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.

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Back on the 30 October 2020, <a href="https://www.smartkarma.com/entities/icar-asia-ltd" target="_blank" data-smartkarma-citation="entities:17682:1" rel="noopener">iCar Asia Ltd (ICQ AU)</a>, owner and operator of automotive portals in Malaysia, Indonesia, and Thailand, <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02301823-3A554168?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it had received a non-binding proposal from China-based <a href="https://www.smartkarma.com/entities/autohome-inc" target="_blank" data-smartkarma-citation="entities:33492:1" rel="noopener">Autohome (2518 HK)</a>, another auto internet platform, to acquire 100% of iCar's shares for A$0.50/share by way of a Scheme of Arrangement.
A trading update on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02347131-3A562420?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">26 February</a> said discussions were still ongoing regarding Autohome's proposal, with similar wording in the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02369968-3A566377?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">30 April</a> update, and the 2020 annual report (<a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02370430-3A566432?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">page 34</a>).
<h3>The New News</h3>
iCar has now <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02394670-3A570637?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it has received a non-binding proposal from privately-held Carsome Group to acquire 100% of iCar's shares for A$0.55/share by way of a Scheme.
Separately Malaysian-based Carsome has entered into an agreement with Catcha Group, iCar's largest shareholder, to acquire 19.9% of shares out in iCar via the issuance of shares in Carsome. That side agreement and the proposal are conditional on ASIC relief.
Provided the agreement completes, Carsome and Catcha will jointly acquire the remaining shares not owned in iCar.
This agreement/proposal appears an initial step towards listing Carsome/Catcha. 
The announcement also says discussions remain ongoing with Autohome. 
More below the fold.

Back on the 30 October 2020, iCar Asia Ltd (ICQ AU), owner and operator of automotive portals in Malaysia, Indonesia, and Thailand, announced it had received a non-binding proposal from China-based Autohome (2518 HK), another auto internet platform, to acquire 100% of iCar's shares for A$0.50/share by way of a Scheme of Arrangement.
A trading update on the 26 February said discussions were still ongoing regarding Autohome's proposal, with similar wording in the 30 April update, and the 2020 annual report (page 34).
The New News
iCar has now announced it has received a non-binding proposal from privately-held Carsome Group to acquire 100% of iCar's shares for A$0.55/share by way of a Scheme.
Separately Malaysian-based Carsome has entered into an agreement with Catcha Group, iCar's largest shareholder, to acquire 19.9% of shares out in iCar via the issuance of shares in Carsome. That side agreement and the proposal are conditional on ASIC relief.
Provided the agreement completes, Carsome and Catcha will jointly acquire the remaining shares not owned in iCar.
This agreement/proposal appears an initial step towards listing Carsome/Catcha. 
The announcement also says discussions remain ongoing with Autohome. 
More below the fold. 

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

Equity Bottom-Up

<ul>
<li>Overseas traveling revenue recovered strongly in China during the Chinese New Year.</li>
<li>Great Wall Motor’s vehicle deliveries increased by 69% in January 2024.</li>
<li>JD.com plans to raise the salaries for customer service employees by 30% in 2024.</li>
</ul>


Overseas traveling revenue recovered strongly in China during the Chinese New Year.
Great Wall Motor’s vehicle deliveries increased by 69% in January 2024.
JD.com plans to raise the salaries for customer service employees by 30% in 2024.


China Consumption Weekly (19 Feb 2024): Ant Group, Great Wall Motor, JD.com, Baidu, Autohome

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

<ul>
<li>There could be 25 inclusions, including many new listings, to the Hang Seng Composite Index (HSCI) in September. Another 6 stocks are close adds on liquidity and market cap.</li>
<li>We see 19 potential deletes and 2 close deletes on market cap, 5 potential deletes on prolonged trading suspension, and 2 close deletes on liquidity.</li>
<li>There are 8 potential deletions where holdings via Stock Connect are more than 20% of shares outstanding. There could be some unwinding of positions over the next couple of months.</li>
</ul>


There could be 25 inclusions, including many new listings, to the Hang Seng Composite Index (HSCI) in September. Another 6 stocks are close adds on liquidity and market cap.
We see 19 potential deletes and 2 close deletes on market cap, 5 potential deletes on prolonged trading suspension, and 2 close deletes on liquidity.
There are 8 potential deletions where holdings via Stock Connect are more than 20% of shares outstanding. There could be some unwinding of positions over the next couple of months.


HSCI Index Rebalance Preview and Stock Connect: The Final List for September

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>China’s total ad spending saw YoY recovery in 2Q23, due to both low base in 2Q22 and consumption recovery.</li><li>Total ad spend returned to positive growth of 15% YoY in April 2023, per CTR.</li><li>However, overall ad spend has yet to recover to the 2021 level, with ad spending in Apr 2023 only reached 92% of the ad spend level in Apr 2021. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China’s total ad spending saw YoY recovery in 2Q23, due to both low base in 2Q22 and consumption recovery.Total ad spend returned to positive growth of 15% YoY in April 2023, per CTR.However, overall ad spend has yet to recover to the 2021 level, with ad spending in Apr 2023 only reached 92% of the ad spend level in Apr 2021. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Internet – 2Q23 online advertising: recovery in cautious mode

China

Autohome Inc. operates as an automotive Internet platform. The Company through its platform provides buying and selling cars. Autohome also offers financing services.

Autohome (2518 HK)

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

ICar (ICQ AU): Carsome & Catcha Carpool

This looks like a knock-out bid. I suspect it is trading wide to terms - 25% gross spread - given the downside to a deal break, and the low...

David Blennerhassett

China Consumption Weekly (19 Feb 2024): Ant Group, Great Wall Motor, JD.com, Baidu, Autohome

Overseas traveling recovered strongly during the Chinese New Year. Great Wall Motor’s vehicle deliveries increased by 69% in Jan 2024. JD.com plans...

Ming Lu

HSCI Index Rebalance Preview and Stock Connect: The Final List for September

There could be nearly 50 adds/deletes for the HSCI in September. That will trigger changes to the Southbound Stock Connect list and increase flows...

Brian Freitas

China Internet – 2Q23 online advertising: recovery in cautious mode

China’s total ad spending saw YoY recovery in 2Q23, due to both low base in 2Q22 and consumption recovery. Total ad spend returned to positive...

CMB International