Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Mar 8th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Dongyue (189 HK), AIA (1299 HK), Kuaishou Technology (1024 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Dongyue (189 HK), AIA (1299 HK), HSBC (5 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Mar 8th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Dongyue (189 HK), AIA (1299 HK), Kuaishou Technology (1024 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Dongyue (189 HK), AIA (1299 HK), HSBC (5 HK).


Hong Kong Buybacks Weekly (Mar 8th): Dongyue, Aia, Kuaishou Technology

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<strong><a href="https://www.smartkarma.com/entities/dongyue-group-ltd" target="_blank" data-smartkarma-citation="entities:20429:1" rel="noopener">Dongyue Group (189 HK)</a></strong> is a leader in the manufacturing of fluorochemicals and organosilicons, and the largest player in second-generation refrigerants. </li>
<li>FY21 profit was up 69% yoy. The company just announced profit in the first five months of 2022 recorded an increase of 170%+ compared to the corresponding period last year.</li>
<li>The trade pushback centers on corporate governance issues, both in Hong Kong and in the PRC.</li>
</ul>



Dongyue Group (189 HK) is a leader in the manufacturing of fluorochemicals and organosilicons, and the largest player in second-generation refrigerants. 
FY21 profit was up 69% yoy. The company just announced profit in the first five months of 2022 recorded an increase of 170%+ compared to the corresponding period last year.
The trade pushback centers on corporate governance issues, both in Hong Kong and in the PRC.


Dongyue (189 HK): Fast-Growing FCEV Play... With Baggage

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cimc-enric-holdings-ltd" target="_blank" data-smartkarma-citation="entities:47:1" rel="noopener">Cimc Enric Holdings (3899 HK)</a> posted a set of encouraging result for FY21. It achieved a 37.4% YoY growth in 2H21 even after a 77.5% growth in 1H21. </li>
<li>Management suggests that gross margin will improve in this year as measures have been taken to cope with the factors that lead to the 2.3pp contraction in FY21.</li>
<li>Hydrogen energy is a bright spot - though contribution is still small, it expects to at least double its revenue in FY22, and remains bullish on the long term prospects.</li>
</ul>



Cimc Enric Holdings (3899 HK) posted a set of encouraging result for FY21. It achieved a 37.4% YoY growth in 2H21 even after a 77.5% growth in 1H21. 
Management suggests that gross margin will improve in this year as measures have been taken to cope with the factors that lead to the 2.3pp contraction in FY21.
Hydrogen energy is a bright spot - though contribution is still small, it expects to at least double its revenue in FY22, and remains bullish on the long term prospects.


CIMC Enric (3899 HK): Still Running on the Fast Lane

Thematic (Sector/Industry)

<ul>
<li>We expect more supportive measures to be rolled out on hydrogen energy development in 2022, and the recently announced MIIT Plan already showed an escalation of its industrial use. </li>
<li>Hydrogen may potentially account for 5% of final energy consumption in 2030 and 20% in 2060. Industrial use may represent 60% of total, driving tremendous opportunities for the players.</li>
<li>We think <a href="https://www.smartkarma.com/entities/dongfang-electric-corporation-limited" target="_blank" data-smartkarma-citation="entities:1251:1" rel="noopener">Dongfang Electric (1072 HK)</a>, <a href="https://www.smartkarma.com/entities/cimc-enric-holdings-ltd" target="_blank" data-smartkarma-citation="entities:47:1" rel="noopener">Cimc Enric Holdings (3899 HK)</a> and <a href="https://www.smartkarma.com/entities/weichai-power-co-ltd-h" target="_blank" data-smartkarma-citation="entities:12508:1" rel="noopener">Weichai Power Co Ltd H (2338 HK)</a> are the prime beneficiaries and they have made good progress lately.</li>
</ul>


We expect more supportive measures to be rolled out on hydrogen energy development in 2022, and the recently announced MIIT Plan already showed an escalation of its industrial use. 
Hydrogen may potentially account for 5% of final energy consumption in 2030 and 20% in 2060. Industrial use may represent 60% of total, driving tremendous opportunities for the players.
We think Dongfang Electric (1072 HK), Cimc Enric Holdings (3899 HK) and Weichai Power Co Ltd H (2338 HK) are the prime beneficiaries and they have made good progress lately.


China's Hydrogen Economy: More Excitements into 2022

<p>Hong Kong SFC reported aggregate short position as of Sep 10. The aggregate short value for equities increased by $423m (+0.6%) WoW and increased by $741m (+1.1%) over the preceding four weeks.</p><p>Most shorted stocks by aggregate short value of positions are Ping An Insurance (Group) Company Of China, Ltd./2318 HK($3,720m, -3.3% WoW), China Merchants Bank Co., Ltd./3968 HK($2,745m, +1.9% WoW), Zhongsheng Group Holdings Limited/881 HK($1,960m, +0.1% WoW), Meituan/3690 HK($1,759m, +6.5% WoW), Anta Sports Products Limited/2020 HK($1,647m, +5.7% WoW).</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/230/549/original/Hong_Kong_Market_Short_Position_Value_%28line%29_and_1W_Changes_%28bar%29_%28%24m%292021-09-18+12_47_11.png?1631948396" class="editor-image img-responsive" data-smartkarma-image-id="230549"></figure></section>

Hong Kong SFC reported aggregate short position as of Sep 10. The aggregate short value for equities increased by $423m (+0.6%) WoW and increased by $741m (+1.1%) over the preceding four weeks.Most shorted stocks by aggregate short value of positions are Ping An Insurance (Group) Company Of China, Ltd./2318 HK($3,720m, -3.3% WoW), China Merchants Bank Co., Ltd./3968 HK($2,745m, +1.9% WoW), Zhongsheng Group Holdings Limited/881 HK($1,960m, +0.1% WoW), Meituan/3690 HK($1,759m, +6.5% WoW), Anta Sports Products Limited/2020 HK($1,647m, +5.7% WoW).

HK Short Interest: Short Cover for Dongyue, WH Group

China

Dongyue Group Ltd. manufactures and distributes fluorine and silicon chemicals. The Company produces refrigerants, fluoride fine chemicals, silicone chemicals, fluoride salts, acids, chloride methy chlorine materials, and other related chemicals.

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Dongyue Group (189 HK)

Hong Kong Buybacks Weekly (Mar 8th): Dongyue, Aia, Kuaishou Technology

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Dongyue (189 HK),...

Ke Yan, CFA, FRM

Dongyue (189 HK): Fast-Growing FCEV Play... With Baggage

Dongyue and SDOM are strongly correlated. Dongyue may get a boost from its positive profit alert. Then I'd probably tilt negative, and look to...

David Blennerhassett

CIMC Enric (3899 HK): Still Running on the Fast Lane

Management expects gross margin to recover in FY22 and it should ride on positive natural gas, chemical & environmental and liquid food demand....

Osbert Tang, CFA

China's Hydrogen Economy: More Excitements into 2022

China's push for hydrogen energy use is likely to further escalate in 2022, following a soon-to-be announcement of top-level design plan for the...

Osbert Tang, CFA

HK Short Interest: Short Cover for Dongyue, WH Group

We highlight week-on-week short covers for Dongyue (189 HK) and WH Group (288 HK) based on the latest HK SFC short aggregate position report.

Ke Yan, CFA, FRM

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