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

In our weekly HK Connect Snippet series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as analyzed by our proprietary data engine, and highlight interesting observations. We split the stocks eligible for the Hong Kong Connect trade into three groups: component stocks in the HSCEI index, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.In this insight, we will highlight the five weeks' consecutive inflow into HK Stocks via the southbound trade, led by Financials sector. Inflows into Tencent have been consistently positive. We also highlight strong outflows from Dalian Port. In the mid-cap space, we highlight Man Wah, a furniture exporter.

In our weekly HK Connect Snippet series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as analyzed by our proprietary data engine, and highlight interesting observations. We split the stocks eligible for the Hong Kong Connect trade into three groups: component stocks in the HSCEI index, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.In this insight, we will highlight the five weeks' consecutive inflow into HK Stocks via the southbound trade, led by Financials sector. Inflows into Tencent have been consistently positive. We also highlight strong outflows from Dalian Port. In the mid-cap space, we highlight Man Wah, a furniture exporter. 

HK Connect Ideas: Five Weeks of Inflows, Dalian Port Outflows (2019-06-14)

Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

Maritime Sector, Equity & Credit Research

Drewry Maritime Financial Research

With no ties to other players in the shipping, finance or banking world, we provide a uniquely impartial view of the markets and companies we cover. Our parent organization, Drewry is a leading independent provider of research services to the maritime and shipping industry, employing over 100 professionals across an international network of offices in London, Delhi, Singapore and Shanghai. Combining our market-leading resources with seasoned sector expertise DFRS offers a highly differentiated and comprehensive range of investment and financial research services to lenders and prospective investors in publicly listed maritime and shipping companies. The full service of reports, supporting resources and sector orientated webinars provides our clients with the most complete picture of the organisations under coverage as is possible. We have been charting and analysing the world’s maritime markets for more than 40 years. This unrivalled intelligence and understanding provides the foundation of our research service. Our analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.

Equity Bottom-Up

Operating profit was up 44.8% as operating costs were kept in check during the 9M18, down by 20.4%. Like other Chinese port operators, Dalian is not shock-proof from potential trade uncertainties; Dalian Port’s throughput growth was unsurprising at 0.5% in 9M18. We believe 2019 will be a difficult year with shrinking sales; but due to tight capital discipline, EBITDA is expected to increase 5-8% in 2019. Dalian’s business segments of cold chain logistics and automotive logistics of Bohai Rim feeder were the saving grace for the company struggling to maintain its core business of container trade. We value the share price at HKD 0.97 on a WACC of 7.8% using DCF-based fair value.

Operating profit was up 44.8% as operating costs were kept in check during the 9M18, down by 20.4%. Like other Chinese port operators, Dalian is not shock-proof from potential trade uncertainties; Dalian Port’s throughput growth was unsurprising at 0.5% in 9M18. We believe 2019 will be a difficult year with shrinking sales; but due to tight capital discipline, EBITDA is expected to increase 5-8% in 2019. Dalian’s business segments of cold chain logistics and automotive logistics of Bohai Rim feeder were the saving grace for the company struggling to maintain its core business of container trade. We value the share price at HKD 0.97 on a WACC of 7.8% using DCF-based fair value. 

Thematic (Sector/Industry)

Financial performances of port operators came under the double-edged sword of weak macro and protectionist trade practices. As such, volume throughput growth expectations did not materialise in 2018 due to weakening demand. Drewry expects an uptick of 4.1% in 2019 despite cautious investor confidence in the port sector as sentiments are dented by weakening throughput. The rates of return from the port sector are waning as the sector grapples with subdued financial performances. We expect a price recovery in 2019 as current risks to trade are absorbed by the market easing up PE ratios in 2019. The price-earnings gap between Drewry Port Index (DPI) and the MSCI EM Index remained volatile at 5-37%, implying that the sentiment-driven share prices are out of touch with port fundamentals.

Financial performances of port operators came under the double-edged sword of weak macro and protectionist trade practices. As such, volume throughput growth expectations did not materialise in 2018 due to weakening demand. Drewry expects an uptick of 4.1% in 2019 despite cautious investor confidence in the port sector as sentiments are dented by weakening throughput. The rates of return from the port sector are waning as the sector grapples with subdued financial performances. We expect a price recovery in 2019 as current risks to trade are absorbed by the market easing up PE ratios in 2019. The price-earnings gap between Drewry Port Index (DPI) and the MSCI EM Index remained volatile at 5-37%, implying that the sentiment-driven share prices are out of touch with port fundamentals.

Drewry Ports Outlook 2019- Trade Concerns Keep Investor Appetite in Check

The Premier Li Keqiang had just conducted an annual Government Work Report in the two session conference (两会) in Beijing this morning. In this insight, we will briefly walk through key points of his report and identify bulls and bears in the market.
While the theme of cost reduction benefits manufacturing companies, it will negative for some infrastructure service providers, such as telecom companies.
The full text in Chinese can be accessed <a href="http://www.xinhuanet.com/politics/2019lh/2019-03/05/c_1124194454.htm" target="_blank">here</a>.

The Premier Li Keqiang had just conducted an annual Government Work Report in the two session conference (两会) in Beijing this morning. In this insight, we will briefly walk through key points of his report and identify bulls and bears in the market.
While the theme of cost reduction benefits manufacturing companies, it will negative for some infrastructure service providers, such as telecom companies.
The full text in Chinese can be accessed here.

Quick Read of 2019 Government Work Report - Bulls and Bears

Quality-Value Investing

Marc Melendez, CFA

Emerging Market Small and Mid Cap Equities

Reperio Capital

Reperio Capital Research was founded in 2013 with the goal of better serving the investment community with in-depth, high quality, value oriented research.

Reperio means to discover in latin. Using value investing principles, we aim to discover a minimum of 12 investment opportunities per year within the Emerging Markets Small and Mid Cap universe.

We take a business owners perspective with a long term investment horizon. We conduct bottom up, fundamental research. We focus on downside risks and require a significant margin of safety in any investment to prevent the permanent loss of capital. All factors differentiating our research from the short term, trading focus of traditional research providers.

<a href="https://www.smartkarma.com/entities/15155" target="_blank" data-smartkarma-citation="entities:15155:1">China Merchants Port Holdings Company Ltd (144 HK)</a> (CMPort) is one of the largest port developers, operators, and investors in the world. Due to concerns over trades wars and pressure on container handling fees within China, the market values the company on an EV/EBITDA of 6.14 and on a Price to Book of 0.65 times. These depressed multiples seem unwarranted given the company’s consistently profitable, financial health, decent corporate governance, and growth potential. Based on the typical acquisition multiples of ports (8 to 12 times EBITDA),CMPort has between 22.1% and 115.8% upside. On an asset-based valuation, CMPort has 75.7% to 258.4%. The earnings base case fair value per share (HKD25.20) is 70.0% above the current market price.

China Merchants Port Holdings Company Ltd (144 HK) (CMPort) is one of the largest port developers, operators, and investors in the world. Due to concerns over trades wars and pressure on container handling fees within China, the market values the company on an EV/EBITDA of 6.14 and on a Price to Book of 0.65 times. These depressed multiples seem unwarranted given the company’s consistently profitable, financial health, decent corporate governance, and growth potential. Based on the typical acquisition multiples of ports (8 to 12 times EBITDA),CMPort has between 22.1% and 115.8% upside. On an asset-based valuation, CMPort has 75.7% to 258.4%. The earnings base case fair value per share (HKD25.20) is 70.0% above the current market price.

China Merchants Port Holdings (144:HK)- A Consistent Earner at Cheap Valuations- 70% Upside

China

Liaoning Port Co.,Ltd. provides logistics services. The Company offers container handling, container transportation, crude oil warehousing, gross cargo transportation, and other services. Liaoning Port provides its services throughout China.

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Liaoning Port (2880 HK)

HK Connect Ideas: Five Weeks of Inflows, Dalian Port Outflows (2019-06-14)

In our weekly HK Connect Snippet series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as...

Ke Yan, CFA, FRM

Dalian: Expect Decent Operating Profits

Operating profit was up 44.8% as operating costs were kept in check during the 9M18, down by 20.4%. Like other Chinese port operators, Dalian is...

Drewry Maritime Financial Research

Drewry Ports Outlook 2019- Trade Concerns Keep Investor Appetite in Check

Financial performances of port operators came under the double-edged sword of weak macro and protectionist trade practices. As such, volume...

Drewry Maritime Financial Research

Quick Read of 2019 Government Work Report - Bulls and Bears

The Premier Li Keqiang had just conducted an annual Government Work Report in the two session conference (两会) in Beijing this morning. In this...

Ke Yan, CFA, FRM

China Merchants Port Holdings (144:HK)- A Consistent Earner at Cheap Valuations- 70% Upside

China Merchants Port Holdings Company Ltd (144 HK) (CMPort) is one of the largest port developers, operators, and investors in the world. Due to...

Reperio Capital

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