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.

Equity Capital Markets

Sany Heavy Industry / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sany-heavy-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:20183:1" rel="noopener">Sany Heavy Industry (600031 CH)</a> aims to raise around US$1.6bn in its H-share listing.</li>
<li>Sany Heavy Industry was the world’s third largest and China’s largest construction machinery company in terms of construction machinery’s cumulative revenue from 2020 to 2024, according to Frost &amp; Sullivan.</li>
<li>We have looked at the past performance and likely A/H premium in our previous note. In this note, we talk about the IPO pricing.</li>
</ul>



Sany Heavy Industry (600031 CH) aims to raise around US$1.6bn in its H-share listing.
Sany Heavy Industry was the world’s third largest and China’s largest construction machinery company in terms of construction machinery’s cumulative revenue from 2020 to 2024, according to Frost &amp; Sullivan.
We have looked at the past performance and likely A/H premium in our previous note. In this note, we talk about the IPO pricing.


Sany Heavy Industries A/H IPO Pricing - Thoughts on Valuations

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

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sany-heavy-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:20183:1" rel="noopener">Sany Heavy Industry (600031 CH)</a> could raise up to HK$16.35bn (US$2.1bn) in its H-share listing if the Offer Size Adjustment Option and the Overallotment Option are both exercised.</li>
<li>There is a big allocation to cornerstone investors that is locked up for 6 months. That eliminates the already small possibility of Fast Entry inclusion to global indexes.</li>
<li>Sany Heavy (6031 HK) should be added to Southbound Stock Connect from the open of trading on 24 November following the end of the Price Stabilisation period.</li>
</ul>



Sany Heavy Industry (600031 CH) could raise up to HK$16.35bn (US$2.1bn) in its H-share listing if the Offer Size Adjustment Option and the Overallotment Option are both exercised.
There is a big allocation to cornerstone investors that is locked up for 6 months. That eliminates the already small possibility of Fast Entry inclusion to global indexes.
Sany Heavy (6031 HK) should be added to Southbound Stock Connect from the open of trading on 24 November following the end of the Price Stabilisation period.


Sany Heavy (6031 HK) IPO: Big Cornerstone Allocation to Delay Global Index Inclusion

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

Shenton Research

Shenton 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 analyse the changes of A-H premium on 200 stocks over the last week. The average A-H premium was 92.3% as of Oct 9th.</li>
<li>The average A-H premium changed by 3.7ppt week-on-week, led by materials, industrials, utilities.</li>
<li>We highlight weekly changes in A-H premium for Innocare, Ganfenglithium, China East Air, Yofc.</li>
</ul>


We analyse the changes of A-H premium on 200 stocks over the last week. The average A-H premium was 92.3% as of Oct 9th.
The average A-H premium changed by 3.7ppt week-on-week, led by materials, industrials, utilities.
We highlight weekly changes in A-H premium for Innocare, Ganfenglithium, China East Air, Yofc.


A-H Premium Weekly (Oct 9th): Innocare, Ganfenglithium, China East Air, Yofc

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>There is a pick-up in heavy machinery sales in Jun, benefiting <a href="https://www.smartkarma.com/entities/lonking-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3944:1" rel="noopener">Lonking Holdings (3339 HK)</a>, <a href="https://www.smartkarma.com/entities/sany-heavy-equipment-intl" target="_blank" data-smartkarma-citation="entities:11104:1" rel="noopener">Sany Heavy Equipment (631 HK)</a>, and <a href="https://www.smartkarma.com/entities/zoomlion-heavy-industry-h" target="_blank" data-smartkarma-citation="entities:7817:1" rel="noopener">Zoomlion Heavy Industry H (1157 HK)</a>. </li>
<li>Indications are for strong 1H25 earnings, with <a href="https://www.smartkarma.com/entities/guangxi-liugong-machinery-a" target="_blank" data-smartkarma-citation="entities:16809:1" rel="noopener">Guangxi Liugong A (000528 CH)</a> seeing 20-30% growth. 1Q25 results of the peers also pointed to solid interim profit.<a href="https://www.smartkarma.com/entities/sany-heavy-equipment-intl" target="_blank" data-smartkarma-citation="entities:11104:1" rel="noopener"></a>
</li>
<li>Despite an average of a 44.6% rally for the HK-listed companies in the sector, their FY25F PER of 10.4x is undemanding. The current consensus forecasts are too conservative. </li>
</ul>


There is a pick-up in heavy machinery sales in Jun, benefiting Lonking Holdings (3339 HK), Sany Heavy Equipment (631 HK), and Zoomlion Heavy Industry H (1157 HK). 
Indications are for strong 1H25 earnings, with Guangxi Liugong A (000528 CH) seeing 20-30% growth. 1Q25 results of the peers also pointed to solid interim profit.

Despite an average of a 44.6% rally for the HK-listed companies in the sector, their FY25F PER of 10.4x is undemanding. The current consensus forecasts are too conservative. 


China Heavy Machinery Sector: Anticipating More Upside

<ul>
<li>The 6 H-share IPOs of the listed A-share companies YTD have seen their H-A discount narrowing from an average of 31% during IPO to 15.5% currently.  </li>
<li>Larger-Cap ones tend to be priced and traded at a smaller discount to their A-shares. However, they are not necessarily those seeing the most significant narrowing in discount. </li>
<li>
<a href="https://www.smartkarma.com/entities/foshan-haitian-flavouring-food-company" target="_blank" data-smartkarma-citation="entities:44279:1" rel="noopener">Foshan Haitian Flavouring &amp; Food Company (3288 HK)</a> may further narrow its discount, while <a href="https://www.smartkarma.com/entities/zhejiang-sanhua-intelligent-controls" target="_blank" data-smartkarma-citation="entities:45277:1" rel="noopener">Zhejiang Sanhua Intelligent Controls (2050 HK)</a> also sees upside from such a perspective. </li>
</ul>


The 6 H-share IPOs of the listed A-share companies YTD have seen their H-A discount narrowing from an average of 31% during IPO to 15.5% currently.  
Larger-Cap ones tend to be priced and traded at a smaller discount to their A-shares. However, they are not necessarily those seeing the most significant narrowing in discount. 

Foshan Haitian Flavouring &amp; Food Company (3288 HK) may further narrow its discount, while Zhejiang Sanhua Intelligent Controls (2050 HK) also sees upside from such a perspective. 


HK Strategy: Trend of Narrowing H-A IPO Discount

China

SANY Heavy Industry Co., Ltd manufactures and markets construction and engineering machinery and related parts. The Company produces and sells concrete pumps, concrete pump vehicles, road rollers, pavers, and other related products. Sany Heavy Industry markets its products worldwide.

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Sany Heavy Industry (600031 CH)

Sany Heavy Industries A/H IPO Pricing - Thoughts on Valuations

Sany Heavy Industry (600031 CH) aims to raise around US$1.6bn in its H-share listing. In this note, we talk about the IPO pricing.

Sumeet Singh

Sany Heavy (6031 HK) IPO: Big Cornerstone Allocation to Delay Global Index Inclusion

Sany Heavy could raise US$2.1bn in its HK IPO. Inclusion in Southbound Connect from 24 Nov. Global index and FXI inclusions in June and August next...

Brian Freitas

A-H Premium Weekly (Oct 9th): Innocare, Ganfenglithium, China East Air, Yofc

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Innocare, Ganfenglithium, China East Air, Yofc.

Ke Yan, CFA, FRM

China Heavy Machinery Sector: Anticipating More Upside

Lonking issued a positive profit alert, suggesting that its 1H25 net profit will reach between Rmb590m and Rmb665m, equaling a 29-45% YoY increase....

Osbert Tang, CFA

HK Strategy: Trend of Narrowing H-A IPO Discount

H-share IPOs of A-shares have seen narrowing discounts, with larger-caps trading at smaller discounts, but not the ones with the largest...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Sany Heavy Industries A/H IPO Pricing - Thoughts on Valuations

Sany Heavy Industry (600031 CH) aims to raise around US$1.6bn in its H-share listing. In this note, we talk about the IPO pricing.

Sumeet Singh

Sany Heavy (6031 HK) IPO: Big Cornerstone Allocation to Delay Global Index Inclusion

Sany Heavy could raise US$2.1bn in its HK IPO. Inclusion in Southbound Connect from 24 Nov. Global index and FXI inclusions in June and August next...

Brian Freitas

A-H Premium Weekly (Oct 9th): Innocare, Ganfenglithium, China East Air, Yofc

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Innocare, Ganfenglithium, China East Air, Yofc.

Ke Yan, CFA, FRM

China Heavy Machinery Sector: Anticipating More Upside

Lonking issued a positive profit alert, suggesting that its 1H25 net profit will reach between Rmb590m and Rmb665m, equaling a 29-45% YoY increase....

Osbert Tang, CFA

HK Strategy: Trend of Narrowing H-A IPO Discount

​H-share IPOs of A-shares have seen narrowing discounts, with larger-caps trading at smaller discounts, but not the ones with the largest...

Osbert Tang, CFA

H-share IPOs of A-shares have seen narrowing discounts, with larger-caps trading at smaller discounts, but not the ones with the largest...