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 the weekly Hong Kong Connect flows with our data engine for holding position as of October 28th.</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 highlight inflows into Tencent Holding, Meituan, Wuxi Biologics, Kuaishou.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of October 28th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight inflows into Tencent Holding, Meituan, Wuxi Biologics, Kuaishou.


Hong Kong Connect Flows (Oct 28th): Tencent, Meituan, Wuxi Biologics, Kuaishou

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

Event-Driven

Zhejiang Leapmotor Technologie / Event-Driven

<ul>
<li>We see three new listings as potential inclusions to the HSCI in December. One is already in Stock Connect, one will be added to Stock Connect while one will not.</li>
<li>Given the large market moves, there will be many changes to the HSCI in March 2023. Quite a few stocks could remain in the HSCI but drop out of Connect.</li>
<li>Some of the potential deletions/ Stock Connect drops have large Southbound holdings and some of these positions could be pared back over the next few months.</li>
</ul>


We see three new listings as potential inclusions to the HSCI in December. One is already in Stock Connect, one will be added to Stock Connect while one will not.
Given the large market moves, there will be many changes to the HSCI in March 2023. Quite a few stocks could remain in the HSCI but drop out of Connect.
Some of the potential deletions/ Stock Connect drops have large Southbound holdings and some of these positions could be pared back over the next few months.


HSCI Index Rebalance and Stock Connect: Potential Changes in December & March (There's a Lot!)

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Equity Capital Markets

AirPower Technologies / Equity Capital Markets

<ul>
<li>AirPower Technologies (1679085D HK) is looking to raise US$1bn in its upcoming Hong Kong IPO.</li>
<li>Airpower Technologies is an industrial gases solution provider with a nationwide footprint in China. </li>
<li>In this note, we will talk about the company's past performance.</li>
</ul>


AirPower Technologies (1679085D HK) is looking to raise US$1bn in its upcoming Hong Kong IPO.
Airpower Technologies is an industrial gases solution provider with a nationwide footprint in China. 
In this note, we will talk about the company's past performance.


Airpower Technologies Pre-IPO - Steady Topline Growth but Lacks Pricing Power

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jan 14 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 Tencent (700 HK), Tian Lun Gas (1600 HK), Skyworth (751 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Wuxi Biologics (2269 HK), Tencent (700 HK), Ping An H&amp;T (1833 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jan 14 based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Tian Lun Gas (1600 HK), Skyworth (751 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Wuxi Biologics (2269 HK), Tencent (700 HK), Ping An H&amp;T (1833 HK).


Hong Kong Buybacks: Tencent Spent HKD 1.12bn This Year

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.

<p><a href="https://www.smartkarma.com/entities/suchuang-gas-corp-ltd" target="_blank" data-smartkarma-citation="entities:304:1" rel="noopener">Suchuang Gas Corp (1430 HK)</a> is the dominant piped natural gas operator in Taicang, Jiangsu Province. After market close on Wednesday, it announced a privatisation offer by way of a scheme of arrangement from <a href="https://www.smartkarma.com/entities/china-resources-gas-group-ltd" target="_blank" data-smartkarma-citation="entities:20525:1" rel="noopener">CR Gas (1193 HK)</a>. The offeror will offer either a cash alternative (HK$2.50 in cash for each scheme share) or a share alternative (1 new share in HoldCo for every scheme share).</p><p>The bid represents a premium of 27.6% over the closing price of HK$1.96 per share on the undisturbed date (10 August 2021 prior to irregular price movements) and a premium of 2.9% over the closing price of HK$2.43 per share on the last trading date (13 August 2021 prior to the trading halt). </p><p>The completion conditions include regulatory approvals from the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) and State Administration for Market Regulation (SAMR). As CR Gas is a subsidiary of China Resources (Holdings) Company Limited, an SOE, regulatory approval should be forthcoming. </p><div class="content-highlight"><p>The key condition precedents are the headcount test along with the scheme approved by at least 75% disinterested shareholders and &lt;10% rejection by all disinterested shareholders. As disinterested scheme shareholders represent 565.4 million shares or 62.61% of shares outstanding, the 10% blocking stake is 56.5 million shares or 6.26% of shares outstanding. Excluding the irrecovables, no disinterested shareholder holds a blocking stake. Overall, we think the offer price is ok and that the privatisation bid will be successful. </p></div>

Suchuang Gas Corp (1430 HK) is the dominant piped natural gas operator in Taicang, Jiangsu Province. After market close on Wednesday, it announced a privatisation offer by way of a scheme of arrangement from CR Gas (1193 HK). The offeror will offer either a cash alternative (HK$2.50 in cash for each scheme share) or a share alternative (1 new share in HoldCo for every scheme share).The bid represents a premium of 27.6% over the closing price of HK$1.96 per share on the undisturbed date (10 August 2021 prior to irregular price movements) and a premium of 2.9% over the closing price of HK$2.43 per share on the last trading date (13 August 2021 prior to the trading halt). The completion conditions include regulatory approvals from the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) and State Administration for Market Regulation (SAMR). As CR Gas is a subsidiary of China Resources (Holdings) Company Limited, an SOE, regulatory approval should be forthcoming. The key condition precedents are the headcount test along with the scheme approved by at least 75% disinterested shareholders and &lt;10% rejection by all disinterested shareholders. As disinterested scheme shareholders represent 565.4 million shares or 62.61% of shares outstanding, the 10% blocking stake is 56.5 million shares or 6.26% of shares outstanding. Excluding the irrecovables, no disinterested shareholder holds a blocking stake. Overall, we think the offer price is ok and that the privatisation bid will be successful. 

Suchuang Gas’ Privatisation Bid from CR Gas

China

China Tian Lun Gas Holdings Ltd. processes and distributes natural gas through urban pipelines.  The Company operates in Henan Province, China.  China Tian Lun Gas also operates a compressed natural gas filling station.

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China Tian Lun Gas (1600 HK)

Hong Kong Connect Flows (Oct 28th): Tencent, Meituan, Wuxi Biologics, Kuaishou

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for Tencent, Meituan, Wuxi Biologics, Kuaishou.

Ke Yan, CFA, FRM

HSCI Index Rebalance and Stock Connect: Potential Changes in December & March (There's a Lot!)

There could be 3 adds in December while there will be MANY more changes in March. The adds should outnumber the deletes, but there will be many...

Brian Freitas

Airpower Technologies Pre-IPO - Steady Topline Growth but Lacks Pricing Power

AirPower Technologies (1679085D HK) is looking to raise US$1bn in its upcoming Hong Kong IPO. In this note, we look at the company's past performance.

Sumeet Singh

Hong Kong Buybacks: Tencent Spent HKD 1.12bn This Year

We highlight top 3 companies that repurchased the most shares from the market last week were Tencent (700 HK), Tian Lun Gas(1600 HK), Skyworth (751...

Ke Yan, CFA, FRM

Suchuang Gas’ Privatisation Bid from CR Gas

Suchuang Gas received a privatisation offer from CR Gas for a cash alternative (HK$2.50) or a share alternative. We think the offer price is ok and...

Arun George

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