APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

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.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wuxi-xdc-cayman-inc" target="_blank" data-smartkarma-citation="entities:39917:1" rel="noopener">WuXi XDC Cayman (2268 HK)</a> was listed in Hong Kong on 17th Nov 2023 after raising US$470m. Its six-month lockup will expire on 16th May 2024.</li>
<li>WuXi XDC Cayman (WXDC) is a contract research, development, and manufacturing organization (CRDMO) focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.</li>
<li>In this note, we will talk about the lock-up dynamics and updates since our last note.</li>
</ul>



WuXi XDC Cayman (2268 HK) was listed in Hong Kong on 17th Nov 2023 after raising US$470m. Its six-month lockup will expire on 16th May 2024.
WuXi XDC Cayman (WXDC) is a contract research, development, and manufacturing organization (CRDMO) focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
In this note, we will talk about the lock-up dynamics and updates since our last note.


Wuxi XDC Lock-Up - US$300m Lockup Expiry Could See Some Selling Owing to the Regulatory Overhang

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Theoretically, there’s no need to doubt WuXi XDC's growth momentum. What needs to be proven is how large the actual ADC market is, which determines how much valuation it deserves.</li>
<li>However, the biggest problem currently is geopolitical risks, which make performance forecasts groundless. In the context of Sino-US confrontation, there is “a hesitation” towards sustained high growth of WuXi XDC.</li>
<li>If several pieces of news are put together, this is not just about China CXO/TikTok being sanctioned by US. New balance point in the game between great powers will emerge.</li>
</ul>


Theoretically, there’s no need to doubt WuXi XDC's growth momentum. What needs to be proven is how large the actual ADC market is, which determines how much valuation it deserves.
However, the biggest problem currently is geopolitical risks, which make performance forecasts groundless. In the context of Sino-US confrontation, there is “a hesitation” towards sustained high growth of WuXi XDC.
If several pieces of news are put together, this is not just about China CXO/TikTok being sanctioned by US. New balance point in the game between great powers will emerge.


WuXi XDC Cayman (2268.HK) - Don't Rush to Bottom Fish This Stock

<ul>
<li>WuXi XDC looks like “an outlier” among domestic CXOs - Its share price has performed well so far. As a niche player, WuXi XDC’s short-term performance growth is relatively guaranteed.</li>
<li>We analyzed the valuation of <a href="https://www.smartkarma.com/entities/wuxi-xdc-cayman-inc" target="_blank" data-smartkarma-citation="entities:39917:1" rel="noopener">WuXi XDC Cayman (2268 HK)</a> under different scenarios. How much upside WuXi XDC’s valuation would have depends on the future real market size of ADCs.</li>
<li>We’re conservative about whether we could have a US$50 billion ADC market. The "lucky" part for WuXi XDC is the current ADC market brings "a safe window period" for investors.</li>
</ul>


WuXi XDC looks like “an outlier” among domestic CXOs - Its share price has performed well so far. As a niche player, WuXi XDC’s short-term performance growth is relatively guaranteed.
We analyzed the valuation of WuXi XDC Cayman (2268 HK) under different scenarios. How much upside WuXi XDC’s valuation would have depends on the future real market size of ADCs.
We’re conservative about whether we could have a US$50 billion ADC market. The "lucky" part for WuXi XDC is the current ADC market brings "a safe window period" for investors.


WuXi XDC Cayman (2268.HK) - Would It Be An "Oasis in the Desert"?

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>We see 30 potential adds (including plenty of new listings) and 28 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in March.</li>
<li>We expect 26 stocks to be added to Southbound Stock Connect following the rebalance while 25 stocks could be deleted from the trading link and become Sell-only.</li>
<li>There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.</li>
</ul>


We see 30 potential adds (including plenty of new listings) and 28 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in March.
We expect 26 stocks to be added to Southbound Stock Connect following the rebalance while 25 stocks could be deleted from the trading link and become Sell-only.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.


HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March

Equity Capital Markets

WuXi XDC Cayman  / Equity Capital Markets

<ul>
<li>WuXi XDC's shares surged since IPO. Obviously, ADC industry is in a "honeymoon period". The market is optimistic about ADC due to high certainty and growth visibility in short term.</li>
<li>Pharmaceutical companies believe this platform would produce blockbuster products continuously. However, if there’s any “persuasive event” to change optimistic expectations on ADC, it's time for investors to reconsider WuXi XDC.</li>
<li>“Positive sentiment + non-falsifiable short-term logic” would indeed push WuXi XDC's shares to a new high. As long as sales of major ADCs are in line with expectations, party continues.</li>
</ul>


WuXi XDC's shares surged since IPO. Obviously, ADC industry is in a "honeymoon period". The market is optimistic about ADC due to high certainty and growth visibility in short term.
Pharmaceutical companies believe this platform would produce blockbuster products continuously. However, if there’s any “persuasive event” to change optimistic expectations on ADC, it's time for investors to reconsider WuXi XDC.
“Positive sentiment + non-falsifiable short-term logic” would indeed push WuXi XDC's shares to a new high. As long as sales of major ADCs are in line with expectations, party continues.


WuXi XDC (2268.HK) - How Long Will the Rally Last?

China

WuXi XDC Cayman Inc. operates as a leading contract testing, development and manufacturing organization focused on the global antibody drug conjugates and broader bioconjugate market. The Company provides bioconjugation discovery, analytical development, intermediate and conjugation manufacturing, and other services. WuXi XDC Cayman provides its services worldwide.

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WuXi XDC Cayman (2268 HK)

Wuxi XDC Lock-Up - US$300m Lockup Expiry Could See Some Selling Owing to the Regulatory Overhang

WuXi XDC Cayman (2268 HK) was listed in Hong Kong on 17th Nov 2023 after raising US$470m. Its six-month lockup will expire on 16th May 2024.

Clarence Chu