In today’s briefing:
- STAR50/STAR100 Index Rebalance Preview: One Is Meh; The Other Is👍
- Guming Holdings (1364 HK) IPO: Valuation Insights
- PegBio 派格生物 IPO: A (Supposedly) Straightforward GLP-1 Challenger Story
- Pentamaster International (1665 HK): Light Offer but Lack of Opposition Ahead of the Vote
- SHEIN: Back in India in Alliance with Reliance, Amid Woes in the West
- EQD | February Macro Vol Roadmap – Stay Alert to Trend Change in 2nd Half of Month
- Lucror Analytics – Morning Views Asia
- Asia Real Estate Tracker (05-Feb-2025): CapitaLand buys Osaka site for $700M data centre.
- StubWorld: WH Group (288 HK) IPOs Smithfield (SFD US). Now What?
- Tariffs Will Affect Tire Industry; Rubber Market
STAR50/STAR100 Index Rebalance Preview: One Is Meh; The Other Is👍
- With the review period complete, we forecast 3 changes for the SSE STAR50 (STAR50 INDEX) and 8 changes for the STAR100 Index. There are a few migrations between the indices.
- We estimate turnover of 3.8% for the SSE STAR50 (STAR50 INDEX) and 9.9% for the STAR100 Index. The estimated net round-trip trade is CNY 13bn (US$1.8bn).
- The forecast adds to the STAR50 INDEX have underperformed the forecast deletes. For the STAR100 Index outright changes, the forecast adds have outperformed the forecast deletes by a lot.
Guming Holdings (1364 HK) IPO: Valuation Insights
- Guming Holdings (GUM HK) (Good me), a freshly-made tea store brand, has launched an HKEx IPO to raise up to US$202 million.
- We previously discussed the IPO in Guming Holdings (Good Me) IPO: The Bull Case and Guming Holdings (Good Me) IPO: The Bear Case.
- There are five cornerstone investors. Our valuation analysis suggests that Guming is attractively valued at the IPO price range. Therefore, we would participate in the IPO.
PegBio 派格生物 IPO: A (Supposedly) Straightforward GLP-1 Challenger Story
- PegBio is looking to raise at least USD 100m via its Hong Kong IPO.
- In this note, we looked at the company’s fundamentals, particularly its core product PB-117.
- We think the story might look simple as a straightforward GLP-1 challenger but there are quite a number of concerns as we dig into the company’s story.
Pentamaster International (1665 HK): Light Offer but Lack of Opposition Ahead of the Vote
- Pentamaster International (1665 HK)’s IFA opines that Pentamaster Corp (PENT MK) and AchiCapital’s HK$1.00 privatisation offer is fair and reasonable. The vote is on 28 February.
- The IFA analysis is biased because it conveniently ignores a relative valuation analysis, which would show that the final offer is unattractive compared to its global peers.
- Disappointingly, there is little minority opposition to an arguably light offer in which the Holdco is privatising its OpCo by arbitraging valuation multiple discrepancies across two exchanges.
SHEIN: Back in India in Alliance with Reliance, Amid Woes in the West
- SHEIN (1895674D HK) returns to India after a five-year hiatus under a license agreement with Reliance Industries (RIL IN) owned Reliance Retail ltd.
- India’s vast, untapped market for fast fashion, driven by a large and growing young population, rising disposable incomes, and increased e-commerce penetration presents an attractive growth opportunity for Shein.
- Shein faces growing challenges in the US due to new trade restrictions. Its partnership with Reliance could serve as a strategic move to develop alternative supply chains outside China.
EQD | February Macro Vol Roadmap – Stay Alert to Trend Change in 2nd Half of Month
- All markets surveyed here tend to see price weakness along with increased volatility in the second half of February.
- SP500 was the only market for which realized vol in January was greater than implied at the end of December.
- Gold, SP500 and SPASX200 have all gone over 450 days without a 10% correction. Nifty moving in opposite direction, 127 days without a 10% rally.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: Greentown China, Health and Happiness (H&H)
- In the US, the December JOLTS job openings unexpectedly declined to 7.6 mn (8.0 mn e / 8.2 mn revised p). The JOLTS lay-off and quits rates were stable at 1.1% and 2.0%, respectively, in December.
- Treasuries rallied yesterday, with yields declining 4-5 bps across the curve, on account of the weaker-than-expected JOLTS report.
Asia Real Estate Tracker (05-Feb-2025): CapitaLand buys Osaka site for $700M data centre.
- CapitaLand Investment secures Osaka site for $700M data centre project, expanding presence in Asia’s growing tech market.
- Singapore’s Temasek boosts investment in CenterSquare’s commercial real estate debt fund with $200M injection for growth.
- Gordon Tang faces setback as Suntec REIT buyout likely to fail with extended deadline, raising uncertainty in real estate market.
StubWorld: WH Group (288 HK) IPOs Smithfield (SFD US). Now What?
- After reducing the IPO price, and the placement size, WH Group (288 HK) has now completed the spin-off of Smithfield Foods (SFD US).
- Preceding my comments on the WH Group 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%.
Tariffs Will Affect Tire Industry; Rubber Market
- Tire industry to be a collateral damage in the tariff battle
- 91% of projected light truck tire requirement is import reliant
- Trade balance tipping towards China and Canada
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