Analyst

Steve

Equity Bottom-Up

China Overseas Property / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-overseas-property-holdings-ltd" target="_blank" data-smartkarma-citation="entities:22794:1" rel="noopener">China Overseas Property (2669 HK)</a> announced an acquisition on October 11 of a technical consultancy business from China State Construction Development (830 HK), a sister company. </li>
<li>The deal consideration will be not higher than HKD950m, which amounts to a PE ratio of 17.5x based on estimated 2023 earnings of the acquired business.</li>
<li>In the current extremely shaky market, this kind of deal is very damaging to the market confidence of the stock.  Further derating is likely. </li>
</ul>



China Overseas Property (2669 HK) announced an acquisition on October 11 of a technical consultancy business from China State Construction Development (830 HK), a sister company. 
The deal consideration will be not higher than HKD950m, which amounts to a PE ratio of 17.5x based on estimated 2023 earnings of the acquired business.
In the current extremely shaky market, this kind of deal is very damaging to the market confidence of the stock.  Further derating is likely. 


China Overseas Property (2669 HK):  Questionable Acquisition From Sister Company

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC 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>Having first introduced the three red line guidance in late 2020, the government has begun shifting its stance, and relaxing some of its regulatory oversight.</li>
<li>In this note, we looked at recent news developments and how some larger developers fared against the three red lines criterion.</li>
<li>Of the large developers we looked at, there are a few names which stand out which could potentially do a capital raising given their financial standing. </li>
</ul>


Having first introduced the three red line guidance in late 2020, the government has begun shifting its stance, and relaxing some of its regulatory oversight.
In this note, we looked at recent news developments and how some larger developers fared against the three red lines criterion.
Of the large developers we looked at, there are a few names which stand out which could potentially do a capital raising given their financial standing. 


Chinese Developers’ Overview - Shift in Sentiment but a Few Still Needs Some Equity

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Equity Capital Markets

<ul>
<li>China Vanke aims to raise around US$500m in its H-share primary placement.</li>
<li>Vanke had recently stated that it aimed to raise around US$2bn via an A-share private placement, so a placement was expected for sure.</li>
<li>In this note, we will talk about the placement and run the deal through our ECM framework.</li>
</ul>


China Vanke aims to raise around US$500m in its H-share primary placement.
Vanke had recently stated that it aimed to raise around US$2bn via an A-share private placement, so a placement was expected for sure.
In this note, we will talk about the placement and run the deal through our ECM framework.


China Vanke Placement - A Placement Was Expected, Unclear if It Was This One

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>We expect property + sector to react positively on CSRC’s pilot scheme since it may accelerate home delivery and social housing with the help of private investment.</li><li>Also, despite limited scope, it may leave some space for hot money into new residential projects and M&amp;A deals especially when the sales are recovering now and trust loans are back.</li><li>This is in line with our previous report that the policy will remain supportive.</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.

We expect property + sector to react positively on CSRC’s pilot scheme since it may accelerate home delivery and social housing with the help of private investment.Also, despite limited scope, it may leave some space for hot money into new residential projects and M&amp;A deals especially when the sales are recovering now and trust loans are back.This is in line with our previous report that the policy will remain supportive.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 Property Sector – Mildly positive for CSRC’s pilot private investment scheme in real estate

<ul>
<li>Property+ sector saw a decent correction on articles from Economic daily and Qiushi that reiterated property price increase and financial system risk.</li>
<li>It has sparked the market fear of policy direction change right in the middle of improving sales data and momentum.</li>
<li>We agree that the better the data, the less policy support needed, but property policy will continue to stay supportive in the coming months as 1) the new home sales remained fragile and still declined 23% YoY YTD despite the recent improvement.</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.


Property+ sector saw a decent correction on articles from Economic daily and Qiushi that reiterated property price increase and financial system risk.
It has sparked the market fear of policy direction change right in the middle of improving sales data and momentum.
We agree that the better the data, the less policy support needed, but property policy will continue to stay supportive in the coming months as 1) the new home sales remained fragile and still declined 23% YoY YTD despite the recent improvement.

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 Property Sector – Good news is bad news?

China

China Overseas Property Holdings Limited operates as a property management firm. The Company manages residential communities, commercial properties and government properties in Hong Kong and Macau.

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China Overseas Property (2669 HK)