IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

WuXi XDC Cayman  / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wuxi-xdc-cayman-inc" target="_blank" data-smartkarma-citation="entities:39917:1" rel="noopener">WuXi XDC Cayman Inc (1877628D HK)</a>, a leading contract research, development and manufacturing organization (CRDMO), is pre-marketing an HKEx IPO to raise US$500 million, according to press reports.</li>
<li>In <em><strong><a href="https://www.smartkarma.com/insights/wuxi-xdc-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:116331" rel="noopener">WuXi XDC IPO: The Bull Case</a></strong></em>, we highlighted the key elements of the bull case. In this note, we outline the bear case.</li>
<li>The bear case rests on margins on a downward trend, large customer concentration, high related party transactions and volatile FCF generation.</li>
</ul>



WuXi XDC Cayman Inc (1877628D HK), a leading contract research, development and manufacturing organization (CRDMO), is pre-marketing an HKEx IPO to raise US$500 million, according to press reports.
In WuXi XDC IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on margins on a downward trend, large customer concentration, high related party transactions and volatile FCF generation.


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.

Midea Group Co Ltd A / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/midea-group-co-ltd-a" target="_blank" data-smartkarma-citation="entities:16185:1" rel="noopener">Midea Group Co Ltd A (000333 CH)</a>, one of the world’s largest home appliance producers, aims to raise up to US$3bn in its H-share listing.</li>
<li>Midea Group is one of the world’s largest home appliance manufacturing companies with a presence in over 200 countries. Its A-shares have been listed since 2013.</li>
<li>We have covered the company and deal background in our previous note. In this note, we talk about the updates from the recent filing.</li>
</ul>



Midea Group Co Ltd A (000333 CH), one of the world’s largest home appliance producers, aims to raise up to US$3bn in its H-share listing.
Midea Group is one of the world’s largest home appliance manufacturing companies with a presence in over 200 countries. Its A-shares have been listed since 2013.
We have covered the company and deal background in our previous note. In this note, we talk about the updates from the recent filing.


Midea A/H Listing - Filing Updates - Growth and Margins Pick Up

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

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 119.1% as of Oct 27th.</li>
<li>The average A-H premium changed by -1.7ppt week on week, led by utilities, consumer discretionary, industrials and offset by consumer staples.</li>
<li>We highlight weekly changes in A-H premium for Beigene, China Merchants Securities, Guangzhou Auto, China Longyuan.</li>
</ul>


We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 119.1% as of Oct 27th.
The average A-H premium changed by -1.7ppt week on week, led by utilities, consumer discretionary, industrials and offset by consumer staples.
We highlight weekly changes in A-H premium for Beigene, China Merchants Securities, Guangzhou Auto, China Longyuan.


A-H Premium Weekly (Oct 27th): Beigene, CMS, Guangzhou Auto, China Longyuan

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Weight loss drug business has indeed significantly alleviated concerns about overcapacity issue in those leading CDMOs, but they do not have such a strong driving force on CROs.</li>
<li>The last straw that hits an industry is often not due to the disappearance of demographic dividends/declining demand/poor financial performance of companies, etc., but rather to policy-guided capital flows.</li>
<li>
<a href="https://www.smartkarma.com/entities/3d-medicines-inc" target="_blank" data-smartkarma-citation="entities:33790:1" rel="noopener">3D Medicines (1244 HK)</a> can be said a typical negative example in biopharmaceutical industry, and it is easy to be “manipulated”. We recommend investors stay away from such high-risk company.</li>
</ul>


Weight loss drug business has indeed significantly alleviated concerns about overcapacity issue in those leading CDMOs, but they do not have such a strong driving force on CROs.
The last straw that hits an industry is often not due to the disappearance of demographic dividends/declining demand/poor financial performance of companies, etc., but rather to policy-guided capital flows.

3D Medicines (1244 HK) can be said a typical negative example in biopharmaceutical industry, and it is easy to be “manipulated”. We recommend investors stay away from such high-risk company.


China Healthcare Weekly (Oct.6) - Weight Loss Drug CXO, Policy-Guided Capital Flows, 3D Medicines

Innovent Biologics Inc / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a> (IB) aims to raise around US$313m for R&amp;D and marketing.</li>
<li>The company has undertaken a number of deals in the past, with the overall results being mixed.</li>
<li>In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>



Innovent Biologics Inc (1801 HK) (IB) aims to raise around US$313m for R&amp;D and marketing.
The company has undertaken a number of deals in the past, with the overall results being mixed.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.


Innovent Biologics Placement - Has Ample Cash but the Discount Is Enticing

China

Asymchem Laboratories (Tianjin) Co., Ltd. operates as a pharmaceutical company. The Company researches, produces, and sells organic and inorganic chemicals, medicines, and other related products. Asymchem Laboratories serves customers worldwide.

Asymchem Laboratories Tianjin (002821 CH)

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Asymchem Laboratories Tianjin (002821 CH)

WuXi XDC IPO: The Bear Case

The bear case rests on margins on a downward trend, large customer concentration, high related party transactions and volatile FCF generation.

Arun George

Midea A/H Listing - Filing Updates - Growth and Margins Pick Up

Midea Group Co Ltd A (000333 CH), one of the world’s largest home appliance producers, aims to raise up to US$3bn in its H-share listing.

Sumeet Singh

A-H Premium Weekly (Oct 27th): Beigene, CMS, Guangzhou Auto, China Longyuan

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Beigene, China Merchants Securities, Guangzhou Auto, China...

Ke Yan, CFA, FRM

China Healthcare Weekly (Oct.6) - Weight Loss Drug CXO, Policy-Guided Capital Flows, 3D Medicines

Weight loss drug business would indeed bring opportunity to CDMO, but not CRO. Investors may need to pay attention to policy-guided capital...

Xinyao (Criss) Wang

Innovent Biologics Placement - Has Ample Cash but the Discount Is Enticing

Innovent Biologics Inc (1801 HK) (IB) aims to raise around US$313m for R&D and marketing. In this note, we talk about the deal dynamics and run the...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)