APAC IPOs & Placements, Aequitas Research

Clarence Chu

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zjld-group" target="_blank" data-smartkarma-citation="entities:36734:1" rel="noopener">ZJLD Group (ZJLD HK)</a> is looking to raise up to US$400m in its upcoming Hong Kong IPO</li>
<li>ZJLD is a Chinese liquor company primarily producing baijiu. As per F&amp;S, the firm was the fourth largest privately-owned baijiu company in terms of FY21 sales.</li>
<li>In this note, we will talk about the positive aspects of the deal.</li>
</ul>



ZJLD Group (ZJLD HK) is looking to raise up to US$400m in its upcoming Hong Kong IPO
ZJLD is a Chinese liquor company primarily producing baijiu. As per F&amp;S, the firm was the fourth largest privately-owned baijiu company in terms of FY21 sales.
In this note, we will talk about the positive aspects of the deal.


ZJLD Group Pre-IPO - The Positives - Larger Network Led to Sales Growth. Poised for Market Tailwind

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/huitongda-network-co-ltd" target="_blank" data-smartkarma-citation="entities:33789:1" rel="noopener">Huitongda (9878 HK)</a> was listed on 18th Feb 2023, when it raised US$285m in its HK IPO. Its one-year lockup will expire on 17th February 2023.</li>
<li>Huitongda (HTD) is a commerce and service platform serving businesses in the lower-tier retail markets of China.</li>
<li>Coming up for one-year lockup expiry are HTD's pre-IPO investors. With the exception of Alibaba and SOE backers, the bulk of HTD’s pre-IPO investors are still currently in the money.</li>
</ul>



Huitongda (9878 HK) was listed on 18th Feb 2023, when it raised US$285m in its HK IPO. Its one-year lockup will expire on 17th February 2023.
Huitongda (HTD) is a commerce and service platform serving businesses in the lower-tier retail markets of China.
Coming up for one-year lockup expiry are HTD's pre-IPO investors. With the exception of Alibaba and SOE backers, the bulk of HTD’s pre-IPO investors are still currently in the money.


Huitongda Lock-Up - US$1.1bn Pre-IPO Lock-Up Expiry. China-Based Funds at Least 40% Up

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>We keep confident on HTD to deliver above-industrial growth and margin improvement in the long run.</li><li>2H22E &amp; 1Q23E momentum would be disrupted by epidemic outbreak &amp; reopening impact (forecasting rev/adj. net profit +16%/17% YoY in 2H22E), but well anticipated by the market.</li><li>We expect HTD to benefit from consumption recovery post reopening, and forecast its FY23E earnings &gt;30% YoY, with moderate but high-quality topline growth (+21% YoY). </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

We keep confident on HTD to deliver above-industrial growth and margin improvement in the long run.2H22E &amp; 1Q23E momentum would be disrupted by epidemic outbreak &amp; reopening impact (forecasting rev/adj. net profit +16%/17% YoY in 2H22E), but well anticipated by the market.We expect HTD to benefit from consumption recovery post reopening, and forecast its FY23E earnings &gt;30% YoY, with moderate but high-quality topline growth (+21% YoY). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Huitongda Network (9878 HK) – Quality growth with advanced profitability

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

<ul>
<li>Last evening, the CSRC and the SFC agreed to further deepen mutual stock market access between the Mainland and Hong Kong and promote the development of both capital markets.</li>
<li>For Southbound Stock Connect, eligible foreign companies primary-listed in Hong Kong will become eligible. That could mean 5 additions to Stock Connect.</li>
<li>Additionally, Southbound access via Shanghai Stock Connect will be expanded to being it in alignment with Shenzhen Stock Connect. That could see 131 stocks added to Shanghai Stock Connect.</li>
</ul>


Last evening, the CSRC and the SFC agreed to further deepen mutual stock market access between the Mainland and Hong Kong and promote the development of both capital markets.
For Southbound Stock Connect, eligible foreign companies primary-listed in Hong Kong will become eligible. That could mean 5 additions to Stock Connect.
Additionally, Southbound access via Shanghai Stock Connect will be expanded to being it in alignment with Shenzhen Stock Connect. That could see 131 stocks added to Shanghai Stock Connect.


Southbound Stock Connect Expansion: Potential Adds in 2023

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

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

Index Rebalance

China Datang Corp Renewable Power / Index Rebalance

<ul>
<li>After one month from the September batch of Hong Kong Connect inclusion, we provide an analysis on the stock inclusion for 12 stocks. </li>
<li>We analysed the inclusion by performance post announcement, performance post inclusion, inflows and analyst coverage.</li>
<li>We continued to observed outperformance post the HSCI announcement but not the actual inclusion despite the fact that southbound inflows has a significant impact on the trading volume. </li>
</ul>


After one month from the September batch of Hong Kong Connect inclusion, we provide an analysis on the stock inclusion for 12 stocks. 
We analysed the inclusion by performance post announcement, performance post inclusion, inflows and analyst coverage.
We continued to observed outperformance post the HSCI announcement but not the actual inclusion despite the fact that southbound inflows has a significant impact on the trading volume. 


HK Connect: Sep '22 Inclusion Post-Event Analysis

China

Huitongda Network Co., Ltd. develops a sinking market retail industry transaction and service platform. The Company provides supply chain solutions development, deal matching, logistics and after sales supporting, and other services. Huitongda Network provides its services throughout China.

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Huitongda (9878 HK)

ZJLD Group Pre-IPO - The Positives - Larger Network Led to Sales Growth. Poised for Market Tailwind

ZJLD Group (ZJLD HK) is looking to raise up to US$400m in its upcoming Hong Kong IPO. In this note, we will talk about the positive aspects of the...

Clarence Chu

Huitongda Lock-Up - US$1.1bn Pre-IPO Lock-Up Expiry. China-Based Funds at Least 40% Up

Huitongda (9878 HK) was listed on 18th Feb 2023, when it raised US$285m in its HK IPO. Coming up for one-year lockup expiry on 17th February 2023...

Clarence Chu

Huitongda Network (9878 HK) – Quality growth with advanced profitability

2H22E & 1Q23E momentum would be disrupted by epidemic outbreak & reopening impact (forecasting rev/adj. net profit +16%/17% YoY in 2H22E), but well...

CMB International

Southbound Stock Connect Expansion: Potential Adds in 2023

Expansion to Southbound Stock Connect will include foreign stocks and eligibility will be aligned for Shanghai & Shenzhen. Preparation will take...

Brian Freitas

HK Connect: Sep '22 Inclusion Post-Event Analysis

We analyzed south bound Hong Kong connect's inclusion in September following Hang Seng index review on August 19th. We highlight strong post...

Ke Yan, CFA, FRM

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