China Specialist, Auto and Industrial Specialist

Victoria Li

Thematic (Sector/Industry)

Despite supply chain  interruptions due to temporary auto chip shortage, regional Covid-19 lockdown and CNY holidays; China's auto sales in 2M2021 were encouraging. Overall PV sales were flattish compared to 2M2019, with EV sales proportion remaining strong.Among leading traditional OEMs, Geely and Great Wall both did well with market share rising. While BYD's sales were relatively weak due to less ICE models sales.Among leading EV emerging brands, market shares of Xpeng (XPEV US), NIO (NIO US) and Tesla Shanghai (TSLA US) all increased. Only Li Auto (LI US) remained flat.We expect auto sales getting better in March with less interruption from Covid-19 and supply chain issues. Xpeng is our top buy in Auto sector, followed by Geely which is our favourite among traditional OEMs.

Despite supply chain  interruptions due to temporary auto chip shortage, regional Covid-19 lockdown and CNY holidays; China's auto sales in 2M2021 were encouraging. Overall PV sales were flattish compared to 2M2019, with EV sales proportion remaining strong.Among leading traditional OEMs, Geely and Great Wall both did well with market share rising. While BYD's sales were relatively weak due to less ICE models sales.Among leading EV emerging brands, market shares of Xpeng (XPEV US), NIO (NIO US) and Tesla Shanghai (TSLA US) all increased. Only Li Auto (LI US) remained flat.We expect auto sales getting better in March with less interruption from Covid-19 and supply chain issues. Xpeng is our top buy in Auto sector, followed by Geely which is our favourite among traditional OEMs.

China Auto: Solid Start Despite Interruptions, Better Sales Ahead

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

Linklogis, a technology solution provider for supply chain finance in China, is aiming to raise around US$500m in its Hong Kong IPO. Its investors include Tencent, GIC and Standard Chartered Bank.Linklogis’ cloud-native solutions optimize the payment cycle of supply chain transactions and digitalize the entire workflow of supply chain finance. As per CIC, Linklogis was the leader among technology solution providers in China in terms of supply chain finance transactions processed over 9M20, accounting for 20.5% market share.Linklogis overall revenue grew by 83% YoY in FY19 and was up another 52% over 9M20. While its core function of Supply Chain finance has been registering strong growth of 64.4% YoY in FY19 and 53.8% in 9M20, revenue from its Emerging solutions was up nearly 6x in FY19 and grew by another 38% over 9M20.In this insight, I'll cover the positive aspects of the deal.

Linklogis, a technology solution provider for supply chain finance in China, is aiming to raise around US$500m in its Hong Kong IPO. Its investors include Tencent, GIC and Standard Chartered Bank.Linklogis’ cloud-native solutions optimize the payment cycle of supply chain transactions and digitalize the entire workflow of supply chain finance. As per CIC, Linklogis was the leader among technology solution providers in China in terms of supply chain finance transactions processed over 9M20, accounting for 20.5% market share.Linklogis overall revenue grew by 83% YoY in FY19 and was up another 52% over 9M20. While its core function of Supply Chain finance has been registering strong growth of 64.4% YoY in FY19 and 53.8% in 9M20, revenue from its Emerging solutions was up nearly 6x in FY19 and grew by another 38% over 9M20.In this insight, I'll cover the positive aspects of the deal.

Linklogis Pre-IPO - The Positives - Fast Growing Blockchain Driven Supply Chain Financier

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

Equity Bottom-Up

Alibaba Group Holding  / Equity Bottom-Up

<ul class="">
<li>The new law impacts Alibaba (BABA) and Tencent (700 HK) loan business.</li>
<li>Alibaba (BABA) is strengthening its “community group purchase” of fresh food.</li>
<li>Trip.com (TCOM) was still in stress in 4Q20.</li>
<li>Baidu (BIDU) set up an automobile joint venture.</li>
</ul>


The new law impacts Alibaba (BABA) and Tencent (700 HK) loan business.
Alibaba (BABA) is strengthening its “community group purchase” of fresh food.
Trip.com (TCOM) was still in stress in 4Q20.
Baidu (BIDU) set up an automobile joint venture.


China Internet Weekly (Mar 8): New Law Limits BABA & Tencent’s Loan Biz, BIDU Starts Car Production.

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

In this month's “In-Focus”, we update our study of agency ratings for Asian issuers, analysing ratings transitions for all issuers in the Lucror Asia HY index between January 2014 and the present. The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.

  In this month's “In-Focus”, we update our study of agency ratings for Asian issuers, analysing ratings transitions for all issuers in the Lucror Asia HY index between January 2014 and the present.   The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.  

Asia HY Monthly - Asian HY Ratings Transition Study - Lucror Analytics

It is disappointing that Geely has given up on its Volvo merger plan, which would limit the share performance upside in short term. In the long term, Geely's valuation re-rating is still possible depending on how successful it would be in NEV market. We believe recent market correction has priced in the negative impact. Looking forward, what the investors could expect in 2021E is 1) its A-share IPO, although it has higher uncertainty with a longer waiting time - as the company might have to update its financial data (such as 2020 annual results), before launching it.2) Lynk Zero, Geely's first EV from SEA platform, might come ahead of schedule. Recent market reports says this new car would be officially launched in March-April and start delivery at end-Sep 2021.

It is disappointing that Geely has given up on its Volvo merger plan, which would limit the share performance upside in short term. In the long term, Geely's valuation re-rating is still possible depending on how successful it would be in NEV market. We believe recent market correction has priced in the negative impact. Looking forward, what the investors could expect in 2021E is 1) its A-share IPO, although it has higher uncertainty with a longer waiting time - as the company might have to update its financial data (such as 2020 annual results), before launching it.2) Lynk Zero, Geely's first EV from SEA platform, might come ahead of schedule. Recent market reports says this new car would be officially launched in March-April and start delivery at end-Sep 2021.

Hong Kong

Geely Automobile Holdings Limited operates as a passenger vehicles manufacturing company. The Company provides passenger vehicles development, manufacturing, sales, and other services. Geely Automobile Holdings also exports passenger vehicles.

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Geely Auto (175 HK)

China Auto: Solid Start Despite Interruptions, Better Sales Ahead

Despite supply chain interruptions due to temporary auto chip shortage, regional Covid-19 lockdown and CNY holidays; China's auto sales in 2M2021...

Victoria Li

Linklogis Pre-IPO - The Positives - Fast Growing Blockchain Driven Supply Chain Financier

Linklogis, a technology solution provider for supply chain finance in China, is aiming to raise around US$500m in its Hong Kong IPO. Its investors...

Sumeet Singh

China Internet Weekly (Mar 8): New Law Limits BABA & Tencent’s Loan Biz, BIDU Starts Car Production.

The new law impacts Alibaba and Tencent loan business. Alibaba is strengthening its “community group purchase” of fresh food. Trip.com was still in...

Ming Lu

Asia HY Monthly - Asian HY Ratings Transition Study - Lucror Analytics

In this month's “In-Focus”, we update our study of agency ratings for Asian issuers, analysing ratings transitions for all issuers in the Lucror...

Lucror Analytics

Geely (175.HK) - No Volvo, Less Momentum

It is disappointing that Geely has given up on its Volvo merger plan, which would limit the share performance upside in short term.

Victoria Li

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