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>We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.</li>
<li>Highest spreads - <a href="https://www.smartkarma.com/entities/21-vianet-group-inc-adr" target="_blank" data-smartkarma-citation="entities:8489:1" rel="noopener">21Vianet Group (VNET US)</a>, <a href="https://www.smartkarma.com/entities/alliance-aviation-services-ltd" target="_blank" data-smartkarma-citation="entities:20401:1" rel="noopener">Alliance Aviation Services (AQZ AU)</a>, <a href="https://www.smartkarma.com/entities/111-inc" target="_blank" data-smartkarma-citation="entities:27412:1" rel="noopener">111 Inc (YI US)</a>, <a href="https://www.smartkarma.com/entities/united-fiber-system-ltd" target="_blank" data-smartkarma-citation="entities:20826:1" rel="noopener">Golden Energy &amp; Resources (GER SP)</a>, <a href="https://www.smartkarma.com/entities/origin-energy-ltd" target="_blank" data-smartkarma-citation="entities:797:1" rel="noopener">Origin Energy (ORG AU)</a>, <a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a>.    </li>
<li>Lowest spreads - <a href="https://www.smartkarma.com/entities/ihara-science-corp" target="_blank" data-smartkarma-citation="entities:9870:1" rel="noopener">Ihara Science (5999 JP)</a>, <a href="https://www.smartkarma.com/entities/tyro-payments-ltd" target="_blank" data-smartkarma-citation="entities:28393:1" rel="noopener">Tyro Payments (TYR AU)</a>, <a href="https://www.smartkarma.com/entities/nitro-software-ltd" target="_blank" data-smartkarma-citation="entities:30943:1" rel="noopener">Nitro Software Ltd (NTO AU)</a>, <a href="https://www.smartkarma.com/entities/boustead-projects-ltd" target="_blank" data-smartkarma-citation="entities:26785:1" rel="noopener">Boustead Projects (BOCJ SP)</a>, <a href="https://www.smartkarma.com/entities/nissin-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:18567:1" rel="noopener">Nissin Electric (6641 JP)</a>, <a href="https://www.smartkarma.com/entities/techno-associe-co-ltd" target="_blank" data-smartkarma-citation="entities:3893:1" rel="noopener">Techno Associe (8249 JP)</a>. </li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads - 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), 111 Inc (YI US), Golden Energy &amp; Resources (GER SP), Origin Energy (ORG AU), Toyo Construction (1890 JP).    
Lowest spreads - Ihara Science (5999 JP), Tyro Payments (TYR AU), Nitro Software Ltd (NTO AU), Boustead Projects (BOCJ SP), Nissin Electric (6641 JP), Techno Associe (8249 JP). 


Merger Arb Mondays (27 Feb) - Jiangnan, Origin Energy, Pushpay, Nitro, Norwest, Halcyon, Boustead

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

<ul>
<li>As expected, <a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a> replaces <a href="https://www.smartkarma.com/entities/china-feihe-ltd" target="_blank" data-smartkarma-citation="entities:24413:1" rel="noopener">China Feihe (6186 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> at the close on 10 March.</li>
<li>Using prices from the close on 24 February, estimated one-way turnover is 3.28% and will result in a one-way trade of HK$2,162m at the close on 10 March.</li>
<li>Short interest on <a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a>, <a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a>, <a href="https://www.smartkarma.com/entities/china-feihe-ltd" target="_blank" data-smartkarma-citation="entities:24413:1" rel="noopener">China Feihe (6186 HK)</a> is quite high in terms of days of ADV to cover and in terms of float.</li>
</ul>


As expected, XPeng (9868 HK) replaces China Feihe (6186 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close on 10 March.
Using prices from the close on 24 February, estimated one-way turnover is 3.28% and will result in a one-way trade of HK$2,162m at the close on 10 March.
Short interest on XPeng (9868 HK), Li Auto (2015 HK), China Feihe (6186 HK) is quite high in terms of days of ADV to cover and in terms of float.


HSCEI Index Rebalance: Xpeng (9868) Replaces China Feihe (6186); Li Auto (2015) Biggest Gainer

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 statistics on top repurchases over one week, one month, one quarter and one year periods ended on Feb 24th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Great Wall Motor (2333 HK), China Mengniu (2319 HK), Esr (1821 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), Great Wall Motor (2333 HK), Esr (1821 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Feb 24th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Great Wall Motor (2333 HK), China Mengniu (2319 HK), Esr (1821 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), Great Wall Motor (2333 HK), Esr (1821 HK).


Hong Kong Buybacks Weekly (Feb 24th): Great Wall Motor, China Mengniu Dairy, Esr

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

China Mengniu Dairy Co / Equity Bottom-Up

<ul><li>Our view to dairy segment’s outlook remains mediocre, as we believe players should in general share less sensitivity to the reopening theme relative to their peers in the beer and cosmetics segment, respectively.</li><li>That said, we see trading opportunity on Mengniu into results season. This would mainly be underpinned by 1) an easy and stabilizing earnings expectation (for both 2H22 and 2023E), when we see subdued downside risk to current consensus estimates, and 2) a moderately lagging valuation to peers who have already been re-rated on reopening sentiment.</li><li>Our call does not indicate any preference changes in our structural picks. Instead, we argue the stock could play near term catch-up catalyzed by this expectation mismatch, when a likely in line 2H could refresh market expectation, despite any earnings miss last year (which looks to be not uncommon as we observed). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Our view to dairy segment’s outlook remains mediocre, as we believe players should in general share less sensitivity to the reopening theme relative to their peers in the beer and cosmetics segment, respectively.That said, we see trading opportunity on Mengniu into results season. This would mainly be underpinned by 1) an easy and stabilizing earnings expectation (for both 2H22 and 2023E), when we see subdued downside risk to current consensus estimates, and 2) a moderately lagging valuation to peers who have already been re-rated on reopening sentiment.Our call does not indicate any preference changes in our structural picks. Instead, we argue the stock could play near term catch-up catalyzed by this expectation mismatch, when a likely in line 2H could refresh market expectation, despite any earnings miss last year (which looks to be not uncommon as we observed). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Mengniu Dairy (2319 HK) – A laggard play to this early-staged consumption-led recovery

<ul>
<li>We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.</li>
<li>Highest spreads - <a href="https://www.smartkarma.com/entities/21-vianet-group-inc-adr" target="_blank" data-smartkarma-citation="entities:8489:1" rel="noopener">21Vianet Group (VNET US)</a>, <a href="https://www.smartkarma.com/entities/alliance-aviation-services-ltd" target="_blank" data-smartkarma-citation="entities:20401:1" rel="noopener">Alliance Aviation Services (AQZ AU)</a>, <a href="https://www.smartkarma.com/entities/origin-energy-ltd" target="_blank" data-smartkarma-citation="entities:797:1" rel="noopener">Origin Energy (ORG AU)</a>, <a href="https://www.smartkarma.com/entities/111-inc" target="_blank" data-smartkarma-citation="entities:27412:1" rel="noopener">111 Inc (YI US)</a>, <a href="https://www.smartkarma.com/entities/united-fiber-system-ltd" target="_blank" data-smartkarma-citation="entities:20826:1" rel="noopener">Golden Energy &amp; Resources (GER SP)</a>, <a href="https://www.smartkarma.com/entities/genesis-minerals-ltd" target="_blank" data-smartkarma-citation="entities:4650:1" rel="noopener">Genesis Minerals (GMD AU)</a>. </li>
<li>Lowest spreads - <a href="https://www.smartkarma.com/entities/boustead-projects-ltd" target="_blank" data-smartkarma-citation="entities:26785:1" rel="noopener">Boustead Projects (BOCJ SP)</a>, <a href="https://www.smartkarma.com/entities/ihara-science-corp" target="_blank" data-smartkarma-citation="entities:9870:1" rel="noopener">Ihara Science (5999 JP)</a>, <a href="https://www.smartkarma.com/entities/nitro-software-ltd" target="_blank" data-smartkarma-citation="entities:30943:1" rel="noopener">Nitro Software Ltd (NTO AU)</a>, <a href="https://www.smartkarma.com/entities/tyro-payments-ltd" target="_blank" data-smartkarma-citation="entities:28393:1" rel="noopener">Tyro Payments (TYR AU)</a>, <a href="https://www.smartkarma.com/entities/essential-metals-ltd" target="_blank" data-smartkarma-citation="entities:9645:1" rel="noopener">Essential Metals (ESS AU)</a>, <a href="https://www.smartkarma.com/entities/warrego-energy-ltd-082ab214-f4bb-4224-b321-8977486cd661" target="_blank" data-smartkarma-citation="entities:7808:1" rel="noopener">Warrego Energy (WGO AU)</a>. </li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads - 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Origin Energy (ORG AU), 111 Inc (YI US), Golden Energy &amp; Resources (GER SP), Genesis Minerals (GMD AU). 
Lowest spreads - Boustead Projects (BOCJ SP), Ihara Science (5999 JP), Nitro Software Ltd (NTO AU), Tyro Payments (TYR AU), Essential Metals (ESS AU), Warrego Energy (WGO AU). 


Merger Arb Mondays (20 Feb) - AAG Energy, Yashili, Toyo, Nitro, Origin Energy, Newcrest, O2Micro

China

China Mengniu Dairy Company Limited, through its subsidiaries, manufactures and distributes quality dairy products in China. The principal products are liquid milk products, ice cream, and other dairy products, such as milk powder. The Company markets its products under its primary MENGNIU core brand.

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China Mengniu Dairy Co (2319 HK)

Merger Arb Mondays (27 Feb) - Jiangnan, Origin Energy, Pushpay, Nitro, Norwest, Halcyon, Boustead

This week, the highest gross spreads are VNET (98.5%), Alliance Aviation (36.1%), 111 (30.7%), Golden Energy (13.0%), Origin Energy (10.1%), Toyo...

Arun George

HSCEI Index Rebalance: Xpeng (9868) Replaces China Feihe (6186); Li Auto (2015) Biggest Gainer

Xpeng replaces China Feihe in the HSCEI at the close on 10 March. Li Auto is the biggest gainer following a change in index handling for dual...

Brian Freitas

Hong Kong Buybacks Weekly (Feb 24th): Great Wall Motor, China Mengniu Dairy, Esr

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Great Wall Motor...

Ke Yan, CFA, FRM

Mengniu Dairy (2319 HK) – A laggard play to this early-staged consumption-led recovery

Our view to dairy segment’s outlook remains mediocre, as we believe players should in general share less sensitivity to the reopening theme...

CMB International

Merger Arb Mondays (20 Feb) - AAG Energy, Yashili, Toyo, Nitro, Origin Energy, Newcrest, O2Micro

This week, the highest gross spreads are VNET (81.0%), Alliance Aviation (36.5%), Origin (28.6%), 111 (22.4%), Golden Energy (19.3%), Genesis...

Arun George

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