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

Guangzhou Automobile Group / Equity Bottom-Up

<ul>
<li>Kuaishou and Bilibili’s GMV surged YoY during “June 18” sales.</li>
<li>
<em>World of Warcraft: Wrath of the Lich King</em>, will formally start on June 27.</li>
<li>GAC Honda Automobile Ltd planned to dismiss 1700 employees, about 14% of total.</li>
</ul>


Kuaishou and Bilibili’s GMV surged YoY during “June 18” sales.

World of Warcraft: Wrath of the Lich King, will formally start on June 27.
GAC Honda Automobile Ltd planned to dismiss 1700 employees, about 14% of total.


China Consumption Weekly (24 Jun 2024): Kuaishou, Bilibili, NetEase, GAC, Honda Motor, Chow Tai Fook

HK/China Equity Long-Short

Osbert Tang, CFA

Chow Tai Fook Jewellery / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook Jewellery (1929 HK)</a> reported a weaker-than-expected FY24 net profit. Despite having HK$2.2bn net cash, the lack of a special dividend is even more disappointing. </li>
<li>Surge in unrealised loss on gold loans and a YoY contraction in margin have contributed to the poor 2H24 result. Apr-May operating figures showed a deteriorated operating environment.</li>
<li>Lacking a special dividend, CTF no longer looks attractive at the current level. Overoptimistic FY25 and FY26 consensus forecasts mean earnings downgrade pressure. </li>
</ul>



Chow Tai Fook Jewellery (1929 HK) reported a weaker-than-expected FY24 net profit. Despite having HK$2.2bn net cash, the lack of a special dividend is even more disappointing. 
Surge in unrealised loss on gold loans and a YoY contraction in margin have contributed to the poor 2H24 result. Apr-May operating figures showed a deteriorated operating environment.
Lacking a special dividend, CTF no longer looks attractive at the current level. Overoptimistic FY25 and FY26 consensus forecasts mean earnings downgrade pressure. 


HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Mokingran Jewellery Group / Equity Capital Markets

<ul>
<li>MOKINGRAN’s revenue fluctuated in the past three years. Profit margin was much lower than that of peers/industry average, which may not necessarily have big improvement even with upward gold price.</li>
<li>MOKINGRAN once applied for IPO in A-share but failed. The concerns of SZSE included “unusual” gold trade-in business, large inventory balance and the risk of "false increase" in profits/revenues.</li>
<li>The gold boom should not mask the risks of MOKINGRAN. Even if MOKINGRAN successfully goes public, it still faces many challenges. Valuation of MOKINGRAN should be lower than peers. </li>
</ul>


MOKINGRAN’s revenue fluctuated in the past three years. Profit margin was much lower than that of peers/industry average, which may not necessarily have big improvement even with upward gold price.
MOKINGRAN once applied for IPO in A-share but failed. The concerns of SZSE included “unusual” gold trade-in business, large inventory balance and the risk of "false increase" in profits/revenues.
The gold boom should not mask the risks of MOKINGRAN. Even if MOKINGRAN successfully goes public, it still faces many challenges. Valuation of MOKINGRAN should be lower than peers. 


Pre-IPO Mokingran Jewellery Group - Disappointing Profit Margin and Potential Risk in Business Model

Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

<ul>
<li>The index seems to be finding support at 19,500 for the second consecutive week. Bullish momentum could resume when we close above 19,800 on the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a> .</li>
<li>Names discussed include <a href="https://www.smartkarma.com/entities/titan-co-ltd" target="_blank" data-smartkarma-citation="entities:12630:1" rel="noopener">Titan Co Ltd (TTAN IN)</a>, <a href="https://www.smartkarma.com/entities/maruti-suzuki-india-ltd" target="_blank" data-smartkarma-citation="entities:733:1" rel="noopener">Maruti Suzuki India (MSIL IN)</a> and <a href="https://www.smartkarma.com/entities/metro-brands" target="_blank" data-smartkarma-citation="entities:35289:1" rel="noopener">Metro Brands (METROBRA IN)</a>.  </li>
<li>We also introduce the Earnings Diary which will be part of the publication, tracking estimates and narratives around over coverage. </li>
</ul>


The index seems to be finding support at 19,500 for the second consecutive week. Bullish momentum could resume when we close above 19,800 on the NIFTY Index (NIFTY INDEX) .
Names discussed include Titan Co Ltd (TTAN IN), Maruti Suzuki India (MSIL IN) and Metro Brands (METROBRA IN).  
We also introduce the Earnings Diary which will be part of the publication, tracking estimates and narratives around over coverage. 


[Week 6] Namaste India 🙏 | TTAN's Glittery Update and Earnings Workbook

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>
<a href="https://www.smartkarma.com/entities/country-garden-services-holdings-company-limited" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services Holdings (6098 HK)</a> and <a href="https://www.smartkarma.com/entities/zhongsheng-group-holdings" target="_blank" data-smartkarma-citation="entities:10573:1" rel="noopener">Zhongsheng Group (881 HK)</a> are high probability deletions in September, while <a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com (9961 HK)</a> is a high probability inclusion.</li>
<li>The second add could be <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene Ltd (6160 HK)</a> if it passes the velocity test. If not, <a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook Jewellery (1929 HK)</a> will be added.</li>
<li>With the exception of <a href="https://www.smartkarma.com/entities/zhongsheng-group-holdings" target="_blank" data-smartkarma-citation="entities:10573:1" rel="noopener">Zhongsheng Group (881 HK)</a>, short interest has been rising on all the other stocks and could affect how the stocks trade close to implementation date.</li>
</ul>



Country Garden Services Holdings (6098 HK) and Zhongsheng Group (881 HK) are high probability deletions in September, while Trip.com (9961 HK) is a high probability inclusion.
The second add could be BeiGene Ltd (6160 HK) if it passes the velocity test. If not, Chow Tai Fook Jewellery (1929 HK) will be added.
With the exception of Zhongsheng Group (881 HK), short interest has been rising on all the other stocks and could affect how the stocks trade close to implementation date.


HSCEI Index Rebalance Preview: Deletions Fairly Certain; Uncertainty Among the Adds

Hong Kong

Chow Tai Fook Jewellery Group Limited is a leading luxury jeweler that manufactures and sells a wide range of jewelry products, including gem-set, platinum, k-gold, and gold jewelry, as well as distributing watches. The company operates a vertically integrated business model, from diamond sourcing and manufacturing to retail and after-sales services, through both physical stores and online platforms. It was founded in 1929 and is headquartered in Hong Kong.

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Chow Tai Fook Jewellery (1929 HK)

China Consumption Weekly (24 Jun 2024): Kuaishou, Bilibili, NetEase, GAC, Honda Motor, Chow Tai Fook

Kuaishou and Bilibili’s GMV surged YoY during “June 18” sales. World of Warcraft: Wrath of the Lich King, will formally start on June 27. GAC Honda...

Ming Lu

Chow Tai Fook (1929 HK): Disappointed

CTF disappoints with poor 2H24 profit and lack of special dividend. Gold loan losses and margin contraction are key reasons. Earnings downgrade...

Osbert Tang, CFA

Pre-IPO Mokingran Jewellery Group - Disappointing Profit Margin and Potential Risk in Business Model

MOKINGRAN's fluctuating revenue and low profit margin raise concerns about its IPO potential and its long-term performance in the gold market. The...

Xinyao (Criss) Wang

[Week 6] Namaste India 🙏 | TTAN's Glittery Update and Earnings Workbook

Bullish momentum may resume if NIFTY Index closes above 19,800. Names discussed Titan Co Ltd, Maruti Suzuki India, and Metro Brands. Earnings...

Pranav Bhavsar

HSCEI Index Rebalance Preview: Deletions Fairly Certain; Uncertainty Among the Adds

The two potential adds have outperformed the two potential deletes by 42% since end May and by 52% since end June. Shorts have jumped on Beigene...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Consumption Weekly (24 Jun 2024): Kuaishou, Bilibili, NetEase, GAC, Honda Motor, Chow Tai Fook

Kuaishou and Bilibili’s GMV surged YoY during “June 18” sales. World of Warcraft: Wrath of the Lich King, will formally start on June 27. GAC Honda...

Ming Lu

Chow Tai Fook (1929 HK): Disappointed

​CTF disappoints with poor 2H24 profit and lack of special dividend. Gold loan losses and margin contraction are key reasons. Earnings downgrade...

Osbert Tang, CFA

Pre-IPO Mokingran Jewellery Group - Disappointing Profit Margin and Potential Risk in Business Model

​MOKINGRAN's fluctuating revenue and low profit margin raise concerns about its IPO potential and its long-term performance in the gold market. The...

Xinyao (Criss) Wang

[Week 6] Namaste India 🙏 | TTAN's Glittery Update and Earnings Workbook

​Bullish momentum may resume if NIFTY Index closes above 19,800. Names discussed Titan Co Ltd, Maruti Suzuki India, and Metro Brands. Earnings...

Pranav Bhavsar

HSCEI Index Rebalance Preview: Deletions Fairly Certain; Uncertainty Among the Adds

The two potential adds have outperformed the two potential deletes by 42% since end May and by 52% since end June. Shorts have jumped on Beigene...

Brian Freitas

CTF disappoints with poor 2H24 profit and lack of special dividend. Gold loan losses and margin contraction are key reasons. Earnings downgrade...

MOKINGRAN's fluctuating revenue and low profit margin raise concerns about its IPO potential and its long-term performance in the gold market. The...

Bullish momentum may resume if NIFTY Index closes above 19,800. Names discussed Titan Co Ltd, Maruti Suzuki India, and Metro Brands. Earnings...