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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/4paradigm" target="_blank" data-smartkarma-citation="entities:34465:1" rel="noopener">4Paradigm (1764934D HK)</a>, a leader in enterprise artificial intelligence (AI) in China, is pre-marketing a US$150-200 million HKEx IPO.  </li>
<li>4Paradigm was the largest player by revenue in China’s platform-centric decision-making AI market with a market share of 22.6% in 2022, according to CIC. </li>
<li>The bull case rests on the success in increasing key account customer numbers, net dollar expansion rates, improving revenue visibility, strong growth in application development services and reducing loss margin.</li>
</ul>



4Paradigm (1764934D HK), a leader in enterprise artificial intelligence (AI) in China, is pre-marketing a US$150-200 million HKEx IPO.  
4Paradigm was the largest player by revenue in China’s platform-centric decision-making AI market with a market share of 22.6% in 2022, according to CIC. 
The bull case rests on the success in increasing key account customer numbers, net dollar expansion rates, improving revenue visibility, strong growth in application development services and reducing loss margin.


Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>4Paradigm is a pioneer and leader in enterprise AI. The company offers platform-centric AI solutions to enterprises that can be deployed on a large scale to support decision making.</li>
<li>The company’s application for HKEx IPO has been approved and this insight focuses on new data points from the company’s latest PHIP release (dated 07th Sep 2023).</li>
<li>
<a href="https://www.smartkarma.com/entities/4paradigm" target="_blank" data-smartkarma-citation="entities:34465:1" rel="noopener">4Paradigm (1764934D HK)</a> revenues have continued to expand with significant reduction in operating losses, and we remain positive on the company’s growth prospects.</li>
</ul>


4Paradigm is a pioneer and leader in enterprise AI. The company offers platform-centric AI solutions to enterprises that can be deployed on a large scale to support decision making.
The company’s application for HKEx IPO has been approved and this insight focuses on new data points from the company’s latest PHIP release (dated 07th Sep 2023).

4Paradigm (1764934D HK) revenues have continued to expand with significant reduction in operating losses, and we remain positive on the company’s growth prospects.


Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

Shandong Hi-Speed New Energy G / Index Rebalance

<ul>
<li>In this insight, we take a look at the potential index changes and the resultant capping flows for HSCEI in December 2023.</li>
<li>Based on the latest available data, I expect one ADD and one DEL for HSCEI in December 2023. </li>
<li>There is more than one potential ADD in the top 40 according to my estimates but recent history tells us some of these names are not "index-provider-friendly."</li>
</ul>


In this insight, we take a look at the potential index changes and the resultant capping flows for HSCEI in December 2023.
Based on the latest available data, I expect one ADD and one DEL for HSCEI in December 2023. 
There is more than one potential ADD in the top 40 according to my estimates but recent history tells us some of these names are not "index-provider-friendly."


Quiddity HSCEI Dec 23 Flow Expectations: At Least One Change Likely; There Could Be More

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.

Equity Bottom-Up

<ul><li>SenseTime announced 1H23 financial results on 28 Aug: total revenue resumed positive YoY growth of 1% and reached RMB1.43bn; adjusted net loss narrowed by 7% YoY to RMB2.39bn, in line with our estimate.</li><li>SenseTime optimized its business strategy: reduce exposure to non-core Smart City business and focus on the development of its Generative AI business, revenue of which has already accounted for 20% of 1H23 total revenue.</li><li>We expect the adjustment will refuel total revenue to grow 18% YoY and unleash operating leverage in 2H23E. </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.

SenseTime announced 1H23 financial results on 28 Aug: total revenue resumed positive YoY growth of 1% and reached RMB1.43bn; adjusted net loss narrowed by 7% YoY to RMB2.39bn, in line with our estimate.SenseTime optimized its business strategy: reduce exposure to non-core Smart City business and focus on the development of its Generative AI business, revenue of which has already accounted for 20% of 1H23 total revenue.We expect the adjustment will refuel total revenue to grow 18% YoY and unleash operating leverage in 2H23E. 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.

SenseTime (20 HK) – Focus on Generative AI Business Development

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>The September rebalance of the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI</a> and <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH</a> indices will use today's closing prices to cap the index constituent weights at 8%. This will lead to large flows.</li>
<li>The largest passive inflows will be on <a href="https://www.smartkarma.com/entities/east-buy-holding-ltd" target="_blank" data-smartkarma-citation="entities:27796:1" rel="noopener">East Buy (1797 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (9618 HK)</a>, <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An (2318 HK)</a>, <a href="https://www.smartkarma.com/entities/sinopharm-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:32:1" rel="noopener">Sinopharm (1099 HK)</a>, <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a>, <a href="https://www.smartkarma.com/entities/lenovo-group-ltd" target="_blank" data-smartkarma-citation="entities:13359:1" rel="noopener">Lenovo (992 HK)</a> and <a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com (9961)</a>.</li>
<li>The largest passive outflows will be on <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a>, <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies (2018 HK)</a>, <a href="https://www.smartkarma.com/entities/kuaishou-technology" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/country-garden-holdings-co" target="_blank" data-smartkarma-citation="entities:5225:1" rel="noopener">COGARD (2007)</a> and <a href="https://www.smartkarma.com/entities/country-garden-services-holdin" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">CG Services (6098)</a>.</li>
</ul>


The September rebalance of the HSI, HSCEI and HSTECH indices will use today's closing prices to cap the index constituent weights at 8%. This will lead to large flows.
The largest passive inflows will be on East Buy (1797 HK), JD.com (9618 HK), Ping An (2318 HK), Sinopharm (1099 HK), BYD (1211 HK), Lenovo (992 HK) and Trip.com (9961).
The largest passive outflows will be on Alibaba (9988 HK), Li Auto (2015 HK), Meituan (3690 HK), AAC Technologies (2018 HK), Kuaishou (1024 HK), COGARD (2007) and CG Services (6098).


HSI, HSCEI, HSTECH: Rebalance Flows Post Capping (Sep 2023)

China

SenseTime Group Inc. offers information technology services. The Company develops artificial intelligence software products, computer vision software products, and other products. SenseTime Group provides its services throughout China.

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SenseTime Group (20 HK)

4Paradigm IPO: The Bull Case

The bull case rests on the success in increasing key customer numbers, net dollar expansion rates, improving visibility, strong growth in...

Arun George

4Paradigm IPO: PHIP Updates

4Paradigm, a leader in enterprise AI, has received approval for its HKEx IPO. This insight focuses on new data points from the company’s latest...

Shifara Samsudeen, FCMA, CGMA

Quiddity HSCEI Dec 23 Flow Expectations: At Least One Change Likely; There Could Be More

Shandong Hi-Speed New Energy (1250 HK) / Beijing Energy (686 HK) and Shandong Hi-Speed New Energy (1250 HK) / Concord New Energy (182 HK) price...

Janaghan Jeyakumar, CFA

SenseTime (20 HK) – Focus on Generative AI Business Development

SenseTime announced 1H23 financial results on 28 Aug: total revenue resumed positive YoY growth of 1% and reached RMB1.43bn; adjusted net loss...

CMB International

HSI, HSCEI, HSTECH: Rebalance Flows Post Capping (Sep 2023)

The September rebalance of the Hang Seng family of indices will use today's closing prices for capping. The one-way trade across all stocks across...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

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Dividend (Yield)

4Paradigm IPO: The Bull Case

The bull case rests on the success in increasing key customer numbers, net dollar expansion rates, improving visibility, strong growth in...

Arun George

4Paradigm IPO: PHIP Updates

​4Paradigm, a leader in enterprise AI, has received approval for its HKEx IPO. This insight focuses on new data points from the company’s latest...

Shifara Samsudeen, FCMA, CGMA

Quiddity HSCEI Dec 23 Flow Expectations: At Least One Change Likely; There Could Be More

Shandong Hi-Speed New Energy (1250 HK) / Beijing Energy (686 HK) and Shandong Hi-Speed New Energy (1250 HK) / Concord New Energy (182 HK) price...

Janaghan Jeyakumar, CFA

SenseTime (20 HK) – Focus on Generative AI Business Development

SenseTime announced 1H23 financial results on 28 Aug: total revenue resumed positive YoY growth of 1% and reached RMB1.43bn; adjusted net loss...

CMB International

HSI, HSCEI, HSTECH: Rebalance Flows Post Capping (Sep 2023)

The September rebalance of the Hang Seng family of indices will use today's closing prices for capping. The one-way trade across all stocks across...

Brian Freitas

4Paradigm, a leader in enterprise AI, has received approval for its HKEx IPO. This insight focuses on new data points from the company’s latest...