Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Jul 12th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short changes in Tencent, Nongfu Spring, China Shenhua, Petrochina, New Oriental.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Jul 12th.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short changes in Tencent, Nongfu Spring, China Shenhua, Petrochina, New Oriental.


HK Short Interest Weekly: Tencent, Nongfu Spring, China Shenhua, Petrochina, New Oriental

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Credit

<ul><li>Credit stories remain sound: Chinese TMT issuers are generally cash-rich with solid liquidity profiles. Most of them are in net cash positions and have strong coverage ratios at their rating levels. See Table 6 on p.7.</li><li>Shorter-dated XIAOMIs remain our top picks: We like Xiaomi for its solid credit story.</li><li>The sizeable net cash position and operating cash inflow offset the impact of higher R&amp;D expenses, especially those on EV. XIAOMI 3 3/8 04/29/30 (Baa2/BBB-/BBB) and XIAOMI 2 7/8 07/14/31 (Baa2/BBB-/BBB) offer 121bps yield pick-up over JD 3 3/8’30 (Baa1/A-/-) and 12bps over MEITUA 3.05’30 (Baa3/BBB-/BBB-).</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Credit stories remain sound: Chinese TMT issuers are generally cash-rich with solid liquidity profiles. Most of them are in net cash positions and have strong coverage ratios at their rating levels. See Table 6 on p.7.Shorter-dated XIAOMIs remain our top picks: We like Xiaomi for its solid credit story.The sizeable net cash position and operating cash inflow offset the impact of higher R&amp;D expenses, especially those on EV. XIAOMI 3 3/8 04/29/30 (Baa2/BBB-/BBB) and XIAOMI 2 7/8 07/14/31 (Baa2/BBB-/BBB) offer 121bps yield pick-up over JD 3 3/8’30 (Baa1/A-/-) and 12bps over MEITUA 3.05’30 (Baa3/BBB-/BBB-).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China TMT: Maintain Buy XIAOMI’30-31s, XIAOMI 0’27 (CB)

Greater China Equity Long/Short Analyst

Eric Chen

Equity Bottom-Up

<ul>
<li>The street’s expectations for Meituan’s bottom line have gone too pessimistic for 2023 while in the meantime too optimistic for 2024 and beyond.</li>
<li>Besides the macro weakness, we see the company’s growth increasingly be constrained by the business model itself, resulting in only 14% CAGR for bottom line over 2023-25 by our calculation.</li>
<li>We take investors’ indifference to Meituan’s strong bottom line growth for 2023 as a signal they are discounting the sharp deceleration kicking in from 2024. Stay neutral.</li>
</ul>


The street’s expectations for Meituan’s bottom line have gone too pessimistic for 2023 while in the meantime too optimistic for 2024 and beyond.
Besides the macro weakness, we see the company’s growth increasingly be constrained by the business model itself, resulting in only 14% CAGR for bottom line over 2023-25 by our calculation.
We take investors’ indifference to Meituan’s strong bottom line growth for 2023 as a signal they are discounting the sharp deceleration kicking in from 2024. Stay neutral.


Meituan (3690 HK): Strong Bottom Line Growth Will Prove to Be Short-Lived

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/robosense-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:39903:1" rel="noopener">Robosense Technology (2498 HK)</a> raised around US$126m in its Hong Kong IPO in Jan 2024. The lockup on its shareholders will expire soon.</li>
<li>The company provides LiDAR and perception solutions to its customers. As of March 2024, it had design wins for mass production of LiDAR products with 22 automotive OEMs and suppliers.</li>
<li>In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.</li>
</ul>



Robosense Technology (2498 HK) raised around US$126m in its Hong Kong IPO in Jan 2024. The lockup on its shareholders will expire soon.
The company provides LiDAR and perception solutions to its customers. As of March 2024, it had design wins for mass production of LiDAR products with 22 automotive OEMs and suppliers.
In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.


Robosense IPO Lock-Up Expiry - US$2.8bn Lockup Expiry for 99% of the Stock, CCASS Movement

China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>Meituan reported CY2Q23 rev./non-IFRS net income in-line/70% vs. cons., and in-line/28% vs. our estimate. Increased spending on in-store competition was offset by abundant rider supply that lowered food delivery cost. </li>
<li>We raise our 3Q net margin est. by 3ppts as (1) the in-store counterattack against Douyin has been a success, (2) CGB spending to counter Duoduo Maicai has remained restrained.</li>
<li>Initial results of the in-store counterattack showed positive results, while FD margin continues to benefit from ample riders. We maintain Meituan’s BUY rating and HK$ 165 TP.</li>
</ul>


Meituan reported CY2Q23 rev./non-IFRS net income in-line/70% vs. cons., and in-line/28% vs. our estimate. Increased spending on in-store competition was offset by abundant rider supply that lowered food delivery cost. 
We raise our 3Q net margin est. by 3ppts as (1) the in-store counterattack against Douyin has been a success, (2) CGB spending to counter Duoduo Maicai has remained restrained.
Initial results of the in-store counterattack showed positive results, while FD margin continues to benefit from ample riders. We maintain Meituan’s BUY rating and HK$ 165 TP.


[Meituan (3690 HK, BUY, TP HK$165) Earnings Review]: Counterstrike Remains Effective… Maintain BUY

China

Meituan operates as a web based shopping platform for locally found consumer products and retail services. The Company offers deals of the day by selling vouchers on local services and entertainment, dining, delivery, and other services. Meituan provides its services throughout China.

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Meituan (3690 HK)

HK Short Interest Weekly: Tencent, Nongfu Spring, China Shenhua, Petrochina, New Oriental

We analyzed the latest HK SFC report for aggregate short position as of Jul 12th and highlight short interest changes in Tencent, Nongfu Spring,...

Ke Yan, CFA, FRM

China TMT: Maintain Buy XIAOMI’30-31s, XIAOMI 0’27 (CB)

Chinese TMT issuers are generally cash-rich with solid liquidity profiles. Most of them are in net cash positions and have strong coverage ratios...

CMB International

Meituan (3690 HK): Strong Bottom Line Growth Will Prove to Be Short-Lived

While we believe the street underestimate Meituan's strong profit outlook for 2023, investors are discounting sharp deceleration to kick in from 2024.

Eric Chen

Robosense IPO Lock-Up Expiry - US$2.8bn Lockup Expiry for 99% of the Stock, CCASS Movement

The pre-IPO shareholders came out of lockup today, leading to a 67% drop in the share price with an accompanying spike in volumes.

Sumeet Singh

[Meituan (3690 HK, BUY, TP HK$165) Earnings Review]: Counterstrike Remains Effective… Maintain BUY

Initial results of the in-store counterattack showed positive results, while FD margin continues to benefit from ample riders. We maintain...

Blue Lotus Research Institute

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