Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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 Bottom-Up

<ul>
<li>BYD released its result estimate for 2023, in which net profit rose by 74% to 86% over 2022.</li>
<li>Li auto delivered 31,165 vehicles in January 2024, up by 106% over 2023.</li>
<li>As per rumors reported in the media, Alibaba will sell RT-Mart, a supermarket brand.</li>
</ul>


BYD released its result estimate for 2023, in which net profit rose by 74% to 86% over 2022.
Li auto delivered 31,165 vehicles in January 2024, up by 106% over 2023.
As per rumors reported in the media, Alibaba will sell RT-Mart, a supermarket brand.


China Consumption Weekly (5 Feb 2024): BYD, Li Auto, Alibaba, Sun Art

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 May 25th.</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 Tencent, China Mobile, Li Ning, China Construction Bank.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of May 25th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Tencent, China Mobile, Li Ning, China Construction Bank.


Hong Kong Connect Flows (May 25th): Tencent, China Mobile, Li Ning, China Construction Bank

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Reuters this afternoon carried an <a href="https://www.reuters.com/markets/deals/exclusive-tencent-plans-divest-24-bln-meituan-stake-sources-2022-08-16/" target="_blank" rel="noopener">article</a> that <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> was seeking to divest "US$24bn" (17%) of $78bn market cap delivery company <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> by year-end to mollify domestic regulators.</li>
<li>Tencent would seek to launch a share sale within 2022 <em>"if market conditions are favourable." </em>Meituan shares tanked 9%, immediately.</li>
<li>The article suggests disposal via block sale (faster than negotiating with a private buyer), odd given Tencent's Q1 2022 experience with the JD.com unwind. But it leads to BIG flows.</li>
</ul>


Reuters this afternoon carried an article that Tencent (700 HK) was seeking to divest "US$24bn" (17%) of $78bn market cap delivery company Meituan (3690 HK) by year-end to mollify domestic regulators.
Tencent would seek to launch a share sale within 2022 "if market conditions are favourable." Meituan shares tanked 9%, immediately.
The article suggests disposal via block sale (faster than negotiating with a private buyer), odd given Tencent's Q1 2022 experience with the JD.com unwind. But it leads to BIG flows.


Tencent (700 HK) To Divest Meituan (3690 HK) - Impact and Index Implications

<ul>
<li>We believe total revenue will grow about 25% YoY in 2Q22.</li>
<li>We believe advertising revenue will grow slowly, but physical store will grow rapidly.</li>
<li>We also believe the operating margin will be stable in the following year.</li>
</ul>


We believe total revenue will grow about 25% YoY in 2Q22.
We believe advertising revenue will grow slowly, but physical store will grow rapidly.
We also believe the operating margin will be stable in the following year.


Alibaba (BABA): F2Q22 Outlook, Slow in App and Rapid in Physical Store

<ul>
<li>Revenue from physical store chains grew by 80% YoY in 1Q22.</li>
<li>The margin decline is partly due to temporary changes.</li>
<li>Generally, we believe EPS will decline by 11% in FY2022, but grow by 13% in FY2023.</li>
<li>We believe the stock has an upside of 30% for the end of March 2022.</li>
</ul>


Revenue from physical store chains grew by 80% YoY in 1Q22.
The margin decline is partly due to temporary changes.
Generally, we believe EPS will decline by 11% in FY2022, but grow by 13% in FY2023.
We believe the stock has an upside of 30% for the end of March 2022.


Alibaba (BABA): FY1Q22, Physical Stores Growing Strongly, Margin Lower but Controllable, 30% Upside

China

Sun Art Retail Group operates hypermarkets, superstores, and membership stores under the RT-Mart, RT-Super, and M-Club brands, alongside online sales channels in the People's Republic of China. The company also provides consulting, investment, procurement, wholesaling, and retailing services. The Group was established on December 13, 2000, and is headquartered in Hong Kong.

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Sun Art Retail Group (6808 HK)

China Consumption Weekly (5 Feb 2024): BYD, Li Auto, Alibaba, Sun Art

BYD estimated its net profit rose by 74% to 86% in 2023. Li auto's deliveries increased by 106% YoY in January 2024. It is rumored that Alibaba...

Ming Lu

Hong Kong Connect Flows (May 25th): Tencent, China Mobile, Li Ning, China Construction Bank

We analyzed the Hong Kong Connect Scheme for last week and highlight flows for Tencent, China Mobile, Li Ning, China Construction Bank。

Ke Yan, CFA, FRM

Tencent (700 HK) To Divest Meituan (3690 HK) - Impact and Index Implications

Tencent is said to be looking at a $20bn block sale of its stake in Meituan (3690 HK) by year end. That's a big block. Maybe a repeat of JD.com?...

Travis Lundy

Alibaba (BABA): F2Q22 Outlook, Slow in App and Rapid in Physical Store

We believe total revenue will grow about 25% YoY in F2Q22. We believe advertising revenue will grow slowly, but physical store will grow rapidly.

Ming Lu

Alibaba (BABA): FY1Q22, Physical Stores Growing Strongly, Margin Lower but Controllable, 30% Upside

Revenue from physical store chains grew by 80% YoY in 1Q22. The margin decline is partly due to temporary changes. Generally, we believe EPS will...

Ming Lu

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