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 142 stocks over the last week. The average A-H premium was 115.3% as of Dec 9th.</li>
<li>The average A-H premium changed by -2.6ppt weeok on week, led by health care, real estate, materials and offset by consumer discretionary, information technology.</li>
<li>We highlight weekly changes in A-H premium for Weichai Power, Shanghai Fudan, Guolian Securities, Joinn Lab, Great Wall Motor, Tsingtao Brewery.</li>
</ul>


We analyse the changes of A-H premium on 142 stocks over the last week. The average A-H premium was 115.3% as of Dec 9th.
The average A-H premium changed by -2.6ppt weeok on week, led by health care, real estate, materials and offset by consumer discretionary, information technology.
We highlight weekly changes in A-H premium for Weichai Power, Shanghai Fudan, Guolian Securities, Joinn Lab, Great Wall Motor, Tsingtao Brewery.


A-H Premium Weekly (Dec 9th): Weichai Power, Shanghai Fudan, Guolian, Joinn Lab, GWC, Tsingtao

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>We are turning more positive on the construction machinery &amp; heavy-duty truck (HDT) sector as we expect meaningful earnings recovery in 2023E (following the down-cycle since early 2021), underpinned by: (1) resilient overseas demand; (2) strong mining activities; (3) gradual reopening in China; (4) decline in freight rate and steel price.</li><li>Meanwhile, the supporting policies on property will serve as risk reduction factor for the sector.</li><li>Aerial work platform (AWP) is our most preferred subsector, followed by HDT, excavator and other machinery.</li></ul><p><em>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.</em></p>

We are turning more positive on the construction machinery &amp; heavy-duty truck (HDT) sector as we expect meaningful earnings recovery in 2023E (following the down-cycle since early 2021), underpinned by: (1) resilient overseas demand; (2) strong mining activities; (3) gradual reopening in China; (4) decline in freight rate and steel price.Meanwhile, the supporting policies on property will serve as risk reduction factor for the sector.Aerial work platform (AWP) is our most preferred subsector, followed by HDT, excavator and other machinery.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 Construction Machinery / HDT – 2023 Outlook

Equity Bottom-Up

Weichai Power Co Ltd H / Equity Bottom-Up

<ul><li>Weichai’s net profit in 3Q22 came in at RMB925mn, down 37% YoY (before restatement), which is below expectations.</li><li>Weichai’s 3Q results were hit by both the core business (engine + HDT) and the European business (KION Group, KGX GR).</li><li>We slash our earnings forecast in 2022E/23E/24E by 47%/40%/37% (34%/35%/31% below consensus).</li></ul><p><em>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.</em></p>

Weichai’s net profit in 3Q22 came in at RMB925mn, down 37% YoY (before restatement), which is below expectations.Weichai’s 3Q results were hit by both the core business (engine + HDT) and the European business (KION Group, KGX GR).We slash our earnings forecast in 2022E/23E/24E by 47%/40%/37% (34%/35%/31% below consensus).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-H (2338 HK) – Valuation Close to the Trough

<div><div><div><div><ul><li>Weichai’s net profit in 3Q22 came in at RMB925mn, down 37% YoY (before restatement), which is below expectations.</li><li>Weichai’s 3Q results were hit by both the core business (engine + HDT) and the European business (KION Group, KGX GR).</li><li>We slash our earnings forecast in 2022E/23E/24E by 47%/40%/37% (34%/35%/31% below consensus).</li></ul></div></div></div></div><p><em>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.</em></p>

Weichai Power-A (000338 CH) – Expect Further Earnings Cut by the Street

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cimc-enric-holdings-ltd" target="_blank" data-smartkarma-citation="entities:47:1" rel="noopener">Cimc Enric Holdings (3899 HK)</a> has an encouraging 1Q22 with 24.9% revenue growth. If not the impact of the pandemic and lockdowns in Mar, growth would even reach 35.2%.</li>
<li>Total new orders increased 23.2% in the quarter even in a period disrupted by lockdowns. Backlog stands at Rmb15.5bn, enough to fully cover FY22 revenue with 7% growth.</li>
<li>Hydrogen energy business, though still small, witnessed 80.5% revenue growth. Good demand drives new orders to Rmb105.4m; and its backlog of Rmb180m equals to 5x of 1Q22 revenue. </li>
</ul>



Cimc Enric Holdings (3899 HK) has an encouraging 1Q22 with 24.9% revenue growth. If not the impact of the pandemic and lockdowns in Mar, growth would even reach 35.2%.
Total new orders increased 23.2% in the quarter even in a period disrupted by lockdowns. Backlog stands at Rmb15.5bn, enough to fully cover FY22 revenue with 7% growth.
Hydrogen energy business, though still small, witnessed 80.5% revenue growth. Good demand drives new orders to Rmb105.4m; and its backlog of Rmb180m equals to 5x of 1Q22 revenue. 


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.

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Weichai Power (000338 CH)

A-H Premium Weekly (Dec 9th): Weichai Power, Shanghai Fudan, Guolian, Joinn Lab, GWC, Tsingtao

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Weichai Power, Shanghai Fudan, Guolian Securities, Joinn...

Ke Yan, CFA, FRM

China Construction Machinery / HDT – 2023 Outlook

We are turning more positive on the construction machinery & heavy-duty truck (HDT) sector as we expect meaningful earnings recovery in 2023E...

CMB International

Weichai Power-H (2338 HK) – Valuation Close to the Trough

We see potential earnings recovery in 2023E, driven by both the recovery of HDT (sensitive to GDP growth) and agricultural machinery engine (import...

CMB International

Weichai Power-A (000338 CH) – Expect Further Earnings Cut by the Street

Weichai’s 3Q results were hit by both the core business (engine + HDT) and the European business (KION Group, KGX GR). We slash our earnings...

CMB International

CIMC Enric (3899 HK): A Favourable Start

CIMC Enric has a good 1Q22 revenue and new order growth; and should there be no disruption from the pandemic, they will even be higher. Hydrogen...

Osbert Tang, CFA

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