Equity Analyst

Xin Yu, CFA

Equity Bottom-Up

<ul>
<li>CBIRC approved the capital replenishment plan of RMB10.5bn of Ant CFC on Dec 30, 2022</li>
<li>Under the regulatory guidance, Ant Group needs to complete a multifaceted rectification plan</li>
<li>After the fund raising, Ant Group's next step is to obtain FHC license and credit bureau license</li>
</ul>


CBIRC approved the capital replenishment plan of RMB10.5bn of Ant CFC on Dec 30, 2022
Under the regulatory guidance, Ant Group needs to complete a multifaceted rectification plan
After the fund raising, Ant Group's next step is to obtain FHC license and credit bureau license


Ant Group Completed Equity Structure Adjustment

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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.

<ul>
<li>A state-owned company invested in Ant Group, which boosted Alibaba’s stock price.</li>
<li>Tencent obtained five new game licenses in December, three of which are imported games.</li>
<li>China Literature’s daily active users increased by 80% in 2022 and reached the historical high.</li>
</ul>


A state-owned company invested in Ant Group, which boosted Alibaba’s stock price.
Tencent obtained five new game licenses in December, three of which are imported games.
China Literature’s daily active users increased by 80% in 2022 and reached the historical high.


China Internet Weekly (9Jan2023): Ant Group, Alibaba, Tencent, ByteDance, China Literature

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/xinjiang-goldwind-science-technology-h" target="_blank" data-smartkarma-citation="entities:10112:1" rel="noopener">Xinjiang Goldwind Science &amp; Technology (2208 HK)</a> performed badly in 2022 and with sustained pressure on WTG price, earnings will stay under pressure. We will only pick up post-FY22 result.</li>
<li>Removal of "zero COVID" policy and consumption recovery should revive sportswear business of <a href="https://www.smartkarma.com/entities/china-dongxiang-group-co" target="_blank" data-smartkarma-citation="entities:1068:1" rel="noopener">China Dongxiang Group (3818 HK)</a>. Improvement in equity market will boost its investment portfolio value.   </li>
<li>Valuation retreat for <a href="https://www.smartkarma.com/entities/china-longyuan-power-group-corp-ltd" target="_blank" data-smartkarma-citation="entities:14215:1" rel="noopener">China Longyuan Power (916 HK)</a> has made it more attractive. Rebound in electricity demand, continued green energy push and potential asset injection are drivers. </li>
</ul>



Xinjiang Goldwind Science &amp; Technology (2208 HK) performed badly in 2022 and with sustained pressure on WTG price, earnings will stay under pressure. We will only pick up post-FY22 result.
Removal of "zero COVID" policy and consumption recovery should revive sportswear business of China Dongxiang Group (3818 HK). Improvement in equity market will boost its investment portfolio value.   
Valuation retreat for China Longyuan Power (916 HK) has made it more attractive. Rebound in electricity demand, continued green energy push and potential asset injection are drivers. 


Our Three Worst Calls in 2022: Signs of Reversal in 2023

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Private Capital Markets

<ul>
<li>The announced restructuring of Ant Group holding companies will block founder Jack Ma from achieving majority voting on the board following the implementation of the holdcos adjustment</li>
<li>The majority of board directors will be “independent” post the holdco restructuring and they are likely to drive a more social policy focused agenda, as the 2021 sustainability report suggests</li>
<li>We see these developments, and especially the lack of IPO plan, to be negative for non-government aligned Ant Group shareholders, such as the international private equity groups and especially Alibaba</li>
</ul>


The announced restructuring of Ant Group holding companies will block founder Jack Ma from achieving majority voting on the board following the implementation of the holdcos adjustment
The majority of board directors will be “independent” post the holdco restructuring and they are likely to drive a more social policy focused agenda, as the 2021 sustainability report suggests
We see these developments, and especially the lack of IPO plan, to be negative for non-government aligned Ant Group shareholders, such as the international private equity groups and especially Alibaba


Ant Group: Shareholder Restructuring Announced and the Lack of IPO Plan Are Negatives Surprise

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Equity Capital Markets

<ul>
<li>Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs</li>
<li>On the IPO front,  only the smaller issuers were active with most following through on year end listing plans.</li>
<li>On placements front, HK market got going in a jiffy, riding on the coattails of China reopening.</li>
</ul>


Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs
On the IPO front,  only the smaller issuers were active with most following through on year end listing plans.
On placements front, HK market got going in a jiffy, riding on the coattails of China reopening.


ECM Weekly (8th Jan 2022) - Sinohytec, Beauty Farm, Sula, Kfin, Bionote, Meidong, CIFI, Jinxin Fert

China

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

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Alibaba (9988 HK)

Ant Group Completed Equity Structure Adjustment

CBIRC approved the capital replenishment plan of RMB10.5bn of Ant CFC on Dec 30, 2022, which signals that Ant Group will soon complete its equity...

Xin Yu, CFA

China Internet Weekly (9Jan2023): Ant Group, Alibaba, Tencent, ByteDance, China Literature

A state-owned company invested in Ant Group. Tencent obtained five new game licenses in December. China Literature’s daily active users increased...

Ming Lu

Our Three Worst Calls in 2022: Signs of Reversal in 2023

Share prices of our three worst calls in 2022 experienced good rebounds so far into 2023. We think outlook for China Dongxiang and China Longyuan...

Osbert Tang, CFA

Ant Group: Shareholder Restructuring Announced and the Lack of IPO Plan Are Negatives Surprise

Shareholding adjustments at Ant Group will block founder Jack Ma from achieving majority on board; new directors likely to focus on social policy...

Victor Galliano

ECM Weekly (8th Jan 2022) - Sinohytec, Beauty Farm, Sula, Kfin, Bionote, Meidong, CIFI, Jinxin Fert

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.

Sumeet Singh

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52-week Range

Market Cap (USDm)

P/E

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