HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>Nov and Dec wind generation continue to accelerate on a YoY basis, and it is also noteworthy that other renewable energy generation surged 346% MoM and 992% YoY in Dec.</li>
<li>SASAC's latest guidance for the centrally-owned SOEs on installed renewable capacity target of over 50% of total by 2025 is another signal of strong government support on wind power.</li>
<li>Acceptance by Shenzhen Stock Exchange of <a href="https://www.smartkarma.com/entities/inner-mongolia-pingzhuang-energy-resources-co-ltd" target="_blank" data-smartkarma-citation="entities:4267:1" rel="noopener">Inner Mongolia PingZhuang Energy Resources (000780 CH)</a> listing withdrawal application marks another step towards <a href="https://www.smartkarma.com/entities/china-longyuan-power-group-corp-ltd" target="_blank" data-smartkarma-citation="entities:14215:1" rel="noopener">China Longyuan Power Group Corp (916 HK)</a> return to A-share.</li>
</ul>


Nov and Dec wind generation continue to accelerate on a YoY basis, and it is also noteworthy that other renewable energy generation surged 346% MoM and 992% YoY in Dec.
SASAC's latest guidance for the centrally-owned SOEs on installed renewable capacity target of over 50% of total by 2025 is another signal of strong government support on wind power.
Acceptance by Shenzhen Stock Exchange of Inner Mongolia PingZhuang Energy Resources (000780 CH) listing withdrawal application marks another step towards China Longyuan Power Group Corp (916 HK) return to A-share.


China Longyuan (916 HK): The Trend Is Your Friend

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 134 stocks over the last week.</li>
<li>Consumer discretionary, consumer staple and health care sectors lower the overall A/H premium. </li>
<li>Real estate and industrials sectors are the only two sectors with WoW A/H premium increases.</li>
</ul>


We analyse the changes of A/H premium on 134 stocks over the last week.
Consumer discretionary, consumer staple and health care sectors lower the overall A/H premium. 
Real estate and industrials sectors are the only two sectors with WoW A/H premium increases.


A/H Premium Weekly: Consumer and Health Care Lowered A/H Premium

China Power International / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-power-international" target="_blank" data-smartkarma-citation="entities:15548:1" rel="noopener">China Power International (2380 HK)</a> has 20-30GW of potential clean energy project pipeline, and with its coal-fired power disposal plan, it has a strong case to achieve clean energy transformation. </li>
<li>Adjustment in tariff in Oct and new mechanism for 2022 tariff will see coal-fired profitability rebound. Potential asset injection from parent SPIC will also be positive long-term catalyst for CPI.  </li>
<li>We project its clean energy capacity growth may reach a CAGR of 44% in the 14th 5-year Plan, driving earnings momentum. Despite sharp rally YTD, valuations are still below peers. </li>
</ul>



China Power International (2380 HK) has 20-30GW of potential clean energy project pipeline, and with its coal-fired power disposal plan, it has a strong case to achieve clean energy transformation. 
Adjustment in tariff in Oct and new mechanism for 2022 tariff will see coal-fired profitability rebound. Potential asset injection from parent SPIC will also be positive long-term catalyst for CPI.  
We project its clean energy capacity growth may reach a CAGR of 44% in the 14th 5-year Plan, driving earnings momentum. Despite sharp rally YTD, valuations are still below peers. 


China Power International (2380 HK): Updates on an Ambitious Roadmap

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Orient Overseas International / Event-Driven

<ul>
<li>The review period for the March review of the HSCI ends on 31 December. There are expected to be a lot more inclusions than deletions at the review.</li>
<li>There are quite a few stocks that should be included following their listing over the last couple of months while others are now potential inclusions after passing the velocity test.</li>
<li>Quite a few of the potential deletions from the HSCI and Stock Connect have large holdings via Southbound Stock Connect and these stock could see some selling.</li>
</ul>


The review period for the March review of the HSCI ends on 31 December. There are expected to be a lot more inclusions than deletions at the review.
There are quite a few stocks that should be included following their listing over the last couple of months while others are now potential inclusions after passing the velocity test.
Quite a few of the potential deletions from the HSCI and Stock Connect have large holdings via Southbound Stock Connect and these stock could see some selling.


HSCI Index Rebalance and Stock Connect: More Inclusions than Exclusions in March

Xinjiang Goldwind Science & Technology / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/xinjiang-goldwind-science-technology-h" target="_blank" data-smartkarma-citation="entities:10112:1" rel="noopener">Xinjiang Goldwind Science &amp; Technology H (2208 HK)</a> is a prime candidate to benefit from the growth in demand for wind power installation and generation in China's "Dual Carbon" policy.</li>
<li>It has healthy order backlog equals to 1.3x FY20 sales, potential for better margin from business mix and product upgrade and sustained wind power capacity growth with solid construction pipeline.</li>
<li>Goldwind is a laggard in YTD performance, and trading on undemanding multiples relative to peers. We also see room for narrowing its underperformance against its A-share in next year.</li>
</ul>



Xinjiang Goldwind Science &amp; Technology H (2208 HK) is a prime candidate to benefit from the growth in demand for wind power installation and generation in China's "Dual Carbon" policy.
It has healthy order backlog equals to 1.3x FY20 sales, potential for better margin from business mix and product upgrade and sustained wind power capacity growth with solid construction pipeline.
Goldwind is a laggard in YTD performance, and trading on undemanding multiples relative to peers. We also see room for narrowing its underperformance against its A-share in next year.


2022 High Conviction: Xinjiang Goldwind (2208 HK) - Riding The "Dual Carbon" Tailwinds

China

China Suntien Green Energy Corp Ltd operates a wind farm and a natural gas business. The Company intends to build wind power projects and develop natural gas projects throughout China.

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China Suntien Green Energy (956 HK)

China Longyuan (916 HK): The Trend Is Your Friend

Good generation trend is positive, particularly a sharp improvement in other renewables. SASAC's latest SOEs energy targets and a step closer to...

Osbert Tang, CFA

A/H Premium Weekly: Consumer and Health Care Lowered A/H Premium

We highlight that the consumer discretionary, consumer staple and health care sectors are the biggest driver for lower A/H premium WoW.

Ke Yan, CFA, FRM

China Power International (2380 HK): Updates on an Ambitious Roadmap

Clean energy transformation will be supported by pipeline projects on hand and potential asset injection from parent. Coal-fired profitability...

Osbert Tang, CFA

HSCI Index Rebalance and Stock Connect: More Inclusions than Exclusions in March

We expect there will be a lot more inclusions than exclusions at the March rebalance of the HSCI. The changes to the index will result in changes...

Brian Freitas

2022 High Conviction: Xinjiang Goldwind (2208 HK) - Riding The "Dual Carbon" Tailwinds

Goldwind should ride on solid demand for wind power installation, margin expansion and commissioning of own wind farms. Valuations are undemanding...

Osbert Tang, CFA

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