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 analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 124.1% as of Feb 2nd.</li>
<li>The average A-H premium changed by -5.6ppt week-on-week, led by consumer staples, information technology, industrials and offset by utilities.</li>
<li>We highlight weekly changes in A-H premium for Haier Smart, Wuxi Apptec, BOC, CGN Power, SMIC, Huaneng Power, China Longyuan.</li>
</ul>


We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 124.1% as of Feb 2nd.
The average A-H premium changed by -5.6ppt week-on-week, led by consumer staples, information technology, industrials and offset by utilities.
We highlight weekly changes in A-H premium for Haier Smart, Wuxi Apptec, BOC, CGN Power, SMIC, Huaneng Power, China Longyuan.


A-H Premium Weekly (Feb 2nd): Haier Smart, Wuxi Apptec, BOC, CGN Power, SMIC, Huaneng Power

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.

Thematic (Sector/Industry)

<ul><li>According to preliminary data from Cvworld, China HDT sales volume (domestic sales + exports) surged 64% YoY to ~80k units in Jan 2024.</li><li>The growth is stronger than our expectation as: (1) part of the sales in Dec 2023 were postponed to Jan 2024; (2) an early CNY in 2023 resulted in a low base effect.</li><li>Smoothing out the CNY effect by comparing the average sales in 2M23 (63k units), the sales of 80k units in Jan 2024 represented 27% growth. </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.

According to preliminary data from Cvworld, China HDT sales volume (domestic sales + exports) surged 64% YoY to ~80k units in Jan 2024.The growth is stronger than our expectation as: (1) part of the sales in Dec 2023 were postponed to Jan 2024; (2) an early CNY in 2023 resulted in a low base effect.Smoothing out the CNY effect by comparing the average sales in 2M23 (63k units), the sales of 80k units in Jan 2024 represented 27% growth. 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.

Capital Goods - HDT Sales Volume Surged ~64% YoY in Jan on Low Base

Equity Bottom-Up

Weichai Power Co Ltd H / Equity Bottom-Up

<ul><li>Weichai Power (Weichai) pre-announced last night (23 Jan) that net profit in 2023E is expected to surge 75-90% YoY to RMB8.58-9.32bn, which is better than expectations as both our and consensus estimates are only close to the low end of the profit range.</li><li>The profit alert implies that Weichai delivered net profit of RMB2.08-2.82bn in 4Q23E (up 31-77% YoY), with a midpoint of RMB2.45bn (+54% YoY).</li><li>As we highlighted in our note on 15 Jan (link), Weichai’s multi-cylinder diesel engine sales volume surged 51% YoY in 4Q23 (surpassing the industry average of 26%), driven by strong HDT engine demand. </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.

Weichai Power (Weichai) pre-announced last night (23 Jan) that net profit in 2023E is expected to surge 75-90% YoY to RMB8.58-9.32bn, which is better than expectations as both our and consensus estimates are only close to the low end of the profit range.The profit alert implies that Weichai delivered net profit of RMB2.08-2.82bn in 4Q23E (up 31-77% YoY), with a midpoint of RMB2.45bn (+54% YoY).As we highlighted in our note on 15 Jan (link), Weichai’s multi-cylinder diesel engine sales volume surged 51% YoY in 4Q23 (surpassing the industry average of 26%), driven by strong HDT engine demand. 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.

Weichai Power (000338 CH) – 4Q23E Earnings Surged 31-71% YoY, Above Expectation

<ul><li>Weichai Power (2338 HK/000338 CH, BUY) delivered 27% YoY growth of multi-cylinder diesel engine sales volume in Dec 2023, similar to the industry average of 29%, according to the latest figures from China Internal Combustion Engine Industry Association (CICEIA).</li><li>In 4Q23, Weichai’s multi-cylinder diesel engine sales volume surged 51% YoY to ~193k units, surpassing the industry average of 26%, driven by strong commercial vehicles demand in the previous months.</li><li>Based on our calculation, Weichai’s market share in multi-cylinder diesel engine reached 18.6% in 4Q23, up 3ppt YoY and 0.1ppt QoQ.</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.

Weichai Power (2338 HK/000338 CH, BUY) delivered 27% YoY growth of multi-cylinder diesel engine sales volume in Dec 2023, similar to the industry average of 29%, according to the latest figures from China Internal Combustion Engine Industry Association (CICEIA).In 4Q23, Weichai’s multi-cylinder diesel engine sales volume surged 51% YoY to ~193k units, surpassing the industry average of 26%, driven by strong commercial vehicles demand in the previous months.Based on our calculation, Weichai’s market share in multi-cylinder diesel engine reached 18.6% in 4Q23, up 3ppt YoY and 0.1ppt QoQ.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.

China Heavy Duty Truck – Multi-Cylinder Diesel Engine Sales +29% YoY in Dec

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of December 1st.</li>
<li>We estimate the weekly inflows to be US$359.9 million, led by information technology, health care, utilities sectors, and offset by financials, materials.</li>
<li>We highlight flows for Hygon Information Technology, Shanghai United Imaging Healthcare, BYD, CMB, Wuliangye, Midea, CATL.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of December 1st.
We estimate the weekly inflows to be US$359.9 million, led by information technology, health care, utilities sectors, and offset by financials, materials.
We highlight flows for Hygon Information Technology, Shanghai United Imaging Healthcare, BYD, CMB, Wuliangye, Midea, CATL.


Northbound Flows (Dec 1st): Hygon Information, Shanghai United Imaging Healthcare, BYD

China

Weichai Power Co., Ltd. specializes in the research and development, manufacturing and sales of diesel engines. The company's products are applicable to markets such as, heavy-duty vehicles, coaches, construction machines, vessels and power generator.

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Weichai Power Co Ltd H (2338 HK)

A-H Premium Weekly (Feb 2nd): Haier Smart, Wuxi Apptec, BOC, CGN Power, SMIC, Huaneng Power

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Haier Smart, Wuxi Apptec, BOC, CGN Power, SMIC, Huaneng...

Ke Yan, CFA, FRM

Capital Goods - HDT Sales Volume Surged ~64% YoY in Jan on Low Base

According to preliminary data from Cvworld, China HDT sales volume (domestic sales + exports) surged 64% YoY to ~80k units in Jan 2024

CMB International

Weichai Power (000338 CH) – 4Q23E Earnings Surged 31-71% YoY, Above Expectation

Weichai Power (Weichai) pre-announced last night (23 Jan) that net profit in 2023E is expected to surge 75-90% YoY to RMB8.58-9.32bn, which is...

CMB International

China Heavy Duty Truck – Multi-Cylinder Diesel Engine Sales +29% YoY in Dec

Weichai Power (2338 HK/000338 CH, BUY) delivered 27% YoY growth of multi-cylinder diesel engine sales volume in Dec 2023, similar to the industry...

CMB International

Northbound Flows (Dec 1st): Hygon Information, Shanghai United Imaging Healthcare, BYD

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Hygon Information Technology, Shanghai United...

Ke Yan, CFA, FRM

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