APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC 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 MeiDong Auto / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-meidong-auto-holdings-limited" target="_blank" data-smartkarma-citation="entities:10795:1" rel="noopener">China MeiDong Auto (1268 HK)</a> is looking to raise US$100m via a top-up placement.</li>
<li>Proceeds from the offering will be geared towards potential M&amp;A and general working capital purposes.</li>
<li>In this note, we will run the deal through our ECM framework and talk about the recent updates.</li>
</ul>



China MeiDong Auto (1268 HK) is looking to raise US$100m via a top-up placement.
Proceeds from the offering will be geared towards potential M&amp;A and general working capital purposes.
In this note, we will run the deal through our ECM framework and talk about the recent updates.


China MeiDong Auto Placement - Strong Track Record and Past Deals Have Held Up

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Event-Driven

<ul>
<li>Today PCAOB announced that they had secured complete access to inspect and investigate Chinese Firms for the first time in history.</li>
<li>This was on back of the Aug 2022 agreement between PCAOB, CSRC and MOF, which was followed up with a Hong Kong visit by PCAOB officials over Sep-Nov 2022.</li>
<li>We wrote about this on 14th Dec 2022 and expected the results to be out on Friday (16th Dec), they have come out a day earlier than we expected.</li>
</ul>


Today PCAOB announced that they had secured complete access to inspect and investigate Chinese Firms for the first time in history.
This was on back of the Aug 2022 agreement between PCAOB, CSRC and MOF, which was followed up with a Hong Kong visit by PCAOB officials over Sep-Nov 2022.
We wrote about this on 14th Dec 2022 and expected the results to be out on Friday (16th Dec), they have come out a day earlier than we expected.


China ADRs Delisting - Christmas Came a Day Earlier than We Expected - No Delisting Risk for Now

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>Since our note in April <a href="https://www.smartkarma.com/insights/china-meidong-back-the-porsche-at-20-hkd" target="_blank" data-smartkarma-citation="insights:69518" rel="noopener">China Meidong: Back the Porsche at 20 HKD</a>, the company is down greater than 50% despite improving fundamentals due to bearish sentiment on China.</li>
<li>The stock trades at 11.3x/6.4x FY22/23e PE. Assuming an 80% payout ratio, the stock has a 7.1%/12.5% dividend yield for FY22/23e. We believe there is an upside to the payout.</li>
<li>Checks with the company suggest Porsche sales are robust in the high double digits, and the company has overall accelerating revenue trends since Q1 2022. </li>
</ul>


Since our note in April China Meidong: Back the Porsche at 20 HKD, the company is down greater than 50% despite improving fundamentals due to bearish sentiment on China.
The stock trades at 11.3x/6.4x FY22/23e PE. Assuming an 80% payout ratio, the stock has a 7.1%/12.5% dividend yield for FY22/23e. We believe there is an upside to the payout.
Checks with the company suggest Porsche sales are robust in the high double digits, and the company has overall accelerating revenue trends since Q1 2022. 


Meidong: Now at 11.5 HKD, a Great Entry Price

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Orient Overseas International / Event-Driven

<ul>
<li>The inclusion of <a href="https://www.smartkarma.com/entities/orient-overseas-international" target="_blank" data-smartkarma-citation="entities:801:1" rel="noopener">Orient Overseas International</a>, <a href="https://www.smartkarma.com/entities/zhongsheng-group-holdings" target="_blank" data-smartkarma-citation="entities:10573:1" rel="noopener">Zhongsheng Group</a>, <a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-international-corp-smic" target="_blank" data-smartkarma-citation="entities:14231:1" rel="noopener">Semiconductor Manufacturing International Corp (SMIC)</a> and <a href="https://www.smartkarma.com/entities/china-hongqiao-group-ltd" target="_blank" data-smartkarma-citation="entities:1909:1" rel="noopener">China Hongqiao</a> plus the deletion of <a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies Holdings</a> takes us to 69 index stocks.</li>
<li>Changes to the stocks, number of shares, float and capping result in an estimated one-way turnover is 3.43% and will result in a one-way trade of HK$7,444m.</li>
<li>There is huge short interest on <a href="https://www.smartkarma.com/entities/zhongsheng-group-holdings" target="_blank" data-smartkarma-citation="entities:10573:1" rel="noopener">Zhongsheng Group (881 HK)</a> and <a href="https://www.smartkarma.com/entities/china-hongqiao-group-ltd" target="_blank" data-smartkarma-citation="entities:1909:1" rel="noopener">China Hongqiao (1378 HK)</a> and there could be some short covering from now to implementation.</li>
</ul>


The inclusion of Orient Overseas International, Zhongsheng Group, Semiconductor Manufacturing International Corp (SMIC) and China Hongqiao plus the deletion of AAC Technologies Holdings takes us to 69 index stocks.
Changes to the stocks, number of shares, float and capping result in an estimated one-way turnover is 3.43% and will result in a one-way trade of HK$7,444m.
There is huge short interest on Zhongsheng Group (881 HK) and China Hongqiao (1378 HK) and there could be some short covering from now to implementation.


HSI Index Rebalance: Four Weddings & A Funeral

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-meidong-auto-holdings-limited" target="_blank" data-smartkarma-citation="entities:10795:1" rel="noopener">China Meidong Auto (1268 HK)</a> trades at a 12x/9x PE FY22/23E with a 6.5% dividend yield at a 20 HKD/share price (assuming an 80% payout ratio).</li>
<li>In buying <a href="https://www.smartkarma.com/entities/china-meidong-auto-holdings-limited" target="_blank" data-smartkarma-citation="entities:10795:1" rel="noopener">China Meidong Auto (1268 HK)</a>, you get an industry leader in the dealership space with supreme execution (35% ROE/47% CAGR profit growth/best capital allocator).</li>
<li>The integration of the Starchase Porsche Dealerships provides an upside potential, as the management, with their superior track record, can significantly improve the target's operations.</li>
</ul>



China Meidong Auto (1268 HK) trades at a 12x/9x PE FY22/23E with a 6.5% dividend yield at a 20 HKD/share price (assuming an 80% payout ratio).
In buying China Meidong Auto (1268 HK), you get an industry leader in the dealership space with supreme execution (35% ROE/47% CAGR profit growth/best capital allocator).
The integration of the Starchase Porsche Dealerships provides an upside potential, as the management, with their superior track record, can significantly improve the target's operations.


China Meidong: Back the Porsche at 20 HKD

China

China Meidong Auto Holdings Limited is an automobile dealership and maintenance group in China.

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China MeiDong Auto (1268 HK)

China MeiDong Auto Placement - Strong Track Record and Past Deals Have Held Up

China MeiDong Auto (1268 HK) is looking to raise US$100m via a top-up placement. In this note, we will run the deal through our ECM framework and...

Clarence Chu

China ADRs Delisting - Christmas Came a Day Earlier than We Expected - No Delisting Risk for Now

Today PCAOB announced that they had secured complete access to inspect and investigate Chinese Firms for the first time in history. This removes...

Sumeet Singh

Meidong: Now at 11.5 HKD, a Great Entry Price

Meidong trades at 11.3x/6.4x FY22/23e PE. Assuming an 80% payout ratio, the stock has a 7.1%/12.5% dividend yield for FY22/23e. We believe there is...

Sameer Taneja

HSI Index Rebalance: Four Weddings & A Funeral

There are 4 adds & 1 delete to take the number of HSI members to 69. There is reasonable impact on the stocks and huge short interest on some of...

Brian Freitas

China Meidong: Back the Porsche at 20 HKD

China Meidong Auto (1268 HK) trades at a 12x/9x FY22/23E with a 6.5% dividend yield at a 20 HKD/share price ( assuming an 80% payout ratio ). We...

Sameer Taneja

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