APAC IPOs & Placements

Zhen Zhou, Toh

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.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> is looking to raise up to about US$3.6bn in its accelerated primary placement. In this note, we take a look at deal dynamics, December auto sales, and run the deal through our ECM framework.

BYD (1211 HK) is looking to raise up to about US$3.6bn in its accelerated primary placement. In this note, we take a look at deal dynamics, December auto sales, and run the deal through our ECM framework.

BYD (比亚迪汽车) Placement - A Well Anticipated Placement with Strong Momentum

China Specialist, Auto and Industrial Specialist

Victoria Li

Equity Bottom-Up

We see more risks to the NIO story from the information given NIO Day on 9th Jan. Sooner rather than later, NIO's monthly car delivery would be overtaken by Xpeng and Li Auto - and that would be the start point of its share performance weakness.NIO has no new car model this year. This would be a risk to the company's market share, while Tesla Shanghai's Model Y and Xpeng P5 would definitely gain market share. eT7, the first sedan of NIO to be delivered in 1Q2021, is almost twice as expensive as Xpeng P7, with very close performance and looks. This makes eT7 difficult to have big sales volume.Promised solid-state battery with1000km NEDC range is still under R&amp;D and  would not come until 4Q2020. NIO cars NEDC range would remain shorter than its peers for at least another two years.What exactly NAD could do is unclear. Only information about NAD is that the hardware employed would have 7 times TOPs as Tesla's. While Xpeng's navigated autopilot (NGP) is coming in 1Q2021 with great feedback on its trial version.Second generation battery swap station doubled battery capacity, but the overall station network build-up would remain behind original schedule.

We see more risks to the NIO story from the information given NIO Day on 9th Jan. Sooner rather than later, NIO's monthly car delivery would be overtaken by Xpeng and Li Auto - and that would be the start point of its share performance weakness.NIO has no new car model this year. This would be a risk to the company's market share, while Tesla Shanghai's Model Y and Xpeng P5 would definitely gain market share. eT7, the first sedan of NIO to be delivered in 1Q2021, is almost twice as expensive as Xpeng P7, with very close performance and looks. This makes eT7 difficult to have big sales volume.Promised solid-state battery with1000km NEDC range is still under R&amp;D and  would not come until 4Q2020. NIO cars NEDC range would remain shorter than its peers for at least another two years.What exactly NAD could do is unclear. Only information about NAD is that the hardware employed would have 7 times TOPs as Tesla's. While Xpeng's navigated autopilot (NGP) is coming in 1Q2021 with great feedback on its trial version.Second generation battery swap station doubled battery capacity, but the overall station network build-up would remain behind original schedule.

If Tesla (TSLA US) is the Apple(AAPL US) of EV sector, Xpeng might be the Xiaomi(XIACY US), in our view. In the short term (before the launch of P5 ), lower prices of new Made in China Tesla Model 3 might have negative impact on P7 sales; but increasing client interest on Tesla would benefit Xpeng P7. On a 10 year view, Xpeng would be the winner among existing Top three Chinese emerging EV brands, by being a follower of Tesla (focusing on making EVs 'smart')Xpeng might turn profitable in 2022 with increasing awareness and acceptance by the customers, launch of P5 and first B-segment SUV. Reiterate BUY with 12M target price of US$71.

If Tesla (TSLA US) is the Apple(AAPL US) of EV sector, Xpeng might be the Xiaomi(XIACY US), in our view. In the short term (before the launch of P5 ), lower prices of new Made in China Tesla Model 3 might have negative impact on P7 sales; but increasing client interest on Tesla would benefit Xpeng P7. On a 10 year view, Xpeng would be the winner among existing Top three Chinese emerging EV brands, by being a follower of Tesla (focusing on making EVs 'smart')Xpeng might turn profitable in 2022 with increasing awareness and acceptance by the customers, launch of P5 and first B-segment SUV. Reiterate BUY with 12M target price of US$71.

Equity Research in HK and Mainland China

Li Tang

Thematic (Sector/Industry)

Ministry of Finance released the NEV subsidy program for 2021, cutting them by 20% compared to the 2020 level for private purchases Xinhua reported. The subsidy for NEVs designated for public sector use, including buses, taxi, logistics, postal vehicles and public fleets, will be cut by 10% in 2021 from the 2020 level, coming into effect on 1 January 2021. The subsidies are dependent on a range of indicators including driving range and battery density.
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China has bet big on NEVs as a strategically important industry, the government has five essential policy support tools for NEVs include reduced taxes, direct subsidies to manufacturers, consumer subsidies, mandated government procurements.
We are still positive on NEV makers (<a href="https://www.smartkarma.com/entities/li-auto-inc" target="_blank" rel="noopener">Li Auto Inc. (LI US)</a> , <a href="https://www.smartkarma.com/entities/nio-inc" target="_blank" data-smartkarma-citation="entities:27399:1" rel="noopener">NIO Inc (NIO US)</a> and <a href="https://www.smartkarma.com/entities/xpeng-motors" target="_blank" data-smartkarma-citation="entities:29217:1" rel="noopener">Xpeng Motors (XPEV US)</a>) and NEV charging infrastructure (<a href="https://www.smartkarma.com/entities/china-titans-energy-technology-group-co" target="_blank" data-smartkarma-citation="entities:3953:1" rel="noopener">China Titans Energy Technology Group Co (2188 HK)</a> ,  <a href="https://www.smartkarma.com/entities/ten-pao-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27241:1" rel="noopener">Ten Pao Group Holdings Ltd (1979 HK)</a> as both segments stand to gain from an improvement in NEV sales after NEV sales lagged the recovery in traditional auto sales, and with local governments providing various support measures.
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Ministry of Finance released the NEV subsidy program for 2021, cutting them by 20% compared to the 2020 level for private purchases Xinhua reported. The subsidy for NEVs designated for public sector use, including buses, taxi, logistics, postal vehicles and public fleets, will be cut by 10% in 2021 from the 2020 level, coming into effect on 1 January 2021. The subsidies are dependent on a range of indicators including driving range and battery density.

China has bet big on NEVs as a strategically important industry, the government has five essential policy support tools for NEVs include reduced taxes, direct subsidies to manufacturers, consumer subsidies, mandated government procurements.
We are still positive on NEV makers (Li Auto Inc. (LI US) , NIO Inc (NIO US) and Xpeng Motors (XPEV US)) and NEV charging infrastructure (China Titans Energy Technology Group Co (2188 HK) ,  Ten Pao Group Holdings Ltd (1979 HK) as both segments stand to gain from an improvement in NEV sales after NEV sales lagged the recovery in traditional auto sales, and with local governments providing various support measures.


China Will Reduce Its Subsidies for Regular New Energy Vehicles by 20% in 2021

China will focus on strengthening strategic scientific and technological capabilities, ensuring the control of supply chains and expand domestic demand in 2021, according to a statement released after the Central Economic Work Conference (CEWC) concluded on 18 December.The Central Economic Work Conference is one of the key events in the governing of China because it sets out the economic, financial and banking priorities for the coming year.Priority economic work for 2021:Strengthen national strategic science and technology power.Macro-Policy for 2021: Overall, avoid making a sharp turn.Increasing domestic demand: Implemented a dual cycle development model, push demand-side reform, a balanced approach between investment and consumption.Monetary policy: continuity rather than credit tightening Money supply: Basically in line with nominal GDP growth Anti-monopoly policy: a balanced approach to tech company regulations Housing policy: softer tone than expected Gradual approach on leverage: to maintain the macro leverage ratio stable (probably not going for a reduction in 2021) We believe meeting increasing urgency about developing Chinese competitors in electric cars, telecoms, biotech, Semiconductors, AI ,5G and other fields as a path to prosperity and global influence. China wants to reduce reliance on foreign suppliers, which it sees as a strategic weakness.

China will focus on strengthening strategic scientific and technological capabilities, ensuring the control of supply chains and expand domestic demand in 2021, according to a statement released after the Central Economic Work Conference (CEWC) concluded on 18 December.The Central Economic Work Conference is one of the key events in the governing of China because it sets out the economic, financial and banking priorities for the coming year.Priority economic work for 2021:Strengthen national strategic science and technology power.Macro-Policy for 2021: Overall, avoid making a sharp turn.Increasing domestic demand: Implemented a dual cycle development model, push demand-side reform, a balanced approach between investment and consumption.Monetary policy: continuity rather than credit tightening Money supply: Basically in line with nominal GDP growth Anti-monopoly policy: a balanced approach to tech company regulations Housing policy: softer tone than expected Gradual approach on leverage: to maintain the macro leverage ratio stable (probably not going for a reduction in 2021) We believe meeting increasing urgency about developing Chinese competitors in electric cars, telecoms, biotech, Semiconductors, AI ,5G  and other fields as a path to prosperity and global influence. China wants to reduce reliance on foreign suppliers, which it sees as a strategic weakness.

China Central Economic Work Conference: "Strengthen National Strategic Science and Technology Power"

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)

BYD (比亚迪汽车) Placement - A Well Anticipated Placement with Strong Momentum

BYD (1211 HK) is looking to raise up to about US$3.6bn in its primary placement. In this note, we take a look at deal dynamics, December auto...

Zhen Zhou, Toh

NIO: NIO Day Unveils Downside Risks

We see more risks to the NIO story from the information given NIO Day on 9th Jan. Sooner rather than later, NIO's monthly car delivery would be...

Victoria Li

Xpeng: The Next Xiaomi?

If Tesla (TSLA US) is the Apple(AAPL US) of EV sector, Xpeng might be the Xiaomi(XIACY US), in our view. Reiterate BUY with 12M TP of US$71.

Victoria Li

China Will Reduce Its Subsidies for Regular New Energy Vehicles by 20% in 2021

China Cuts Nev Subsidy in 2021,looking ahead from a policy perspective, removing local subsidies after 2022 should lead to greater consolidation in...

Li Tang

China Central Economic Work Conference: "Strengthen National Strategic Science and Technology Power"

China will focus on strengthening strategic scientific and technological capabilities, ensuring the control of supply chains and expand domestic...

Li Tang

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