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

China Resources Beverage / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-resources-beverage" target="_blank" data-smartkarma-citation="entities:41984:1" rel="noopener">China Resources Beverage (2460 HK)</a> priced its IPO at HK$14.50 per share to raise the gross proceeds of US$649 million. The shares will start trading on 23 October.</li>
<li>The IPO was discussed in <strong><em><a href="https://www.smartkarma.com/insights/cr-beverage-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:157572" rel="noopener">CR Beverage IPO: The Bull Case</a>, <a href="https://www.smartkarma.com/insights/cr-beverage-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:158613" rel="noopener">CR Beverage IPO: The Bear Case</a>, <a href="https://www.smartkarma.com/insights/cr-beverage-ipo-the-investment-case" target="_blank" data-smartkarma-citation="insights:161273" rel="noopener">CR Beverage IPO: The Investment Case</a>, <a href="https://www.smartkarma.com/insights/cr-beverage-2460-hk-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:162418" rel="noopener">CR Beverage (2460 HK) IPO: Valuation Insights</a></em></strong>. </li>
<li>The market sentiment of the peers has remained unchanged since the IPO launch. CR Beverage is fairly valued at the IPO price.</li>
</ul>



China Resources Beverage (2460 HK) priced its IPO at HK$14.50 per share to raise the gross proceeds of US$649 million. The shares will start trading on 23 October.
The IPO was discussed in CR Beverage IPO: The Bull Case, CR Beverage IPO: The Bear Case, CR Beverage IPO: The Investment Case, CR Beverage (2460 HK) IPO: Valuation Insights. 
The market sentiment of the peers has remained unchanged since the IPO launch. CR Beverage is fairly valued at the IPO price.


Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of September 13th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Alibaba, CCB, ICBC, Kuaishou Technology, Tencent, Meituan, HKEx.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of September 13th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Alibaba, CCB, ICBC, Kuaishou Technology, Tencent, Meituan, HKEx.


Hong Kong Connect Flows (Sep 13th): $1.5bn Inflows into Baba Post Inclusion

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

Index Rebalance

<ul>
<li>There are 38 adds and 29 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents up to 518.</li>
<li>We expect 33 of the 38 HSCI inclusions to be added to Stock Connect while we expect 27 of the 29 HSCI deletions to be removed from Southbound Stock Connect.</li>
<li>Since the start of the calendar year, shares held though Southbound Connect have increased in 22 of the 27 HSCI deletions that will also be removed from Stock Connect.</li>
</ul>


There are 38 adds and 29 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents up to 518.
We expect 33 of the 38 HSCI inclusions to be added to Stock Connect while we expect 27 of the 29 HSCI deletions to be removed from Southbound Stock Connect.
Since the start of the calendar year, shares held though Southbound Connect have increased in 22 of the 27 HSCI deletions that will also be removed from Stock Connect.


HSCI Index Rebalance: 38 Adds, 29 Deletes & Changes to Southbound Stock Connect

<ul>
<li>We see 37 potential adds (including plenty of new listings) and 25 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in September.</li>
<li>We expect 32 stocks to be added to Southbound Stock Connect following the rebalance while 24 stocks could be deleted from the trading link and become Sell-only.</li>
<li>There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.</li>
</ul>


We see 37 potential adds (including plenty of new listings) and 25 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in September.
We expect 32 stocks to be added to Southbound Stock Connect following the rebalance while 24 stocks could be deleted from the trading link and become Sell-only.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.


HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September

Event-Driven

<ul>
<li>On 25 June, <a href="https://www.smartkarma.com/entities/midea-real-estate-holding-ltd" target="_blank" data-smartkarma-citation="entities:27450:1" rel="noopener">Midea Real Estate Holding (3990 HK)</a> disclosed an in-specie distribution of its PD&amp;S business through a scrip or cash (HK$5.90 per share, 57.33% premium to undisturbed price).</li>
<li>The key condition will be approval of the distribution by at least 75% of disinterested shareholders (&lt;10% of all disinterested shareholders rejection).</li>
<li>Midea RE will remain listed with an asset-light retained business, which is estimated to be worth HK$1.93. The Group's estimated value is HK$7.83, a 17.6% upside to the last close.</li>
</ul>


On 25 June, Midea Real Estate Holding (3990 HK) disclosed an in-specie distribution of its PD&amp;S business through a scrip or cash (HK$5.90 per share, 57.33% premium to undisturbed price).
The key condition will be approval of the distribution by at least 75% of disinterested shareholders (&lt;10% of all disinterested shareholders rejection).
Midea RE will remain listed with an asset-light retained business, which is estimated to be worth HK$1.93. The Group's estimated value is HK$7.83, a 17.6% upside to the last close.


Midea Real Estate (3990 HK): An In-Specie Distribution to Unlock Value

China

Onewo provides comprehensive property management services across three segments: Community Space Living Consumption, Commercial and Urban Space Integrated Services, and AIoT and BPaaS Solution Services. Its offerings include residential property management, home-related asset services, commercial and urban facility management, and smart space solutions. The company was founded in 1990 and is headquartered in Shenzhen, China.

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Onewo (2602 HK)

CR Beverage (2460 HK) IPO: Trading Debut

The market sentiment of the peers has remained unchanged since the IPO launch. CR Beverage is fairly valued at the IPO price.

Arun George

Hong Kong Connect Flows (Sep 13th): $1.5bn Inflows into Baba Post Inclusion

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Alibaba, CCB, ICBC, Kuaishou Technology, Tencent,...

Ke Yan, CFA, FRM

HSCI Index Rebalance: 38 Adds, 29 Deletes & Changes to Southbound Stock Connect

There are 38 adds and 29 deletes for the HSCI at the September rebalance to take the number of index constituents up to 518. There will be a lot of...

Brian Freitas

HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September

There could be nearly 80 adds/deletes for the HSCI in September. That will trigger changes to the Southbound Stock Connect list and increase flows...

Brian Freitas

Midea Real Estate (3990 HK): An In-Specie Distribution to Unlock Value

After the distribution of the asset-heavy business, Midea RE will remain listed as an asset-light business, estimated to be worth HK$1.93. The...

Arun George

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