Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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>On 8th Mar 2022, Securities Exchange Commission (SEC) added five China ADR names to its provisional list of issuers under the Holding Foreign Companies Accountable Act (HFCAA).</li>
<li>There is nothing new about the list, on 2nd Dec 2021, SEC had issued final amendments to implement the HFCAA which had already spoken about the list and its implications.</li>
<li>In this note, we'll talk about the latest developments its possible timelines and implications.</li>
</ul>


On 8th Mar 2022, Securities Exchange Commission (SEC) added five China ADR names to its provisional list of issuers under the Holding Foreign Companies Accountable Act (HFCAA).
There is nothing new about the list, on 2nd Dec 2021, SEC had issued final amendments to implement the HFCAA which had already spoken about the list and its implications.
In this note, we'll talk about the latest developments its possible timelines and implications.


China ADRs Delisting - SEC Sets the Clock Ticking and Sends China ADRs Tripping

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nio-inc-2d526675-c878-4104-840f-87fed1735e85" target="_blank" data-smartkarma-citation="entities:35652:1" rel="noopener">NIO Inc (9866 HK)</a> is expected to list on the <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> tomorrow. Nearly 820m Class A shares are now held on the Hong Kong Share Register.</li>
<li>We do not expect <a href="https://www.smartkarma.com/entities/nio-inc-2d526675-c878-4104-840f-87fed1735e85" target="_blank" data-smartkarma-citation="entities:35652:1" rel="noopener">NIO Inc (9866 HK)</a> to get Fast Entry to the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI INDEX</a> and <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH INDEX</a>, though inclusion in the HSTECH could take place in June.</li>
<li>
<a href="https://www.smartkarma.com/entities/nio-inc-2d526675-c878-4104-840f-87fed1735e85" target="_blank" data-smartkarma-citation="entities:35652:1" rel="noopener">NIO Inc (9866 HK)</a> is not likely to get Fast Entry to the HSCI. The stock is not eligible for Southbound Stock Connect as a Secondary Listing.</li>
</ul>



NIO Inc (9866 HK) is expected to list on the HKEX (388 HK) tomorrow. Nearly 820m Class A shares are now held on the Hong Kong Share Register.
We do not expect NIO Inc (9866 HK) to get Fast Entry to the HSCEI INDEX and HSTECH INDEX, though inclusion in the HSTECH could take place in June.

NIO Inc (9866 HK) is not likely to get Fast Entry to the HSCI. The stock is not eligible for Southbound Stock Connect as a Secondary Listing.


NIO (9866 HK) Secondary Listing: HSTECH Inclusion in June Likely

Equity Capital Markets

<ul>
<li>NIO announced that it would look to list in the HK by way of introduction with trading set to begin on 10th March 2022.</li>
<li>Unlike a secondary or a dual primary listing, there will be no new capital raised and there will be no secondary shares sold either.</li>
<li>In this note we take a quick look at the deal dynamics.</li>
</ul>


NIO announced that it would look to list in the HK by way of introduction with trading set to begin on 10th March 2022.
Unlike a secondary or a dual primary listing, there will be no new capital raised and there will be no secondary shares sold either.
In this note we take a quick look at the deal dynamics.


China Specialist, Auto and Industrial Specialist

Victoria Li

Equity Bottom-Up

<ul>
<li>Short term interruption from chips and LFP battery shortage would be eased in 2H2022.</li>
<li>Xpeng’s monthly delivery would ramp up to 30,000 cars with the launch of G9 in 3Q2022.</li>
<li>We estimate Xpeng’s net profit will turn positive at the end of 2022, which would trigger further re-rating of the stock to HK$300 (or US$77).</li>
</ul>


Short term interruption from chips and LFP battery shortage would be eased in 2H2022.
Xpeng’s monthly delivery would ramp up to 30,000 cars with the launch of G9 in 3Q2022.
We estimate Xpeng’s net profit will turn positive at the end of 2022, which would trigger further re-rating of the stock to HK$300 (or US$77).


Thematic (Sector/Industry)

<ul>
<li>Short supply of LFP battery would not slow down the growth of EV sales. Only certain models might be affected short term.</li>
<li>However China’s increasing new COVID cases with its ‘zero tolerance’ measures is expected to results in an unprecedented decline in auto sales in worst scenario.</li>
<li>We suggest to stay with pure EV players (Xpeng) and wait for better entry point for ICE players (Geely).</li>
</ul>


Short supply of LFP battery would not slow down the growth of EV sales. Only certain models might be affected short term.
However China’s increasing new COVID cases with its ‘zero tolerance’ measures is expected to results in an unprecedented decline in auto sales in worst scenario.
We suggest to stay with pure EV players (Xpeng) and wait for better entry point for ICE players (Geely).


China

XPeng Inc. designs, produces, and distributes electric vehicles. The Company designs, develops, manufactures and markets smart smart electric vehicles, as well as finance, parts, and maintenance services. XPeng serves customers in China.

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XPeng (XPEV US)

China ADRs Delisting - SEC Sets the Clock Ticking and Sends China ADRs Tripping

On 8th Mar 2022, Securities Exchange Commission (SEC) added five China ADR names to its provisional list of issuers under the Holding Foreign...

Sumeet Singh

NIO (9866 HK) Secondary Listing: HSTECH Inclusion in June Likely

NIO is expected to list on the HKEX tomorrow as a Secondary Listing. We do not expect any passive inflows to the stock in the short-term. HSTECH...

Brian Freitas

NIO HK Listing - Ticking the Box

NIO announced that it would look to list in the HK by way of introduction with trading set to begin on 10th March 2022. In this note, we take a...

Sumeet Singh

Xpeng: Milestone Year Ahead

Short term interruption from chips and LFP battery shortage would be eased in 2H2022.Xpeng’s monthly delivery would ramp up to 30,000 cars with the...

Victoria Li

Chin Auto: Downward Risk from Lockdown

Short supply of LFP battery would not slow down the growth of EV sales. Only certain models might be affected short term.

Victoria Li

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