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>
<a href="https://www.smartkarma.com/entities/chery-automobile-co-ltd-3fd31c4e-aba6-43af-bdf8-c5a7af8cf9b2" target="_blank" data-smartkarma-citation="entities:44473:1" rel="noopener">Chery Automobile</a> raised around US$1.2bn in its Hong Kong IPO. The lockup on its pre-IPO investors is set to expire soon.</li>
<li>Chery Auto is a Chinese passenger vehicle company which designs, develops, manufactures and sells passenger vehicles, including internal combustion engine vehicles and new energy vehicles, both domestically and overseas.</li>
<li>In this note, we will talk about the lockup dynamics and possible placement.</li>
</ul>



Chery Automobile raised around US$1.2bn in its Hong Kong IPO. The lockup on its pre-IPO investors is set to expire soon.
Chery Auto is a Chinese passenger vehicle company which designs, develops, manufactures and sells passenger vehicles, including internal combustion engine vehicles and new energy vehicles, both domestically and overseas.
In this note, we will talk about the lockup dynamics and possible placement.


Aequitas: Chery Auto IPO Lockup - US$8bn Pre-IPO Release

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>YTD, the share prices of the H-share IPOs of A-shares increased by an average of 30.2%, and the H-A discount narrowed by 14.8pp, but the range is wide.</li>
<li>The growth outlook, as reflected by the 3-year EPS CAGR, is the key driver for the performance and reduction in H-A share discounts.</li>
<li>Market cap, absolute PER multiples, and even relative PER ratios are not the major factors supporting their post-IPO performance.</li>
</ul>


YTD, the share prices of the H-share IPOs of A-shares increased by an average of 30.2%, and the H-A discount narrowed by 14.8pp, but the range is wide.
The growth outlook, as reflected by the 3-year EPS CAGR, is the key driver for the performance and reduction in H-A share discounts.
Market cap, absolute PER multiples, and even relative PER ratios are not the major factors supporting their post-IPO performance.


HK Strategy: How to Play the Future H IPOs of the As

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>CATL / In Depth: CATL’s bet on Europe shows challenges of recreating supply chains abroad</li><li>Summer Davos /: Increasing incomes key to boosting domestic demand, professor says</li><li>Gold /: China opens first offshore gold vault to attract global investors</li></ul>

CATL / In Depth: CATL’s bet on Europe shows challenges of recreating supply chains abroadSummer Davos /: Increasing incomes key to boosting domestic demand, professor saysGold /: China opens first offshore gold vault to attract global investors

CX Daily: CATL’s Bet on Europe Shows Challenges of Recreating Supply Chains Abroad 

<ul>
<li>The 6 H-share IPOs of the listed A-share companies YTD have seen their H-A discount narrowing from an average of 31% during IPO to 15.5% currently.  </li>
<li>Larger-Cap ones tend to be priced and traded at a smaller discount to their A-shares. However, they are not necessarily those seeing the most significant narrowing in discount. </li>
<li>
<a href="https://www.smartkarma.com/entities/foshan-haitian-flavouring-food-company" target="_blank" data-smartkarma-citation="entities:44279:1" rel="noopener">Foshan Haitian Flavouring &amp; Food Company (3288 HK)</a> may further narrow its discount, while <a href="https://www.smartkarma.com/entities/zhejiang-sanhua-intelligent-controls" target="_blank" data-smartkarma-citation="entities:45277:1" rel="noopener">Zhejiang Sanhua Intelligent Controls (2050 HK)</a> also sees upside from such a perspective. </li>
</ul>


The 6 H-share IPOs of the listed A-share companies YTD have seen their H-A discount narrowing from an average of 31% during IPO to 15.5% currently.  
Larger-Cap ones tend to be priced and traded at a smaller discount to their A-shares. However, they are not necessarily those seeing the most significant narrowing in discount. 

Foshan Haitian Flavouring &amp; Food Company (3288 HK) may further narrow its discount, while Zhejiang Sanhua Intelligent Controls (2050 HK) also sees upside from such a perspective. 


HK Strategy: Trend of Narrowing H-A IPO Discount

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>A Bloomberg <a href="https://archive.is/6X0kZ" target="_blank" rel="noopener">op-ed piece on the 5th June</a> concludes it is time to move on from "<em>from an archaic currency regime</em>". That conclusion appears presumptuous. And uninformed.</li>
<li>A key tenent of this piece is that HK's benchmark interest rates are (or were) significantly - and stubbornly - lower than US rates. Yet this "anomaly" is easily explained.</li>
<li>The article fails to discuss the impact from <strong><a href="https://www.smartkarma.com/entities/contemporary-amperex-technology-catl-co-limited" target="_blank" data-smartkarma-citation="entities:45179:1" rel="noopener">CATL (3750 HK)</a></strong>'s IPO on the peg;  and even what would replace the peg (IF it were replaced).</li>
</ul>


A Bloomberg op-ed piece on the 5th June concludes it is time to move on from "from an archaic currency regime". That conclusion appears presumptuous. And uninformed.
A key tenent of this piece is that HK's benchmark interest rates are (or were) significantly - and stubbornly - lower than US rates. Yet this "anomaly" is easily explained.
The article fails to discuss the impact from CATL (3750 HK)'s IPO on the peg;  and even what would replace the peg (IF it were replaced).


China

Contemporary Amperex Technology Co., Limited (CATL) is a Chinese battery manufacturer and technology company specializing in lithium-ion batteries for electric vehicles and energy storage systems. It is the world's largest producer of EV and energy storage batteries, also offering battery materials and recycling services. The company was founded in 2011 and is headquartered in Ningde, Fujian province, China.

Contemporary Amperex Technology (3750 HK)

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Contemporary Amperex Technology (3750 HK)

Aequitas: Chery Auto IPO Lockup - US$8bn Pre-IPO Release

Chery Automobile raised around US$1.2bn in its Hong Kong IPO. The lockup on its pre-IPO investors is set to expire soon.

Sumeet Singh

HK Strategy: How to Play the Future H IPOs of the As

H-share IPOs of A-shares have seen a 30.2% increase in share prices YTD, with a growth outlook driving performance and narrowing H-A discounts....

Osbert Tang, CFA

CX Daily: CATL’s Bet on Europe Shows Challenges of Recreating Supply Chains Abroad

TOP STORIES CATL / In Depth: CATL’s bet on Europe shows challenges of recreating supply chains abroad When Chinese battery giant Contemporary...

Caixin Global

HK Strategy: Trend of Narrowing H-A IPO Discount

H-share IPOs of A-shares have seen narrowing discounts, with larger-caps trading at smaller discounts, but not the ones with the largest...

Osbert Tang, CFA

No, Hong Kong Won't Abandon The Peg

Given Hong Kong is a very externalised economy, the peg works. Until the RMB is convertible (which means abolishing capital controls - a...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Aequitas: Chery Auto IPO Lockup - US$8bn Pre-IPO Release

Chery Automobile raised around US$1.2bn in its Hong Kong IPO. The lockup on its pre-IPO investors is set to expire soon.

Sumeet Singh

HK Strategy: How to Play the Future H IPOs of the As

​H-share IPOs of A-shares have seen a 30.2% increase in share prices YTD, with a growth outlook driving performance and narrowing H-A discounts....

Osbert Tang, CFA

CX Daily: CATL’s Bet on Europe Shows Challenges of Recreating Supply Chains Abroad

TOP STORIES CATL / In Depth: CATL’s bet on Europe shows challenges of recreating supply chains abroad When Chinese battery giant Contemporary...

Caixin Global

HK Strategy: Trend of Narrowing H-A IPO Discount

​H-share IPOs of A-shares have seen narrowing discounts, with larger-caps trading at smaller discounts, but not the ones with the largest...

Osbert Tang, CFA

No, Hong Kong Won't Abandon The Peg

Given Hong Kong is a very externalised economy, the peg works. Until the RMB is convertible (which means abolishing capital controls - a...

David Blennerhassett

H-share IPOs of A-shares have seen a 30.2% increase in share prices YTD, with a growth outlook driving performance and narrowing H-A discounts....

H-share IPOs of A-shares have seen narrowing discounts, with larger-caps trading at smaller discounts, but not the ones with the largest...