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.

Equity Bottom-Up

<ul>
<li>Giant Biogene was listed in Hong Kong IPO in 2022. It has done well since and is now trading 45% above its IPO price, but its still cheap.</li>
<li>GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.</li>
<li>In this note, we will talk about the company’s past performance and future prospects.</li>
</ul>


Giant Biogene was listed in Hong Kong IPO in 2022. It has done well since and is now trading 45% above its IPO price, but its still cheap.
GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
In this note, we will talk about the company’s past performance and future prospects.


2024 High Conviction - Giant Biogene - Growth Rate Keeps Moving Higher

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>Chinese restaurant sector could see 15% YoY revenue growth in Q1 2023, as Total Retail Sales of Meals in China rose 16.4% YoY during Jan-Feb 2023.</li>
<li>
<a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings Inc (9987 HK)</a>'s 1Q23 OP may reach a record high of $350m, and annual profitability is expected to double as restaurant footfall recovers.</li>
<li>We suggest buying Yum China for potential multiple expansion due to rapid profitability growth.</li>
</ul>


Chinese restaurant sector could see 15% YoY revenue growth in Q1 2023, as Total Retail Sales of Meals in China rose 16.4% YoY during Jan-Feb 2023.

Yum China Holdings Inc (9987 HK)'s 1Q23 OP may reach a record high of $350m, and annual profitability is expected to double as restaurant footfall recovers.
We suggest buying Yum China for potential multiple expansion due to rapid profitability growth.


Yum China: Looking Delicious with Record Profits Expected in 1Q23 and Potential for Further Growth

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

KraneShares CSI China Internet ETF / Event-Driven

<ul>
<li>The PCAOB has not, despite a cooperation agreement with the CSRC signed in 2013, been able to conduct on-site investigations of a HK or mainland-based company since 2010.</li>
<li>On Friday, the CSRC published a new Strengthening Confidentiality and File Management Related to Overseas Issuance to replace 2009 rules. </li>
<li>Importantly, the revised Provisions deletes the stipulation that “on-site inspections shall be dominated by domestic regulators or depend on the conclusions of inspections by domestic regulators.” Will it be enough?</li>
</ul>


The PCAOB has not, despite a cooperation agreement with the CSRC signed in 2013, been able to conduct on-site investigations of a HK or mainland-based company since 2010.
On Friday, the CSRC published a new Strengthening Confidentiality and File Management Related to Overseas Issuance to replace 2009 rules. 
Importantly, the revised Provisions deletes the stipulation that “on-site inspections shall be dominated by domestic regulators or depend on the conclusions of inspections by domestic regulators.” Will it be enough?


New CSRC "Provisions" Take a Step Towards Meeting PCAOB Requirements

China and US Equity Analyst

Roger Xie

<ul>
<li>
<a href="https://www.smartkarma.com/entities/yum-china-holdings-inc" target="_blank" data-smartkarma-citation="entities:23677:1" rel="noopener">Yum China Holdings, Inc (YUMC US)</a> delivered 21Q1 result better than market expectation. Helped by a low base for comparison (Pandemic peak in China in 20Q1), Yum China revenue is up 46% year-over-year or 11% vs 19Q1, operating profit is up 250% year-over-year or 13% vs 19Q1. The positive surprise is that Pizza Hut is starting to fully reap the benefits of multiple years of revitalization efforts. Pizza Hut's restaurant delivered margin of 15.3% in 21Q1 (the highest level since 2017), which drives operating profit up 20% vs 19Q1. </li>
<li>Yum China management expects non-linear recovery of SSS (<em>Same Store Sale</em>) as dine-in traffic still well below 2019 level. The resurgence of COVID-19 cases early this year has put Chinese restaurant sector under pressure. Several cities have returning to citywide quarantines, and travel volume during the early period of Chinese New Year is down 70%. Given Yum China's resilience in its KFC brand and the faster recovery in Pizza Hut, we feel more confident that the company can sustain a midteens restaurant margin over the next few years and even achieve high teens over the longer period. </li>
<li>Management's guidance on growth strategy also shows Yum China's agility to navigate through the uncertainty. 1) Yum China is dedicated to opening another 1,000 stores in 2021, and reach around more than 11,000 stores in China by year end; 2) Growing its portfolio to include diversified restaurant offerings; 3) Digital strategy: Delivery and takeaway now account for 55%/40% of KFC/PH revenue. We continue to believe <a href="https://www.smartkarma.com/entities/yum-china-holdings-inc" target="_blank" data-smartkarma-citation="entities:23677:1" rel="noopener">Yum China Holdings, Inc (YUMC US)</a> offers investors better reward/risk potential in China restaurant sector. Our raised TP for Yum Chin is US$72, which is based on 30x 2021e P/E. </li>
</ul>



Yum China Holdings, Inc (YUMC US) delivered 21Q1 result better than market expectation. Helped by a low base for comparison (Pandemic peak in China in 20Q1), Yum China revenue is up 46% year-over-year or 11% vs 19Q1, operating profit is up 250% year-over-year or 13% vs 19Q1. The positive surprise is that Pizza Hut is starting to fully reap the benefits of multiple years of revitalization efforts. Pizza Hut's restaurant delivered margin of 15.3% in 21Q1 (the highest level since 2017), which drives operating profit up 20% vs 19Q1. 
Yum China management expects non-linear recovery of SSS (Same Store Sale) as dine-in traffic still well below 2019 level. The resurgence of COVID-19 cases early this year has put Chinese restaurant sector under pressure. Several cities have returning to citywide quarantines, and travel volume during the early period of Chinese New Year is down 70%. Given Yum China's resilience in its KFC brand and the faster recovery in Pizza Hut, we feel more confident that the company can sustain a midteens restaurant margin over the next few years and even achieve high teens over the longer period. 
Management's guidance on growth strategy also shows Yum China's agility to navigate through the uncertainty. 1) Yum China is dedicated to opening another 1,000 stores in 2021, and reach around more than 11,000 stores in China by year end; 2) Growing its portfolio to include diversified restaurant offerings; 3) Digital strategy: Delivery and takeaway now account for 55%/40% of KFC/PH revenue. We continue to believe Yum China Holdings, Inc (YUMC US) offers investors better reward/risk potential in China restaurant sector. Our raised TP for Yum Chin is US$72, which is based on 30x 2021e P/E. 


Yum China (YUMC and 9987.HK): Pizza Hut Recovered Faster than Market Expectation

China

Yum China Holdings, Inc. operates chain restaurants. The Company offers pizza, entrees, pasta, rice dishes, appetizers, soups, vegetables, beverages, and desserts. Yum China Holding conducts its business worldwide.

Yum China Holdings (YUMC US)

2024 High Conviction - Giant Biogene - Growth Rate Keeps Moving Higher

Giant Biogene was listed in Hong Kong IPO in 2022. It has done well since and is now trading 45% above its IPO price, but its still cheap.

Sumeet Singh

Yum China: Looking Delicious with Record Profits Expected in 1Q23 and Potential for Further Growth

Yum China's 1Q23 OP may reach a record high of $350m, and annual profitability is expected to double. Consider buying Yum China for potential...

Oshadhi Kumarasiri

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

New CSRC "Provisions" Take a Step Towards Meeting PCAOB Requirements

CSRC has published new Provisions putting the onus of info management on companies, making it easier for the PCAOB to conduct on-site audits. It...

Travis Lundy

Yum China (YUMC and 9987.HK): Pizza Hut Recovered Faster than Market Expectation

The biggest earning surprise is that Pizza Hut is starting to fully reap the benefits of multiple years of revitalization efforts. We raise TP for...

Roger Xie