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

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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Equity Capital Markets

IMAX China Holding / Equity Capital Markets

<p>As part of our IPO coverage, we closely followed Hong Kong IPOs over 2015, and wrote on most of the larger deals. In this insight, we've used the data from our deal coverage to highlight a few interesting analytics about the deals that we saw over the past year.</p><p>We've analysed 53 IPO deals and keyed in on 5 charts: the overall performance distribution, and IPO performance based on sector, market cap, lead broker and retail participation. </p><div class="content-remarks">For our analysis we have selected listings in Hong Kong…</div>

As part of our IPO coverage, we closely followed Hong Kong IPOs over 2015, and wrote on most of the larger deals. In this insight, we've used the data from our deal coverage to highlight a few interesting analytics about the deals that we saw over the past year.We've analysed 53 IPO deals and keyed in on 5 charts: the overall performance distribution, and IPO performance based on sector, market cap, lead broker and retail participation. For our analysis we have selected listings in Hong Kong…

5 Key Charts to Wrap-Up 2015 HK IPO - Broker, Sector, and Retail Analytics

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Suchuang Gas Corp / Equity Capital Markets

<p>Suchuang Gas, a piped natural gas operator in Taicang, China, plans to raise up to US$75m via an IPO. We would avoid the deal, given:</p><ul><li>The company has only one exclusivity agreement, to provider piped natural gas in Taicang, vs. it larger peers who operate across multiple cities. This greatly increases local government risk to its business vs. its peers, while reducing its scope for long term growth.</li><li>Corporate governance remains questionable, as management had earlier paid out large dividends in 2013 and plans to use part of the proceeds to acquire some refueling stations from a related entity, the price of which hasn't been disclosed.</li><li>While at the lower end the stock is being offered at a 30% discount to its larger peers however, the market cap post listing will be &lt;1/10th of its larger peers, thus, the discount looks adequate in our view.</li><li>Chinese government remains intent on increasing the share of natural gas in its energy consumption, but the fall in oil prices have made domestic natural gas uncompetitive in several regions. While NDRC has been undertaking reforms to move to market based pricing, however, in the near term uncompetitive prices could impact volume offtake of commercial and industrial clients, who form the largest customers for Suchuang Gas.</li><li>The company achieves a borderline score on our framework. In addition, recent small/mid-cap IPOs in HK have not been doing well.</li></ul>

Suchuang Gas, a piped natural gas operator in Taicang, China, plans to raise up to US$75m via an IPO. We would avoid the deal, given:The company has only one exclusivity agreement, to provider piped natural gas in Taicang, vs. it larger peers who operate across multiple cities. This greatly increases local government risk to its business vs. its peers, while reducing its scope for long term growth.Corporate governance remains questionable, as management had earlier paid out large dividends in 2013 and plans to use part of the proceeds to acquire some refueling stations from a related entity, the price of which hasn't been disclosed.While at the lower end the stock is being offered at a 30% discount to its larger peers however, the market cap post listing will be &lt;1/10th of its larger peers, thus, the discount looks adequate in our view.Chinese government remains intent on increasing the share of natural gas in its energy consumption, but the fall in oil prices have made domestic natural gas uncompetitive in several regions. While NDRC has been undertaking reforms to move to market based pricing, however, in the near term uncompetitive prices could impact volume offtake of commercial and industrial clients, who form the largest customers for Suchuang Gas.The company achieves a borderline score on our framework. In addition, recent small/mid-cap IPOs in HK have not been doing well.

Suchuang Gas - Cheap price but dim prospects - Avoid

China

Suchuang Gas Corporation Limited sells and transmits piped natural gas to users operating in the Taicang, Jiangsu Province area of the People's Republic of China.

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Suchuang Gas Corp (1430 HK)

5 Key Charts to Wrap-Up 2015 HK IPO - Broker, Sector, and Retail Analytics

As part of our IPO coverage, we closely followed Hong Kong IPOs over 2015, and wrote on most of the larger deals. In this insight, we've used the...

Ke Yan, CFA, FRM

Suchuang Gas - Cheap price but dim prospects - Avoid

Suchuang Gas, a piped natural gas operator in Taicang, China, plans to raise up to US$75m via an IPO. We would avoid the deal, given: The company...

Sumeet Singh

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52-week Range

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