Investment Advisors, JL Warren Capital

Junheng Li

Investment Advisors

JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

Thematic (Sector/Industry)

<p><em>In CY 2018 private AST operators responded to the regulatory tightening by swiftly reigning in their capacity expansions. In July 2018 <a href="https://www.smartkarma.com/entities/new-oriental-education-tech-grp-adr" target="_blank" data-smartkarma-citation="entities:531:1" rel="noopener">New Oriental Education (EDU US)</a>  and <a href="https://www.smartkarma.com/entities/tal-education-group" target="_blank" data-smartkarma-citation="entities:1124:1" rel="noopener">TAL Education (TAL US)</a>  guided ~27% and ~45% YoY topline YoY growth in the following summer semesters (August Q 2018, FQ2 19 for TAL, FQ1 19 for EDU), decelerating from 44% and 71% YoY growth in FQ1 2019 ended May 2018, respectively.  Both stocks were massively sold off:  TAL declined by 51% from then all-time high of 47 USD in June to 23 USD in October 2018.   During the same period, EDU dropped 50% from then all-time high of 105 USD (before 10 for 1 stock split on March 2021) in June 2018 to 52 USD in December 2018.   Nevertheless, since then EDU and TAL delivered 198% and 164% return since the beginning of 2019. </em></p>

In CY 2018 private AST operators responded to the regulatory tightening by swiftly reigning in their capacity expansions. In July 2018 New Oriental Education (EDU US)  and TAL Education (TAL US)  guided ~27% and ~45% YoY topline YoY growth in the following summer semesters (August Q 2018, FQ2 19 for TAL, FQ1 19 for EDU), decelerating from 44% and 71% YoY growth in FQ1 2019 ended May 2018, respectively.  Both stocks were massively sold off:  TAL declined by 51% from then all-time high of 47 USD in June to 23 USD in October 2018.   During the same period, EDU dropped 50% from then all-time high of 105 USD (before 10 for 1 stock split on March 2021) in June 2018 to 52 USD in December 2018.   Nevertheless, since then EDU and TAL delivered 198% and 164% return since the beginning of 2019. 

China’s Congress on AST Industry Oversight: Mostly Rhetoric, Little Practicality

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.

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a> launched a $3 billion secondary listing in Hong Kong last Thursday evening. Bookbuilding is scheduled to run until the pricing on 17 March. The secondary listing has received good early demand with the books covered on the first day, according to press reports. The H-shares will begin trading on 23 March. </p><p>In <a href="https://www.smartkarma.com/insights/baidu-secondary-listing-searching-for-the-next-big-thing" target="_blank" data-smartkarma-citation="insights:49043" rel="noopener">Baidu Secondary Listing: Searching for the Next Big Thing</a>, we outlined our views on Baidu’ fundamentals and valuation. Baidu is making great strides in expanding its total addressable market (TAM) through ongoing investments. In combination with the potential valuation upside to the last close price (based on SoTP), we concluded that the equity story is attractive. </p><div class="content-highlight"><p>In this note, we will look at Baidu’s potential HK-ADS premium/(discount). Baidu will price its H-shares at a discount to its ADSs to entice investors to participate in the secondary listing. However, market conditions remain volatile and there remains a possibility of a renewed global equity sell-off. Consequently, Baidu will likely price its H-shares at a wider discount than the median HK-ADS discount of previous secondary listings. Overall, Baidu pricing its H-shares at a discount range of 3% to 4% to its ADSs will be reasonable.</p></div>

Baidu (BIDU US) launched a $3 billion secondary listing in Hong Kong last Thursday evening. Bookbuilding is scheduled to run until the pricing on 17 March. The secondary listing has received good early demand with the books covered on the first day, according to press reports. The H-shares will begin trading on 23 March. In Baidu Secondary Listing: Searching for the Next Big Thing, we outlined our views on Baidu’ fundamentals and valuation. Baidu is making great strides in expanding its total addressable market (TAM) through ongoing investments. In combination with the potential valuation upside to the last close price (based on SoTP), we concluded that the equity story is attractive. In this note, we will look at Baidu’s potential HK-ADS premium/(discount). Baidu will price its H-shares at a discount to its ADSs to entice investors to participate in the secondary listing. However, market conditions remain volatile and there remains a possibility of a renewed global equity sell-off. Consequently, Baidu will likely price its H-shares at a wider discount than the median HK-ADS discount of previous secondary listings. Overall, Baidu pricing its H-shares at a discount range of 3% to 4% to its ADSs will be reasonable.

Baidu Secondary Listing: HK-ADS Premium/​(Discount) Views

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.

Autohome Inc (Adr) / Equity Capital Markets

<div><p>Autohome raised around US$700m in its secondary listing in Hong Kong. </p></div><div>
<p>I have covered most aspects of the deal in my earlier note, <a href="https://www.smartkarma.com/insights/autohome-secondary-listing-doesn-t-need-the-cash-at-all" target="_blank" rel="noopener">Autohome Secondary Listing - Doesn’t Need the Cash at All </a> and <a href="https://www.smartkarma.com/insights/autohome-secondary-listing-going-down-a-different-route" target="_blank" rel="noopener">Autohome Secondary Listing - Going Down a Different Route.</a></p>
<p>In this note, I'll talk about the updates since my last note.</p>
</div>

Autohome raised around US$700m in its secondary listing in Hong Kong. 
I have covered most aspects of the deal in my earlier note, Autohome Secondary Listing - Doesn’t Need the Cash at All  and Autohome Secondary Listing - Going Down a Different Route.
In this note, I'll talk about the updates since my last note.


Autohome Secondary Trading - Strong Retail, Weak Insti Coverage

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

<p>This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices. </p><p><strong><em>Companies mentioned this week:</em></strong></p><p><a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a>, <a href="https://www.smartkarma.com/entities/new-oriental-education-tech-grp-adr" target="_blank" data-smartkarma-citation="entities:531:1" rel="noopener">New Oriental Education (EDU US)</a>, <a href="https://www.smartkarma.com/entities/tal-education-group" target="_blank" data-smartkarma-citation="entities:1124:1" rel="noopener">TAL Education (TAL US)</a>, <a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a>, <a href="https://www.smartkarma.com/entities/bilibili-inc" target="_blank" data-smartkarma-citation="entities:26793:1" rel="noopener">Bilibili Inc (BILI US)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a></p>

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices. Companies mentioned this week:SK Hynix (000660 KS), New Oriental Education (EDU US), TAL Education (TAL US), NetEase (9999 HK), Bilibili Inc (BILI US), Tencent Holdings (700 HK), Baidu (BIDU US)

Global Emerging Markets Weekly: 12 March 2021

<div><p><a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a> plans to raise around US$3bn in its secondary listing in Hong Kong. <span>I have covered most aspects of the deal in my earlier note, </span><a href="https://www.smartkarma.com/insights/baidu-secondary-listing-early-look-will-be-one-of-the-largest-secondary-listings-this-year" target="_blank" rel="noopener">Baidu Secondary Listing Early Look - Will Be One of the Largest Secondary Listings This Year</a><span>.</span></p></div><div><p>In this note, I'll only touch upon the updates since my last note.</p></div>

Baidu (BIDU US) plans to raise around US$3bn in its secondary listing in Hong Kong. I have covered most aspects of the deal in my earlier note, Baidu Secondary Listing Early Look - Will Be One of the Largest Secondary Listings This Year.In this note, I'll only touch upon the updates since my last note.

Baidu Secondary Listing - Smaller than Expected, Doing the Bare Minimum

China

New Oriental Education & Technology Group, Inc. offers educational services. The Company offers foreign language training, test preparation courses for admissions and assessment tests in the United States, the PRC and Commonwealth countries, primary and secondary school education, and other services. New Oriental Education & Technology Group also operates software development.

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New Oriental Education & Techn (EDU US)

China’s Congress on AST Industry Oversight: Mostly Rhetoric, Little Practicality

The crackdown on irregular AST businesses, if seriously implemented, will wipe out small operators (mostly mom and pops), and leave the big ones...

JL Warren Capital

Baidu Secondary Listing: HK-ADS Premium/(Discount) Views

Baidu has launched a $3 bn secondary listing in Hong Kong. Due to choppy market conditions, Baidu pricing its H-shares at a discount range of 3% to...

Arun George

Autohome Secondary Trading - Strong Retail, Weak Insti Coverage

Autohome raised around US$700m in its secondary listing in Hong Kong. I have covered most aspects of the deal in my earlier note. In this note,...

Sumeet Singh

Global Emerging Markets Weekly: 12 March 2021

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity...

Wium Malan, CFA

Baidu Secondary Listing - Smaller than Expected, Doing the Bare Minimum

Baidu plans to raise around US$3bn in its secondary listing in Hong Kong. I have covered most aspects of the deal in my earlier note. In this note,...

Sumeet Singh

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China’s Congress on AST Industry Oversight: Mostly Rhetoric, Little Practicality

The crackdown on irregular AST businesses, if seriously implemented, will wipe out small operators (mostly mom and pops), and leave the big ones...

JL Warren Capital

Baidu Secondary Listing: HK-ADS Premium/​(Discount) Views

Baidu has launched a $3 bn secondary listing in Hong Kong. Due to choppy market conditions, Baidu pricing its H-shares at a discount range of 3% to...

Arun George

Autohome Secondary Trading - Strong Retail, Weak Insti Coverage

Autohome raised around US$700m in its secondary listing in Hong Kong. I have covered most aspects of the deal in my earlier note. In this note,...

Sumeet Singh

Global Emerging Markets Weekly: 12 March 2021

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity...

Wium Malan, CFA

Baidu Secondary Listing - Smaller than Expected, Doing the Bare Minimum

Baidu plans to raise around US$3bn in its secondary listing in Hong Kong. I have covered most aspects of the deal in my earlier note. In this note,...

Sumeet Singh

Baidu Secondary Listing: HK-ADS Premium/(Discount) Views