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 analyze the weekly Hong Kong Connect flows with our data engine for holding position as of May 19th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Tencent, China Construction Bank, China Mobile, Li Auto.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of May 19th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Tencent, China Construction Bank, China Mobile, Li Auto.


Hong Kong Connect Flows (May 19th): Tencent, China Construction Bank, China Mobile, Li Auto

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.

Thematic (Sector/Industry)

<ul><li>Impressive recovery vs Feb-Apr 2023, while both consumer and investors sentiment should be boosted, the post holidays purchasing power is still important.</li><li>We find the data points during this 5-1 golden week in 2023 slightly better than expectation and encouraging, esp. after the weakening consumption trend post CNY 2023.</li><li>We are highly delighted to see a surge in recovery rate of domestic tourism volume/ spending during this holiday to 119%/ 101%, which is far better than the 83%/ 51% in Qingming Festival and 89%/ 73% in CNY, according to Ministry of Culture and Tourism/文化和旅游部.</li></ul>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.

Impressive recovery vs Feb-Apr 2023, while both consumer and investors sentiment should be boosted, the post holidays purchasing power is still important.We find the data points during this 5-1 golden week in 2023 slightly better than expectation and encouraging, esp. after the weakening consumption trend post CNY 2023.We are highly delighted to see a surge in recovery rate of domestic tourism volume/ spending during this holiday to 119%/ 101%, which is far better than the 83%/ 51% in Qingming Festival and 89%/ 73% in CNY, according to Ministry of Culture and Tourism/文化和旅游部.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 Consumer Sector – A Strong Comeback in 5-1 Golden Week

Greater China Equity Long/Short Analyst

Eric Chen

Equity Bottom-Up

<ul>
<li>We believe the recovery of China consumption is "not yet solid", but not faltering.</li>
<li>China catering sector's recovery stays on track, although Q2 has historically been a low season.</li>
<li>Long Xiabuxiabu and short Jiumaojiu to play the sector's recovery while hedging against potential macro weakness.</li>
</ul>


We believe the recovery of China consumption is "not yet solid", but not faltering.
China catering sector's recovery stays on track, although Q2 has historically been a low season.
Long Xiabuxiabu and short Jiumaojiu to play the sector's recovery while hedging against potential macro weakness.


China Catering Sector: Long Xiabuxiabu / Short Jiumaojiu

Haidilao International Holding / Equity Bottom-Up

<ul><li>FY22 result beat again if we consider only its Greater China business.</li><li>As Haidilao achieved positive SSSG returns in YTD 2023 and notably low breakeven point since 2H22 (thru staff costs refinement and no negative impacts on service quality), we do find its turnaround in FY23E and valuation attractive.</li><li>Our net profit forecasts are 23%-33% higher than BBG consensus. Maintain BUY.</li></ul>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.

FY22 result beat again if we consider only its Greater China business.As Haidilao achieved positive SSSG returns in YTD 2023 and notably low breakeven point since 2H22 (thru staff costs refinement and no negative impacts on service quality), we do find its turnaround in FY23E and valuation attractive.Our net profit forecasts are 23%-33% higher than BBG consensus. Maintain BUY.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.

Haidilao (6862 HK) – Reopen and staff costs reform-led turnaround

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>Total short interest in Hong Kong is HK$435.1bn, marginally higher from end-December. Short notional has moved in line with the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a>. </li>
<li>Total short notional of the KOSPI and KOSDAQ market has moved up since end-December and is in line with the move higher in the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI2 INDEX</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index</a>.</li>
<li>Short notional in Taiwan is lower over the quarter even as the <a href="https://www.smartkarma.com/entities/taiwan-stock-exchange-weighted-index" target="_blank" data-smartkarma-citation="entities:26056:1" rel="noopener">TWSE INDEX</a> has moved higher over the period. There has been big short covering on some stocks.</li>
</ul>


Total short interest in Hong Kong is HK$435.1bn, marginally higher from end-December. Short notional has moved in line with the Hong Kong Hang Seng Index (HSI INDEX). 
Total short notional of the KOSPI and KOSDAQ market has moved up since end-December and is in line with the move higher in the KOSPI2 INDEX and KOSDAQ 150 Index.
Short notional in Taiwan is lower over the quarter even as the TWSE INDEX has moved higher over the period. There has been big short covering on some stocks.


Short Interest Movements (Q1 2023): HK, Korea, Taiwan, Australia

China

Haidilao International Holding Ltd. operates Chinese cuisine restaurant brand focusing on hot pot cuisine. The Company provides hot pots, soup bases, dipping sauces, drinks, prepared food, and other products. Haidilao International Holding opens restaurants in Taiwan, Hong Kong, Singapore, South Korea, Japan, and the United States.

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Haidilao International Holding (6862 HK)

Hong Kong Connect Flows (May 19th): Tencent, China Construction Bank, China Mobile, Li Auto

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for Tencent, China Construction Bank, China Mobile, Li Auto.

Ke Yan, CFA, FRM

China Consumer Sector – A Strong Comeback in 5-1 Golden Week

Impressive recovery vs Feb-Apr 2023, while both consumer and investors sentiment should be boosted, the post holidays purchasing power is still...

CMB International

China Catering Sector: Long Xiabuxiabu / Short Jiumaojiu

The recovery of China catering sector remains on track. We recommend long Xiabuxiabu / short Jiumaojiu to play the recovery while hedging against...

Eric Chen

Haidilao (6862 HK) – Reopen and staff costs reform-led turnaround

Haidilao’s sales dropped by 16% YoY but returned to profit of RMB 1.3bn in FY22, both were inline with its positive profit alert.

CMB International

Short Interest Movements (Q1 2023): HK, Korea, Taiwan, Australia

The Insight looks at movements in short interest across HK, Korea, Taiwan and Australia stocks over Q1 and highlights large increases/decreases in...

Brian Freitas

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