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>Management reduced shareholding in Tencent (700 HK).</li>
<li>Funds withdrew from game developers such as 37 Interactive (002555 CN).</li>
<li>Huya (HUYA) and Douyu (DOYU) merged in the way we expected in April.</li>
<li>Delivered parcels increased 28% YoY in 1~3Q20.</li>
</ul>


Management reduced shareholding in Tencent (700 HK).
Funds withdrew from game developers such as 37 Interactive (002555 CN).
Huya (HUYA) and Douyu (DOYU) merged in the way we expected in April.
Delivered parcels increased 28% YoY in 1~3Q20.


China Internet Weekly (19Oct20): Tencent Mgt Reduced Shares, HUYA & DOYU Merged in Our Expected Way

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: Evergrande, Link Admin, NTT Docomo, Melifecare, Wipro, Wilmar, Huya/DouYu

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

Shimao Services Holdings Limited / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/shimao-services-holdings-limited" target="_blank" data-smartkarma-citation="entities:29199:1" rel="noopener">Shimao Services Holdings (SSH HK)</a> is a Chinese property management company which is a subsidiary of <a href="https://www.smartkarma.com/entities/shimao-property-holdings-limited" target="_blank" data-smartkarma-citation="entities:8375:1" rel="noopener">Shimao Property Holdings (813 HK)</a> and backed by Sequoia China and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>. Shimao ranked third among the Top 20 Property Management Companies in China as measured by the revenue growth rate in 2019, according to China Index Academy. Shimao Group, the parent, will shortly launch the spin-off and Hong Kong IPO of Shimao to raise up to $1 billion, according to press reports. <div class="content-highlight">Property management IPOs are popular due to the strong post-IPO share price performance of recent listings. The property management sector has a long-term recurring business model and is capital-light. Overall, Shimao’s fundamentals over the track record period are attractive, in our view.</div>

Shimao Services Holdings (SSH HK) is a Chinese property management company which is a subsidiary of Shimao Property Holdings (813 HK) and backed by Sequoia China and Tencent Holdings (700 HK). Shimao ranked third among the Top 20 Property Management Companies in China as measured by the revenue growth rate in 2019, according to China Index Academy. Shimao Group, the parent, will shortly launch the spin-off and Hong Kong IPO of Shimao to raise up to $1 billion, according to press reports. Property management IPOs are popular due to the strong post-IPO share price performance of recent listings. The property management sector has a long-term recurring business model and is capital-light. Overall, Shimao’s fundamentals over the track record period are attractive, in our view.

Shimao Services IPO Initiation: At Your Service

APAC IPOs & Placements

Zhen Zhou, Toh

<a href="https://www.smartkarma.com/entities/miniso-group-holdings" target="_blank" data-smartkarma-citation="entities:29673:1" rel="noopener">MINISO Group Holdings (MNSO US)</a> raised about US$608m at US$20 per ADS, above the top-end of the initial price range.
MINISO is a value retailer with a focus on offering products that are aesthetically pleasing, good-quality, and affordable. It operates its flagship brand “MINISO” and has a global presence with about 2,500 stores in China and over 1,680 stores across 80 other countries. 
We have earlier covered various aspects of the IPO in:
<div>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/miniso-pre-ipo-store-walkthrough-co-branding-allows-for-stronger-pricing" target="_blank" data-smartkarma-citation="insights:43821" rel="noopener">MINISO (名创优品) Pre-IPO - Store Walkthrough - Co-Branding Allows for Stronger Pricing</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/miniso-pre-ipo-asset-light-and-fairly-resilient-despite-covid" target="_blank" data-smartkarma-citation="insights:43623" rel="noopener">MINISO (名创优品) Pre-IPO - Asset-Light and Fairly Resilient Despite COVID</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/miniso-ipo-reasonable-towards-the-low-end" target="_blank" data-smartkarma-citation="insights:43988" rel="noopener">MINISO (名创优品) IPO - Reasonable Towards the Low-End</a> </li>
</ul>
In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.
</div>

MINISO Group Holdings (MNSO US) raised about US$608m at US$20 per ADS, above the top-end of the initial price range.
MINISO is a value retailer with a focus on offering products that are aesthetically pleasing, good-quality, and affordable. It operates its flagship brand “MINISO” and has a global presence with about 2,500 stores in China and over 1,680 stores across 80 other countries. 
We have earlier covered various aspects of the IPO in:



MINISO (名创优品) Pre-IPO - Store Walkthrough - Co-Branding Allows for Stronger Pricing 

MINISO (名创优品) Pre-IPO - Asset-Light and Fairly Resilient Despite COVID 

MINISO (名创优品) IPO - Reasonable Towards the Low-End 

In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.


MINISO (名创优品) IPO Trading - Not Much Value Left After Pricing Above Range

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

*Lucky and Smart: In Afterpay’s Touch’s (APT.AU) [Afterpay] latest update, it was announced that AUSTRAC has decided that it will not be taking any further regulatory action and that that it had uplifted its AML/CTF compliance framework and financial crime function, and satisfactorily completed all required remediation activity. Further, Afterpay `launched its instore offering in the US market just in time for the Christmas shopping season following its Simon Property Group (SPG.US) collaboration in the US;*Tencent Tutelage: Afterpay is helping Tencent enter markets earlier and with Tencent’s (700.HK) tutelage likely will help Afterpay more deeply penetrate North America.  We fully anticipate that Tencent will help Afterpay enter the Asian markets - uncharted territory with a large young population – with the big prize obviously being mainland China. Tencent’s digital expertise should also help Afterpay to improve its technology platform (e.g. its digital wallet checkout experience and its shopping platform, plus customer led generation). It also wouldn’t surprise us if Tencent took up greater than its pro rata share of the capital raise; and*Magic Fairy Dust: While no transaction particulars were disclosed, we calculate an average share purchase price of AUD 22.47 per share for the 5% stake or a hefty 6.8x P/BV for a company which is loss-making and where Tencent hasn’t control. Tencent has already earned 328% on this stake.

*Lucky and Smart: In Afterpay’s Touch’s (APT.AU) [Afterpay] latest update, it was announced that AUSTRAC has decided that it will not be taking any further regulatory action and that that it had uplifted its AML/CTF compliance framework and financial crime function, and satisfactorily completed all required remediation activity. Further, Afterpay `launched its instore offering in the US market just in time for the Christmas shopping season following its Simon Property Group (SPG.US) collaboration in the US;*Tencent Tutelage: Afterpay is helping Tencent enter markets earlier and with Tencent’s (700.HK) tutelage likely will help Afterpay more deeply penetrate North America.  We fully anticipate that Tencent will help Afterpay enter the Asian markets - uncharted territory with a large young population – with the big prize obviously being mainland China. Tencent’s digital expertise should also help Afterpay to improve its technology platform (e.g. its digital wallet checkout experience and its shopping platform, plus customer led generation). It also wouldn’t surprise us if Tencent took up greater than its pro rata share of the capital raise; and*Magic Fairy Dust: While no transaction particulars were disclosed, we calculate an average share purchase price of AUD 22.47 per share for the 5% stake or a hefty 6.8x P/BV for a company which is loss-making and where Tencent hasn’t control. Tencent has already earned 328% on this stake. 

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent Holdings (ADR) (TCEHY US)

China Internet Weekly (19Oct20): Tencent Mgt Reduced Shares, HUYA & DOYU Merged in Our Expected Way

News about online games. Mgt reduced shares in Tencent. Funds withdrew from game developers such as 37 Interactive. Huya and Douyu merged in the...

Ming Lu

Last Week in Event SPACE: Evergrande, Link Admin, NTT Docomo, Melifecare, Wipro, Wilmar, Huya/DouYu

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Shimao Services IPO Initiation: At Your Service

Property management IPOs are popular due to the strong post-IPO share price performance of recent listings. Overall, Shimao’s fundamentals over the...

Arun George

MINISO (名创优品) IPO Trading - Not Much Value Left After Pricing Above Range

MINISO is a value retailer with a focus on offering products that are aesthetically pleasing, good-quality, and affordable. There isn't much value...

Zhen Zhou, Toh

Tencent – Rubbing Two Nickels Together

Tencent Continues To Reap The Benefits Of Its Australian Alliance, With Afterpay Now Getting A Clean Bill Of Health and Increasing Their US Presence

Thomas J. Monaco

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