HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

China International Capital Corporation / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-international-capital-corporation-ltd" target="_blank" data-smartkarma-citation="entities:1071:1" rel="noopener">China International Capital Corporation (3908 HK)</a>'s 1H25 positive profit alert is encouraging, with 1H25 results growing by 55-78% YoY.  </li>
<li>YTD, CICC has a 59.5% share of the HK IPO market. The solid H-share IPO pipeline of A-share companies is beneficial, as this is its major area of strength.</li>
<li>Market consensus has underestimated its FY25 earnings, inflating its PER multiples. The current 51% discount of its H-share to A-share is just too steep (average 37.7%).</li>
</ul>



China International Capital Corporation (3908 HK)'s 1H25 positive profit alert is encouraging, with 1H25 results growing by 55-78% YoY.  
YTD, CICC has a 59.5% share of the HK IPO market. The solid H-share IPO pipeline of A-share companies is beneficial, as this is its major area of strength.
Market consensus has underestimated its FY25 earnings, inflating its PER multiples. The current 51% discount of its H-share to A-share is just too steep (average 37.7%).


CICC (3908 HK): It Is the Best of the Time

Thematic (Sector/Industry)

<ul>
<li>YTD, the share prices of the H-share IPOs of A-shares increased by an average of 30.2%, and the H-A discount narrowed by 14.8pp, but the range is wide.</li>
<li>The growth outlook, as reflected by the 3-year EPS CAGR, is the key driver for the performance and reduction in H-A share discounts.</li>
<li>Market cap, absolute PER multiples, and even relative PER ratios are not the major factors supporting their post-IPO performance.</li>
</ul>


YTD, the share prices of the H-share IPOs of A-shares increased by an average of 30.2%, and the H-A discount narrowed by 14.8pp, but the range is wide.
The growth outlook, as reflected by the 3-year EPS CAGR, is the key driver for the performance and reduction in H-A share discounts.
Market cap, absolute PER multiples, and even relative PER ratios are not the major factors supporting their post-IPO performance.


HK Strategy: How to Play the Future H IPOs of the As

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 Capital Markets

Fortior Technology (Shenzhen) / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/fortior-technology-shenzhen-co-ltd" target="_blank" data-smartkarma-citation="entities:44259:1" rel="noopener">Fortior Technology (Shenzhen) (688279 CH)</a>, a BLDC motor IC design company, raised around US$330m in its H-share listing.</li>
<li>Fortior Tech is an IC design company dedicated to the design and R&amp;D of BLDC motor control ICs.</li>
<li>In our previous note, we have looked at the past performance and likely A/H premium. In this note, we talk about the trading dynamics.</li>
</ul>



Fortior Technology (Shenzhen) (688279 CH), a BLDC motor IC design company, raised around US$330m in its H-share listing.
Fortior Tech is an IC design company dedicated to the design and R&amp;D of BLDC motor control ICs.
In our previous note, we have looked at the past performance and likely A/H premium. In this note, we talk about the trading dynamics.


Fortior Tech A/H Trading - Sluggish Demand

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lens-technology" target="_blank" data-smartkarma-citation="entities:45390:1" rel="noopener">Lens Technology (6613 HK)</a> priced its H Share at HK$18.18 to raise HK$4,768 million (US$607 million) in gross proceeds. The H Share will be listed tomorrow.</li>
<li>I discussed the H Share listing in <em><strong><a href="https://www.smartkarma.com/insights/lens-technology-h-share-listing-6613-hk-the-investment-case" target="_blank" data-smartkarma-citation="insights:191858" rel="noopener">Lens Technology H Share Listing (6613 HK): The Investment Case</a></strong></em>. </li>
<li>Lens had the fourth-highest international oversubscription rates among recent large AH listings. The AH discount is attractive in part due to the decent price momentum.</li>
</ul>



Lens Technology (6613 HK) priced its H Share at HK$18.18 to raise HK$4,768 million (US$607 million) in gross proceeds. The H Share will be listed tomorrow.
I discussed the H Share listing in Lens Technology H Share Listing (6613 HK): The Investment Case. 
Lens had the fourth-highest international oversubscription rates among recent large AH listings. The AH discount is attractive in part due to the decent price momentum.


Lens Technology H Share Listing (6613 HK): Trading Debut

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sicc-co-ltd" target="_blank" data-smartkarma-citation="entities:36273:1" rel="noopener">SICC (688234 CH)</a>, a manufacturer of high-quality SiC substrates, aims to raise around US$500m in its H-share listing.</li>
<li>As per Frost &amp; Sullivan, based on 2023 sales, SICC was the second largest manufacturer globally with a market share of 14.8%.</li>
<li>In this note, we look at its past performance and other deal dynamics that might impact the listing.</li>
</ul>



SICC (688234 CH), a manufacturer of high-quality SiC substrates, aims to raise around US$500m in its H-share listing.
As per Frost &amp; Sullivan, based on 2023 sales, SICC was the second largest manufacturer globally with a market share of 14.8%.
In this note, we look at its past performance and other deal dynamics that might impact the listing.


SICC A/H Listing - Past Growth Has Been Volatile

China

Zhejiang Sanhua Intelligent Controls Co.,Ltd. manufactures refrigeration and air conditioning electrical parts. The Company designs, produces, and sells four-way reversing valves, electronic expansion valves, solenoid valves, microchannel heat exchangers, omega pumps, and more. Sanhua Intelligent also produces automotive thermal components for vehicles.

Zhejiang Sanhua Intelligent Controls (2050 HK)

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Zhejiang Sanhua Intelligent Controls (2050 HK)

CICC (3908 HK): It Is the Best of the Time

CICC is alerting a strong 1H25 profit growth, leading in the HK IPO market with a promising H-share IPO pipeline of A-share companies. The market...

Osbert Tang, CFA

HK Strategy: How to Play the Future H IPOs of the As

H-share IPOs of A-shares have seen a 30.2% increase in share prices YTD, with a growth outlook driving performance and narrowing H-A discounts....

Osbert Tang, CFA

Fortior Tech A/H Trading - Sluggish Demand

Fortior Technology (Shenzhen) (688279 CH), a BLDC motor IC design company, raised around US$330m in its H-share listing. In this note, we talk...

Sumeet Singh

SICC A/H Listing - Past Growth Has Been Volatile

SICC (688234 CH), a manufacturer of high-quality SiC substrates, aims to raise around US$500m in its H-share listing. In this note, we look at the...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

CICC (3908 HK): It Is the Best of the Time

​CICC is alerting a strong 1H25 profit growth, leading in the HK IPO market with a promising H-share IPO pipeline of A-share companies. The market...

Osbert Tang, CFA

HK Strategy: How to Play the Future H IPOs of the As

​H-share IPOs of A-shares have seen a 30.2% increase in share prices YTD, with a growth outlook driving performance and narrowing H-A discounts....

Osbert Tang, CFA

Fortior Tech A/H Trading - Sluggish Demand

Fortior Technology (Shenzhen) (688279 CH), a BLDC motor IC design company, raised around US$330m in its H-share listing. In this note, we talk...

Sumeet Singh

Lens Technology H Share Listing (6613 HK): Trading Debut

Lens had the fourth-highest international oversubscription rates among recent large AH listings. The AH discount is attractive in part due to the...

Arun George

SICC A/H Listing - Past Growth Has Been Volatile

SICC (688234 CH), a manufacturer of high-quality SiC substrates, aims to raise around US$500m in its H-share listing. In this note, we look at the...

Sumeet Singh

CICC is alerting a strong 1H25 profit growth, leading in the HK IPO market with a promising H-share IPO pipeline of A-share companies. The market...

H-share IPOs of A-shares have seen a 30.2% increase in share prices YTD, with a growth outlook driving performance and narrowing H-A discounts....