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>Based on the latest updates, it's still uncertain to see a positive turnaround.There've been no effective ways to evade.Debate about restricting Chinese biopharmaceuticals has never gone away in US politics.</li>
<li>Nobody can say with 100% certainty whether the Bill will be passed/how much impact it will have. Until the dust settles, any rebound in share prices is difficult to sustain.</li>
<li>The market is preparing for the worst-case scenario, but if the final Bill is less stringent than expected, shares of WuXi AppTec and its subsidiaries would rebound.Here're different bottom-fishing strategies.</li>
</ul>


Based on the latest updates, it's still uncertain to see a positive turnaround.There've been no effective ways to evade.Debate about restricting Chinese biopharmaceuticals has never gone away in US politics.
Nobody can say with 100% certainty whether the Bill will be passed/how much impact it will have. Until the dust settles, any rebound in share prices is difficult to sustain.
The market is preparing for the worst-case scenario, but if the final Bill is less stringent than expected, shares of WuXi AppTec and its subsidiaries would rebound.Here're different bottom-fishing strategies.


Latest Impact of the US Biosecure Act on WuXi AppTec/WuXi Bio/WuXi XDC - China CXO Really Game Over?

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

Index Rebalance

<ul>
<li>There are 25 adds and 29 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents down to 514.</li>
<li>We expect 21 of the 25 HSCI inclusions to be added to Stock Connect while we expect 27 of the 29 HSCI deletions to be removed from Southbound Stock Connect.</li>
<li>Since the start of the year, shares held though Southbound Connect have increased on 22 of the 29 HSCI deletions and there could be some unwinding in the weeks ahead.</li>
</ul>


There are 25 adds and 29 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents down to 514.
We expect 21 of the 25 HSCI inclusions to be added to Stock Connect while we expect 27 of the 29 HSCI deletions to be removed from Southbound Stock Connect.
Since the start of the year, shares held though Southbound Connect have increased on 22 of the 29 HSCI deletions and there could be some unwinding in the weeks ahead.


HSCI Index Rebalance: 25 Adds, 29 Deletes & Changes to Southbound Stock Connect

<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"?

China

WuXi XDC is a leading global Contract Research, Development, and Manufacturing Organization (CRDMO) specializing in antibody-drug conjugates (ADCs) and other bioconjugates. The company offers integrated, end-to-end services for the discovery, process development, and GMP manufacturing of bioconjugates, monoclonal antibody intermediates, and payload-linkers. WuXi XDC was founded in 2013 and is headquartered in Wuxi, China.

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WuXi XDC (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

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

Due to geopolitical conflicts, there is “a hesitation” towards sustained high growth of WuXi XDC. This helps explain why WuXi XDC posted high...

Xinyao (Criss) Wang

Latest Impact of the US Biosecure Act on WuXi AppTec/WuXi Bio/WuXi XDC - China CXO Really Game Over?

Rally of WuXi AppTec/its subsidiaries is due to the news that Biden's order could reduce pressure on Democrats to support legislation targeting...

Xinyao (Criss) Wang

HSCI Index Rebalance: 25 Adds, 29 Deletes & Changes to Southbound Stock Connect

There are 25 adds and 29 deletes for the HSCI in March. 21 stocks will be added to Stock Connect while 27 will be deleted. Positions via the...

Brian Freitas

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

WuXi XDC's share price rebounded quickly after a brief correction. Considering that a certain part of WuXi Bio's significant increase in new orders...

Xinyao (Criss) Wang

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