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

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

Dividend (Yield)