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

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of April 11th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Tencent, Alibaba, Xiaomi, China Mobile, SMIC, HSBC.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of April 11th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Tencent, Alibaba, Xiaomi, China Mobile, SMIC, HSBC.


HK Connect Flows Weekly (Apr 11th): Tencent, Alibaba, Xiaomi, China Mobile, SMIC, HSBC

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

AviChina Industry & Technology H / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/avichina-industry-technology-h" target="_blank" data-smartkarma-citation="entities:16315:1" rel="noopener">AviChina Industry &amp; Technology H (2357 HK)</a>'s FY23 earnings growth of 5.5% is affected by dilution and restatement. Its A-share subsidiaries achieved a 24% aggregate earnings growth. </li>
<li>Gross margin expanded and outlook remains decent. Projected growth for these A-shares reached 36.6% in FY24F and 23.8% in FY25F. Net cash equals 40% of the share price.</li>
<li>The stock's 8.5x and 7.3x PERs for FY24F and FY25F are cheap relative to its peers. It also trades at 57% discount to its A-share holdings.</li>
</ul>



AviChina Industry &amp; Technology H (2357 HK)'s FY23 earnings growth of 5.5% is affected by dilution and restatement. Its A-share subsidiaries achieved a 24% aggregate earnings growth. 
Gross margin expanded and outlook remains decent. Projected growth for these A-shares reached 36.6% in FY24F and 23.8% in FY25F. Net cash equals 40% of the share price.
The stock's 8.5x and 7.3x PERs for FY24F and FY25F are cheap relative to its peers. It also trades at 57% discount to its A-share holdings.


AviChina Industry (2357 HK): Better Look Forward

<ul>
<li>The A-share subsidiaries of <a href="https://www.smartkarma.com/entities/avichina-industry-technology-h" target="_blank" data-smartkarma-citation="entities:16315:1" rel="noopener">AviChina Industry &amp; Technology (2357 HK)</a> have mostly posted solid 3Q23 results - aggregate earnings growth has accelerated to 50.2%, from 26.8% in 1Q23.</li>
<li>Their 9M23 result reached 64% of FY23 consensus forecast earnings for AviChina, vs. just 61% a year ago. This indicates the market is too conservative and suggests room for upgrade.</li>
<li>Valuations are cheap at 8.7x and 7.0x PERs for FY23 and FY24. Its market capitalisation equals just 46% of the total attributable market capitalisation of these subsidiaries.</li>
</ul>


The A-share subsidiaries of AviChina Industry &amp; Technology (2357 HK) have mostly posted solid 3Q23 results - aggregate earnings growth has accelerated to 50.2%, from 26.8% in 1Q23.
Their 9M23 result reached 64% of FY23 consensus forecast earnings for AviChina, vs. just 61% a year ago. This indicates the market is too conservative and suggests room for upgrade.
Valuations are cheap at 8.7x and 7.0x PERs for FY23 and FY24. Its market capitalisation equals just 46% of the total attributable market capitalisation of these subsidiaries.


AviChina Industry (2357 HK): No Way Its Parts Are Greater than the Sum

<ul>
<li>
<a href="https://www.smartkarma.com/entities/avichina-industry-technology-h" target="_blank" data-smartkarma-citation="entities:16315:1" rel="noopener">AviChina Industry &amp; Technology H (2357 HK)</a> is expected to see sustained profit upturn in 2H23 following a 26.8% growth in 1H23. Continued geopolitical turmoil will still benefit it.  </li>
<li>All its listed A-share subsidiaries recorded a pick-up in earnings momentum in 2Q23, and this indicates solid underlying demand as well as the impact of product developments.</li>
<li>
<a href="https://www.smartkarma.com/entities/avic-helicopter-co-ltd-a" target="_blank" data-smartkarma-citation="entities:14380:1" rel="noopener">Avicopter PLC (600038 CH)</a> has seen volume and price recovery after product portfolio refinement while new products have stimulated the ancillary system and related business.</li>
</ul>



AviChina Industry &amp; Technology H (2357 HK) is expected to see sustained profit upturn in 2H23 following a 26.8% growth in 1H23. Continued geopolitical turmoil will still benefit it.  
All its listed A-share subsidiaries recorded a pick-up in earnings momentum in 2Q23, and this indicates solid underlying demand as well as the impact of product developments.

Avicopter PLC (600038 CH) has seen volume and price recovery after product portfolio refinement while new products have stimulated the ancillary system and related business.


AviChina Industry (2357 HK): This Is Just the Beginning

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

AviChina Industry & Technology H / Event-Driven

<ul>
<li>As a PRC aviation/defense play, <strong><a href="https://www.smartkarma.com/entities/avichina-industry-technology-h" target="_blank" data-smartkarma-citation="entities:16315:1" rel="noopener">AviChina Industry &amp; Technology H (2357 HK)</a></strong>'s fundamentals are undemanding. </li>
<li>Preceding my comments on AviChina are the current setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>


As a PRC aviation/defense play, AviChina Industry &amp; Technology H (2357 HK)'s fundamentals are undemanding. 
Preceding my comments on AviChina are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


China

AviChina Industry & Technology Co Ltd manufactures and sells aviation tools and aero-parts. The Company's main products include helicopters, regional aircrafts, trainers, general aircrafts, aero-parts and components and aero-electrical products.

AviChina Industry & Technology H (2357 HK)

Price Gauge
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AviChina Industry & Technology H (2357 HK)

HK Connect Flows Weekly (Apr 11th): Tencent, Alibaba, Xiaomi, China Mobile, SMIC, HSBC

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Tencent, Alibaba, Xiaomi, China Mobile, SMIC, HSBC.

Ke Yan, CFA, FRM

AviChina Industry (2357 HK): Better Look Forward

AviChina's FY23 earnings growth is affected by dilution and restatement, while its A-share subsidiaries see strong growth. The stock trades at a...

Osbert Tang, CFA

AviChina Industry (2357 HK): No Way Its Parts Are Greater than the Sum

We continue to like AviChina as a cheap play to access its underlying A-share aerospace and defense holdings. The stock has fallen by 12% YTD, and...

Osbert Tang, CFA

AviChina Industry (2357 HK): This Is Just the Beginning

With the heightened conflicts in the Middle East, defense companies like AviChina are expected to benefit from the rise in geopolitical risks....

Osbert Tang, CFA

StubWorld: AviChina Is Coming Up "Cheap"

A key tenet for China is the importance of ensuring the security of the economy and society. This should catalyse companies such as AviChina. And...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HK Connect Flows Weekly (Apr 11th): Tencent, Alibaba, Xiaomi, China Mobile, SMIC, HSBC

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Tencent, Alibaba, Xiaomi, China Mobile, SMIC, HSBC.

Ke Yan, CFA, FRM

AviChina Industry (2357 HK): Better Look Forward

​AviChina's FY23 earnings growth is affected by dilution and restatement, while its A-share subsidiaries see strong growth. The stock trades at a...

Osbert Tang, CFA

AviChina Industry (2357 HK): No Way Its Parts Are Greater than the Sum

We continue to like AviChina as a cheap play to access its underlying A-share aerospace and defense holdings. The stock has fallen by 12% YTD, and...

Osbert Tang, CFA

AviChina Industry (2357 HK): This Is Just the Beginning

With the heightened conflicts in the Middle East, defense companies like AviChina are expected to benefit from the rise in geopolitical risks....

Osbert Tang, CFA

StubWorld: AviChina Is Coming Up "Cheap"

A key tenet for China is the importance of ensuring the security of the economy and society. This should catalyse companies such as AviChina. And...

David Blennerhassett

AviChina's FY23 earnings growth is affected by dilution and restatement, while its A-share subsidiaries see strong growth. The stock trades at a...