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.

Equity Capital Markets

China Education Group / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-education-group-holdin" target="_blank" data-smartkarma-citation="entities:18218:1" rel="noopener">China Education Group (839 HK)</a> is looking to raise up to US$209m in its top-up placement. </li>
<li>This will be the fourth placement by the group since its listing in 2017, we have earlier looked at the past three placements as well.</li>
<li>In this note, we will look  at the deal dynamics and run the deal through our ECM framework.</li>
</ul>



China Education Group (839 HK) is looking to raise up to US$209m in its top-up placement. 
This will be the fourth placement by the group since its listing in 2017, we have earlier looked at the past three placements as well.
In this note, we will look  at the deal dynamics and run the deal through our ECM framework.


China Education Group Placement - Recent Momentum Has Been Strong but past Deals Were Mixed

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 analyze the weekly Hong Kong Connect flows with our data engine for holding position as of December 23rd.</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 estimate that the outflow last week was USD 258m. Tencent, Kuaishou led the outflows.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of December 23rd.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We estimate that the outflow last week was USD 258m. Tencent, Kuaishou led the outflows.


Hong Kong Connect Flows (Dec 23rd): Tencent, Kuaishou

Equity Analyst

Xin Yu, CFA

Equity Bottom-Up

<ul>
<li>China private higher education sector is recovering with the supportive government policy</li>
<li>The sector trades at single digit P/E, which is attractive</li>
<li>China Education Group with its largest scale and solid trade record is a good candidate for investment</li>
</ul>


China private higher education sector is recovering with the supportive government policy
The sector trades at single digit P/E, which is attractive
China Education Group with its largest scale and solid trade record is a good candidate for investment


Buy China Education Group on China Private Higher Education Sector Recovery

Thematic (Sector/Industry)

<ul>
<li>On December 14, the CPC Central Committee and the State Council issued the Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035), supporting private education in China.</li>
<li>Private higher education is a necessary complement to the public higher education in China.</li>
<li>Private higher education sector is an attractive sector for investing now.</li>
</ul>


On December 14, the CPC Central Committee and the State Council issued the Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035), supporting private education in China.
Private higher education is a necessary complement to the public higher education in China.
Private higher education sector is an attractive sector for investing now.


China Private Higher Education Sector Is Recovering

HK/China Equity Long-Short

Osbert Tang, CFA

Hope Education Group Co Ltd / Equity Bottom-Up

<ul>
<li>Despite the plunge in share price after FY22 result, we think <a href="https://www.smartkarma.com/entities/hope-education-group-co-ltd" target="_blank" data-smartkarma-citation="entities:27321:1" rel="noopener">Hope Education Group Co Ltd (1765 HK)</a> has not yet reached its bottom given the challenging outlook faced.</li>
<li>We are concerned about stretched financial position with gearing surged 32.5pp in last year. Heavy capex and need to repay outstanding convertible bonds will strain its cash flow.  </li>
<li>Market earnings expectations are still overly optimistic. New schools looks to drag on near-term margins while surge in staffing, primarily teacher, costs is an added pressure.</li>
</ul>


Despite the plunge in share price after FY22 result, we think Hope Education Group Co Ltd (1765 HK) has not yet reached its bottom given the challenging outlook faced.
We are concerned about stretched financial position with gearing surged 32.5pp in last year. Heavy capex and need to repay outstanding convertible bonds will strain its cash flow.  
Market earnings expectations are still overly optimistic. New schools looks to drag on near-term margins while surge in staffing, primarily teacher, costs is an added pressure.


Hope Education (1765 HK): Have We Reached the Bottom?

China

Fu Shou Yuan International Group, Ltd. is a death care service provider in China.  The Company operates cemeteries and funeral facilities.

East Buy Holding Limited operates livestreaming platform businesses. The Company provides private label products including agricultural products, food, books, and household goods. East Buy Holding also conducts college education businesses.

Xiamen Unigroup Xue Co., Ltd. offers various educational services. The Company provides after-school tutoring and education consulting. Unigroup Xue also participates in real estate development and investment activities.

China Chunlai Education Group Co., Ltd. provides educational services. The Company offers private higher education services and other services. China Chunlai Education Group provides services in China.

Zhejiang Yasha Decoration Company Ltd. provides decorating services for large-scale infrastructure, high-end luxury hotel and luxury residential property.

China East Education Holdings Limited provides vocational training educational services. The Company offers culinary education, internet technology education, automotive education, and other services. China East Education Holdings provides services in China.

Shanghai Xin Nanyang Co., Ltd., through its subsidiaries, manufactures communication products and industrial equipment, develops cable TV network, security trading, and communication systems, provides network integration, education, and precision processing services.

China Kepei Education Group Limited provides educational services. The Company offers high-quality profession-oriented education services and other services. China Kepei Education Group provides services in China.

China YuHua Education operates private education from kindergarten to university in China.

Dong Yi Ri Sheng Home Decoration Group Company Limited designs and constructs set decorations, integrates home decoration materials, manufactures wood products and provides organic home decoration solutions, and its franchise business.

Dong Yi Ri Sheng Home Decoratn Gp (002713 CH)

InvoCare Limited owns and operates funeral homes, cemeteries and crematoriums in Australia. The Company's activities include the provision of funerals, burials and cremations through it's funeral home brands including Blackwell, Guardian, George Hartnett, Le Pine, Purslowe, Simplicity Funerals and White Lady Funerals.

Perdoceo Education Corporation provides educational services. The Company offers a variety of bachelor's, associate, and non-degree programs, with a core curricula of information technologies, visual communication and design technologies, business studies, and culinary arts. Perdoceo Education operates in the United States.

Universal Technical Institute Inc., through its Universal Technical Institute (UTI) campuses, provides technical education training. The Schools, through its UTI campuses, offers automotive, collision repair and refinishing, and diesel training. UTI also offers training in motorcycle, marine, and personal watercraft through its Motorcycle and Marine Mechanics Institutes(MMI).

Universal Technical Institute, Inc (UTI US)

SISB operates a premium K-12 international school in Thailand, adopted Singapore, UK and IBDP curriculum as a blended student pathway in schools. SISB was established in 2001 with the school license under the Private School Act. Currently, there are 6 international schools with over 4,000 students.

G8 Education Limited provides community-focused child care for families to foster their child's development.  The Company also conducts a range of child care services that includes child care centers acquisition, child care centers management, and industry-related project management, services and consultancy.

Lung Yen Life Service Corp operates a cemetery and offers funeral and disposition services.

Laureate Education, Inc. provides educational services. The University offers undergraduate and doctoral degrees in business and management, medical and health sciences, engineering, information technology, architecture, education, law, communications, and hospitality management. Laureate Education operates worldwide.

AcadeMedia AB provides educational services. The Company offers pre-school, elementary, secondary, vocational, adult education, comprehensive lesson plans, skills training, and professional rehabilitation services. AcadeMedia operates throughout Sweden.

Propel Funeral Partners Limited provides funeral services. The Company owns and operates funeral homes, cemeteries, crematoria, and related assets, as well as offers funeral, cremation, burial, and mortuary services. Propel Funeral Partners serves individuals and families in Australia and New Zealand.

Perfect Medical Health Management (previously Perfect Shape Medical Limited) offers slimming and beauty treatments. The Company provides fat softens and dissolves services, laser freckle services, and other services. Perfect Shape Medical offers services in China.

China Education Group Holdings Limited offers educational services. The Company provides private universities operating services, education training services, and other services. China Education Group Holdings offers services in Hong Kong.

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China Education Group (839 HK)

China Education Group Placement - Recent Momentum Has Been Strong but past Deals Were Mixed

China Education Group (839 HK) is looking to raise up to US$209m in its top-up placement. In this note, we run the deal through our ECM framework.

Sumeet Singh

Hong Kong Connect Flows (Dec 23rd): Tencent, Kuaishou

We analyzed the Hong Kong Connect Scheme for last week and highlight flows for Tencent (700 HK), Kuaishou Technology (1024 HK).

Ke Yan, CFA, FRM

Buy China Education Group on China Private Higher Education Sector Recovery

China private higher education sector is recovering with the supportive government policy. China Education Group with its largest scale and solid...

Xin Yu, CFA

China Private Higher Education Sector Is Recovering

The Chinese government issued the Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035) on Dec 14. It is positive for the...

Xin Yu, CFA

Hope Education (1765 HK): Have We Reached the Bottom?

Outlook for Hope Education is still very challenging given high cost pressure, heavy capex and tight financial position. There are significant...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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