few weeks. The FX interventions result in an increase in HK$ liquidity and we expect the HKMA to continue to support the local currency through this difficult time-period.In the US, three-month Treasuries rose 1 basis points during the week and remained a safe-haven shelter from simmering risks. These include rising U.S.-China geo-political tensions, resurgent virus activity in Asia, Europe and several U.S. states, global growth concerns and the outcome of the US election. In this background, concerns began to be voiced on the potentially unsettling bond market impact from a successful coronavirus vaccine. We expect the Fed’s moves to have a more lasing affect. In fact, as we move through the US election, downward moves in US Treasury rates may occur, given potential investor uncertainty on policy direction, post-election. One cannot rule out a return to negative short-term US$ interest rates, as occurred in mid-March.In-line with Asia's more risk-on sentiment, sixteenAsia bank bonds tightened for every one that widened during the weeksetting a year high for the tightening versus widening spread ratio. India- headquartered and Hong Kong-centric banks were, once again, prevalent amongst those tightening most. In bank debt capital markets, Huntington Bancshares (HBAN US) brought an AT1 bond with a coupon lower than the yield on its shorter callable debt, following similar issuance by Chong Hing Bank (1111 HK) and Fifth Third Bank (FITB US) last week. We explain the mechanics of this in Chong Hing Bank: AT1 Alchemy. The shorter-callable bonds rallied following issuance by each of these banks. We have modelled the pricing of these securities and will shortly publish a note identifying other bonds that may benefit from this AT1 alchemy.Market Outlook: Strong positive market technicals and unconventional monetary policy stimulus should help to avoid a substantial credit sell-off and continue to push risk asset prices higher. Tactically, cross-over senior unsecured may be best for defensive positioning; however, given the improved environment, higher beta senior unsecured as well as longer duration high yield and cross-over subordinated debt are better positioned for additional risk taking.Inside: In this weekly, we review global credit index levels, interest rates and fund flows as well as bank bond spread moves and recent debt issuance to identify possible investment opportunities and potential pitfalls in Asia-headquartered bank bonds.

Bank Credit Weekly: Asia Outperforms a More Measured US

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Thematic (Sector/Industry)

*China Retaliation: A day after US government ordered mainland China's Houston consulate to close and personnel to depart within 72 hours, mainland China retaliated with an order telling the US to close its Chengdu consulate. The Houston, Texas consulate closure was “officially” due to the ongoing theft of American intellectual property and private information; and *China De-Escalation: Chengdu is  arguably the least high profile consulate versus the forced closure of the American consulates Hong Kong, Shanghai, Shenyang, or Wuhan. Although the WSJ has reported that the Chengdu consulate is to be closed within 72 hours, all consulate staff are actually being given 30 days to depart  - suggesting  a de-escalation is already underway.

*China Retaliation: A day after US government ordered mainland China's Houston consulate to close and personnel to depart within 72 hours, mainland China retaliated with an order telling the US to close its Chengdu consulate. The Houston, Texas consulate closure was “officially” due to the ongoing theft of American intellectual property and private information; and *China De-Escalation: Chengdu is  arguably the least high profile consulate versus the forced closure of the American consulates Hong Kong, Shanghai, Shenyang, or Wuhan. Although the WSJ has reported that the Chengdu consulate is to be closed within 72 hours, all consulate staff are actually being given 30 days to depart  - suggesting  a de-escalation is already underway. 

US/Mainland China - De-Escalation Appears Evident

China

Huishang Bank Corporation Limited is a commercial bank. The Bank provides banking services including loans, money market operations, treasury business, investment and trading services, and valet transactions.

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