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 117.4% as of Sep 29th.</li>
<li>The average A-H premium changed by 1.5ppt week on week, led by health care, industrials, consumer discretionary and offset by consumer staples, utilities, real estate.</li>
<li>We highlight weekly changes in A-H premium for Beigene, China Vanke, Guangzhou Automobile Group, Wuapptec Co Ltd.</li>
</ul>


We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 117.4% as of Sep 29th.
The average A-H premium changed by 1.5ppt week on week, led by health care, industrials, consumer discretionary and offset by consumer staples, utilities, real estate.
We highlight weekly changes in A-H premium for Beigene, China Vanke, Guangzhou Automobile Group, Wuapptec Co Ltd.


A-H Premium Weekly (Sep 29th): Beigene, China Vanke, Guangzhou Automobile, Wuapptec, Byd

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Thematic (Sector/Industry)

<ul>
<li>Fund exposure to China &amp; HK Banks closes in on lowest levels on record</li>
<li>Asia Ex-Japan investors prefer Indian and Indonesian Banks, whilst Tech/Internet industry groups dominate portfolios.</li>
<li>China &amp; HK Banks stand as the largest industry underweight, with 87% of funds positioned below the benchmark. Underperformance is expected.</li>
</ul>


Fund exposure to China &amp; HK Banks closes in on lowest levels on record
Asia Ex-Japan investors prefer Indian and Indonesian Banks, whilst Tech/Internet industry groups dominate portfolios.
China &amp; HK Banks stand as the largest industry underweight, with 87% of funds positioned below the benchmark. Underperformance is expected.


Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Equity Bottom-Up

<ul>
<li>Fee income is down 33% in the most recent quarter which may have prompted the bank to realize gains up 63% in the period to preserve profit growth</li>
<li>Quality of earnings is not strong, with more than half of the bank's pre-tax income delta driven by realized and unrealized gains, with credit cost decline the other key driver</li>
<li>Loss NPLs are now 26% of total NPLs, from 11% a few year ago, suggesting worsening credit metrics. Declining credit costs seem at odds with economy, NPL distribution.</li>
</ul>


Fee income is down 33% in the most recent quarter which may have prompted the bank to realize gains up 63% in the period to preserve profit growth
Quality of earnings is not strong, with more than half of the bank's pre-tax income delta driven by realized and unrealized gains, with credit cost decline the other key driver
Loss NPLs are now 26% of total NPLs, from 11% a few year ago, suggesting worsening credit metrics. Declining credit costs seem at odds with economy, NPL distribution.


Bank of Jiangsu - Fees -33%, Gains +64% Credit Costs -19%, Does Not Suggest Quality Earnings

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Sep 15th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short changes in Innovent Bio, Trip.Com, Nio, Baba, Zto Express, HSBC.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Sep 15th.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short changes in Innovent Bio, Trip.Com, Nio, Baba, Zto Express, HSBC.


HK Short Interest Weekly: Innovent Bio, Trip.Com, Nio, Baba, Zto Express, HSBC

<p>Rising oil prices can benefit DBS far more than peers, given its loan exposure to oil &amp; gas service sector. The bank can see improvements in both in on-balance sheet exposures as well as its off-balance sheet commitments. A look at loan loss reserves compared with gross loans, shows how one can model write-backs, and a precedence for seeing reserves come down after a sharp rise.  </p>

Rising oil prices can benefit DBS far more than peers, given its loan exposure to oil &amp; gas service sector. The bank can see improvements in both in on-balance sheet exposures as well as its off-balance sheet commitments. A look at loan loss reserves compared with gross loans, shows how one can model write-backs, and a precedence for seeing reserves come down after a sharp rise.  

China

China Merchants Bank Co., Ltd. operates as a commercial bank. The Company provides deposits, loans, wealth management, asset custody, finance leasing, investment banking, and other banking services. China Merchants Bank conducts businesses domestically and internationally.

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China Merchants Bank H (3968 HK)

A-H Premium Weekly (Sep 29th): Beigene, China Vanke, Guangzhou Automobile, Wuapptec, Byd

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Beigene, China Vanke, Guangzhou Automobile, Wuapptec, Byd.

Ke Yan, CFA, FRM

China Banks: Depressed Positioning

China and HK Banks stand as the largest industry underweight, with 87% of Asia Ex-Japan funds positioned below the benchmark. Underperformance is...

Steven Holden

Bank of Jiangsu - Fees -33%, Gains +64% Credit Costs -19%, Does Not Suggest Quality Earnings

Dramatically lower fee income, far higher realized gains, and lower credit costs are driving net profit growth, and do not suggest a positive or...

Daniel Tabbush

HK Short Interest Weekly: Innovent Bio, Trip.Com, Nio, Baba, Zto Express, HSBC

We analyzed the latest HK SFC report for aggregate short position as of Sep 15th and highlight short interest changes in Innovent Bio, Trip.Com,...

Ke Yan, CFA, FRM

DBS - Oil Prices Can Support Reversals

Far higher oil prices in recent days, weeks, makes the outlook for the bank's oil and gas service exposures much better, and these remain the...

Daniel Tabbush

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