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>In 1Q23, total revenue grew by 58% YoY and the operating margin improved to 18% versus 9% in the same period last year.</li>
<li>We believe the company benefited from its low-price products and the low comparison base last year.</li>
<li>We conclude the stock has an upside of 40% and a price target of US$100.</li>
</ul>


In 1Q23, total revenue grew by 58% YoY and the operating margin improved to 18% versus 9% in the same period last year.
We believe the company benefited from its low-price products and the low comparison base last year.
We conclude the stock has an upside of 40% and a price target of US$100.


Pinduoduo (PDD): 1Q23, Up by 58% YoY, 40% Upside

Greater China Equity Long/Short Analyst

Eric Chen

<ul>
<li>The odds are high for PDD to miss consensus for 1Q results this Friday due to high base and deflating domestic growth drivers, despite TEMU's momentum.</li>
<li>Among major China tech companies, PDD is likely to be the only one to register stagnant or even negative earnings growth for FY23, which has not been in the price.</li>
<li>A down cycle for PDD's earnings growth leads us to assign 12x P/E to an estimated non-GAAP net profit of RMB39 billion for FY23, implying 15% downside. </li>
</ul>


The odds are high for PDD to miss consensus for 1Q results this Friday due to high base and deflating domestic growth drivers, despite TEMU's momentum.
Among major China tech companies, PDD is likely to be the only one to register stagnant or even negative earnings growth for FY23, which has not been in the price.
A down cycle for PDD's earnings growth leads us to assign 12x P/E to an estimated non-GAAP net profit of RMB39 billion for FY23, implying 15% downside. 


Pinduoduo(PDD US): The Worst Is yet to Come

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC IPOs & Placements

Equity Capital Markets

Horizon Construction Development / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/horizon-construction-development" target="_blank" data-smartkarma-citation="entities:35117:1" rel="noopener">Horizon Construction Development (1887128D HK)</a> raised around US$210m in its Hong Kong IPO.</li>
<li>HCD is an equipment operation service provider in China. It provides services covering the full cycle of projects.</li>
<li>In this note, we will talk about the trading dynamics and valuation.</li>
</ul>



Horizon Construction Development (1887128D HK) raised around US$210m in its Hong Kong IPO.
HCD is an equipment operation service provider in China. It provides services covering the full cycle of projects.
In this note, we will talk about the trading dynamics and valuation.


Horizon Construction Dev IPO Trading - Subscription Rates Still Weak, Despite Cornerstone Support

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>E-commerce /In Depth: Chinese fast fashion platforms could be next U.S. target</li><li>Sentiment /: British firms ‘conditionally optimistic’ about their China operations in 2023</li><li>AIDS /: HIV/AIDS cases in China fell 13% during pandemic, expert says</li></ul>

E-commerce /In Depth: Chinese fast fashion platforms could be next U.S. targetSentiment /: British firms ‘conditionally optimistic’ about their China operations in 2023AIDS /: HIV/AIDS cases in China fell 13% during pandemic, expert says

CX Daily: Chinese Fast Fashion Platforms Could Be Next U.S. Target

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>Weaknesses of BABA stock and China tech sector in general post their strong earnings recovery for March quarter suggest market’s concerns centering around growth outlook.</li>
<li>BABA fundamental has tracked well to our projection since last November. P/E multiple contraction - which priced in too much pessimism - prevented our bullish call from materializing, for now.</li>
<li>We stick to our thesis that March quarter results set stage for BABA re-rating on sustained recovery, well-executed overhaul effectively unlocking value and investors’ renewed appetite for China assets.</li>
</ul>


Weaknesses of BABA stock and China tech sector in general post their strong earnings recovery for March quarter suggest market’s concerns centering around growth outlook.
BABA fundamental has tracked well to our projection since last November. P/E multiple contraction - which priced in too much pessimism - prevented our bullish call from materializing, for now.
We stick to our thesis that March quarter results set stage for BABA re-rating on sustained recovery, well-executed overhaul effectively unlocking value and investors’ renewed appetite for China assets.


Alibaba (BABA US): What It Takes for Re-Rating

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)

Pinduoduo (PDD): 1Q23, Up by 58% YoY, 40% Upside

In 1Q23, total revenue grew by 58% YoY and the operating margin improved significantly. We believe the company benefit from its low-price products...

Ming Lu

Pinduoduo(PDD US): The Worst Is yet to Come

The odds are high for PDD to miss consensus for 1Q results and the next two quarters will be more challenging due to tough comps.

Eric Chen

Horizon Construction Dev IPO Trading - Subscription Rates Still Weak, Despite Cornerstone Support

Horizon Construction Development (1887128D HK) raised around US$210m in its Hong Kong IPO. In this note, we will talk about the trading dynamics...

Ethan Aw

CX Daily: Chinese Fast Fashion Platforms Could Be Next U.S. Target

E-commerce /In Depth: Chinese fast fashion platforms could be next U.S. target Sentiment /: British firms ‘conditionally optimistic’ about their...

Caixin Global

Alibaba (BABA US): What It Takes for Re-Rating

Despite markets' focus on near-term growth weakness, we stick to our bullish call on BABA on sustained recovery, well-executed reorganization...

Eric Chen

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