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

<div>
<p>Trip.com raised around US$1.2bn in its secondary listing in Hong Kong.</p>
<p>We have covered the background of the deal in our earlier notes:</p>
<ul>
<li>
<a href="https://www.smartkarma.com/insights/trip-com-secondary-listing-probably-needs-to-correct" target="_blank" rel="noopener">Trip.com Secondary Listing - Probably Needs to Correct,</a> and</li>
<li><a href="https://www.smartkarma.com/insights/trip-com-secondary-listing-quick-take-doing-the-bare-minimum-needs-some-more-correction" target="_blank" rel="noopener">Trip.com Secondary Listing Quick Take - Doing the Bare Minimum - Needs Some More Correction.</a></li>
</ul>
</div><div><p>In this note, we'll talk about the updates since then.</p></div>


Trip.com raised around US$1.2bn in its secondary listing in Hong Kong.
We have covered the background of the deal in our earlier notes:


Trip.com Secondary Listing - Probably Needs to Correct, and
Trip.com Secondary Listing Quick Take - Doing the Bare Minimum - Needs Some More Correction.

In this note, we'll talk about the updates since then.

Trip.com Secondary Trading Note - Delivered a Good Correction but Seems to Be Widely Distributed

Research on Tech Companies

Evelyn Zhang

Thematic (Sector/Industry)

<p style="text-align: left;">The recent fall in price of many so called “China concept shares” of US listed Chinese companies, has largely been triggered by the passing of the "Holding Foreign Company Accountability Act" (HFCAA).</p><p style="text-align: left;">A flock of US listed Chinese companies have since decided to relist in HKSE due to a few reasons:</p><ol>
<li>The HFCAA causing conflicting compliance requirements with Chinese regulations.</li>
<li>Fear among investors of forced delisting in the US.</li>
<li>HKEX deregulation allowing more Chinese companies to be listed.</li>
<li>The valuation in HK is in sync with the U.S. stock market.</li>
<li>HK attracting more Chinese funds to operate in HKEX.</li>
</ol>

The recent fall in price of many so called “China concept shares” of US listed Chinese companies, has largely been triggered by the passing of the "Holding Foreign Company Accountability Act" (HFCAA).A flock of US listed Chinese companies have since decided to relist in HKSE due to a few reasons:
The HFCAA causing conflicting compliance requirements with Chinese regulations.
Fear among investors of forced delisting in the US.
HKEX deregulation allowing more Chinese companies to be listed.
The valuation in HK is in sync with the U.S. stock market.
HK attracting more Chinese funds to operate in HKEX.


Exit the Dragon – the Mass Exodus of US Listed Chinese Companies

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.

<div><p><a href="https://www.smartkarma.com/entities/trip-com-group-ltd" target="_blank" data-smartkarma-citation="entities:180:1" rel="noopener">Trip.com (TCOM US)</a> has launched a $1.4 billion secondary listing in Hong Kong by offering 31.6 million ordinary shares. Bookbuilding is scheduled to run until the pricing on 13 April. The net proceeds will be used to fund the expansion of its travel offerings, improve user experience and invest in technology. </p></div><div><p>In <a href="https://www.smartkarma.com/insights/trip-com-secondary-listing-no-heads-in-the-clouds" target="_blank" data-smartkarma-citation="insights:49965" rel="noopener">Trip.com Secondary Listing: No Heads in the Clouds</a>, we outlined our views on Trip.com’s fundamentals and valuation. Trip.com is a play on the expected reopening and recovery of travel in 2021 due to the global rollout of vaccines. In combination with the potential valuation upside to the last close price (based on SoTP), we concluded that the equity story is attractive. </p></div><div><div>
<p>In this note, we will look at Trip.com’s potential HK-ADS premium/(discount). As per the norm, Trip.com will price its H-shares at a discount to its ADSs to entice investors to participate in the secondary listing. However, market conditions remain volatile and Chinese tech names are losing their shine due to the US delisting threat and the trend of investors rotating out of tech stocks. The NASDAQ Golden Dragon China Index is down -18% since March 2021. Trip.com shares are up 15% YTD but down -2% since March 2021.  </p>
<div class="content-highlight"><p>Due to the weakening market sentiment on Chinese tech names, Trip.com will likely price its H-shares at a wider discount than the median of past secondary listings. Trip.com pricing its H-shares at a discount of 3-4% to its ADSs will be reasonable, in our view.</p></div>
</div></div>

Trip.com (TCOM US) has launched a $1.4 billion secondary listing in Hong Kong by offering 31.6 million ordinary shares. Bookbuilding is scheduled to run until the pricing on 13 April. The net proceeds will be used to fund the expansion of its travel offerings, improve user experience and invest in technology. In Trip.com Secondary Listing: No Heads in the Clouds, we outlined our views on Trip.com’s fundamentals and valuation. Trip.com is a play on the expected reopening and recovery of travel in 2021 due to the global rollout of vaccines. In combination with the potential valuation upside to the last close price (based on SoTP), we concluded that the equity story is attractive. 
In this note, we will look at Trip.com’s potential HK-ADS premium/(discount). As per the norm, Trip.com will price its H-shares at a discount to its ADSs to entice investors to participate in the secondary listing. However, market conditions remain volatile and Chinese tech names are losing their shine due to the US delisting threat and the trend of investors rotating out of tech stocks. The NASDAQ Golden Dragon China Index is down -18% since March 2021. Trip.com shares are up 15% YTD but down -2% since March 2021.  
Due to the weakening market sentiment on Chinese tech names, Trip.com will likely price its H-shares at a wider discount than the median of past secondary listings. Trip.com pricing its H-shares at a discount of 3-4% to its ADSs will be reasonable, in our view.


Trip.com Secondary Listing: HK-ADS Premium/​​(Discount) Views

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

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.

<p>Hong Kong Stock Exchange has become the beneficiary of tightening listing requirements and accounting rules for foreign companies by the US regulatory authorities. Chinese companies that are listed in the US are forced to comply with US accounting standards and as a result, a large number of US-listed Chinese companies have sought secondary listings on the Hong Kong Stock Exchange over the last two years.</p><p>Autohome, Baidu and Bilibili conducted secondary listings earlier this year and several other companies including <a href="https://www.smartkarma.com/entities/trip-com-group-ltd" target="_blank" data-smartkarma-citation="entities:180:1" rel="noopener">Trip.com (TCOM US)</a> , <a href="https://www.smartkarma.com/entities/tencent-music-entertainment" target="_blank" data-smartkarma-citation="entities:27255:1" rel="noopener">Tencent Music (TME US)</a> and <a href="https://www.smartkarma.com/entities/vipshop-holdings-ltd-adr" target="_blank" data-smartkarma-citation="entities:1088:1" rel="noopener">Vipshop Holdings (VIPS US)</a>  are said to be in the process of securing secondary listings in Hong Kong due to the fear of being delisted from the US Exchange.</p><p>As these companies rush for secondary listings in Hong Kong, in a series of reports, we analyse 10 of the secondary listings on the Hong Kong Stock Exchange over the last 2-years. These 10 companies include <a href="https://www.smartkarma.com/entities/autohome-inc-adr" target="_blank" data-smartkarma-citation="entities:20234:1" rel="noopener">Autohome Inc (Adr) (ATHM US)</a> , <a href="https://www.smartkarma.com/entities/gds-holdings-adr" target="_blank" data-smartkarma-citation="entities:23649:1" rel="noopener">GDS Holdings (ADR) (GDS US)</a> , <a href="https://www.smartkarma.com/entities/zai-lab-ltd" target="_blank" data-smartkarma-citation="entities:25877:1" rel="noopener">Zai Lab Ltd (ZLAB US)</a> , <a href="https://www.smartkarma.com/entities/baozun-inc" target="_blank" data-smartkarma-citation="entities:24184:1" rel="noopener">Baozun Inc. (BZUN US)</a> , <a href="https://www.smartkarma.com/entities/zto-express" target="_blank" data-smartkarma-citation="entities:23628:1" rel="noopener">ZTO Express (ZTO US)</a> , <a href="https://www.smartkarma.com/entities/huazhu-group-ltd" target="_blank" data-smartkarma-citation="entities:17527:1" rel="noopener">Huazhu Group (HTHT US)</a> , <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a> , <a href="https://www.smartkarma.com/entities/netease-inc-adr" target="_blank" data-smartkarma-citation="entities:17203:1" rel="noopener">NetEase Inc (NTES US)</a> , <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> and <a href="https://www.smartkarma.com/entities/beigene" target="_blank" data-smartkarma-citation="entities:23712:1" rel="noopener">BeiGene (BGNE US)</a> .</p>

Hong Kong Stock Exchange has become the beneficiary of tightening listing requirements and accounting rules for foreign companies by the US regulatory authorities. Chinese companies that are listed in the US are forced to comply with US accounting standards and as a result, a large number of US-listed Chinese companies have sought secondary listings on the Hong Kong Stock Exchange over the last two years.Autohome, Baidu and Bilibili conducted secondary listings earlier this year and several other companies including Trip.com (TCOM US) , Tencent Music (TME US) and Vipshop Holdings (VIPS US)  are said to be in the process of securing secondary listings in Hong Kong due to the fear of being delisted from the US Exchange.As these companies rush for secondary listings in Hong Kong, in a series of reports, we analyse 10 of the secondary listings on the Hong Kong Stock Exchange over the last 2-years. These 10 companies include Autohome Inc (Adr) (ATHM US) , GDS Holdings (ADR) (GDS US) , Zai Lab Ltd (ZLAB US) , Baozun Inc. (BZUN US) , ZTO Express (ZTO US) , Huazhu Group (HTHT US) , JD.com Inc (ADR) (JD US) , NetEase Inc (NTES US) , Alibaba Group (BABA US) and BeiGene (BGNE US) .

ADR/HKEX Analysis: Lower Trading Volumes on HKEX Show Limited Liquidity Compared to the US

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<div class="content-highlight">
<p><a href="https://www.smartkarma.com/entities/adi-sarana-armada-tbk-pt" target="_blank" data-smartkarma-citation="entities:16947:1" rel="noopener">Adi Sarana Armada (ASSA IJ)</a> continues to see improvements not just for its core car rental business but also for rapid momentum behind its move into the last mile through Anteraja, which looks set to account for more than 50% of revenues over the next 1-2 years and it has already broken even, earlier than expected.</p>
<p>A Webinar we hosted on Smartkarma with senior management revealed a positive outlook for the business on a number of fronts.</p>
</div>
<p>Despite the impact of the pandemic, the company's car rental business under ASSA Rent saw very little fall out from the COVID-19 pandemic, with the overall fleet increasing by +1% last year and the company has also increased its team of drivers.</p>
<p><a href="https://www.smartkarma.com/entities/adi-sarana-armada-tbk-pt" target="_blank" data-smartkarma-citation="entities:16947:1" rel="noopener">Adi Sarana Armada (ASSA IJ)</a> has also developed a car-sharing App to help to better utilize the fleet, where cars are booked by individuals from its corporate clients.</p>
<section class="figure">
<figure class="editor-figure mceNonEditable"></figure>
</section>
<p>ASSA rent will increase the fleet further in 2021 by around +10% to cater for higher demand from government departments, as well as the economic recovery in the coming year. </p>
<p>The company's B2B used car auction business under JBA BidWin Auction had a very strong year in 2020, with volume growth of +30%.</p>
<p><a href="https://www.smartkarma.com/entities/adi-sarana-armada-tbk-pt" target="_blank" data-smartkarma-citation="entities:16947:1" rel="noopener">Adi Sarana Armada (ASSA IJ)</a> also has a C2C car marketplace called Caroline, which deals with individuals for new and used cars, with financing as an option. </p>
<p>The backbone of the company's third pillar of business is ASSA logistics, which provides fleet management services, trip management, and delivery systems for its corporate customers. </p>
<p><a href="https://www.smartkarma.com/entities/adi-sarana-armada-tbk-pt" target="_blank" data-smartkarma-citation="entities:16947:1" rel="noopener">Adi Sarana Armada (ASSA IJ)</a>'s last-mile subsidiary is called Anteraja is the real future growth driver for the company with 300 service points in 34 provinces.  Anteraja partners with all the major e-commerce players but is also seeking to enlarge other segments such as B2B, C2C, and Social Commerce. </p>
<p>In 2020, Anteraja delivered 50m packages recording positive growth in its second year of operation by booking 300,000 packages per day on average by the end of 2020, allowing Anteraja to breakeven by the end of the year. </p>
<p>Anteraja has also launched a number of new initiatives including Bisnisaja, Travylite, and Titipaja, a self-developed e-fulfillment service</p>
<section class="figure"><a href="https://www.smartkarma.com/entities/adi-sarana-armada-tbk-pt" target="_blank" data-smartkarma-citation="entities:16947:1" rel="noopener">Adi Sarana Armada (ASSA IJ)</a> takes a positive view on the outlook for this year with positive expectations for revenue growth overall but with the real growth momentum coming from Anteraja.  It trades on 42.2x and 24.4x FY21E and FY22E PER respectively but should be viewed as a transformational growth story crossing into the digital ecosystem, with even higher growth potential in FY2022 according to management. </section>
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</div>
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</section>


Adi Sarana Armada (ASSA IJ) continues to see improvements not just for its core car rental business but also for rapid momentum behind its move into the last mile through Anteraja, which looks set to account for more than 50% of revenues over the next 1-2 years and it has already broken even, earlier than expected.
A Webinar we hosted on Smartkarma with senior management revealed a positive outlook for the business on a number of fronts.

Despite the impact of the pandemic, the company's car rental business under ASSA Rent saw very little fall out from the COVID-19 pandemic, with the overall fleet increasing by +1% last year and the company has also increased its team of drivers.
Adi Sarana Armada (ASSA IJ) has also developed a car-sharing App to help to better utilize the fleet, where cars are booked by individuals from its corporate clients.



ASSA rent will increase the fleet further in 2021 by around +10% to cater for higher demand from government departments, as well as the economic recovery in the coming year. 
The company's B2B used car auction business under JBA BidWin Auction had a very strong year in 2020, with volume growth of +30%.
Adi Sarana Armada (ASSA IJ) also has a C2C car marketplace called Caroline, which deals with individuals for new and used cars, with financing as an option. 
The backbone of the company's third pillar of business is ASSA logistics, which provides fleet management services, trip management, and delivery systems for its corporate customers. 
Adi Sarana Armada (ASSA IJ)'s last-mile subsidiary is called Anteraja is the real future growth driver for the company with 300 service points in 34 provinces.  Anteraja partners with all the major e-commerce players but is also seeking to enlarge other segments such as B2B, C2C, and Social Commerce. 
In 2020, Anteraja delivered 50m packages recording positive growth in its second year of operation by booking 300,000 packages per day on average by the end of 2020, allowing Anteraja to breakeven by the end of the year. 
Anteraja has also launched a number of new initiatives including Bisnisaja, Travylite, and Titipaja, a self-developed e-fulfillment service
Adi Sarana Armada (ASSA IJ) takes a positive view on the outlook for this year with positive expectations for revenue growth overall but with the real growth momentum coming from Anteraja.  It trades on 42.2x and 24.4x FY21E and FY22E PER respectively but should be viewed as a transformational growth story crossing into the digital ecosystem, with even higher growth potential in FY2022 according to management. 












Adi Sarana Armada (ASSA IJ) - To the Last Mile and Beyond

China

ZTO Express (Cayman) Inc. operates as an express delivery company. The Company provides express delivery service through their nationwide network, as well as other value-added logistics services. ZTO Express serves customers globally.

Price Gauge
52-week Range	0.00 - 0.00
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ZTO Express Cayman (ZTO US)

Trip.com Secondary Trading Note - Delivered a Good Correction but Seems to Be Widely Distributed

Trip.com raised around US$1.2bn in its secondary listing in Hong Kong. In this note, we'll talk about the trading dynamics.

Sumeet Singh

Exit the Dragon – the Mass Exodus of US Listed Chinese Companies

Is US-China financial decoupling affecting the US stock market? What's the future of US listed Chinese companies l? How can investors in China...

Evelyn Zhang

Trip.com Secondary Listing: HK-ADS Premium/(Discount) Views

Trip.com has launched a $1.4 bn secondary listing in Hong Kong. In the context of the weakening market sentiment, Trip.com pricing its H-shares at...

Arun George

ADR/HKEX Analysis: Lower Trading Volumes on HKEX Show Limited Liquidity Compared to the US

Given relatively lower levels of trading volumes in HK compared to the US Exchanges, it is questionable whether the ADR/HKEX listed companies are...

Shifara Samsudeen, FCMA, CGMA

Adi Sarana Armada (ASSA IJ) - To the Last Mile and Beyond

ASSA saw growth in its car rental business despite the pandemic but its last-mile delivery business Anteraja is what will drive the long-term...

Angus Mackintosh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Trip.com Secondary Trading Note - Delivered a Good Correction but Seems to Be Widely Distributed

Trip.com raised around US$1.2bn in its secondary listing in Hong Kong. In this note, we'll talk about the trading dynamics.

Sumeet Singh

Exit the Dragon – the Mass Exodus of US Listed Chinese Companies

Is US-China financial decoupling affecting the US stock market? What's the future of US listed Chinese companies l? How can investors in China...

Evelyn Zhang

Trip.com Secondary Listing: HK-ADS Premium/​​(Discount) Views

Trip.com has launched a $1.4 bn secondary listing in Hong Kong. In the context of the weakening market sentiment, Trip.com pricing its H-shares at...

Arun George

ADR/HKEX Analysis: Lower Trading Volumes on HKEX Show Limited Liquidity Compared to the US

Given relatively lower levels of trading volumes in HK compared to the US Exchanges, it is questionable whether the ADR/HKEX listed companies are...

Shifara Samsudeen, FCMA, CGMA

Adi Sarana Armada (ASSA IJ) - To the Last Mile and Beyond

ASSA saw growth in its car rental business despite the pandemic but its last-mile delivery business Anteraja is what will drive the long-term...

Angus Mackintosh

Trip.com Secondary Listing: HK-ADS Premium/(Discount) Views