Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

Event-Driven

<ul>
<li>On 16th Nov 22, post-market close, along with its 3Q22 results Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.</li>
<li>At the time of declaration, the dividend amounted to US$20bn or 15.5% of Meituan’s outstanding shares. Its value has since declined to US$17bn</li>
<li>We have covered the background of the event in our previous notes. In this note, we talk about the recent updates.</li>
</ul>


On 16th Nov 22, post-market close, along with its 3Q22 results Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.
At the time of declaration, the dividend amounted to US$20bn or 15.5% of Meituan’s outstanding shares. Its value has since declined to US$17bn
We have covered the background of the event in our previous notes. In this note, we talk about the recent updates.


Tencent Meituan Dividend - The US$17bn Overhang Is Here - Not All Shares in CCASS, Here We Go Again!

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>In early 2022, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> made clear it was on a divestment path - disposing of investments able to support themselves - possibly "obliged" after 2021's China internet mess.</li>
<li>In August, Reuters suggested <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> was next. Tencent denied it, but in November with Q3 earnings, announced a January 2023 distribution with March 2023 settlement. </li>
<li>US$16bn of Meituan shares get delivered on 24 March 2023 - this Friday. That's a lot. But this time is different than last time.
</li>
</ul>


In early 2022, Tencent (700 HK) made clear it was on a divestment path - disposing of investments able to support themselves - possibly "obliged" after 2021's China internet mess.
In August, Reuters suggested Meituan (3690 HK) was next. Tencent denied it, but in November with Q3 earnings, announced a January 2023 distribution with March 2023 settlement. 
US$16bn of Meituan shares get delivered on 24 March 2023 - this Friday. That's a lot. But this time is different than last time.



Meituan (3690 HK) - US$16bn of Shares To Be Delivered This Week

Equity Capital Markets

Alibaba Group Holding  / Equity Capital Markets

<ul>
<li>2022 marked our seventh year covering Equity Capital Markets (ECM) in Asia Pacific. 2022 was rather quiet ending with us covering one of the lowest number of IPOs and placements.</li>
<li>We ended 2022 with an accuracy rate of 74.6% across 55 IPOs that we covered and 70.5% across 78 placements. </li>
<li>For those not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific, including China ADRs.</li>
</ul>


2022 marked our seventh year covering Equity Capital Markets (ECM) in Asia Pacific. 2022 was rather quiet ending with us covering one of the lowest number of IPOs and placements.
We ended 2022 with an accuracy rate of 74.6% across 55 IPOs that we covered and 70.5% across 78 placements. 
For those not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific, including China ADRs.


Aequitas 2022 IPOs and Placements Performance Review - From the Busiest Year to the Slowest Year

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>
<a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>'s in-specie distribution of <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> shares goes ex-dividend next Thursday. Passive Hang Seng trackers will sell <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> stock at the close on 4 January.</li>
<li>The passive impact is not very large but there could be selling from active investors, both before and after settlement of the shares that is scheduled for 24 March.</li>
<li>
<a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus</a>/<a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers</a> will receive 258.93m shares (HK$47.69bn; 6.5x ADV; 4.18% of shares outstanding) of <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> and that will be an overhang on the stock for the near future.</li>
</ul>



Tencent (700 HK)'s in-specie distribution of Meituan (3690 HK) shares goes ex-dividend next Thursday. Passive Hang Seng trackers will sell Meituan (3690 HK) stock at the close on 4 January.
The passive impact is not very large but there could be selling from active investors, both before and after settlement of the shares that is scheduled for 24 March.

Prosus/Naspers will receive 258.93m shares (HK$47.69bn; 6.5x ADV; 4.18% of shares outstanding) of Meituan (3690 HK) and that will be an overhang on the stock for the near future.


Meituan (3690 HK): Passive Selling Next Week; Plus the Prosus Overhang

David Blennerhassett

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/atrenew-inc" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener"></a><a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a>-backed<a href="https://www.smartkarma.com/entities/atrenew-inc" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener"> ATRenew (RERE US)</a>, one of the pioneers of China's circular economy, registered its first non-GAAP net profit in the 3Q22.</li>
<li>The improvement pivoted off core business stability (consumer electronic devices recycling and sales) and an increasing revenue stream from its multi-category recycling business, including luxury goods.</li>
<li>This is all positive. However ATR, like all US-listed China plays, faces the prospect of a potential delisting under the HFCAA just 16 months away.</li>
</ul>



JD.com Inc. (9618 HK)-backed ATRenew (RERE US), one of the pioneers of China's circular economy, registered its first non-GAAP net profit in the 3Q22.
The improvement pivoted off core business stability (consumer electronic devices recycling and sales) and an increasing revenue stream from its multi-category recycling business, including luxury goods.
This is all positive. However ATR, like all US-listed China plays, faces the prospect of a potential delisting under the HFCAA just 16 months away.


China

JD.com Inc is an online direct sales company in China.  The Company offers a wide selection of products through its website and mobile applications.  JD.com sells appliances, computers, digital products, communication products, garments, books, and household items to consumers and vendors.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

JD.com Inc (ADR) (JD US)

Tencent Meituan Dividend - The US$17bn Overhang Is Here - Not All Shares in CCASS, Here We Go Again!

On 16th Nov 22, Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan. The settlement was...

Sumeet Singh

Meituan (3690 HK) - US$16bn of Shares To Be Delivered This Week

There are about US$16bn of Meituan (3690 HK) shares to be delivered at the end of this week. This setup resembles the JD.com distribution by...

Travis Lundy

Aequitas 2022 IPOs and Placements Performance Review - From the Busiest Year to the Slowest Year

2022 marked our seventh year covering Equity Capital Markets (ECM) in Asia Pacific. 2022 was rather quiet ending with us covering one of the lowest...

Sumeet Singh

Meituan (3690 HK): Passive Selling Next Week; Plus the Prosus Overhang

Passive Hang Seng trackers will sell Meituan next week, though the impact is not large. The overhang from the Prosus allocation is much bigger -...

Brian Freitas

ATRenew: Round & Round It Goes

ATR is trading cheap. Even cheaper when taking into account its net cash position. I would not be surprised to see ATR seek a secondary listing in...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)