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

Sunshine Insurance Group  Lt / Equity Capital Markets

<ul>
<li>Sunshine Insurance Group (SIG), a life, health and P&amp;C insurance company, aims to raise up to US$1bn in its HK IPO.</li>
<li>SIG is an integrated insurance provider which offers both life and health (L&amp;H) and property and casualty (P&amp;C) insurance in China.</li>
<li>We have looked at the company’s past performance in our previous notes. In this note, we will undertake a peer comparison.</li>
</ul>


Sunshine Insurance Group (SIG), a life, health and P&amp;C insurance company, aims to raise up to US$1bn in its HK IPO.
SIG is an integrated insurance provider which offers both life and health (L&amp;H) and property and casualty (P&amp;C) insurance in China.
We have looked at the company’s past performance in our previous notes. In this note, we will undertake a peer comparison.


Sunshine Insurance Group Pre-IPO - Peer Comparison - Fastest in One Segment, Slowest in the Other

<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, HK IPOs continued to struggle with <a href="https://www.smartkarma.com/entities/calb-co-ltd" target="_blank" data-smartkarma-citation="entities:35985:1" rel="noopener">CALB (3931 HK)</a> joining <a href="https://www.smartkarma.com/entities/zhejiang-leapmotor-technology" target="_blank" data-smartkarma-citation="entities:35968:1" rel="noopener">Leapmotor (9863 HK)</a> and <a href="https://www.smartkarma.com/entities/onewo-space-tech" target="_blank" data-smartkarma-citation="entities:36204:1" rel="noopener">Onewo (2602 HK)</a> with its tepid performance.</li>
<li>Given the mid-week HK holiday and the ongoing golden week, there weren't any large placements this week.</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, HK IPOs continued to struggle with CALB (3931 HK) joining Leapmotor (9863 HK) and Onewo (2602 HK) with its tepid performance.
Given the mid-week HK holiday and the ongoing golden week, there weren't any large placements this week.


ECM Weekly (9th Oct 2022) - CALB, Socionext, Betagro, Country Style, I-Tail, Lionheart, Kakao Pay

Event-Driven

<ul>
<li>In early Jun 2022, Alipay raised around US$386m via selling 3.3% of outstanding shares of <a href="https://www.smartkarma.com/entities/kakao-pay-corp" target="_blank" data-smartkarma-citation="entities:29675:1" rel="noopener">Kakao Pay (377300 KS)</a>. That was the first selldown by Alipay  <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">(Alibaba (ADR) (BABA US)</a>).  </li>
<li>Despite pricing the shares at an enticing 11.8% discount to last close, the stock failed to hold the deal price and hasn’t looked back since.</li>
<li>In this note, we will talk about the previous deal and the upcoming lockup expiry.</li>
</ul>


In early Jun 2022, Alipay raised around US$386m via selling 3.3% of outstanding shares of Kakao Pay (377300 KS). That was the first selldown by Alipay  (Alibaba (ADR) (BABA US)).  
Despite pricing the shares at an enticing 11.8% discount to last close, the stock failed to hold the deal price and hasn’t looked back since.
In this note, we will talk about the previous deal and the upcoming lockup expiry.


Kakao Pay Placement Lockup Expiry - Alipay Is Soon Going to Be Free to Shed Its US$1.6bn Stake

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Various figures for the Chinese New Year holidays suggested that the domestic tourism market is lukewarm in 2022. However, there are evidences that high-end consumption is better than low-end.</li>
<li>Weak cross-province tourism and low-end spending are likely negative to <a href="https://www.smartkarma.com/entities/china-southern-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1078:1" rel="noopener">China Southern Airlines (1055 HK)</a>, <a href="https://www.smartkarma.com/entities/maoyan-entertainment" target="_blank" data-smartkarma-citation="entities:27451:1" rel="noopener">Maoyan Entertainment (1896 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-pictures-group-ltd" target="_blank" data-smartkarma-citation="entities:20724:1" rel="noopener">Alibaba Pictures (1060 HK)</a> and <a href="https://www.smartkarma.com/entities/imax-china-holding-inc" target="_blank" data-smartkarma-citation="entities:888:1" rel="noopener">IMAX China Holding (1970 HK)</a>.  </li>
<li>Good duty-free sales and high-end spending are beneficial to <a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free-corp-ltd" target="_blank" data-smartkarma-citation="entities:12278:1" rel="noopener">CTG Duty Free Corp (601888 CH)</a>, <a href="https://www.smartkarma.com/entities/fosun-tourism-group" target="_blank" data-smartkarma-citation="entities:27439:1" rel="noopener">Fosun Tourism (1992 HK)</a>, <a href="https://www.smartkarma.com/entities/fosun-international-ltd" target="_blank" data-smartkarma-citation="entities:433:1" rel="noopener">Fosun International (656 HK)</a> and <a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook Jewellery (1929 HK)</a>. </li>
</ul>


Various figures for the Chinese New Year holidays suggested that the domestic tourism market is lukewarm in 2022. However, there are evidences that high-end consumption is better than low-end.
Weak cross-province tourism and low-end spending are likely negative to China Southern Airlines (1055 HK), Maoyan Entertainment (1896 HK), Alibaba Pictures (1060 HK) and IMAX China Holding (1970 HK).  
Good duty-free sales and high-end spending are beneficial to CTG Duty Free Corp (601888 CH), Fosun Tourism (1992 HK), Fosun International (656 HK) and Chow Tai Fook Jewellery (1929 HK). 


2022 Chinese New Year Holidays - Some Winners and Losers

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

Equity Bottom-Up

*Why Do They Always Do This?: At a competitor conference, management ridiculously diminished government allegations. Tencent Holdings (700.HK) [Tencent] should simply answer “yes, we made mistakes and pushed the envelope but we are actively rectifying these issues. Its going to be painful for investors as we address the government's numerous over the near-term”;  
*Elephant In The Room: Mainland China's crackdown on capital markets activities has rapidly expanded under the broad narrative of "financial stability". There remains no doubt, in our view, that Tencent will follow Alibaba Group (BABA.US) [Alibaba] in the formation of a financial holding company. It’s pretty surprising that Tencent refuses to discuss this matter when financial services are the largest component of earnings and growth; and    
*Results Have Also Deteriorated As Distractions Mount: Tencent’s 2Q21 GAAP net income declined CNY 5.2 bn (10.8%) linked quarter – and were of poor quality. Results were challenged by: cost of revenue increase; operating expense increase; losses in associates; higher impairment charges; and weaker online games. Were it not for the artificially lower tax rate, results would have been even more challenged.

*Why Do They Always Do This?: At a competitor conference, management ridiculously diminished government allegations. Tencent Holdings (700.HK) [Tencent] should simply answer “yes, we made mistakes and pushed the envelope but we are actively rectifying these issues. Its going to be painful for investors as we address the government's numerous over the near-term”;  
*Elephant In The Room: Mainland China's crackdown on capital markets activities has rapidly expanded under the broad narrative of "financial stability". There remains no doubt, in our view, that Tencent will follow Alibaba Group (BABA.US) [Alibaba] in the formation of a financial holding company. It’s pretty surprising that Tencent refuses to discuss this matter when financial services are the largest component of earnings and growth; and    
*Results Have Also Deteriorated As Distractions Mount: Tencent’s 2Q21 GAAP net income declined CNY 5.2 bn (10.8%) linked quarter – and were of poor quality. Results were challenged by: cost of revenue increase; operating expense increase; losses in associates; higher impairment charges; and weaker online games. Were it not for the artificially lower tax rate, results would have been even more challenged.       

Tencent Holdings – Incredulous Management

Hong Kong

Alibaba Pictures Group Ltd. produces and invests in television programming and motion pictures in China.

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Alibaba Pictures (1060 HK)

Sunshine Insurance Group Pre-IPO - Peer Comparison - Fastest in One Segment, Slowest in the Other

Sunshine Insurance Group (SIG), a life, health and P&C insurance company, aims to raise up to US$1bn in its HK IPO. In this note, we undertake a...

Sumeet Singh

ECM Weekly (9th Oct 2022) - CALB, Socionext, Betagro, Country Style, I-Tail, Lionheart, Kakao Pay

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

Kakao Pay Placement Lockup Expiry - Alipay Is Soon Going to Be Free to Shed Its US$1.6bn Stake

In early Jun 2022, Alipay raised around US$386m via selling 3.3% of outstanding shares of Kakao Pay (377300 KS). That was the first selldown by...

Sumeet Singh

2022 Chinese New Year Holidays - Some Winners and Losers

2022 Chinese New Year figures showed marginal decline domestic tourists, and pointed to better high-end consumption performance than low-end. We...

Osbert Tang, CFA

Tencent Holdings – Incredulous Management

TENCENT: At a competitor virtual conference, Tencent discussed the impact of regulatory changes but didn’t discuss its targeted financial services...

Thomas J. Monaco

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