HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Although 5% GDP growth target for 2023 is at the low end of market speculation of 5.5-6%, we think this reflects the government's conservative stance amid post-COVID recovery. </li>
<li>A 0.2pp higher budget deficit and a special purpose bond quota of Rmb3.8trn suggested that government spending will stay as important economic driver.</li>
<li>Consumption is another major stimulus for economic growth, and more supportive measures will be rolled out - we have seen many cities planning to hand out consumption vouchers.</li>
</ul>


Although 5% GDP growth target for 2023 is at the low end of market speculation of 5.5-6%, we think this reflects the government's conservative stance amid post-COVID recovery. 
A 0.2pp higher budget deficit and a special purpose bond quota of Rmb3.8trn suggested that government spending will stay as important economic driver.
Consumption is another major stimulus for economic growth, and more supportive measures will be rolled out - we have seen many cities planning to hand out consumption vouchers.


China NPC: Implications of Government Working Report 2023

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Capital Markets

Sany Heavy Industry / Equity Capital Markets

<ul>
<li>Our base case valuation of Sany Heavy Industry is target price of CNY21.1 per share. This represents 7.6% lower than current price of CNY22.83 per share.</li>
<li>IPO price of Sany Heavy is expected to be set between HKD20.30 and HKD21.30. Our valuation analysis suggests lack of a meaningful upside for Sany Heavy Industry listing in HK.</li>
<li>There are still lack of a major turnaround of the property market in China and this could continue to negatively impact the overall construction equipment market in China.</li>
</ul>


Our base case valuation of Sany Heavy Industry is target price of CNY21.1 per share. This represents 7.6% lower than current price of CNY22.83 per share.
IPO price of Sany Heavy is expected to be set between HKD20.30 and HKD21.30. Our valuation analysis suggests lack of a meaningful upside for Sany Heavy Industry listing in HK.
There are still lack of a major turnaround of the property market in China and this could continue to negatively impact the overall construction equipment market in China.


Sany Heavy Industry IPO Valuation Analysis

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.

<ul><li>China Construction Machinery Association (CCMA) has just released the full set of construction machinery sales data for Oct.</li><li>Domestic sales of truck cranes and crawler cranes remained strong (+42%/+54% YoY in Oct), which we believe were driven by energy projects and wind power installation.</li><li>Exports in Oct were strong across different types of machinery (except AWPs &amp; truck cranes). </li></ul>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 Construction Machinery Association (CCMA) has just released the full set of construction machinery sales data for Oct.Domestic sales of truck cranes and crawler cranes remained strong (+42%/+54% YoY in Oct), which we believe were driven by energy projects and wind power installation.Exports in Oct were strong across different types of machinery (except AWPs &amp; truck cranes). 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.

Capital Goods - Domestic crane demand continues to recover

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.

CNGR Advanced Material / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cngr-advanced-material-co-ltd-47ff2856-4dc1-492a-8394-03d69de02ce4" target="_blank" data-smartkarma-citation="entities:45994:1" rel="noopener">CNGR Advanced Material (2579 HK)</a>, a new energy materials company, has launched an H Share listing to raise US$507 million.</li>
<li>I discussed the H Share listing in <a href="https://www.smartkarma.com/insights/cngr-advanced-material-h-share-listing-the-investment-case" target="_blank" data-smartkarma-citation="insights:208525" rel="noopener">CNGR Advanced Material H Share Listing: The Investment Case</a>. </li>
<li>The proposed AH discount range of 36.9% to 29.9% (based on the 7 November A Share price) is attractive, and I would participate in the H Share listing.</li>
</ul>



CNGR Advanced Material (2579 HK), a new energy materials company, has launched an H Share listing to raise US$507 million.
I discussed the H Share listing in CNGR Advanced Material H Share Listing: The Investment Case. 
The proposed AH discount range of 36.9% to 29.9% (based on the 7 November A Share price) is attractive, and I would participate in the H Share listing.


CNGR Advanced Material H Share Listing (2579 HK): Valuation Insights

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/seres-group-co-ltd" target="_blank" data-smartkarma-citation="entities:29951:1" rel="noopener">Seres Group (601127 CH)</a>,  a Chinese NEV manufacturer, raised around US$2.1bn in its H-share listing.</li>
<li>Seres Group (SG) is principally engaged in the research and development, manufacturing, sales and services of new energy vehicles (NEV) as well as core NEV components.</li>
<li>We have looked at the past performance and likely A/H premium in our previous note. In this note, we talk about IPO trading dynamics.</li>
</ul>



Seres Group (601127 CH),  a Chinese NEV manufacturer, raised around US$2.1bn in its H-share listing.
Seres Group (SG) is principally engaged in the research and development, manufacturing, sales and services of new energy vehicles (NEV) as well as core NEV components.
We have looked at the past performance and likely A/H premium in our previous note. In this note, we talk about IPO trading dynamics.


Seres Group A/H Trading - Demand Wasn’t Very Strong, Close to Fair Value

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)

China NPC: Implications of Government Working Report 2023

A 0.2pp higher budget deficit and a Rmb3.8trn special purpose bond quota suggested government spending will remain important economic driver. More...

Osbert Tang, CFA

Sany Heavy Industry IPO Valuation Analysis

Sany Heavy priced its IPO at HK$21.3 per share (at the high end of the IPO price range). This is just 2% lower than our base case valuation of the...

Douglas Kim

Capital Goods - Domestic crane demand continues to recover

China Construction Machinery Association (CCMA) has just released the full set of construction machinery sales data for Oct.

CMB International

Seres Group A/H Trading - Demand Wasn’t Very Strong, Close to Fair Value

Seres Group (601127 CH), a Chinese NEV manufacturer, raised around US$2.1bn in its H-share listing. In this note, we talk about the trading dynamics.

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China NPC: Implications of Government Working Report 2023

A 0.2pp higher budget deficit and a Rmb3.8trn special purpose bond quota suggested government spending will remain important economic driver. More...

Osbert Tang, CFA

Sany Heavy Industry IPO Valuation Analysis

Sany Heavy priced its IPO at HK$21.3 per share (at the high end of the IPO price range). This is just 2% lower than our base case valuation of the...

Douglas Kim

Capital Goods - Domestic crane demand continues to recover

China Construction Machinery Association (CCMA) has just released the full set of construction machinery sales data for Oct.

CMB International

CNGR Advanced Material H Share Listing (2579 HK): Valuation Insights

CNGR has launched an H Share listing to raise US$507 million. The proposed AH discount range of 36.9% to 29.9% is attractive.

Arun George

Seres Group A/H Trading - Demand Wasn’t Very Strong, Close to Fair Value

Seres Group (601127 CH), a Chinese NEV manufacturer, raised around US$2.1bn in its H-share listing. In this note, we talk about the trading dynamics.

Sumeet Singh