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 150 stocks over the last week. The average A-H premium was 104.8% as of Nov 15th.</li>
<li>The average A-H premium changed by 6.9ppt week-on-week, led by financials, information technology, consumer discretionary and offset by communication services.</li>
<li>We highlight weekly changes in A-H premium for Chalco, CICC, HUAHONG GROUP, CanSinoBIO.</li>
</ul>


We analyse the changes of A-H premium on 150 stocks over the last week. The average A-H premium was 104.8% as of Nov 15th.
The average A-H premium changed by 6.9ppt week-on-week, led by financials, information technology, consumer discretionary and offset by communication services.
We highlight weekly changes in A-H premium for Chalco, CICC, HUAHONG GROUP, CanSinoBIO.


A-H Premium Weekly (Nov 15th):Chalco, CICC, HUAHONG GROUP, CanSinoBIO

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>Three companies reported their 3Q24 results last night (30 Oct).</li><li>SANY Heavy reported better-than-expected earnings driven by strong revenue growth (+19% YoY), while Zoomlion’s profit is below our expectation as strong overseas sales were more than offset by weak China performance.</li><li>Weichai Power reported profit decrease (-4% YoY), but is largely in-line with expectation given the weak HDT and 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.

Three companies reported their 3Q24 results last night (30 Oct).SANY Heavy reported better-than-expected earnings driven by strong revenue growth (+19% YoY), while Zoomlion’s profit is below our expectation as strong overseas sales were more than offset by weak China performance.Weichai Power reported profit decrease (-4% YoY), but is largely in-line with expectation given the weak HDT and 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.

Capital Goods - 3Q24 Earnings Review: SANY Heavy Beat; Zoomlion Missed; Weichai In-Line

<ul><li>We revise down our 2024E/25E heavy-duty truck (HDT) sales forecast by 10%/5% to 856k/ 954k units, following our cut in forecast in Aug, due to further deterioration of HDT demand over the last two months.</li><li>We now expect 5% YoY decline in HDT sales (China sales + exports) in 2024E, followed by 10%/9% recovery in 2025E/26E.</li><li>We are cautious on export market as Russia, the major market for Chinese trucks, will likely see further decline due to high base and impact of high tax recycling tax (starting in Oct).</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.

We revise down our 2024E/25E heavy-duty truck (HDT) sales forecast by 10%/5% to 856k/ 954k units, following our cut in forecast in Aug, due to further deterioration of HDT demand over the last two months.We now expect 5% YoY decline in HDT sales (China sales + exports) in 2024E, followed by 10%/9% recovery in 2025E/26E.We are cautious on export market as Russia, the major market for Chinese trucks, will likely see further decline due to high base and impact of high tax recycling tax (starting in Oct).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 - Headwinds in 4Q24 in Both China & Export; Eyes on Policy-Driven Recovery in 2025

Equity Bottom-Up

<ul><li>We trim our HDT engine sales volume forecast by 7%/7%2% in 2024E/25E/26E, after incorporating our new industry HDT sales forecast (for details, please refer to our sector report “China Heavy-duty Truck – Headwinds in 4Q24 in both China &amp; export; Eyes on policy-driven recovery in 2025”). In the near term, we believe the narrowed LNG/diesel price spread will be unfavourable to Weichai’s gas engine segment.</li><li>While our earnings forecast in 2024E-26E is only revised down by 1-3% due to a relatively solid margin outlook, our new forecasts suggest profit growth to decelerate from 51% in 1H24 to 7%/2% in 2H24E/2025E.</li><li>Our SOTP-based TP for A/H (rolled over to 2025E) is revised down to RMB17.9/HK$17.7 (from RMB18.0/HK$19.5). </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.

We trim our HDT engine sales volume forecast by 7%/7%2% in 2024E/25E/26E, after incorporating our new industry HDT sales forecast (for details, please refer to our sector report “China Heavy-duty Truck – Headwinds in 4Q24 in both China &amp; export; Eyes on policy-driven recovery in 2025”). In the near term, we believe the narrowed LNG/diesel price spread will be unfavourable to Weichai’s gas engine segment.While our earnings forecast in 2024E-26E is only revised down by 1-3% due to a relatively solid margin outlook, our new forecasts suggest profit growth to decelerate from 51% in 1H24 to 7%/2% in 2H24E/2025E.Our SOTP-based TP for A/H (rolled over to 2025E) is revised down to RMB17.9/HK$17.7 (from RMB18.0/HK$19.5). 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) - Still Positive, but Wait for a Better Entry Point After 3Q24E Results

<ul><li>The HK market had a strong run over the past two weeks following the dramatic policy changes announced by the Chinese government.</li><li>In order to have a closer look at the sources of buying forces, we analysed ~13,000 data points of shareholdings over the past nine settlement days (23 Sep - 4 Oct on T+2 basis) for four HK-listed names under our coverage, namely Weichai PowerH (2338 HK, BUY), Zoomlion-H (1157 HK, BUY), SANYI (631 HK, BUY) and Sinotruk (3808 HK, HOLD). Our analysis is based on CCASS data, which represented brokers’ holdings on behalf of clients.</li><li>We divided ~380 brokers into six categories: (1) Hong Kong, (2) the Chinese mainland, (3) Stock connect, (4) the US, (5) Europe and (6) other foreign brokers (excluding the US and Europe). </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.

The HK market had a strong run over the past two weeks following the dramatic policy changes announced by the Chinese government.In order to have a closer look at the sources of buying forces, we analysed ~13,000 data points of shareholdings over the past nine settlement days (23 Sep - 4 Oct on T+2 basis) for four HK-listed names under our coverage, namely Weichai PowerH (2338 HK, BUY), Zoomlion-H (1157 HK, BUY), SANYI (631 HK, BUY) and Sinotruk (3808 HK, HOLD). Our analysis is based on CCASS data, which represented brokers’ holdings on behalf of clients.We divided ~380 brokers into six categories: (1) Hong Kong, (2) the Chinese mainland, (3) Stock connect, (4) the US, (5) Europe and (6) other foreign brokers (excluding the US and Europe). 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 - Who Are Buying/Selling the Sector?

China

Weichai Power Co., Ltd. specializes in the research and development, manufacturing and sales of vehicles and parts. The Company produces engines, heavy vehicles, light vehicles, construction machinery, hydraulic products, automotive electronics, and related parts. Weichai Power markets its products across worldwide.

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

Weichai Power (000338 CH)

A-H Premium Weekly (Nov 15th):Chalco, CICC, HUAHONG GROUP, CanSinoBIO

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Chalco, CICC, HUAHONG GROUP, CanSinoBIO.

Ke Yan, CFA, FRM

Capital Goods - 3Q24 Earnings Review: SANY Heavy Beat; Zoomlion Missed; Weichai In-Line

SANY Heavy reported better-than-expected earnings driven by strong revenue growth (+19% YoY), while Zoomlion’s profit is below our expectation

CMB International

Capital Goods - Headwinds in 4Q24 in Both China & Export; Eyes on Policy-Driven Recovery in 2025

We revise down our 2024E/25E heavy-duty truck (HDT) sales forecast by 10%/5% to 856k/ 954k units, following our cut in forecast in Aug, due to...

CMB International