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.

Equity Bottom-Up

<ul>
<li>Xiaomi released healthy financial results inspite of the shrinking market.</li>
<li>Alibaba Freshippo founder, Mr. Hou, retired from his role as the CEO of Freshippo.</li>
<li>JD began to provide aftermarket service to BYD, the largest new energy vehicle producer.</li>
</ul>


Xiaomi released healthy financial results inspite of the shrinking market.
Alibaba Freshippo founder, Mr. Hou, retired from his role as the CEO of Freshippo.
JD began to provide aftermarket service to BYD, the largest new energy vehicle producer.


China Consumption Weekly (25 Mar 2024): Xiaomi, Alibaba, Xpeng, Maoyan, JD Health, JD.com

<ul>
<li>In 4Q23, Tencent experienced a one-digit growth, but its margin improved significantly.</li>
<li>We believe Tencent’s social networks will stop shrinking after the company sold movie assets to China Literature.</li>
<li>We believe the stock will have an upside of 37.5% and a price target of HK$397 for year end 2024. Buy.</li>
</ul>


In 4Q23, Tencent experienced a one-digit growth, but its margin improved significantly.
We believe Tencent’s social networks will stop shrinking after the company sold movie assets to China Literature.
We believe the stock will have an upside of 37.5% and a price target of HK$397 for year end 2024. Buy.


Tencent (700 HK): 4Q23, Slower Growth, But Higher Margin, 37% Upside

<ul>
<li>East Buy's stock price plunged after a conflict broke out between the top broadcaster and the management team.</li>
<li>NIO will launch another brand for low price products, following BYD’s low price and Li Auto’s price reduction.</li>
<li>Tencent will move its unimportant assets to China Literature again.</li>
</ul>


East Buy's stock price plunged after a conflict broke out between the top broadcaster and the management team.
NIO will launch another brand for low price products, following BYD’s low price and Li Auto’s price reduction.
Tencent will move its unimportant assets to China Literature again.


China Consumption Weekly: East Buy, NIO, Tencent, PDD, Alibaba, JD.com

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

Index Rebalance

<ul>
<li>Wednesday will be a busy day as positions are put on and unwound following announcement of the changes to the MSC indices.</li>
<li>Friday will end the review cutoff for the ASX indices and Hang Seng Indexes will announce the December changes for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH</a> and HSCI post market close.</li>
<li>Another week of large outflows for China focused ETFs with redemptions across all the major indices.</li>
</ul>


Wednesday will be a busy day as positions are put on and unwound following announcement of the changes to the MSC indices.
Friday will end the review cutoff for the ASX indices and Hang Seng Indexes will announce the December changes for the HSI, HSCEI, HSTECH and HSCI post market close.
Another week of large outflows for China focused ETFs with redemptions across all the major indices.


Index Rebalance & ETF Flow Recap: SSE50, Chinext/50, Renesas, Tencent, Amman Mineral

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> announced in-specie dividends of <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (9618 HK)</a> (US$15bn+) in 2021 and <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> (US$20bn) in 2022.</li>
<li>With the <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> Board meeting on 15 November to approve Q3 results and considering the payment of a dividend, the pattern could repeat this year.</li>
<li>
<a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> owns stakes of US$1bn+ in 10 listed companies. We take a look at the stocks that could be next in line to be paid as in-specie dividends.</li>
</ul>



Tencent (700 HK) announced in-specie dividends of JD.com (9618 HK) (US$15bn+) in 2021 and Meituan (3690 HK) (US$20bn) in 2022.
With the Tencent (700 HK) Board meeting on 15 November to approve Q3 results and considering the payment of a dividend, the pattern could repeat this year.

Tencent (700 HK) owns stakes of US$1bn+ in 10 listed companies. We take a look at the stocks that could be next in line to be paid as in-specie dividends.


Tencent (700 HK): Board Meets Next Week; In-Specie Dividend Candidates

China

China Literature Limited is an investment holding company primarily engaged in operating online literature platforms, providing literary content, and producing television series and films. It offers online reading services, copyright commercialization, writer cultivation and brokerage, and operates text work reading. The company is headquartered in Shanghai, People's Republic of China, and was founded in 2002.

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China Literature (772 HK)

China Consumption Weekly (25 Mar 2024): Xiaomi, Alibaba, Xpeng, Maoyan, JD Health, JD.com

Xiaomi released healthy financial results despite of the shrinking market. Alibaba Freshippo founder retired. JD began to provide aftermarket...

Ming Lu

Tencent (700 HK): 4Q23, Slower Growth, But Higher Margin, 37% Upside

Tencent experienced a one-digit growth, but its margin improved significantly in 4Q23. We believe Tencent’s social networks will stop shrinking...

Ming Lu

China Consumption Weekly: East Buy, NIO, Tencent, PDD, Alibaba, JD.com

East Buy plunged after a conflict broke out between the top broadcaster and the management team. NIO will launch a second brand for low price...

Ming Lu

Index Rebalance & ETF Flow Recap: SSE50, Chinext/50, Renesas, Tencent, Amman Mineral

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Tencent (700 HK): Board Meets Next Week; In-Specie Dividend Candidates

Tencent could make it a hat-trick of special in-specie dividend distributions. After JD.com and Meituan, Kuaishou could be next. Or it could be...

Brian Freitas

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