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 analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 103.3% as of Jun 21st.</li>
<li>The average A-H premium changed by -1.5ppt week-on-week, led by real estate, communication services, consumer staples and offset by utilities, information technology.</li>
<li>We highlight weekly changes in A-H premium for China Tourism, Shenhua, China Telecom, CNOOC, Hua Hong Semi, YOFC, Huadian.</li>
</ul>


We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 103.3% as of Jun 21st.
The average A-H premium changed by -1.5ppt week-on-week, led by real estate, communication services, consumer staples and offset by utilities, information technology.
We highlight weekly changes in A-H premium for China Tourism, Shenhua, China Telecom, CNOOC, Hua Hong Semi, YOFC, Huadian.


A-H Premium Weekly (Jun 21st): China Tourism, Shenhua, China Telecom, CNOOC, Hua Hong Semi, YOFC

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.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/asia-cement-china-holdings" target="_blank" data-smartkarma-citation="entities:3374:1" rel="noopener">Asia Cement China (743 HK)</a> disclosed a Cayman scheme privatisation offer from <a href="https://www.smartkarma.com/entities/asia-cement-corp" target="_blank" data-smartkarma-citation="entities:15350:1" rel="noopener">Asia Cement (1102 TT)</a> at HK$3.22. Including the dividend, the total offer is HK$3.26, 1.7% below the last close. </li>
<li>The offer, which is final, is unattractive as it is materially below net cash and historical trading ranges. The disparity cannot be justified by the potential cash burn this year.</li>
<li>While no shareholder holds the 10% blocking stake, the high AGM minority participation rates and emerging retail opposition suggest a high chance of a deal break. </li>
</ul>



Asia Cement China (743 HK) disclosed a Cayman scheme privatisation offer from Asia Cement (1102 TT) at HK$3.22. Including the dividend, the total offer is HK$3.26, 1.7% below the last close. 
The offer, which is final, is unattractive as it is materially below net cash and historical trading ranges. The disparity cannot be justified by the potential cash burn this year.
While no shareholder holds the 10% blocking stake, the high AGM minority participation rates and emerging retail opposition suggest a high chance of a deal break. 


Asia Cement China (743 HK): A Low-Balled Offer Set up to Fail

<ul>
<li>
<a href="https://www.smartkarma.com/entities/asia-cement-china-holdings" target="_blank" data-smartkarma-citation="entities:3374:1" rel="noopener">Asia Cement China (743 HK)</a> entered a trading halt based on the Hong Kong Code on Takeovers and Mergers. Bloomberg reports that <a href="https://www.smartkarma.com/entities/asia-cement-corp" target="_blank" data-smartkarma-citation="entities:15350:1" rel="noopener">Asia Cement (1102 TT)</a> is considering a buyout. </li>
<li>Privatisation interest is unsurprising, as ACC’s EV has been negative since 6 July 2022 due to headwinds from the weak Chinese property sector and uncertainty about cash use.</li>
<li>An offer price of HK$5.18 would imply a zero EV. However, due to the difficult trading conditions, we think an offer would be around HK$4.00 per share.</li>
</ul>



Asia Cement China (743 HK) entered a trading halt based on the Hong Kong Code on Takeovers and Mergers. Bloomberg reports that Asia Cement (1102 TT) is considering a buyout. 
Privatisation interest is unsurprising, as ACC’s EV has been negative since 6 July 2022 due to headwinds from the weak Chinese property sector and uncertainty about cash use.
An offer price of HK$5.18 would imply a zero EV. However, due to the difficult trading conditions, we think an offer would be around HK$4.00 per share.


Asia Cement China (743 HK): Privatisation by Asia Cement?

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>Stable cement price, good cost control, and a better base for comparison will lift <a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd" target="_blank" data-smartkarma-citation="entities:159:1" rel="noopener">Anhui Conch Cement (914 HK)</a>'s profitability recovery in 2-4Q24.  <a href="https://www.smartkarma.com/entities/anhui-gourgen-traffic-cons-a" target="_blank" data-smartkarma-citation="entities:30237:1" rel="noopener"></a>
</li>
<li>Anhui Conch's earnings outperformed in 1Q24. Its peers are making losses and hence will reduce excess supply. Stabilisation of the real estate market will lower the pressure on demand.</li>
<li>Net cash equals 46% of the current share price, and its valuations (both PER and P/B) are inexpensive relative to peers and ROE.  </li>
</ul>


Stable cement price, good cost control, and a better base for comparison will lift Anhui Conch Cement (914 HK)'s profitability recovery in 2-4Q24.  

Anhui Conch's earnings outperformed in 1Q24. Its peers are making losses and hence will reduce excess supply. Stabilisation of the real estate market will lower the pressure on demand.
Net cash equals 46% of the current share price, and its valuations (both PER and P/B) are inexpensive relative to peers and ROE.  


Anhui Conch Cement (914 HK): Increasingly Favourable Odds

<ul>
<li>We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 124.6% as of Mar 22nd.</li>
<li>The average A-H premium changed by 1.4ppt week-on-week, led by consumer staples, information technology, utilities and offset by financials, health care.</li>
<li>We highlight weekly changes in A-H premium for ZTE, CRCC Times Electric, Air China, Longyuan, Shanghai Fudan, Hua Hong Semi.</li>
</ul>


We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 124.6% as of Mar 22nd.
The average A-H premium changed by 1.4ppt week-on-week, led by consumer staples, information technology, utilities and offset by financials, health care.
We highlight weekly changes in A-H premium for ZTE, CRCC Times Electric, Air China, Longyuan, Shanghai Fudan, Hua Hong Semi.


A-H Premium Weekly (Mar 22nd): ZTE, CRCC Times Electric, Air China, Longyuan, Shanghai Fudan

China

BBMG Corporation has operation in manufacturing and sales of cement and modern building materials. The Company also operates in property development, property investment and provision of property management services in China.

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BBMG Corp H (2009 HK)

A-H Premium Weekly (Jun 21st): China Tourism, Shenhua, China Telecom, CNOOC, Hua Hong Semi, YOFC

We analyzed A-H premium changes in the past week and highlight A-H premium changes for China Tourism, Shenhua, China Telecom, CNOOC, Hua Hong Semi,...

Ke Yan, CFA, FRM

Asia Cement China (743 HK): A Low-Balled Offer Set up to Fail

The low-balled offer is final. While no shareholder holds the 10% blocking stake, the high AGM minority participation rates and emerging retail...

Arun George

Asia Cement China (743 HK): Privatisation by Asia Cement?

An offer price of HK$5.18 would imply a zero EV. However, due to the difficult trading conditions, we think an offer would be around HK$4.00 per...

Arun George

Anhui Conch Cement (914 HK): Increasingly Favourable Odds

Anhui Conch Cement has rallied 14% in last week on the back of the government’s rescue of the property market through buying of unsold homes by...

Osbert Tang, CFA

A-H Premium Weekly (Mar 22nd): ZTE, CRCC Times Electric, Air China, Longyuan, Shanghai Fudan

We analyzed A-H premium changes in the past week and highlight A-H premium changes for ZTE, CRCC Times Electric, Air China, Longyuan, Shanghai...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

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