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.

Equity Capital Markets

ADICON Holdings Limited / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/adicon-holdings-limited" target="_blank" data-smartkarma-citation="entities:33786:1" rel="noopener">ADICON Holdings Limited (ADI HK)</a> is pre-marketing an HKEx IPO to raise up to US$400 million, according to press reports.</li>
<li>Adicon is the third largest independent clinical laboratories (ICL) service provider in China, with an 8.6% market share of the non-COVID-19 testing market in 2021, according to Frost &amp; Sullivan.</li>
<li>The key elements of the bull case rest on the growing non-COVID-19 testing addressable market, improving market sentiment, strong non-COVID-19 testing growth, stable EBITDA margin and cash generation. </li>
</ul>



ADICON Holdings Limited (ADI HK) is pre-marketing an HKEx IPO to raise up to US$400 million, according to press reports.
Adicon is the third largest independent clinical laboratories (ICL) service provider in China, with an 8.6% market share of the non-COVID-19 testing market in 2021, according to Frost &amp; Sullivan.
The key elements of the bull case rest on the growing non-COVID-19 testing addressable market, improving market sentiment, strong non-COVID-19 testing growth, stable EBITDA margin and cash generation. 


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

Event-Driven

Hunan Zhongke Electric Co,Ltd. / Event-Driven

<ul>
<li>There will be 10 changes for the <a href="https://www.smartkarma.com/entities/chinext-price-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">Chinext Price Index</a> and 5 changes for the ChiNext 50 Index. Implementation is at the close on 9 December.</li>
<li>One surprise is the inclusion of <a href="https://www.smartkarma.com/entities/hunan-zhongke-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:13009:1" rel="noopener">Hunan Zhongke Electric Co,Ltd. (300035 CH)</a> in both indices. Four stocks are adds to both indices while two stocks are deletes from both indices.</li>
<li>The adds have outperformed the deletes over the last 8 months but have given up some of the gains over the last month. There is a big sector skew.</li>
</ul>


There will be 10 changes for the Chinext Price Index and 5 changes for the ChiNext 50 Index. Implementation is at the close on 9 December.
One surprise is the inclusion of Hunan Zhongke Electric Co,Ltd. (300035 CH) in both indices. Four stocks are adds to both indices while two stocks are deletes from both indices.
The adds have outperformed the deletes over the last 8 months but have given up some of the gains over the last month. There is a big sector skew.


ChiNext/​ChiNext 50 Index Rebalance: Materials & Industrials Take Spots from IT, Health Care

Hubei Feilihua Quartz Glass  / Event-Driven

<ul>
<li>At the end of the review period, we forecast 10 changes for the <a href="https://www.smartkarma.com/entities/chinext-price-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">Chinext Price Index (SZ399006 INDEX)</a> and 5 changes for the ChiNext 50 Index in December.</li>
<li>Passive trackers will need to buy +/-0.5 days of ADV for most inclusions and exclusions from the indices. The impact on the potential deletions is higher on average.</li>
<li>The potential adds have outperformed the potential deletes over the last six months, though there has been a sharp narrowing of the gap over the last few weeks.</li>
</ul>


At the end of the review period, we forecast 10 changes for the Chinext Price Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index in December.
Passive trackers will need to buy +/-0.5 days of ADV for most inclusions and exclusions from the indices. The impact on the potential deletions is higher on average.
The potential adds have outperformed the potential deletes over the last six months, though there has been a sharp narrowing of the gap over the last few weeks.


ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Stocks & Mean Reversion

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>Mega should establish core competitiveness via entering hospital market and being recognized by hospitals. It’s not a long-term solution to exploit the market by mainly relying on Meinian.</li>
<li>Although Mega’s competitive advantage in the channels is still more obvious due to Meinian, it is actually a double-edged sword, especially when Meinian is in financial difficulty.</li>
<li>Without Meinian, whether Mega can develop independently is a question mark. In terms of valuation, BGI and Berry could be comparable companies, and Mega’s valuation could be lower than Berry.</li>
</ul>


Mega should establish core competitiveness via entering hospital market and being recognized by hospitals. It’s not a long-term solution to exploit the market by mainly relying on Meinian.
Although Mega’s competitive advantage in the channels is still more obvious due to Meinian, it is actually a double-edged sword, especially when Meinian is in financial difficulty.
Without Meinian, whether Mega can develop independently is a question mark. In terms of valuation, BGI and Berry could be comparable companies, and Mega’s valuation could be lower than Berry.


Pre-IPO Mega Genomics - Immature Market and Over-Reliance on Meinian Put Future Performance in Doubt

<ul>
<li>There are 28 changes for the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX)</a> at the upcoming rebalance that will be implemented at the close of trading on 9 June.</li>
<li>We had forecast nearly all the changes, though the index committee seems to have used discretion in deciding not to add three Distillers to the index, leading to other changes.</li>
<li>There's a large sector skew with Industrials, Information Technology and Materials stocks taking 17 more spots in the index, while Health Care and Financials lose 9 and 5 spots respectively.</li>
</ul>


There are 28 changes for the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) at the upcoming rebalance that will be implemented at the close of trading on 9 June.
We had forecast nearly all the changes, though the index committee seems to have used discretion in deciding not to add three Distillers to the index, leading to other changes.
There's a large sector skew with Industrials, Information Technology and Materials stocks taking 17 more spots in the index, while Health Care and Financials lose 9 and 5 spots respectively.


CSI300 Index Rebalance: Big Sector Shift with 28 Changes

China

BGI Genomics Co., Ltd offers researching and testing services. The Company provides deoxyribonucleic acid sequencing, food science, health care researching, cancer prevention, drug discovery, and DNA sequencing. BGI Genomics offers services to medical and scientific research institutions worldwide.

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BGI Genomics (300676 CH)

ADICON Holdings IPO: The Bull Case

The key elements of the bull case rest on the growing non-COVID-19 testing addressable market, improving market sentiment, strong non-COVID-19...

Arun George

ChiNext/ChiNext 50 Index Rebalance: Materials & Industrials Take Spots from IT, Health Care

10 changes for Chinext and 5 for Chinext 50. Most changes were expected and there is a big sector skew. One surprise is the inclusion of Hunan...

Brian Freitas

ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Stocks & Mean Reversion

We forecast 10 changes to the ChiNext & 5 changes to the ChiNext50 in Dec. There are a few overlapping stocks and the potential adds have...

Brian Freitas

Pre-IPO Mega Genomics - Immature Market and Over-Reliance on Meinian Put Future Performance in Doubt

Consumer genetic testing market is immature. Mega hasn't established core competitiveness or recognized by hospitals. The over-reliance on Meinian...

Xinyao (Criss) Wang

CSI300 Index Rebalance: Big Sector Shift with 28 Changes

The June rebalance of the CSI300 Index will have 28 changes, a large sector skew, one-way turnover of 4.11% and a one-way trade of CNY 10bn. The...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

ADICON Holdings IPO: The Bull Case

The key elements of the bull case rest on the growing non-COVID-19 testing addressable market, improving market sentiment, strong non-COVID-19...

Arun George

ChiNext/​ChiNext 50 Index Rebalance: Materials & Industrials Take Spots from IT, Health Care

10 changes for Chinext and 5 for Chinext 50. Most changes were expected and there is a big sector skew. One surprise is the inclusion of Hunan...

Brian Freitas

ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Stocks & Mean Reversion

We forecast 10 changes to the ChiNext & 5 changes to the ChiNext50 in Dec. There are a few overlapping stocks and the potential adds have...

Brian Freitas

Pre-IPO Mega Genomics - Immature Market and Over-Reliance on Meinian Put Future Performance in Doubt

Consumer genetic testing market is immature. Mega hasn't established core competitiveness or recognized by hospitals. The over-reliance on Meinian...

Xinyao (Criss) Wang

CSI300 Index Rebalance: Big Sector Shift with 28 Changes

The June rebalance of the CSI300 Index will have 28 changes, a large sector skew, one-way turnover of 4.11% and a one-way trade of CNY 10bn. The...

Brian Freitas

ChiNext/ChiNext 50 Index Rebalance: Materials & Industrials Take Spots from IT, Health Care