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 monthly Shanghai/Shenzhen northbound Connect flows with our data engine.</li>
<li>Industrials ($2,588 million worth of outflows), Financials ($1,109 million worth of outflows) led the outflows. </li>
<li>We highlight outflows from Moutai, CATL, Longi, Focus Media, Ping An Insurance.</li>
</ul>


We analyze the monthly Shanghai/Shenzhen northbound Connect flows with our data engine.
Industrials ($2,588 million worth of outflows), Financials ($1,109 million worth of outflows) led the outflows. 
We highlight outflows from Moutai, CATL, Longi, Focus Media, Ping An Insurance.


Northbound Flows Monthly (October): Three Months of Outflows

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.

Thematic (Sector/Industry)

<ul><li>Following prelim results released in Jan 2023, the sector started to rally substantially despite a mixed or disappointing set of results.</li><li>In our view, the rebound is mainly due to: 1) a relief rally with better-than-feared results; 2) rising expectation for economy rebound on China reopening; 3) accelerated localization trend under the backdrop of Sino-US tensions.</li><li>However, based on our checks with semi contacts in China and analysis of recent results from major global/ Chinese semi companies, we think the consumer electronic market will remain challenging in 1H23, and recovery may come in 2H23 the earliest. </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>

Following prelim results released in Jan 2023, the sector started to rally substantially despite a mixed or disappointing set of results.In our view, the rebound is mainly due to: 1) a relief rally with better-than-feared results; 2) rising expectation for economy rebound on China reopening; 3) accelerated localization trend under the backdrop of Sino-US tensions.However, based on our checks with semi contacts in China and analysis of recent results from major global/ Chinese semi companies, we think the consumer electronic market will remain challenging in 1H23, and recovery may come in 2H23 the earliest. 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.

China Hardware/Semi – Reality Check on Smartphone Supply Chain

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>2023 gameplan remains unchanged; we see limited upside from here for ACWI-US, and we expect a rangebound year of trading on ACWI-US with $93 capping upside and $75-77 capping downside</li>
<li>We also remain overweight Europe/UK, we want to add exposure on pullbacks to China/Hong Kong/EM, and overweight non-U.S. equities (MSCI ACWI ex-US) relative to MSCI ACWI</li>
<li>We highlight buy ideas within Technology, Communications, and Consumer Discretionary. The UK/Europe and Hong Kong/China continue to make up the majority of our buy recommendations</li>
</ul>


2023 gameplan remains unchanged; we see limited upside from here for ACWI-US, and we expect a rangebound year of trading on ACWI-US with $93 capping upside and $75-77 capping downside
We also remain overweight Europe/UK, we want to add exposure on pullbacks to China/Hong Kong/EM, and overweight non-U.S. equities (MSCI ACWI ex-US) relative to MSCI ACWI
We highlight buy ideas within Technology, Communications, and Consumer Discretionary. The UK/Europe and Hong Kong/China continue to make up the majority of our buy recommendations


Major Top on U.S. Dollar; Overweight Non-U.S. And Europe/UK; Buys in Tech, Comm., Discretionary

Equity Bottom-Up

Maxscend Microelectronics  L / Equity Bottom-Up

<div><div><div><div><ul><li>Maxscend announced its 3Q22 results. 3Q revenue declined 30.5% YoY and 13.6% QoQ to RMB782mn.</li><li>NP to shareholders fell 54.6% YoY and 20.5% QoQ to RMB233mn. The decline was mainly attributable to the weak mobile market.</li><li>3Q GPM increased slightly to 54.1% (vs. 52.4%/52.7% for 1Q/2Q22). We lowered our forecasts for 2022/23E sales by 25%/30%, due to both tough macro environment and prolonged weakness observed in mobile, particularly in Android names. </li></ul></div></div></div></div><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>

Maxscend announced its 3Q22 results. 3Q revenue declined 30.5% YoY and 13.6% QoQ to RMB782mn.NP to shareholders fell 54.6% YoY and 20.5% QoQ to RMB233mn. The decline was mainly attributable to the weak mobile market.3Q GPM increased slightly to 54.1% (vs. 52.4%/52.7% for 1Q/2Q22). We lowered our forecasts for 2022/23E sales by 25%/30%, due to both tough macro environment and prolonged weakness observed in mobile, particularly in Android names. 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.

Maxscend (300782 CH) – 3Q Performance Dragged by Weak Mobile

<div><div><div><div><ul><li>We expect global CIS sales to decline 5.1% YoY in 2022, mainly dragged by the weak performance in mobile CIS market.</li><li>We expect CIS market to recover in 2H23, as mobile CIS inventory level returns to a normal level.</li><li>However, challenges remain given high uncertainties in economy and geopolitical issues.</li></ul></div></div></div></div><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 expect global CIS sales to decline 5.1% YoY in 2022, mainly dragged by the weak performance in mobile CIS market.We expect CIS market to recover in 2H23, as mobile CIS inventory level returns to a normal level.However, challenges remain given high uncertainties in economy and geopolitical issues.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.

China CIS Sector – Maintain long-term positive outlook; near-term challenges persist

China

Maxscend Microelectronics Company Limited operates as an electrical components manufacturing company. The Company produces and sells smart phone radio frequency (RF) switches, low noise amplifiers, RF front end chips, and other products. Maxscend Microelectronics provides products for automotive, smart phone, and infrastructure areas.

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Maxscend Microelectronics L (300782 CH)

Northbound Flows Monthly (October): Three Months of Outflows

We analyzed the Shanghai/Shenzhen Connect Scheme for October and highlight flows for Moutai, CATL, Longi, Focus Media, Ping An Insurance.

Ke Yan, CFA, FRM

China Hardware/Semi – Reality Check on Smartphone Supply Chain

Following prelim results released in Jan 2023, the sector started to rally substantially despite a mixed or disappointing set of results.

CMB International

Major Top on U.S. Dollar; Overweight Non-U.S. And Europe/UK; Buys in Tech, Comm., Discretionary

The $DXY broke below 5-year support at $103, signaling a major top in place. This is bullish for risk assets, and is another sign suggesting the...

Vermilion Research

Maxscend (300782 CH) – 3Q Performance Dragged by Weak Mobile

NP to shareholders fell 54.6% YoY and 20.5% QoQ to RMB233mn. The decline was mainly attributable to the weak mobile market.

CMB International

China CIS Sector – Maintain long-term positive outlook; near-term challenges persist

We expect CIS market to recover in 2H23, as mobile CIS inventory level returns to a normal level.However, challenges remain given high...

CMB International

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