IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Horizon Construction Development / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/horizon-construction-development" target="_blank" data-smartkarma-citation="entities:35117:1" rel="noopener">Horizon Construction Development (1887128D HK)</a>/HCD, a subsidiary of <a href="https://www.smartkarma.com/entities/far-east-horizon-ltd" target="_blank" data-smartkarma-citation="entities:420:1" rel="noopener">Far East Horizon (3360 HK)</a>, is pre-marketing an HKEx IPO to raise US$200-250 million, according to press reports.</li>
<li>In <a href="https://www.smartkarma.com/insights/horizon-construction-development-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:100813" rel="noopener">Horizon Construction Development IPO: The Bull Case</a>, we highlighted the key elements of the bull case. In this note, we outline the bear case.</li>
<li>The key elements of the bear case rest on core business margin decline, unexplained headcount reduction, cash burn, long receivable days and stretched balance sheet.</li>
</ul>



Horizon Construction Development (1887128D HK)/HCD, a subsidiary of Far East Horizon (3360 HK), is pre-marketing an HKEx IPO to raise US$200-250 million, according to press reports.
In Horizon Construction Development IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The key elements of the bear case rest on core business margin decline, unexplained headcount reduction, cash burn, long receivable days and stretched balance sheet.


Horizon Construction Development IPO: The Bear Case

<ul>
<li>
<a href="https://www.smartkarma.com/entities/horizon-construction-development" target="_blank" data-smartkarma-citation="entities:35117:1" rel="noopener">Horizon Construction Development (1887128D HK)</a>/HCD, a subsidiary of <a href="https://www.smartkarma.com/entities/far-east-horizon-ltd" target="_blank" data-smartkarma-citation="entities:420:1" rel="noopener">Far East Horizon (3360 HK)</a>, is pre-marketing an HKEx IPO to raise US$200-250 million, according to press reports.</li>
<li>HCD is the largest equipment operation service provider in China in terms of revenue in 2021, according to Frost &amp; Sullivan.</li>
<li>The key elements of the bull case rest on market share gains, an anticipated post-COVID recovery boost, high revenue visibility, stable operating margin and young equipment life.</li>
</ul>



Horizon Construction Development (1887128D HK)/HCD, a subsidiary of Far East Horizon (3360 HK), is pre-marketing an HKEx IPO to raise US$200-250 million, according to press reports.
HCD is the largest equipment operation service provider in China in terms of revenue in 2021, according to Frost &amp; Sullivan.
The key elements of the bull case rest on market share gains, an anticipated post-COVID recovery boost, high revenue visibility, stable operating margin and young equipment life.


Horizon Construction Development IPO: The Bull Case

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

Quantitative Analysis

<ul>
<li>Total short interest in Hong Kong is HK$435.1bn, marginally higher from end-December. Short notional has moved in line with the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a>. </li>
<li>Total short notional of the KOSPI and KOSDAQ market has moved up since end-December and is in line with the move higher in the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI2 INDEX</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index</a>.</li>
<li>Short notional in Taiwan is lower over the quarter even as the <a href="https://www.smartkarma.com/entities/taiwan-stock-exchange-weighted-index" target="_blank" data-smartkarma-citation="entities:26056:1" rel="noopener">TWSE INDEX</a> has moved higher over the period. There has been big short covering on some stocks.</li>
</ul>


Total short interest in Hong Kong is HK$435.1bn, marginally higher from end-December. Short notional has moved in line with the Hong Kong Hang Seng Index (HSI INDEX). 
Total short notional of the KOSPI and KOSDAQ market has moved up since end-December and is in line with the move higher in the KOSPI2 INDEX and KOSDAQ 150 Index.
Short notional in Taiwan is lower over the quarter even as the TWSE INDEX has moved higher over the period. There has been big short covering on some stocks.


Short Interest Movements (Q1 2023): HK, Korea, Taiwan, Australia

Haitong UniTrust International Leasing / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/28044" target="_blank" data-smartkarma-citation="entities:28044:1">Haitong UniTrust International Leasing (1905 HK)</a> has launched its Hong Kong IPO at a price range of HK$1.88-2.08 per share to raise HK$2.3 billion ($290 million) at the mid-point of the IPO price range. Haitong UniTrust is a foreign-funded financial leasing company in China and is the leasing unit of <a href="https://www.smartkarma.com/entities/5665" target="_blank" data-smartkarma-citation="entities:5665:1">Haitong Securities Co Ltd (H) (6837 HK)</a>.<div class="content-highlight">In <a href="https://www.smartkarma.com/insights/haitong-unitrust-intl-leasing-ipo-preview-fourth-time-lucky" target="_blank">our IPO initiation note</a>, we noted that Haitong UniTrust’s fundamentals are mixed, which would need to be reflected in the IPO valuation. Overall, our view is that Haitong UniTrust is fairly priced at the proposed IPO price range and would participate in the IPO at most at the low-end of the IPO price range. </div>

Haitong UniTrust International Leasing (1905 HK) has launched its Hong Kong IPO at a price range of HK$1.88-2.08 per share to raise HK$2.3 billion ($290 million) at the mid-point of the IPO price range. Haitong UniTrust is a foreign-funded financial leasing company in China and is the leasing unit of Haitong Securities Co Ltd (H) (6837 HK).In our IPO initiation note, we noted that Haitong UniTrust’s fundamentals are mixed, which would need to be reflected in the IPO valuation. Overall, our view is that Haitong UniTrust is fairly priced at the proposed IPO price range and would participate in the IPO at most at the low-end of the IPO price range. 

Haitong UniTrust Intl Leasing IPO: Fair Value

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.

CSSC (Hong Kong) Shipping Co Ltd / Equity Capital Markets

CSSC (HK) Shipping, the ship leasing company under one of the world's largest shipyard CSSC (China State Shipbuilding Corp), is said to be pre-marketing its USD 300 to 500 million IPO. In this insight, we will discuss the following topics:
<ul>
<li>The company's business segments</li>
<li>The company's assets</li>
<li>The industry backdrop</li>
<li>Financial snapshot and highlights</li>
<li>Our thoughts on valuation</li>
</ul>

CSSC (HK) Shipping, the ship leasing company under one of the world's largest shipyard CSSC (China State Shipbuilding Corp), is said to be pre-marketing its USD 300 to 500 million IPO. In this insight, we will discuss the following topics:

The company's business segments
The company's assets
The industry backdrop
Financial snapshot and highlights
Our thoughts on valuation


CSSC (HK) Shipping IPO: A Cyclical Business Masked as an Income Stock

Hong Kong

Far East Horizon Ltd is a financial services provider. The Company specializes in providing financing solutions through equipment-based financial leasing. Far East currently targets industries that include healthcare, education, infrastructure construction, shipping, printing and machinery industries.

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Far East Horizon (3360 HK)

Horizon Construction Development IPO: The Bear Case

The key elements of the bear case rest on core business margin decline, unexplained headcount reduction, cash burn, long receivable days and...

Arun George

Horizon Construction Development IPO: The Bull Case

The key elements of the bull case rest on market share gains, an anticipated post-COVID recovery boost, high revenue visibility, stable operating...

Arun George

Short Interest Movements (Q1 2023): HK, Korea, Taiwan, Australia

The Insight looks at movements in short interest across HK, Korea, Taiwan and Australia stocks over Q1 and highlights large increases/decreases in...

Brian Freitas

Haitong UniTrust Intl Leasing IPO: Fair Value

Haitong UniTrust International Leasing (1905 HK) has launched its Hong Kong IPO at a price range of HK$1.88-2.08 per share to raise HK$2.3 billion...

Arun George

CSSC (HK) Shipping IPO: A Cyclical Business Masked as an Income Stock

CSSC (HK) Shipping, the ship leasing company under one of the world's largest shipyard CSSC (China State Shipbuilding Corp), is said to be...

Ke Yan, CFA, FRM

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