In today’s briefing:
- DPC Dash IPO – Might Be Worth a Small Slice
- Tencent (700 HK) Earnings Preview: To Stop Decrease in 4Q22 and to Recover in 2023
- Quiddity Flow Expectations HSTECH Jun 23: New Oriental Education IN; AAC Technologies OUT
- DPC Dash IPO Valuation: Looks Expensive Cf. Yum China & Dominos Master Franchisees in Other Regions
- AviChina Industry (2357 HK): Still Well-Placed as Our High Conviction
- LONGi Green Energy to Build $600 Million Solar Panel Plant in U.S.
- Giant Biogene Holding (2367.HK) – The Situation May Not Be as Rosy as It Looks
- [Akeso Inc. (9926 HK) Target Price Change]: A Mini-BeiGene in the Making…Reiterate BUY
DPC Dash IPO – Might Be Worth a Small Slice
- DPC Dash (1405 HK) is now looking to raise up to US$90m, after having shelved its last attempt to raise around US$75m in its Hong Kong IPO in December.
- The company is the exclusive master franchisee for Domino’s Pizza in China, HK and Macau. DPC operated 604 stores across 17 cities, as of Feb 2023.
- In this note, we run the deal through our ECM framework and talk about valuations.
Tencent (700 HK) Earnings Preview: To Stop Decrease in 4Q22 and to Recover in 2023
- We believe revenue will grow by 2.5% YoY in 4Q22 and 9% in 2023.
- We believe EPS will decrease by 62% YoY in 4Q22 and increase by 16% in 2023.
- We expect the stock has an upside of 42% for yearend 2023. Buy.
Quiddity Flow Expectations HSTECH Jun 23: New Oriental Education IN; AAC Technologies OUT
- In this insight, we take a look at the potential index changes and the resultant capping flows for the HSTECH Index in June 2023.
- According to our estimation, there could be one ADD/DEL for the HSTECH in June 2023 triggering total one-way index flows of US$238mn.
- The final index changes along with indicative capping and index weights will be published in Mid/Late-May 2023.
DPC Dash IPO Valuation: Looks Expensive Cf. Yum China & Dominos Master Franchisees in Other Regions
- The exclusive master franchisee of Domino’s Pizza in mainland China, Hong Kong and Macau, DPC Dash’s IPO opened for subscriptions today at a price range of HK$ 46.0-55.0 per share.
- The IPO valuation is not particularly enticing to lure us as we don’t think it’s at a sufficient discount to Yum China Holdings Inc (9987 HK)’s multiples.
- DPC Dash (1405 HK) is also relatively more expensive than Domino’s Pizza (DPZ US) master franchisees in other regions.
AviChina Industry (2357 HK): Still Well-Placed as Our High Conviction
- The slight dip in FY22 earnings for AviChina Industry & Technology H (2357 HK) is due to product restructuring at Avicopter (600038 CH) and higher impairment/fair value losses.
- It should return to growth track in the next two years, with rise in product demand, recovery in Avicopter, further restructuring and M&As being major drivers.
- Share price has increased 15.9% YTD but it is just on 9.2x FY23 PER. Its market cap is at 58.5% discount to holdings in its four listed A-share subsidiaries.
LONGi Green Energy to Build $600 Million Solar Panel Plant in U.S.
- Chinese solar wafer giant LONGi Green Energy Technology Co. Ltd. will partner with U.S. solar developer Invenergy to build a $600 million, 5-gigawatt solar panel assembly factory in Ohio
- The project will be LONGi’s first entrance into the U.S. manufacturing market.
- What will eventually be the largest crystalline silicon solar panel factory in the U.S. will create 850 jobs, and operations are expected to start by the end of 2023
Giant Biogene Holding (2367.HK) – The Situation May Not Be as Rosy as It Looks
- Giant Biogene has been added to Hong Kong Stock Connect.There’s also positive sentiment driven by the consumption recovery after China reopens. But the Company is overvalued if compared with peers.
- The subsequent product pipeline progress is relatively slow, with a gap of nearly two years in the middle. So, Giant Biogene’s stock price performance may be relatively weak after 2024.
- Due to various restrictions, the actual market space of collagen in the future may not be as large as expected. This is a point investors need to be aware of.
[Akeso Inc. (9926 HK) Target Price Change]: A Mini-BeiGene in the Making…Reiterate BUY
- Akeso reported C2H22 total sales, net revenue 41% and 67% above our estimates. Non-IFRS operating loss, however, was in-line with our estimate, thanks to higher OPEX;
- Given Summit’s US$500mn upfront and up to US$5bn upfront payment for Ivonescimab (PD-1/VEGF) (AK112), we now forecast Akeso to achieve non-IFRS breakeven in C1H23 and all subsequent years;
- We raise TP by 18% to HK$59 and maintain BUY.
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