HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

Bright Smart Securities & Commodities / Equity Bottom-Up

Bright Smart Securities & Commodities (1428 HK)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bright-smart-securities-commodities-group" target="_blank" data-smartkarma-citation="entities:20511:1" rel="noopener"></a>Ant Financial has essentially passed through all hurdles in its acquisition of a 50.55% stake in <a href="https://www.smartkarma.com/entities/bright-smart-securities-commodities-group" target="_blank" data-smartkarma-citation="entities:20511:1" rel="noopener">Bright Smart Securities (1428 HK)</a> from the current controlling shareholder.</li>
<li>With a 68.5% surge in share price YTD, it is now trading on 31.8x FY27F PER and 9.2x P/B. A lot of 'dream' or 'hope' value has already been discounted. </li>
<li>It is more expensive than <a href="https://www.smartkarma.com/entities/futu-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27858:1" rel="noopener">Futu Holdings Ltd (FUTU US)</a> and <a href="https://www.smartkarma.com/entities/up-fintech-holding-ltd" target="_blank" data-smartkarma-citation="entities:27957:1" rel="noopener">UP Fintech (TIGR US)</a>, so taking some money off the table is sensible. </li>
</ul>



Ant Financial has essentially passed through all hurdles in its acquisition of a 50.55% stake in Bright Smart Securities (1428 HK) from the current controlling shareholder.
With a 68.5% surge in share price YTD, it is now trading on 31.8x FY27F PER and 9.2x P/B. A lot of 'dream' or 'hope' value has already been discounted. 
It is more expensive than Futu Holdings Ltd (FUTU US) and UP Fintech (TIGR US), so taking some money off the table is sensible. 


Equity Capital Markets

Wuxi Lead Intelligent Equipmen / Equity Capital Markets

Wuxi Lead Intelligent Equipmen (300450 CH)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wuxi-lead-intelligent-equipmen" target="_blank" data-smartkarma-citation="entities:27971:1" rel="noopener">Wuxi Lead Intelligent Equipment (470 HK)</a> has a lukewarm H-share IPO response, but is still priced at the maximum of HK$45.80. This places it on 29.2x PER for FY26F.</li>
<li>We consider an appropriate HA discount to be roughly 25-30%, implying a fair value of HK$45.6-48.8, or 6.6% downside/upside, and it is almost fairly-valued. </li>
<li>At the top-end of our estimated fair value, its multiples do not appear attractive against the A-share and other global peers, so HK$48.8 is the ceiling. </li>
</ul>



Wuxi Lead Intelligent Equipment (470 HK) has a lukewarm H-share IPO response, but is still priced at the maximum of HK$45.80. This places it on 29.2x PER for FY26F.
We consider an appropriate HA discount to be roughly 25-30%, implying a fair value of HK$45.6-48.8, or 6.6% downside/upside, and it is almost fairly-valued. 
At the top-end of our estimated fair value, its multiples do not appear attractive against the A-share and other global peers, so HK$48.8 is the ceiling. 


Wuxi Lead Equipment (470 HK): Almost Fair

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

National Securities Depository / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/national-securities-depository-ltd-nsdl" target="_blank" data-smartkarma-citation="entities:39939:1" rel="noopener">NSDL (NSDL IN)</a> raised around US$460m in its India IPO. The lockup on its pre-IPO investors is set to expire soon.</li>
<li>It is the largest depository in India in terms of number of issuers, number of active instruments, market share in demat value of settlement volume and value of assets.</li>
<li>In this note, we will talk about the lockup dynamics and possible placement.</li>
</ul>



NSDL (NSDL IN) raised around US$460m in its India IPO. The lockup on its pre-IPO investors is set to expire soon.
It is the largest depository in India in terms of number of issuers, number of active instruments, market share in demat value of settlement volume and value of assets.
In this note, we will talk about the lockup dynamics and possible placement.


Aequitas: NSDL IPO Lockup - US$1.6bn Lockup Release with Most Sitting on 10x Gains

GigaDevice Semiconductor  / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/gigadevice-semiconductor" target="_blank" data-smartkarma-citation="entities:46238:1" rel="noopener">GigaDevice Semiconductor (3986 HK)</a>'s grey market price of HK$224.8 is 38.8% higher than the IPO price. This means a PER of 53.5x for FY26, simply too stretched for us. </li>
<li>The grey market price represents a 68-77% FY26 PER premium to the most-expensive peers, namely <a href="https://www.smartkarma.com/entities/microchip-technology-inc" target="_blank" data-smartkarma-citation="entities:8788:1" rel="noopener">Microchip Technology (MCHP US)</a> and <a href="https://www.smartkarma.com/entities/texas-instruments-inc" target="_blank" data-smartkarma-citation="entities:18804:1" rel="noopener">Texas Instruments (TXN US)</a>. </li>
<li>Our fair value range is HK$204-238, based on the HA discount for 2025 IPOs and the current overall HA discount, implying limited upside potential.</li>
</ul>



GigaDevice Semiconductor (3986 HK)'s grey market price of HK$224.8 is 38.8% higher than the IPO price. This means a PER of 53.5x for FY26, simply too stretched for us. 
The grey market price represents a 68-77% FY26 PER premium to the most-expensive peers, namely Microchip Technology (MCHP US) and Texas Instruments (TXN US). 
Our fair value range is HK$204-238, based on the HA discount for 2025 IPOs and the current overall HA discount, implying limited upside potential.


GigaDevice (3986 HK): Its Just Too Demanding

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beijing-zhipu-huazhang-technology-co-ltd-knowledge-atlas-technology" target="_blank" data-smartkarma-citation="entities:44500:1" rel="noopener">Knowledge Atlas Technology (2513 HK)</a>'s debut is lukewarm, and currently trading on 37.8x P/S for FY27, it is close to fairly valued. </li>
<li>
<a href="https://www.smartkarma.com/entities/minimax-group-inc" target="_blank" data-smartkarma-citation="entities:46185:1" rel="noopener">MiniMax (100 HK)</a>'s B2C focus and its 3-year revenue CAGR of 126.8% (vs. 63.9%) warrants FY27 P/S of 55.1x, up from 48.8x as its peer <a href="https://www.smartkarma.com/entities/moore-threads-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:40221:1" rel="noopener">Moore Threads (688795 CH)</a> rallied. </li>
<li>Our fair value of <a href="https://www.smartkarma.com/entities/minimax-group-inc" target="_blank" data-smartkarma-citation="entities:46185:1" rel="noopener">MiniMax (100 HK)</a> equals a 45% premium to <a href="https://www.smartkarma.com/entities/beijing-zhipu-huazhang-technology-co-ltd-knowledge-atlas-technology" target="_blank" data-smartkarma-citation="entities:44500:1" rel="noopener">Knowledge Atlas Technology (2513 HK)</a>, justified by its above-sector momentum and "winner-take-all" characteristics.</li>
</ul>



Knowledge Atlas Technology (2513 HK)'s debut is lukewarm, and currently trading on 37.8x P/S for FY27, it is close to fairly valued. 

MiniMax (100 HK)'s B2C focus and its 3-year revenue CAGR of 126.8% (vs. 63.9%) warrants FY27 P/S of 55.1x, up from 48.8x as its peer Moore Threads (688795 CH) rallied. 
Our fair value of MiniMax (100 HK) equals a 45% premium to Knowledge Atlas Technology (2513 HK), justified by its above-sector momentum and "winner-take-all" characteristics.


Knowledge Atlas (2513 HK) & MiniMax Group (100 HK): Comparison, Debuts and Implications

United States

Futu Holdings Limited operates as a holding company. The Company, through its subsidiaries, offers an online brokerage platform that enables individual investors to trade in listed stocks. Futu Holdings serves customers in the United States, China, and Hong Kong.

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Futu Holdings Ltd (FUTU US)

Bright Smart (1428 HK): Enough Is Enough

As expected, Ant Financial has put forward the Unconditional MGO at HK$3.28, or a 74% discount to its last close. This is a formality in the...

Osbert Tang, CFA

Wuxi Lead Equipment (470 HK): Almost Fair

Wuxi Lead Intelligent Equipment's lukewarm IPO response leads to a fair value estimate of HK$45.6-48.8, suggesting it is almost fairly-valued with...

Osbert Tang, CFA

Aequitas: NSDL IPO Lockup - US$1.6bn Lockup Release with Most Sitting on 10x Gains

NSDL (NSDL IN) raised around US$460m in its India IPO. The lockup on its pre-IPO investors is set to expire soon, who are all sitting on at least...

Sumeet Singh

GigaDevice (3986 HK): Its Just Too Demanding

GigaDevice's grey market price is 38.8% higher than IPO, leading to a FY26 PER of 53.5x, with limited upside potential compared to peers, even...

Osbert Tang, CFA

Knowledge Atlas (2513 HK) & MiniMax Group (100 HK): Comparison, Debuts and Implications

Debut of Knowledge Atlas is lukewarm, trading close to fair value at 37.8x P/S for FY27, while MiniMax's B2C focus and strong revenue growth...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Bright Smart (1428 HK): Enough Is Enough

As expected, Ant Financial has put forward the Unconditional MGO at HK$3.28, or a 74% discount to its last close. This is a formality in the...

Osbert Tang, CFA

Wuxi Lead Equipment (470 HK): Almost Fair

​Wuxi Lead Intelligent Equipment's lukewarm IPO response leads to a fair value estimate of HK$45.6-48.8, suggesting it is almost fairly-valued with...

Osbert Tang, CFA

Aequitas: NSDL IPO Lockup - US$1.6bn Lockup Release with Most Sitting on 10x Gains

NSDL (NSDL IN) raised around US$460m in its India IPO. The lockup on its pre-IPO investors is set to expire soon, who are all sitting on at least...

Sumeet Singh

GigaDevice (3986 HK): Its Just Too Demanding

​GigaDevice's grey market price is 38.8% higher than IPO, leading to a FY26 PER of 53.5x, with limited upside potential compared to peers, even...

Osbert Tang, CFA

Knowledge Atlas (2513 HK) & MiniMax Group (100 HK): Comparison, Debuts and Implications

​Debut of Knowledge Atlas is lukewarm, trading close to fair value at 37.8x P/S for FY27, while MiniMax's B2C focus and strong revenue growth...

Osbert Tang, CFA

Wuxi Lead Intelligent Equipment's lukewarm IPO response leads to a fair value estimate of HK$45.6-48.8, suggesting it is almost fairly-valued with...

GigaDevice's grey market price is 38.8% higher than IPO, leading to a FY26 PER of 53.5x, with limited upside potential compared to peers, even...

Debut of Knowledge Atlas is lukewarm, trading close to fair value at 37.8x P/S for FY27, while MiniMax's B2C focus and strong revenue growth...