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.

Quantitative Analysis

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of November 10th.</li>
<li>We estimate the weekly outflows to be US$1,078.3 million, led by information technology, industrials, and offset by consumer staples, communication services, real estate.</li>
<li>We highlight flows for BYD, Ping An Insurance, Eoptolink Technology, Zhongji Innolight.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of November 10th.
We estimate the weekly outflows to be US$1,078.3 million, led by information technology, industrials, and offset by consumer staples, communication services, real estate.
We highlight flows for BYD, Ping An Insurance, Eoptolink Technology, Zhongji Innolight.


Northbound Flows (Nov 10th): BYD, Ping An Insurance, Eoptolink Technology, Zhongji Innolight

Analyst

Steve

Equity Bottom-Up

China Mengniu Dairy Co / Equity Bottom-Up

<ul>
<li>The read-across for <a href="https://www.smartkarma.com/entities/inner-mongolia-yili-indus-a" target="_blank" data-smartkarma-citation="entities:3220:1" rel="noopener">Inner Mongolia Yili Industrial Group (A) (600887 CH)</a>'s 3Q23 results and briefing to <a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a> was overall positive. </li>
<li>For 3Q23, Yili's sales grew 3% yoy and net profit increased 59% yoy, mainly due to lower raw milk prices, better product mix, cost savings and low base.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a> continues to be a good value play, with reasonable valuation (15x 2024E PE), stable growth (above 10% net profit growth), and proactive shareholder returns.</li>
</ul>


The read-across for Inner Mongolia Yili Industrial Group (A) (600887 CH)'s 3Q23 results and briefing to China Mengniu Dairy Co (2319 HK) was overall positive. 
For 3Q23, Yili's sales grew 3% yoy and net profit increased 59% yoy, mainly due to lower raw milk prices, better product mix, cost savings and low base.

China Mengniu Dairy Co (2319 HK) continues to be a good value play, with reasonable valuation (15x 2024E PE), stable growth (above 10% net profit growth), and proactive shareholder returns.


Mengniu Dairy (2319 HK):  Positive Read-Across From Yili 3Q23 Results And Briefing

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of November 3rd.</li>
<li>We estimate the weekly inflows to be US$100.5 million, led by consumer staples, information technology, health care sectors, and offset by industrials, consumer discretionary.</li>
<li>We highlight flows for Moutai, China Yangtze Power, Maxscend Microelectronics, Mindray, Wuliangye, BYD.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of November 3rd.
We estimate the weekly inflows to be US$100.5 million, led by consumer staples, information technology, health care sectors, and offset by industrials, consumer discretionary.
We highlight flows for Moutai, China Yangtze Power, Maxscend Microelectronics, Mindray, Wuliangye, BYD.


Northbound Flows (Nov 3rd): Moutai, China Yangtze Power, Maxscend Microelectronics, Mindray

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.

Inner Mongolia Yili Industrial Group (A) / Equity Bottom-Up

<ul><li>Yili’s 3Q revenue/net profit stood at RMB31.2/3.1bn, up +2.7%/59.5%, and both came in in line with our estimates.</li><li>The former was largely driven by a sequential acceleration in liquid milk sales to +8.5% YoY (from -2.6%/+0.5% in 1Q/2Q) that offset a rather disappointing momentum in low-temp/IMF sales (-35.7%/-3.9% YoY).</li><li>Meanwhile, the latter grew off a low comps with a 1.6pp expansion in GPM, along with a notable 1.6pp decline in opex ratio which we previously asserted it to be a major earnings growth driver. </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>

Yili’s 3Q revenue/net profit stood at RMB31.2/3.1bn, up +2.7%/59.5%, and both came in in line with our estimates.The former was largely driven by a sequential acceleration in liquid milk sales to +8.5% YoY (from -2.6%/+0.5% in 1Q/2Q) that offset a rather disappointing momentum in low-temp/IMF sales (-35.7%/-3.9% YoY).Meanwhile, the latter grew off a low comps with a 1.6pp expansion in GPM, along with a notable 1.6pp decline in opex ratio which we previously asserted it to be a major earnings growth driver. 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.

Yili Industrial (600887 CH) – 3Q Rev/Np +3%/59%; Cost Cut Was Key to Profit Growth

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of October 19th.</li>
<li>We estimate the weekly outflows to be US$3,259.2 million, led by materials, industrials, and offset by consumer discretionary, utilities.</li>
<li>We highlight flows for BYD, Chongqing Changan Automobile, Zhongji Innolight, Moutai, Wuliangye, Ping An Insurance, CATL, Haitian Flavouring, Longi Green, CMB.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of October 19th.
We estimate the weekly outflows to be US$3,259.2 million, led by materials, industrials, and offset by consumer discretionary, utilities.
We highlight flows for BYD, Chongqing Changan Automobile, Zhongji Innolight, Moutai, Wuliangye, Ping An Insurance, CATL, Haitian Flavouring, Longi Green, CMB.


Northbound Flows (Oct 19th): BYD, Changan Auto, Zhongji Innolight, Moutai, Wuliangye

China

Inner Mongolia Yili Industrial Group Co., Ltd. produces milk, powdered milk, ice cream, and other dairy products.  The Company also produces frozen food and noodles.

Inner Mongolia Yili Industrial Group (A) (600887 CH)

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

Inner Mongolia Yili Industrial Group (A) (600887 CH)

Northbound Flows (Nov 10th): BYD, Ping An Insurance, Eoptolink Technology, Zhongji Innolight

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for BYD, Ping An Insurance, Eoptolink Technology Inc.,...

Ke Yan, CFA, FRM

Mengniu Dairy (2319 HK): Positive Read-Across From Yili 3Q23 Results And Briefing

Good read-across from Yili's 3Q23 results and briefing. Mengniu continues to be a good value play with reasonable valuation, growth, and proactive...

Steve

Northbound Flows (Nov 3rd): Moutai, China Yangtze Power, Maxscend Microelectronics, Mindray

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Moutai, China Yangtze Power, Maxscend...

Ke Yan, CFA, FRM

Yili Industrial (600887 CH) – 3Q Rev/Np +3%/59%; Cost Cut Was Key to Profit Growth

Management has guided down full-year sales growth target to MSD% (from low-teen), and we believe this would not come in as a total surprise to the...

CMB International

Northbound Flows (Oct 19th): BYD, Changan Auto, Zhongji Innolight, Moutai, Wuliangye

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for BYD, Chongqing Changan Automobile, Zhongji...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)