In this briefing:
- ECM Weekly (23 February 2019) – Futu, CStone, Dexin, New Century, AB InBev, MabPharma
- UK Trip – Wake up to Deflation Risk
- Confluence of Politics – China Bans Australian Coal Imports (Flash Note)
- Foldable Smartphones to Debut in 2019; Will It Aid an Industry Turnaround?
1. ECM Weekly (23 February 2019) – Futu, CStone, Dexin, New Century, AB InBev, MabPharma
Aequitas Research puts out a weekly update on the deals that have been covered by Smartkarma Insight Providers recently, along with updates for upcoming IPOs.
Starting with listings in Hong Kong next week, CStone Pharma (2616 HK) and Dexin China Holdings (2019 HK) will list on the 26th of February. Dexin is said to have priced at the mid-point of its price range while CStone is priced above its mid-point.
We also heard that Haitong Unitrust International Leasing was given the green light by CSRC for its Hong Kong IPO. The company had previously re-filed its draft prospectus in September last year. Shanghai Dongzheng Automotive Finance has also received approval from CSRC for its IPO.
There had also been a small property developer, YinCheng, that had launched its US$100m IPO. Jinxin Fertility had also just filed its draft prospectus with the HKEX.
Back in the US, we are hearing that Futu Holdings Ltd (FHL US) could be starting its bookbuild as early as next week. Sumeet Singh had previously analyzed the company in his insight, Futu Holdings Pre-IPO – Great Metrics but in a Commoditised Industry, and he will be following up with another insight next week.
In Japan, there is an Aruhi Corp (7198 JP) placement in which Carlyle looking to sell their entire stake in the company. Sumeet Singh had covered in Aruhi Placement – Bigger than the IPO but Good Track Record and Price Performance Should Help. The placement would be more attractive if it corrects down over the next few days but the removal of overhang from Carlyle seemed to be very well received by the market and the share price had even traded up 13% on Wednesday this week.
Accuracy Rate:
Our overall accuracy rate is 72.1% for IPOs and 63.7% for Placements
(Performance measurement criteria is explained at the end of the note)
New IPO filings
- Jinxin Fertility Group (US$600m, Hong Kong)
Below is a snippet of our IPO tool showing upcoming events for the next week. The IPO tool is designed to provide readers with timely information on all IPO related events (Book open/closing, listing, initiation, lock-up expiry, etc) for all the deals that we have worked on. You can access the tool here or through the tools menu.
News on Upcoming IPOs
- Fund Companies Ask Hong Kong to Relax IPO Investment Rules
- Chinese Tech Giants Seek Further IPO Rule Changes in Hong Kong
- Sembcorp could delay India energy IPO due to market conditions
- PNB Metlife IPO likely next fiscal
Smartkarma Community’s this week Analysis on Upcoming IPO
- New Century Hotel Mgmt IPO Preview: Two-Speed Businesses
- New Century Hotel (浙江開元酒店) Pre-IPO – Improved Profitability Not Driven by Underlying Operations
- Ab InBev Asia Pre-IPO – Quick Note – More like CR Beer Rather than Tsingtao
- MabPharma (迈博医药) IPO: Assembled for a Trade?
- Hyundai Autoever IPO Preview
- Hyundai Autoever IPO Pricing: Likely to Be a Dull Event Given No Growth Story & Glovis Merger
- HLX02: Innovation Could Overtake
2. UK Trip – Wake up to Deflation Risk
By Bo Zhuang, Chief China Economist
- London-based investors are turning cautiously optimistic on China’s growth outlook amid the latest easing measures in January
- There is still little awareness about the rising deflation risk
- Interest in the trade war has subsided
3. Confluence of Politics – China Bans Australian Coal Imports (Flash Note)
- China implements coal import caps specifically targeting Australian producers
- Unclear as to how widespread these restrictions will eventually be
- Thermal and metallurgical coal exports affected
- Impacting ~A$8.4Bn of metallurgical coal exports; or 4.4% of national income
- Thermal coal exports affected worth ~A$3.8Bn; or an additional 2% of national income
- Collectively, thermal and metallurgical exports equate to ~0.9% of Australian annual GDP
- Actions appear to be a response to blocking Huawei bidding for the 5G network
- Recent Chinese cyber-attacks harden Australian Government’s resolve
- Expect similar Chinese measures (in time) to be applied to other commodities and industries
4. Foldable Smartphones to Debut in 2019; Will It Aid an Industry Turnaround?
Plans regarding Samsung and Huawei’s foldable smartphones are out. The companies, which happen to be two of the largest contenders in the smartphone landscape are expected to unveil their foldable smartphone prototypes this month. In 4Q2018, Samsung, coming in first place, held a market share of 18.7% while Huawei, in third place, held a market share of 16.1%. Both companies are following different strategies when it comes to their foldable phone models.
The concept of foldable phones revolves around devices that can be folded into the size of a smartphone or opened up in to the size of a tablet. Huawei is said to be planning to introduce their foldable smartphone with 5G compatibility while Samsung is planning to release their foldable model with 4G compatibility. The market leader aims to leverage the expertise it has gained on its display technologies in its foldable smartphones.
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