Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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 Bottom-Up

<ul>
<li>Revenue grew rapidly by 23% in 4Q21 and we believe revenue will grow by 18% in 2022.</li>
<li>We are not concerned about the zero net margin, because operating cash flows were still strong in 2021.</li>
<li>We believe the stock has a price target of US$73, which is 18% over last closing price.</li>
</ul>


Revenue grew rapidly by 23% in 4Q21 and we believe revenue will grow by 18% in 2022.
We are not concerned about the zero net margin, because operating cash flows were still strong in 2021.
We believe the stock has a price target of US$73, which is 18% over last closing price.


JD.com (JD): Plunged Following Indexes, But 4Q21 Result Worth Buying

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>BABA’s app, SDTao, has been taking active users from Pinduoduo.</li>
<li>We believe BABA’s physical store chain, Freshippo, will go public.</li>
<li>We believe BABA will stop investing in unprofitable Ele.me as it underperforms Meituan.</li>
</ul>


BABA’s app, SDTao, has been taking active users from Pinduoduo.
We believe BABA’s physical store chain, Freshippo, will go public.
We believe BABA will stop investing in unprofitable Ele.me as it underperforms Meituan.


Alibaba (BABA): 3Q22, Transforming Missions Going Under Slow Quarter

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Hang Seng China Enterprises Index / Event-Driven

<ul>
<li>The HSCEI 2022 dividend futures are trading around our fair value. Larger than expected special dividends from oil and telecom companies could provide some upside.</li>
<li>The HSCEI 2022/23 div steepener has dropped from -5 to -15 since our last Insight. We see further downside here and would look to add to shorts in the spread.</li>
<li>With rising interest rates, higher inflation, higher oil prices, a slowdown could lead to a rapid repricing of dividends and there will be opportunities to buy back the spread lower.</li>
</ul>


The HSCEI 2022 dividend futures are trading around our fair value. Larger than expected special dividends from oil and telecom companies could provide some upside.
The HSCEI 2022/23 div steepener has dropped from -5 to -15 since our last Insight. We see further downside here and would look to add to shorts in the spread.
With rising interest rates, higher inflation, higher oil prices, a slowdown could lead to a rapid repricing of dividends and there will be opportunities to buy back the spread lower.


HSCEI Dividend Futures: Stay Short the 2022/23 Steepener

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/huitongda" target="_blank" data-smartkarma-citation="entities:33789:1" rel="noopener">Huitongda (9878 HK)</a> had a subdued stock market debut with shares opening marginally above the IPO price.</li>
<li>Its subdued first-day performance suggests that investors are no longer misled by artificially low valuation multiples of "1P" EC players.</li>
<li>Based on EV/ (GMV + Retail Revenue), there’s a 38% downside to Huitongda’s valuation. However, it may be best to wait for signs of weakness before arranging a short position.</li>
</ul>



Huitongda (9878 HK) had a subdued stock market debut with shares opening marginally above the IPO price.
Its subdued first-day performance suggests that investors are no longer misled by artificially low valuation multiples of "1P" EC players.
Based on EV/ (GMV + Retail Revenue), there’s a 38% downside to Huitongda’s valuation. However, it may be best to wait for signs of weakness before arranging a short position.


APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

<ul>
<li>
<a href="https://www.smartkarma.com/entities/huitongda" target="_blank" data-smartkarma-citation="entities:33789:1" rel="noopener">Huitongda (9878 HK)</a> raised around US$285m in its Hong Kong IPO.</li>
<li>Overall, we are not comfortable with paying a premium valuation for HTD given its small scale of operations in a highly competitive and fragmented market. </li>
<li>In this note, we will look at the trading dynamics and current valuation.</li>
</ul>



Huitongda (9878 HK) raised around US$285m in its Hong Kong IPO.
Overall, we are not comfortable with paying a premium valuation for HTD given its small scale of operations in a highly competitive and fragmented market. 
In this note, we will look at the trading dynamics and current valuation.


Huitongda (汇通达) IPO Trading - Subscription Rates and Cornerstone Quality Leaves Much to Be Desired

China

PDD Holdings Inc. is a multinational commerce group that owns and operates a portfolio of businesses. The Company focuses on digital economy so that local communities and small businesses can benefit from the increased productivity and new opportunities. PDD Holdings has built a network of sourcing, logistics, and fulfillment capabilities for its underlying businesses.

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PDD Holdings (PDD US)

JD.com (JD): Plunged Following Indexes, But 4Q21 Result Worth Buying

Revenue grew rapidly by 23% in 4Q21 and we believe revenue will grow by 18% in 2022. We are not concerned about the zero net margin, because...

Ming Lu

Alibaba (BABA): 3Q22, Transforming Missions Going Under Slow Quarter

BABA’s app, SDTao, has been taking active users from Pinduoduo. We believe BABA’s physical store chain, Freshippo, will go public. We believe BABA...

Ming Lu

HSCEI Dividend Futures: Stay Short the 2022/23 Steepener

We see the HSCEI 2022 div futures trading in line with our estimates while there could be more downside to the 2022/23 div spread. We'd look to get...

Brian Freitas

Huitongda IPO – First Day Trading

The fact that Huitongda failed to generate a substantial first day gain could be an indication that investors are no longer misled by artificially...

Oshadhi Kumarasiri

Huitongda (汇通达) IPO Trading - Subscription Rates and Cornerstone Quality Leaves Much to Be Desired

Huitongda Network raised around US$285m in its Hong Kong IPO. In this note, we will look at the trading dynamics and current valuation.

Clarence Chu

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