APAC IPOs & Placements, Aequitas Research

Akshat Shah

APAC 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.

Equity Capital Markets

Time Interconnect Technology / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/time-interconnect-technology-limited" target="_blank" data-smartkarma-citation="entities:34829:1" rel="noopener">Time Interconnect Technology (1729 HK)</a> is looking to raise around US$300m from a primary share placement.</li>
<li>TIME Interconnect Technology Limited (TIME) makes cable assembly products, server products, and networking and speciality cables.</li>
<li>In this note we talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>



Time Interconnect Technology (1729 HK) is looking to raise around US$300m from a primary share placement.
TIME Interconnect Technology Limited (TIME) makes cable assembly products, server products, and networking and speciality cables.
In this note we talk about the deal dynamics and run the deal through our ECM framework.


Aequitas:Time Interconnect Placement-Opportunistic Raising but Momentum Is Strong;Last Deal Did Well

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Huaqin Technology / Equity Capital Markets

<ul>
<li>The IPO pricing is up to HK$77.7, about 32% discount to Huaqin A-share), higher than normal discount range of 25-30%. 14.2x P/E based on 2026 forecast is lower than peers.</li>
<li>The IPO pricing strategy is "flexible", indicating that investment banks have taken risks into account when setting the price, as HK market's valuation of consumer electronics ODM becomes more rational.</li>
<li>Conservative scenario is P/E of 15-17x. Neutral scenario is P/E of 18-20x. Optimistic scenario is P/E above 21x. So, Huaqin’s IPO pricing leaves room for future potential upside.</li>
</ul>


The IPO pricing is up to HK$77.7, about 32% discount to Huaqin A-share), higher than normal discount range of 25-30%. 14.2x P/E based on 2026 forecast is lower than peers.
The IPO pricing strategy is "flexible", indicating that investment banks have taken risks into account when setting the price, as HK market's valuation of consumer electronics ODM becomes more rational.
Conservative scenario is P/E of 15-17x. Neutral scenario is P/E of 18-20x. Optimistic scenario is P/E above 21x. So, Huaqin’s IPO pricing leaves room for future potential upside.


Pre-IPO Huaqin (3296 HK) - Thoughts on the IPO Pricing and the Outlook

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/huaqin-co-ltd" target="_blank" data-smartkarma-citation="entities:48099:1" rel="noopener">Huaqin (3296 HK)</a> priced its H Share at HK$77.70, raising HK$4,549 million (US$581 million) in gross proceeds. The H Share will be listed tomorrow.</li>
<li>I discussed the H Share listing in <a href="https://www.smartkarma.com/insights/huaqin-h-share-listing-the-investment-case" target="_blank" data-smartkarma-citation="insights:229484" rel="noopener">Huaqin H Share Listing: The Investment Case</a> and <a href="https://www.smartkarma.com/insights/huaqin-h-share-listing-3296-hk-valuation-insights" target="_blank" data-smartkarma-citation="insights:231473" rel="noopener">Huaqin H Share Listing (3296 HK): Valuation Insights</a>. </li>
<li>The grey market price is up 20% due to peers' reratings and FOMO driven by the strong performance of recent listings. Take profits and head for the exit.</li>
</ul>



Huaqin (3296 HK) priced its H Share at HK$77.70, raising HK$4,549 million (US$581 million) in gross proceeds. The H Share will be listed tomorrow.
I discussed the H Share listing in Huaqin H Share Listing: The Investment Case and Huaqin H Share Listing (3296 HK): Valuation Insights. 
The grey market price is up 20% due to peers' reratings and FOMO driven by the strong performance of recent listings. Take profits and head for the exit.


Huaqin H Share Listing (3296 HK): Trading Debut

<ul>
<li>
<a href="https://www.smartkarma.com/entities/huaqin-co-ltd" target="_blank" data-smartkarma-citation="entities:48099:1" rel="noopener">Huaqin (3296 HK)</a>, the world’s largest consumer electronics original design manufacturer, has launched an H Share listing to raise US$580 million.</li>
<li>I discussed the H Share listing in <a href="https://www.smartkarma.com/insights/huaqin-h-share-listing-the-investment-case" target="_blank" data-smartkarma-citation="insights:229484" rel="noopener">Huaqin H Share Listing: The Investment Case</a>. </li>
<li>Given my previously discussed bearish investment case and the unattractive AH discount, I would avoid the H Share listing. </li>
</ul>



Huaqin (3296 HK), the world’s largest consumer electronics original design manufacturer, has launched an H Share listing to raise US$580 million.
I discussed the H Share listing in Huaqin H Share Listing: The Investment Case. 
Given my previously discussed bearish investment case and the unattractive AH discount, I would avoid the H Share listing. 


Huaqin H Share Listing (3296 HK): Valuation Insights

<ul>
<li>Huaqin adopts "3+N+3" global large platform strategy. The core of business model lies in large-scale manufacturing and vertical integration. Due to “Buy &amp; Sell model”, profitability is a concern.</li>
<li>Despite negative operating cash flow, Huaqin still announced RMB1.216 billion dividend. The controlling shareholder has pledged shares for financing, which attracted market attention to the true adequacy of its funds.</li>
<li>Although Huaqin has big revenue scale, its profit quality, cash flow, corporate governance transparency are weaker than peers, making it difficult to enjoy the same level of valuation premium.   </li>
</ul>


Huaqin adopts "3+N+3" global large platform strategy. The core of business model lies in large-scale manufacturing and vertical integration. Due to “Buy &amp; Sell model”, profitability is a concern.
Despite negative operating cash flow, Huaqin still announced RMB1.216 billion dividend. The controlling shareholder has pledged shares for financing, which attracted market attention to the true adequacy of its funds.
Although Huaqin has big revenue scale, its profit quality, cash flow, corporate governance transparency are weaker than peers, making it difficult to enjoy the same level of valuation premium.   


Pre-IPO Huaqin (A/H Listing) - Low Profit Margin Is a Pain Point Due to Flaws in Business Model

Taiwan

Foxconn Industrial Internet Co., Ltd. operates as a communication network equipment development company. The Company develops and sells network switches, routers, wireless devices, web servers, set top boxes, smart home gateways, and other products. Foxconn Industrial Internet also manufactures storage equipment.

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Foxconn Industrial Internet (601138 CH)

Aequitas:Time Interconnect Placement-Opportunistic Raising but Momentum Is Strong;Last Deal Did Well

Time Interconnect Technology (1729 HK) is looking to raise around US$300m from a primary share placement. In this note we talk about the deal...

Akshat Shah

Pre-IPO Huaqin (3296 HK) - Thoughts on the IPO Pricing and the Outlook

Huaqin's IPO pricing of HK$77.70/share is still conservative in our view, which has not fully priced in Huaqin’s strong moat in the industry chain...

Xinyao (Criss) Wang

Pre-IPO Huaqin (A/H Listing) - Low Profit Margin Is a Pain Point Due to Flaws in Business Model

Huaqin's faces profitability concerns due to its Buy & Sell model. Despite large revenue, questions arise about the company's financial stability...

Xinyao (Criss) Wang

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Aequitas:Time Interconnect Placement-Opportunistic Raising but Momentum Is Strong;Last Deal Did Well

Time Interconnect Technology (1729 HK) is looking to raise around US$300m from a primary share placement. In this note we talk about the deal...

Akshat Shah

Pre-IPO Huaqin (3296 HK) - Thoughts on the IPO Pricing and the Outlook

Huaqin's IPO pricing of HK$77.70/share is still conservative in our view, which has not fully priced in Huaqin’s strong moat in the industry chain...

Xinyao (Criss) Wang

Huaqin H Share Listing (3296 HK): Trading Debut

The grey market price is up 20% due to peers' reratings and FOMO driven by the strong performance of recent listings. Take profits and head for the...

Arun George

Huaqin H Share Listing (3296 HK): Valuation Insights

Huaqin, the world’s largest consumer electronics original design manufacturer, has launched an H Share listing to raise US$580 million. In this...

Arun George

Pre-IPO Huaqin (A/H Listing) - Low Profit Margin Is a Pain Point Due to Flaws in Business Model

​Huaqin's faces profitability concerns due to its Buy & Sell model. Despite large revenue, questions arise about the company's financial stability...

Xinyao (Criss) Wang

Huaqin's faces profitability concerns due to its Buy & Sell model. Despite large revenue, questions arise about the company's financial stability...