In today’s briefing:
- StubWorld: CKH (1 HK) – Expect Near-Term Weakness If Exclusivity Ends Without Resolution
- Everest Medicine Placement – Third Deal in the Year, Previous Ones Didn’t Do Well
- Meitu (1357 HK): AI-Driven Global Index Inclusion
- OSL Group Placement: Momentum Is Strong but Is Opportunistic
- Leads Biolabs (维立志生物) Trading Update
- Aux Electric Co Ltd Pre-IPO Tearsheet
- Dongfang Electric (1072 HK): Is There Any Room Left After the Rally?
- Lucror Analytics – Morning Views Asia
StubWorld: CKH (1 HK) – Expect Near-Term Weakness If Exclusivity Ends Without Resolution
- CK Hutchison Holdings (1 HK)‘s delicate dance continues as it juggles U.S and Beijing politics; and its fiduciary duty to shareholders, as the Blackrock exclusivity long stop date looms.
- In a double dose of StubWorld this week, preceding my comments on CKH – and CK Infrastructure Holdings (1038 HK) – are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Everest Medicine Placement – Third Deal in the Year, Previous Ones Didn’t Do Well
- Everest Medicines (1952 HK) aims to raise around US$200m via a top-up placement.
- This will be the third placement this year for the stock, the previous two deals didn’t do well. Although the stock has bounced back a lot since.
- In this note, we comment on the deal dynamics and run the deal through our ECM framework.
Meitu (1357 HK): AI-Driven Global Index Inclusion
- Meitu Inc (1357 HK)‘s stock price has more than tripled over the last few months and the significantly higher market cap should lead to global index inclusion in August.
- Shorts covered a lot in 2024 and that has continued this year as the stock price has moved higher.
- Meitu Inc (1357 HK) has outperformed its peers significantly and there could be a pullback in the stock following index inclusion.
OSL Group Placement: Momentum Is Strong but Is Opportunistic
- BC Technology Group (863 HK) is looking to raise around US$157m from a primary placement.
- The deal is a large one to digest, representing 20.2 days of the stock’s three month ADV, and 11.3% of total shares outstanding.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Leads Biolabs (维立志生物) Trading Update
- Leads Biolabs raised HKD 1290m (USD 166m) from its global offering and will list on the Hong Kong Stock Exchange on Friday, July 24th.
- In our previous note, we looked at the company’s operation, management track records and discussed the IPO valuation.
- In this note, we provide an update for the IPO before trading debut.
Aux Electric Co Ltd Pre-IPO Tearsheet
- Aux Electric Co Ltd (0917839D HK) (AECL) is looking to raise about US$100m in its upcoming Hong Kong IPO. The bookrunners for the deal are CICC and Oriental Securities.
- AECL is engaged in the design, R&D, manufacturing, sales, and after-sales services of both household and central air conditioners, with operations spanning over 150 countries and regions.
- According to F&S Report, AECL was among the top five global air conditioner providers by sales volume in 2024, with a market share of 7.1%.
Dongfang Electric (1072 HK): Is There Any Room Left After the Rally?
- Dongfang Electric (1072 HK)‘s recent rally following the Yarlung Zangbo hydropower project announcement appears overdone, as it now trades more than 3SD above average.
- We estimate that, even with generous assumptions, the project will add 11.5% of revenue of its annual revenue. This seems unmatched with the 52.7% share price jump.
- 1Q25 has performed well and deserves a re-rating, but the current extent is excessive. Fair value for the next three years is HK$18-22.8, at best.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: West China Cement, SK Hynix
- US treasuries fell yesterday, with yields rising after three straight days of declines. That said, the sell-off in longer-dated treasuries moderated during the day, following strong demand for an auction of 20Y notes.
- The UST curve bear-flattened, with the yield on the 2Y UST rising 5 bps to 3.88%, while the yield on the 10Y UST was up 4 bps at 4.38%.
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