Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

Hang Seng China Enterprises Index / Index Rebalance

Hang Seng China Enterprises Index (HSCEI INDEX)

<p>The announcement of 2020 full year results is bringing some certainty to the HSCEI 2021 dividend index points. With <a href="https://www.smartkarma.com/entities/bank-of-communications-co-h" target="_blank" data-smartkarma-citation="entities:659:1" rel="noopener">Bank Of Communications Co H (3328 HK)</a>, <a href="https://www.smartkarma.com/entities/ind-comm-bk-of-china-h" target="_blank" data-smartkarma-citation="entities:1119:1" rel="noopener">ICBC (H) (1398 HK)</a> and <a href="https://www.smartkarma.com/entities/china-construction-bank-h" target="_blank" data-smartkarma-citation="entities:45:1" rel="noopener">China Construction Bank H (939 HK)</a> announcing results (and dividends) today, and <a href="https://www.smartkarma.com/entities/postal-savings-bank-of-china" target="_blank" data-smartkarma-citation="entities:22848:1" rel="noopener">Postal Savings Bank of China (1658 HK)</a>, <a href="https://www.smartkarma.com/entities/agricultural-bank-of-china-limited" target="_blank" data-smartkarma-citation="entities:1120:1" rel="noopener">Agricultural Bank Of China (1288 HK)</a> and <a href="https://www.smartkarma.com/entities/bank-of-china-ltd-h" target="_blank" data-smartkarma-citation="entities:656:1" rel="noopener">Bank Of China Ltd (H) (3988 HK)</a> announcing on Monday and Tuesday next week, over 85% of the 2021 dividend index points will be known by end of the month.</p><p>With <a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a> included in the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> at the close of trading on 8 April, potential changes to the index at the June review that will be implemented at the close on 4 June, and capping changes that will be implemented at 8% of the index weight for all stocks at the June review, the dividend ex-date for the stocks (and banks in particular) will play a big role in determining the fair value of the 2021 dividend futures.</p><p>With the SEC pushing forward with the Holding Foreign Companies Accountable Act, US listed Chinese stocks could look to bring forward their plans to Secondary List on the <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a>. <a href="https://www.smartkarma.com/entities/bilibili-inc-83a27302-cd7d-4e6a-a1de-bcf93eb022c3" target="_blank" data-smartkarma-citation="entities:32215:1" rel="noopener">Bilibili Inc (9626 HK)</a> lists on Monday and media indicates that other Chinese companies are evaluating listing in Hong Kong. <a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (JDL HK)</a> has already filed papers to list in Hong Kong. Then there are companies like <a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Chuxing (1284375D CH)</a>, <a href="https://www.smartkarma.com/entities/bytedance-technology" target="_blank" data-smartkarma-citation="entities:27936:1" rel="noopener">ByteDance (1460967D CH)</a> and <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a> that could primary list in Hong Kong in the near future. While this will have minimal impact on the 2021 dividends, the impact on the 2022 and later dividend futures would be a lot higher.</p><p>We see little downside from the current market on the HSCEI 2021 dividend futures, but believe that the HSCEI 2021/22 dividend steepener is trading too high. Potential changes to the index constituents should put downward pressure on the 2022 dividends with low dividend yield or zero dividend paying companies joining the index at high index weights, and high dividend paying companies being deleted from the index.</p>

The announcement of 2020 full year results is bringing some certainty to the HSCEI 2021 dividend index points. With Bank Of Communications Co H (3328 HK), ICBC (H) (1398 HK) and China Construction Bank H (939 HK) announcing results (and dividends) today, and Postal Savings Bank of China (1658 HK), Agricultural Bank Of China (1288 HK) and Bank Of China Ltd (H) (3988 HK) announcing on Monday and Tuesday next week, over 85% of the 2021 dividend index points will be known by end of the month.With Baidu (9888 HK) included in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close of trading on 8 April, potential changes to the index at the June review that will be implemented at the close on 4 June, and capping changes that will be implemented at 8% of the index weight for all stocks at the June review, the dividend ex-date for the stocks (and banks in particular) will play a big role in determining the fair value of the 2021 dividend futures.With the SEC pushing forward with the Holding Foreign Companies Accountable Act, US listed Chinese stocks could look to bring forward their plans to Secondary List on the HKEX (388 HK). Bilibili Inc (9626 HK) lists on Monday and media indicates that other Chinese companies are evaluating listing in Hong Kong. JD Logistics (JDL HK) has already filed papers to list in Hong Kong. Then there are companies like DiDi Chuxing (1284375D CH), ByteDance (1460967D CH) and Ant Financial Services Group (6688 HK) that could primary list in Hong Kong in the near future. While this will have minimal impact on the 2021 dividends, the impact on the 2022 and later dividend futures would be a lot higher.We see little downside from the current market on the HSCEI 2021 dividend futures, but believe that the HSCEI 2021/22 dividend steepener is trading too high. Potential changes to the index constituents should put downward pressure on the 2022 dividends with low dividend yield or zero dividend paying companies joining the index at high index weights, and high dividend paying companies being deleted from the index.

HSCEI Dividend Futures: June Index Review, Bank Divs, HFCAA - Sell the 2021/22 Steepener

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

<div><p>Linklogis, a technology solution provider for supply chain finance in China, is aiming to raise over US$500m in its Hong Kong IPO. Its investors include Tencent, GIC and Standard Chartered Bank.</p></div><div>
<p>We have covered various aspects of the deal in our earlier insights,</p>
<ul>
<li>
<a href="https://www.smartkarma.com/insights/linklogis-pre-ipo-the-positives-fast-growing-blockchain-driven-supply-chain-financier" target="_blank" rel="noopener">Linklogis Pre-IPO - The Positives - Fast Growing Blockchain Driven Supply Chain Financier,</a> </li>
<li><a href="https://www.smartkarma.com/insights/linklogis-pre-ipo-the-negatives-inconsistent-growth-and-margins-well-funded-competitors" target="_blank" rel="noopener">Linklogis Pre-IPO - The Negatives - Inconsistent Growth and Margins, Well Funded Competitors, and</a></li>
<li><a href="https://www.smartkarma.com/insights/linklogis-pre-ipo-earnings-forecast-peer-comparison-and-first-stab-at-valuation" target="_blank" rel="noopener">Linklogis Pre-IPO - Earnings Forecast, Peer Comparison and First Stab at Valuation</a></li>
</ul>
<p>In this note, we'll talk about the latest updates from the recently filed PHIP.</p>
</div>

Linklogis, a technology solution provider for supply chain finance in China, is aiming to raise over US$500m in its Hong Kong IPO. Its investors include Tencent, GIC and Standard Chartered Bank.
We have covered various aspects of the deal in our earlier insights,


Linklogis Pre-IPO - The Positives - Fast Growing Blockchain Driven Supply Chain Financier, 
Linklogis Pre-IPO - The Negatives - Inconsistent Growth and Margins, Well Funded Competitors, and
Linklogis Pre-IPO - Earnings Forecast, Peer Comparison and First Stab at Valuation

In this note, we'll talk about the latest updates from the recently filed PHIP.


Linklogis Pre-IPO - PHIP Updates - Nothing to Complain About

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.

Smart Share Global / Equity Capital Markets

<p>Smart Share/<a href="https://www.smartkarma.com/entities/smart-share-global-limited" target="_blank" data-smartkarma-citation="entities:32217:1" rel="noopener">Energy Monster (EM US)</a> is the largest mobile device charging service provider in China as measured by gross revenues in 2020, according to iResearch. Smart Share is backed by <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> (16.5% stake), Hillhouse Capital (11.7% stake) and <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> (7.5% stake). Smart Share has filed for a Nasdaq IPO to raise proceeds of $300 million, according to press reports. </p><p>The mobile device charging service industry in China started to scale in 2017 out of the increasing gap between smartphone battery consumption and smartphone battery life. The rise of compelling apps, such as gaming and short-video apps, has spurred the need for a smartphone charge in a quick, cheap and convenient method. The widespread low-battery anxiety is the key pain point. A survey by iResearch shows that 93% of smartphone users have experienced the need to charge their mobile devices while they are away from their homes or offices.</p><div class="content-highlight"><p>Due to these favourable trends, the size of the mobile device charging service market in China is expected to grow from RMB9.0 billion in 2020 to RMB106.3 billion in 2028, representing a CAGR of 36.2% from 2020 to 2028, according to iResearch. Overall, we believe that Smart Share is well-positioned to tap into this growth opportunity.</p></div>

Smart Share/Energy Monster (EM US) is the largest mobile device charging service provider in China as measured by gross revenues in 2020, according to iResearch. Smart Share is backed by Alibaba Group (BABA US) (16.5% stake), Hillhouse Capital (11.7% stake) and Xiaomi Corp (1810 HK) (7.5% stake). Smart Share has filed for a Nasdaq IPO to raise proceeds of $300 million, according to press reports. The mobile device charging service industry in China started to scale in 2017 out of the increasing gap between smartphone battery consumption and smartphone battery life. The rise of compelling apps, such as gaming and short-video apps, has spurred the need for a smartphone charge in a quick, cheap and convenient method. The widespread low-battery anxiety is the key pain point. A survey by iResearch shows that 93% of smartphone users have experienced the need to charge their mobile devices while they are away from their homes or offices.Due to these favourable trends, the size of the mobile device charging service market in China is expected to grow from RMB9.0 billion in 2020 to RMB106.3 billion in 2028, representing a CAGR of 36.2% from 2020 to 2028, according to iResearch. Overall, we believe that Smart Share is well-positioned to tap into this growth opportunity.

Smart Share Global IPO Initiation: Charging Ahead

<div><p>Bairong, an independent AI-powered technology platform in China serving the financial services industry, aims to raise up to US$508m in its Hong Kong IPO. According to F&amp;S, it was the largest independent financial big data analytics solutions provider in China by revenue in 2019, with a market share of 8.7%.</p></div><div>
<p>We have covered various aspects of the deal in our earlier notes:</p>
<ul>
<li>
<a href="https://www.smartkarma.com/insights/bairong-pre-ipo-the-positives-largest-independent-big-data-analytics-provider" target="_blank" rel="noopener">Bairong Pre-IPO - The Positives - Largest Independent Big-Data Analytics Provider,</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/bairong-pre-ipo-the-negatives-playing-with-its-own-data" target="_blank" rel="noopener">Bairong Pre-IPO - The Negatives - Playing with Its Own Data</a>,</li>
<li><a href="https://www.smartkarma.com/insights/bairong-pre-ipo-earnings-forecast-peer-comparison-and-valuation" target="_blank" rel="noopener">Bairong Pre-IPO - Earnings Forecast, Peer Comparison and Valuation, and</a></li>
<li><a href="https://www.smartkarma.com/insights/bairong-pre-ipo-phip-and-valuation-updates-better-4q20-but-client-data-isn-t-as-encouraging" target="_blank" rel="noopener">Bairong Pre-IPO - PHIP and Valuation Updates - Better 4Q20, but Client Data Isn’t as Encouraging</a></li>
</ul>
</div><div><p>In this note, we will talk about deal dynamics and valuation.</p></div>

Bairong, an independent AI-powered technology platform in China serving the financial services industry, aims to raise up to US$508m in its Hong Kong IPO. According to F&amp;S, it was the largest independent financial big data analytics solutions provider in China by revenue in 2019, with a market share of 8.7%.
We have covered various aspects of the deal in our earlier notes:


Bairong Pre-IPO - The Positives - Largest Independent Big-Data Analytics Provider, 

Bairong Pre-IPO - The Negatives - Playing with Its Own Data,
Bairong Pre-IPO - Earnings Forecast, Peer Comparison and Valuation, and
Bairong Pre-IPO - PHIP and Valuation Updates - Better 4Q20, but Client Data Isn’t as Encouraging

In this note, we will talk about deal dynamics and valuation.

Bairong IPO - Decent Valuation Probably Weighed Down by Regulation

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<p>Just when you start to think that the friction between <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> and the Chinese government may have started settling down, the Chinese government dropped another bomb yesterday by asking <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> to dispose its media businesses.</p><p>This news comes four days after the resignation of <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a> CEO, Mr. Simon Hu, on personal grounds, just over a month after Ant Group’s proposal to restructure Ant Group into financial holding company, which would be overseen by China's central bank. The latest decision by the government indicates that they are not done curbing Alibaba’s and Jack Ma's powers.</p>

Just when you start to think that the friction between Alibaba Group (BABA US) and the Chinese government may have started settling down, the Chinese government dropped another bomb yesterday by asking Alibaba Group (9988 HK) to dispose its media businesses.This news comes four days after the resignation of Ant Financial Services Group (6688 HK) CEO, Mr. Simon Hu, on personal grounds, just over a month after Ant Group’s proposal to restructure Ant Group into financial holding company, which would be overseen by China's central bank. The latest decision by the government indicates that they are not done curbing Alibaba’s and Jack Ma's powers.

Xi & The Communist Party Is Not Done With Alibaba Yet

China

Ant Group Co., Ltd. develops online payment platforms. The Company produces credit system and financial services platforms which provide consumers and small businesses with safe and convenient inclusive financial services globally. Ant Group provides its services worldwide.

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Ant Group (6688 HK)

HSCEI Dividend Futures: June Index Review, Bank Divs, HFCAA - Sell the 2021/22 Steepener

While the HSCEI 2021 dividend futures are trading near our estimated fair, the HSCEI 2021/22 div steepener is not. We recommend selling the...

Brian Freitas

Linklogis Pre-IPO - PHIP Updates - Nothing to Complain About

Linklogis, a technology solution provider for supply chain finance in China, is aiming to raise over US$500m in its Hong Kong IPO. Its investors...

Sumeet Singh

Bairong IPO - Decent Valuation Probably Weighed Down by Regulation

Bairong, an independent AI-powered technology platform in China serving the financial services industry, aims to raise up to US$508m in its Hong...

Sumeet Singh

Xi & The Communist Party Is Not Done With Alibaba Yet

Just when you start to think that the friction between Alibaba and the Chinese government may have started settling down, the Chinese government...

Oshadhi Kumarasiri

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HSCEI Dividend Futures: June Index Review, Bank Divs, HFCAA - Sell the 2021/22 Steepener

While the HSCEI 2021 dividend futures are trading near our estimated fair, the HSCEI 2021/22 div steepener is not. We recommend selling the...

Brian Freitas

Linklogis Pre-IPO - PHIP Updates - Nothing to Complain About

Linklogis, a technology solution provider for supply chain finance in China, is aiming to raise over US$500m in its Hong Kong IPO. Its investors...

Sumeet Singh

Smart Share Global IPO Initiation: Charging Ahead

Smart Share has filed for a Nasdaq IPO to raise $300m, according to press reports. Overall, we believe that Smart Share is well-positioned in the...

Arun George

Bairong IPO - Decent Valuation Probably Weighed Down by Regulation

Bairong, an independent AI-powered technology platform in China serving the financial services industry, aims to raise up to US$508m in its Hong...

Sumeet Singh

Xi & The Communist Party Is Not Done With Alibaba Yet

Just when you start to think that the friction between Alibaba and the Chinese government may have started settling down, the Chinese government...

Oshadhi Kumarasiri