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>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

Equity Research Analyst - Long-Short

Raj S, CA, CFA

Equity Bottom-Up

<ul>
<li>Regulation steady, not softer; policy silence reaffirms the 24% cap as industry standard, with industry participants electing to comply with immediate effect.</li>
<li>Asset stress rising; delinquencies peak as low-tier borrowers struggle, but QFIN’s disciplined underwriting and data scale set the stage for recovery in 2026e.</li>
<li>Leadership and capital strength, market-leading balance sheet and strong commitment to shareholder returns underpin confidence through the transition phase.</li>
</ul>


Regulation steady, not softer; policy silence reaffirms the 24% cap as industry standard, with industry participants electing to comply with immediate effect.
Asset stress rising; delinquencies peak as low-tier borrowers struggle, but QFIN’s disciplined underwriting and data scale set the stage for recovery in 2026e.
Leadership and capital strength, market-leading balance sheet and strong commitment to shareholder returns underpin confidence through the transition phase.


QFIN US - Follow-Up: Asset-Quality Pressure Undermines Early Bull Case; Recovery Shifts to 2026e

<ul>
<li>QFIN US is down 30% since July on fear that the Oct 1 regulatory action on 24%+ loans will lead to significant and sustained earnings downgrades.</li>
<li>QFIN’s industry-leading franchise, risk management history, capital return yield (~18-20%), and strong balance sheet support a strong recovery post-regulatory clarity and cleanup.</li>
<li>Valuation at 1.2x FY1 P/BV already discounts worst case; QFIN’s recovery potential leaves scope for 100%+ upside (peak valuation at 2.4x in Mar-24 pre-regulation).</li>
</ul>


QFIN US is down 30% since July on fear that the Oct 1 regulatory action on 24%+ loans will lead to significant and sustained earnings downgrades.
QFIN’s industry-leading franchise, risk management history, capital return yield (~18-20%), and strong balance sheet support a strong recovery post-regulatory clarity and cleanup.
Valuation at 1.2x FY1 P/BV already discounts worst case; QFIN’s recovery potential leaves scope for 100%+ upside (peak valuation at 2.4x in Mar-24 pre-regulation).


2025 High Conviction: QFIN US – Event-Driven: Regulatory Overhang Sets Up 100%+ Upside Post-Clarity

<ul>
<li>On 26th Aug 2022, PCAOB and CSRC announced that they had entered into an agreement granting US authorities access to investigate public accounting firms headquartered in China and HK.</li>
<li>On 2nd Apr 2022, CSRC put out a draft for public comments on the revision of certain provisions which would allow easier access by overseas regulators to China ADRs audits.</li>
<li>In this note, we'll talk about the latest developments and its implications.</li>
</ul>


On 26th Aug 2022, PCAOB and CSRC announced that they had entered into an agreement granting US authorities access to investigate public accounting firms headquartered in China and HK.
On 2nd Apr 2022, CSRC put out a draft for public comments on the revision of certain provisions which would allow easier access by overseas regulators to China ADRs audits.
In this note, we'll talk about the latest developments and its implications.


China ADRs Delisting - Tide Is Turning - Non-HK Listed ADRs Are Already Outperforming

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

<ul>
<li>With <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a> under regulatory pressure from PBoC, Chinese NBFCs are set to gain market share in Chinese consumer and SMB credit</li>
<li>We review prospects and valuations for four listed names in this report</li>
<li>We see fundamental opportunities still, despite the marked outperformance of three out of four names since November 2020</li>
<li>We would highlight <a href="https://www.smartkarma.com/entities/lexinfintech-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26036:1" rel="noopener">Lexinfintech Holdings (LX US)</a> for its premium returns and most attractive valuations versus peers</li>
<li>
<a href="https://www.smartkarma.com/entities/lufax-holdings" target="_blank" data-smartkarma-citation="entities:29690:1" rel="noopener">Lufax Holdings (LU US)</a> is the unloved name, and it is lower return than its peers; yet it should deliver better returns with faster growth in credit volumes going forward</li>
<li>Delinquency ratios remain ranging from 2% to under 5% in 3Q 2020, and we do not expect these ratios to rise sharply and threaten profitability</li>
<li>Risks to our positive view on Chinese NBFCs generally include a sharp deterioration in credit quality, which could drive far higher credit costs; on the regulatory side, an increase in required capital adequacy for NBFCs could adversely impact the pace of loan origination</li>
</ul>


With Ant Financial Services Group (6688 HK) under regulatory pressure from PBoC, Chinese NBFCs are set to gain market share in Chinese consumer and SMB credit
We review prospects and valuations for four listed names in this report
We see fundamental opportunities still, despite the marked outperformance of three out of four names since November 2020
We would highlight Lexinfintech Holdings (LX US) for its premium returns and most attractive valuations versus peers

Lufax Holdings (LU US) is the unloved name, and it is lower return than its peers; yet it should deliver better returns with faster growth in credit volumes going forward
Delinquency ratios remain ranging from 2% to under 5% in 3Q 2020, and we do not expect these ratios to rise sharply and threaten profitability
Risks to our positive view on Chinese NBFCs generally include a sharp deterioration in credit quality, which could drive far higher credit costs; on the regulatory side, an increase in required capital adequacy for NBFCs could adversely impact the pace of loan origination


China Non-Bank Finance Companies (NBFCs); Ant’s Loss, Their Gain

United States

FinVolution Group develops online consumer finance platform. The Company offers credit risk assessment, fraud detection, big data, automated loan transaction, and artificial intelligence solutions. FinVolution Group serves clients in China.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

FinVolution Group (FINV US)

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

QFIN US - Follow-Up: Asset-Quality Pressure Undermines Early Bull Case; Recovery Shifts to 2026e

Newsflash on QFIN: Market chatter today points to further tightening in China’s consumer finance regulations beyond the 24% capping. If confirmed,...

Raj S, CA, CFA

2025 High Conviction: QFIN US – Event-Driven: Regulatory Overhang Sets Up 100%+ Upside Post-Clarity

QFIN US down 30% on regulatory fears, but strong fundamentals suggest potential for 100%+ upside post-regulatory clarity.

Raj S, CA, CFA

China ADRs Delisting - Tide Is Turning - Non-HK Listed ADRs Are Already Outperforming

On 26th Aug 2022, PCAOB and CSRC announced that they had entered into an agreement granting US authorities access to investigate public accounting...

Sumeet Singh

China Non-Bank Finance Companies (NBFCs); Ant’s Loss, Their Gain

Chinese NBFCs' share prices have rallied as Ant's regulatory hurdles mounted; yet we see more scope for re-rating in the case of LexinFintech on...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

QFIN US - Follow-Up: Asset-Quality Pressure Undermines Early Bull Case; Recovery Shifts to 2026e

Newsflash on QFIN: Market chatter today points to further tightening in China’s consumer finance regulations beyond the 24% capping. If confirmed,...

Raj S, CA, CFA

2025 High Conviction: QFIN US – Event-Driven: Regulatory Overhang Sets Up 100%+ Upside Post-Clarity

​QFIN US down 30% on regulatory fears, but strong fundamentals suggest potential for 100%+ upside post-regulatory clarity.

Raj S, CA, CFA

China ADRs Delisting - Tide Is Turning - Non-HK Listed ADRs Are Already Outperforming

On 26th Aug 2022, PCAOB and CSRC announced that they had entered into an agreement granting US authorities access to investigate public accounting...

Sumeet Singh

China Non-Bank Finance Companies (NBFCs); Ant’s Loss, Their Gain

Chinese NBFCs' share prices have rallied as Ant's regulatory hurdles mounted; yet we see more scope for re-rating in the case of LexinFintech on...

Victor Galliano

QFIN US down 30% on regulatory fears, but strong fundamentals suggest potential for 100%+ upside post-regulatory clarity.