Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of October 27th.</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 Meituan, Semiconductor Manufacturing International and CNOOC.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of October 27th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Meituan, Semiconductor Manufacturing International and CNOOC.


Hong Kong Connect Flows (Oct 27th): Meituan, Semiconductor Manufacturing International, CNOOC

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.

Event-Driven

<a href="https://www.smartkarma.com/entities/suchuang-gas-corp-ltd" target="_blank" data-smartkarma-citation="entities:304:1" rel="noopener">Suchuang Gas Corp (1430 HK)</a> is the dominant piped natural gas operator in Taicang, Jiangsu Province. After market close on Wednesday, it announced a privatisation offer by way of a scheme of arrangement from <a href="https://www.smartkarma.com/entities/china-resources-gas-group-ltd" target="_blank" data-smartkarma-citation="entities:20525:1" rel="noopener">CR Gas (1193 HK)</a>. The offeror will offer either a cash alternative (HK$2.50 in cash for each scheme share) or a share alternative (1 new share in HoldCo for every scheme share).The bid represents a premium of 27.6% over the closing price of HK$1.96 per share on the undisturbed date (10 August 2021 prior to irregular price movements) and a premium of 2.9% over the closing price of HK$2.43 per share on the last trading date (13 August 2021 prior to the trading halt). The completion conditions include regulatory approvals from the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) and State Administration for Market Regulation (SAMR). As CR Gas is a subsidiary of China Resources (Holdings) Company Limited, an SOE, regulatory approval should be forthcoming. <div class="content-highlight">The key condition precedents are the headcount test along with the scheme approved by at least 75% disinterested shareholders and &lt;10% rejection by all disinterested shareholders. As disinterested scheme shareholders represent 565.4 million shares or 62.61% of shares outstanding, the 10% blocking stake is 56.5 million shares or 6.26% of shares outstanding. Excluding the irrecovables, no disinterested shareholder holds a blocking stake. Overall, we think the offer price is ok and that the privatisation bid will be successful. </div>

Suchuang Gas Corp (1430 HK) is the dominant piped natural gas operator in Taicang, Jiangsu Province. After market close on Wednesday, it announced a privatisation offer by way of a scheme of arrangement from CR Gas (1193 HK). The offeror will offer either a cash alternative (HK$2.50 in cash for each scheme share) or a share alternative (1 new share in HoldCo for every scheme share).The bid represents a premium of 27.6% over the closing price of HK$1.96 per share on the undisturbed date (10 August 2021 prior to irregular price movements) and a premium of 2.9% over the closing price of HK$2.43 per share on the last trading date (13 August 2021 prior to the trading halt). The completion conditions include regulatory approvals from the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) and State Administration for Market Regulation (SAMR). As CR Gas is a subsidiary of China Resources (Holdings) Company Limited, an SOE, regulatory approval should be forthcoming. The key condition precedents are the headcount test along with the scheme approved by at least 75% disinterested shareholders and &lt;10% rejection by all disinterested shareholders. As disinterested scheme shareholders represent 565.4 million shares or 62.61% of shares outstanding, the 10% blocking stake is 56.5 million shares or 6.26% of shares outstanding. Excluding the irrecovables, no disinterested shareholder holds a blocking stake. Overall, we think the offer price is ok and that the privatisation bid will be successful. 

Suchuang Gas’ Privatisation Bid from CR Gas

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

A Reporter of Deals flagged the possibility of <a href="https://www.smartkarma.com/entities/hong-kong-china-gas-co-ltd" target="_blank" data-smartkarma-citation="entities:375:1" rel="noopener">Hong Kong &amp; China Gas (3 HK)</a> taking gas distributor  <a href="https://www.smartkarma.com/entities/towngas-china-co-ltd" target="_blank" data-smartkarma-citation="entities:10771:1" rel="noopener">Towngas China (1083 HK)</a>, currently 67.76%-held, private. 
Towngas is not terribly liquid with respect to its market cap, and the recommendation in the past, from some corners, was that HKCG should sell down its interest to improve liquidity. Instead, HKCG has continued to chip away at Towngas over the years via scrip dividends.
Towngas is trading at a multi-year low for what is a relatively stable business. However, as noted in <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0414/2020041400724.pdf" target="_blank" rel="noopener">2019 annual report</a>, consumer spending and production have declined significantly in China since COVID-19, leading to a material fall in demand for gas and water in commercial and industrial sectors, and in turn impacting the results of Towngas. 
A privatisation? Perhaps. The benefits to HKCG are apparent.
A clutch of thoughts and musings before the line.

A Reporter of Deals flagged the possibility of Hong Kong &amp; China Gas (3 HK) taking gas distributor  Towngas China (1083 HK), currently 67.76%-held, private. 
Towngas is not terribly liquid with respect to its market cap, and the recommendation in the past, from some corners, was that HKCG should sell down its interest to improve liquidity. Instead, HKCG has continued to chip away at Towngas over the years via scrip dividends.
Towngas is trading at a multi-year low for what is a relatively stable business. However, as noted in 2019 annual report, consumer spending and production have declined significantly in China since COVID-19, leading to a material fall in demand for gas and water in commercial and industrial sectors, and in turn impacting the results of Towngas. 
A privatisation? Perhaps. The benefits to HKCG are apparent.
A clutch of thoughts and musings before the line.

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

The MSCI EM index has recovered over the last couple of weeks and is now approaching a logical resistance level. We reiterate: avoid broad EM exposure and be selective.  India’s S&amp;P BSE SENSEX is our top country-specific EM index recommendation, overweight India. We also provide an update on Brazil’s Bovespa, which has surged over the last month following a steep selloff. We are skeptical that the index will be able to continue its unabated advance.  Today’s report also includes a wide variety of bottom-up recommendations spanning most sectors and all market capitalizations.

The MSCI EM index has recovered over the last couple of weeks and is now approaching a logical resistance level. We reiterate: avoid broad EM exposure and be selective.  India’s S&amp;P BSE SENSEX is our top country-specific EM index recommendation, overweight India. We also provide an update on Brazil’s Bovespa, which has surged over the last month following a steep selloff. We are skeptical that the index will be able to continue its unabated advance.  Today’s report also includes a wide variety of bottom-up recommendations spanning most sectors and all market capitalizations.

EM Strategy: MSCI EM Approaching Resistance; India Breaking Out to New Highs -- Add Exposure

Commodities and related stocks are on the rise. Crude oil, industrial metals, and lumber prices are all breaking out to new highs and related energy and materials stocks are reaping the benefits. We expect their outperformance to continue. In this week's report we highlight commodities and actionable associated stocks.

Commodities and related stocks are on the rise. Crude oil, industrial metals, and lumber prices are all breaking out to new highs and related energy and materials stocks are reaping the benefits. We expect their outperformance to continue. In this week's report we highlight commodities and actionable associated stocks.

Opportunities in Global Energy & Materials Stocks

Hong Kong

Towngas China Company Ltd. distributes and markets gas.  The Company sells LPG (liquefied petroleum gas) in  bulk and in cylinder, provides piped LPG and natural gas, constructs gas pipelines, operates city gas-pipeline networks and gas stations, and sells LPG  and natural gas household appliances.

Towngas China (1083 HK)

Hong Kong Connect Flows (Oct 27th): Meituan, Semiconductor Manufacturing International, CNOOC

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for Meituan, Semiconductor Manufacturing International, CNOOC.

Ke Yan, CFA, FRM

Suchuang Gas’ Privatisation Bid from CR Gas

Suchuang Gas received a privatisation offer from CR Gas for a cash alternative (HK$2.50) or a share alternative. We think the offer price is ok and...

Arun George

Towngas (1083 HK): A HKCG Privatisation?

A Reporter of Deals flagged the possibility of Hong Kong & China Gas (3 HK) taking gas distributor Towngas China (1083 HK), currently...

David Blennerhassett

EM Strategy: MSCI EM Approaching Resistance; India Breaking Out to New Highs -- Add Exposure

The MSCI EM index has recovered over the last couple of weeks and is now approaching a logical resistance level. We reiterate: avoid broad EM...

Vermilion Research

Opportunities in Global Energy & Materials Stocks

Commodities and related stocks are on the rise. Crude oil, industrial metals, and lumber prices are all breaking out to new highs and related...

Vermilion Research