HK/China Equity Long-Short

Osbert Tang, CFA

Equity Capital Markets

Robotphoenix Intelligent Technology / Equity Capital Markets

Robotphoenix Intelligent Technology (6871 HK)

<ul>
<li>To raise HK$679.2m of net proceeds, <a href="https://www.smartkarma.com/entities/robotphoenix-intelligent-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:48807:1" rel="noopener">Robotphoenix Intelligent Technology (6871 HK)</a>'s IPO is small. But this dedicated industrial robotics company is worth a bet.</li>
<li>Although losses have been increasing for FY23-25, with a 3-year forward revenue CAGR of 35.2%, they should peak in FY27 and start to reduce in FY28.</li>
<li>We calculate a fair P/S of 13.7-15.5x for FY26, translating into a price of HK$34.3-38.6, or 12.5-26.5% upside from the IPO price. </li>
</ul>


To raise HK$679.2m of net proceeds, Robotphoenix Intelligent Technology (6871 HK)'s IPO is small. But this dedicated industrial robotics company is worth a bet.
Although losses have been increasing for FY23-25, with a 3-year forward revenue CAGR of 35.2%, they should peak in FY27 and start to reduce in FY28.
We calculate a fair P/S of 13.7-15.5x for FY26, translating into a price of HK$34.3-38.6, or 12.5-26.5% upside from the IPO price. 


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.

Shenzhen Zhaowei Machinery & Electronics / Equity Capital Markets

Shenzhen Zhaowei Machinery & Electronics (2692 HK)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shenzhen-zhaowei-machinery-a" target="_blank" data-smartkarma-citation="entities:46000:1" rel="noopener">Shenzhen Zhaowei Machinery (2692 HK)</a> (003021 CH), raised around US$240m in its H-share listing.</li>
<li>(SZME) is a provider of integrated micro transmission and drive system solutions ranking first in China and fourth globally by revenue, according to F&amp;S.</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 trading dynamics.</li>
</ul>



Shenzhen Zhaowei Machinery (2692 HK) (003021 CH), raised around US$240m in its H-share listing.
(SZME) is a provider of integrated micro transmission and drive system solutions ranking first in China and fourth globally by revenue, according to F&amp;S.
We have looked at the past performance and likely A/H premium in our previous note. In this note, we talk about the trading dynamics.


Aequitas: Shenzhen Zhaowei A/H Trading - Decent Insti and Strong Retail Demand, No Greenshoe

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shenzhen-zhaowei-machinery-a" target="_blank" data-smartkarma-citation="entities:46000:1" rel="noopener">Shenzhen Zhaowei Machinery (2692 HK)</a>'s IPO does not look attractive, as valuations are not cheap relative to peers, despite a steep 45.6% discount to A-share. </li>
<li>At the maximum IPO price of HK$73.68, Zhaowei will trade on a PER of 50.1x for FY26F and 40.8x for FY27F. Global peers are, on average, just 16.9x.</li>
<li>Even if we park its HA discount alongside its close peer, <a href="https://www.smartkarma.com/entities/zhejiang-sanhua-intelligent-controls-co-ltd" target="_blank" data-smartkarma-citation="entities:45277:1" rel="noopener">Zhejiang Sanhua Intelligent Controls (2050 HK)</a>, it will only mean 6.5% upside from the IPO price.</li>
</ul>



Shenzhen Zhaowei Machinery (2692 HK)'s IPO does not look attractive, as valuations are not cheap relative to peers, despite a steep 45.6% discount to A-share. 
At the maximum IPO price of HK$73.68, Zhaowei will trade on a PER of 50.1x for FY26F and 40.8x for FY27F. Global peers are, on average, just 16.9x.
Even if we park its HA discount alongside its close peer, Zhejiang Sanhua Intelligent Controls (2050 HK), it will only mean 6.5% upside from the IPO price.


Shenzhen Zhaowei (2692 HK) IPO: Limited Near-Term Upside

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>Shenzhen Zhaowei Machinery launched its Hongkong IPO aiming to raise up to HK$1.97B (~ US$ 250M). The company leading provider of integrated micro transmission and drive system products in China.</li>
<li>Zhaowei Machinery intends to use the IPO proceeds for funding product expansion, enhance R&amp;D capabilities, enhance production capacity, fund acquisitions, expand global marketing efforts etc.</li>
<li>The outlook more than justifies the valuation the company is seeking through this issue. We would recommend the investors to subscribe to the issue.</li>
</ul>


Shenzhen Zhaowei Machinery launched its Hongkong IPO aiming to raise up to HK$1.97B (~ US$ 250M). The company leading provider of integrated micro transmission and drive system products in China.
Zhaowei Machinery intends to use the IPO proceeds for funding product expansion, enhance R&amp;D capabilities, enhance production capacity, fund acquisitions, expand global marketing efforts etc.
The outlook more than justifies the valuation the company is seeking through this issue. We would recommend the investors to subscribe to the issue.


Zhaowei Machinery IPO Update: Valuation Justifies Product Strength and Market Leadership Position

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shenzhen-zhaowei-machinery-a" target="_blank" data-smartkarma-citation="entities:46000:1" rel="noopener">Shenzhen Zhaowei Machinery (003021 CH)</a>, aims to raise around US$254m in its H-share listing.</li>
<li>Shenzhen Zhaowei Machinery &amp; Electronic (SZME) is a provider of integrated micro transmission and drive system solutions ranking first in China and fourth globally by revenue, according to F&amp;S.</li>
<li>We have looked at the company’s past performance in our previous note. In this note, we talk about the pricing.</li>
</ul>



Shenzhen Zhaowei Machinery (003021 CH), aims to raise around US$254m in its H-share listing.
Shenzhen Zhaowei Machinery &amp; Electronic (SZME) is a provider of integrated micro transmission and drive system solutions ranking first in China and fourth globally by revenue, according to F&amp;S.
We have looked at the company’s past performance in our previous note. In this note, we talk about the pricing.


Aequitas: Shenzhen Zhaowei A/H Listing - Hoping to Catch the Robotics Wave

China

Shenzhen Zhaowei Machinery & Electronics designs, develops, manufactures, and sells micro transmission and drive systems, including precision gear motors and planetary gearboxes. These systems are applied across intelligent automotive, consumer electronics, robotics, and medical sectors. The company was founded in 2001 and is headquartered in Shenzhen, China.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Shenzhen Zhaowei Machinery & Electronics (2692 HK)

Robotphoenix (6871) IPO: Worth a Bet

Robotphoenix's small IPO aims to raise HK$679.2m, but with a promising future in industrial robotics and a leadership position in the industry, it...

Osbert Tang, CFA

Aequitas: Shenzhen Zhaowei A/H Trading - Decent Insti and Strong Retail Demand, No Greenshoe

Shenzhen Zhaowei Machinery (2692 HK) (003021 CH), raised around US$240m in its H-share listing. In this note, we talk about the trading dyanmics.

Sumeet Singh

Shenzhen Zhaowei (2692 HK) IPO: Limited Near-Term Upside

Shenzhen Zhaowei Machinery's IPO is not particularly attractive at HK$73.68 due to high valuations compared to peers, despite a significant 45.6%...

Osbert Tang, CFA

Zhaowei Machinery IPO Update: Valuation Justifies Product Strength and Market Leadership Position

Shenzhen Zhaowei Machinery launches Hong Kong IPO to raise up to HK$1.97B. Investors recommended to subscribe. The long-term growth scenario looks...

Tina Banerjee

Aequitas: Shenzhen Zhaowei A/H Listing - Hoping to Catch the Robotics Wave

Shenzhen Zhaowei Machinery (003021 CH), aims to raise around US$254m in its H-share listing. In this note, we talk about pricing.

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Robotphoenix (6871) IPO: Worth a Bet

​Robotphoenix's small IPO aims to raise HK$679.2m, but with a promising future in industrial robotics and a leadership position in the industry, it...

Osbert Tang, CFA

Aequitas: Shenzhen Zhaowei A/H Trading - Decent Insti and Strong Retail Demand, No Greenshoe

Shenzhen Zhaowei Machinery (2692 HK) (003021 CH), raised around US$240m in its H-share listing. In this note, we talk about the trading dyanmics.

Sumeet Singh

Shenzhen Zhaowei (2692 HK) IPO: Limited Near-Term Upside

​Shenzhen Zhaowei Machinery's IPO is not particularly attractive at HK$73.68 due to high valuations compared to peers, despite a significant 45.6%...

Osbert Tang, CFA

Zhaowei Machinery IPO Update: Valuation Justifies Product Strength and Market Leadership Position

​Shenzhen Zhaowei Machinery launches Hong Kong IPO to raise up to HK$1.97B. Investors recommended to subscribe. The long-term growth scenario looks...

Tina Banerjee

Aequitas: Shenzhen Zhaowei A/H Listing - Hoping to Catch the Robotics Wave

Shenzhen Zhaowei Machinery (003021 CH), aims to raise around US$254m in its H-share listing. In this note, we talk about pricing.

Sumeet Singh

Robotphoenix's small IPO aims to raise HK$679.2m, but with a promising future in industrial robotics and a leadership position in the industry, it...

Shenzhen Zhaowei Machinery's IPO is not particularly attractive at HK$73.68 due to high valuations compared to peers, despite a significant 45.6%...

Shenzhen Zhaowei Machinery launches Hong Kong IPO to raise up to HK$1.97B. Investors recommended to subscribe. The long-term growth scenario looks...