Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

KWG Living Group / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/kwg-living-group" target="_blank" data-smartkarma-citation="entities:29231:1" rel="noopener">KWG Living Group (3913 HK)</a>  offers comprehensive property management services for both residential properties and commercial properties in China. The company has filed for an IPO on the Hong Kong Stock Exchange to raise about US$402m through the issuance of 383m shares at an indicative IPO price of HK$8.13 per share.</p><p>The company has entered into cornerstone investment agreements with Hillhouse Funds, Orchid China and LMA SPC, Harvest Global Capital Investments, Snow Lake, Valliance, China Lesso, OP Capital and Aspex Master Fund. These cornerstone investors have agreed to subscribe for an aggregate amount of US$120m worth of shares.</p><p>In our previous insight on the company, we discussed the company’s business model, business segments and its financials. In this insight, we discuss the company’s valuation and key risks.</p><p>Read our previous insight:</p><p><a href="https://www.smartkarma.com/insights/kwg-living-ipo-expansion-in-community-value-added-services-drives-growth" target="_blank" data-smartkarma-citation="insights:44334" rel="noopener">KWG Living IPO: Expansion in Community Value-Added Services Drives Growth</a> </p>

KWG Living Group (3913 HK)  offers comprehensive property management services for both residential properties and commercial properties in China. The company has filed for an IPO on the Hong Kong Stock Exchange to raise about US$402m through the issuance of 383m shares at an indicative IPO price of HK$8.13 per share.The company has entered into cornerstone investment agreements with Hillhouse Funds, Orchid China and LMA SPC, Harvest Global Capital Investments, Snow Lake, Valliance, China Lesso, OP Capital and Aspex Master Fund. These cornerstone investors have agreed to subscribe for an aggregate amount of US$120m worth of shares.In our previous insight on the company, we discussed the company’s business model, business segments and its financials. In this insight, we discuss the company’s valuation and key risks.Read our previous insight:KWG Living IPO: Expansion in Community Value-Added Services Drives Growth 

KWG Living IPO: Strong Financials and Growth Prospects Justify a Premium

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.

Shimao Services Holdings Limited / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/shimao-services-holdings-limited" target="_blank" data-smartkarma-citation="entities:29199:1" rel="noopener">Shimao Services Holdings (873 HK)</a> is a Chinese property management company which is a subsidiary of <a href="https://www.smartkarma.com/entities/shimao-property-holdings-limited" target="_blank" data-smartkarma-citation="entities:8375:1" rel="noopener">Shimao Property Holdings (813 HK)</a> and backed by Sequoia China and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>. At the proposed IPO price range of HK$14.80-17.20 per share, Shimao will have a market cap of HK$34,823.5-40,470.6 million ($4.5-5.2 billion). At the mid-point of the IPO price range, Shimao will raise net proceeds of HK$5,449.9 million ($703 million). Unlike most of the property management IPOs, Shimao's IPO has no cornerstone support. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/shimao-services-ipo-initiation-at-your-service" target="_blank" rel="noopener">our initiation note</a>, we highlighted that Shimao’s fundamentals over the track record period are attractive. Our valuation analysis suggests that the valuation implied by the IPO price range is reasonable for the growth. </p></div></div></div>

Shimao Services Holdings (873 HK) is a Chinese property management company which is a subsidiary of Shimao Property Holdings (813 HK) and backed by Sequoia China and Tencent Holdings (700 HK). At the proposed IPO price range of HK$14.80-17.20 per share, Shimao will have a market cap of HK$34,823.5-40,470.6 million ($4.5-5.2 billion). At the mid-point of the IPO price range, Shimao will raise net proceeds of HK$5,449.9 million ($703 million). Unlike most of the property management IPOs, Shimao's IPO has no cornerstone support. In our initiation note, we highlighted that Shimao’s fundamentals over the track record period are attractive. Our valuation analysis suggests that the valuation implied by the IPO price range is reasonable for the growth. 

<div><p><a href="https://www.smartkarma.com/entities/kwg-living-group" target="_blank" data-smartkarma-citation="entities:29231:1" rel="noopener">KWG Living Group (3913 HK)</a> is a property management service provider in China. KWG accounted for 0.09% of the total GFA under management in the China property management market in 2019, according to JLL. At the proposed IPO price range of HK$7.00-8.13 per share, KWG will have a market cap of HK$14,124.7-16,404.8 million ($1.8-2.1 billion). At the mid-point of the IPO price range, KWG will raise net proceeds of HK$2,755.5 million ($356 million). </p></div><div><p>Eight cornerstone investors will subscribe for 32.09% of the offer shares at the mid-point of the IPO price range. The cornerstone investors are Hillhouse Capital, Orchid China, Harvest Fund Management, Snow Lake Capital, Valliance Asset Management, <a href="https://www.smartkarma.com/entities/china-lesso-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11598:1" rel="noopener">China Lesso Group Holdings (2128 HK)</a>, OP Capital and Aspex Management. </p></div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/kwg-living-group-ipo-initiation-urban-living" target="_blank" rel="noopener">our initiation note</a>, we highlighted that KWG’s fundamentals over the track record period are attractive. Overall, we think that the valuation implied by the IPO price range is reasonable for KWG's growth potential. </p></div>

KWG Living Group (3913 HK) is a property management service provider in China. KWG accounted for 0.09% of the total GFA under management in the China property management market in 2019, according to JLL. At the proposed IPO price range of HK$7.00-8.13 per share, KWG will have a market cap of HK$14,124.7-16,404.8 million ($1.8-2.1 billion). At the mid-point of the IPO price range, KWG will raise net proceeds of HK$2,755.5 million ($356 million). Eight cornerstone investors will subscribe for 32.09% of the offer shares at the mid-point of the IPO price range. The cornerstone investors are Hillhouse Capital, Orchid China, Harvest Fund Management, Snow Lake Capital, Valliance Asset Management, China Lesso Group Holdings (2128 HK), OP Capital and Aspex Management. In our initiation note, we highlighted that KWG’s fundamentals over the track record period are attractive. Overall, we think that the valuation implied by the IPO price range is reasonable for KWG's growth potential. 

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Hangzhou Kangji Medical Instrument Co., Ltd. / Event-Driven

Hangzhou Kangji Medical Instrument Co., Ltd.

<p>The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 14 August. The constituent changes will be effective from 7 September 2020 and the rebalancing trades will need to be done at the closing auction on 4 September 2020.</p><p>There are 32 inclusions and 23 exclusions for the Hang Seng Composite Index (HSCI). Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program could see large inflows from mainland investors.</p><p>In this Insight, we take a look at the exclusion names that have high Southbound shareholdings and could see some selling ahead of the move to a 'sell-only' Southbound list, and at inclusion names that could see Southbound inflows over the weeks after inclusion into the Stock Connect buy/sell list.</p>

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 14 August. The constituent changes will be effective from 7 September 2020 and the rebalancing trades will need to be done at the closing auction on 4 September 2020.There are 32 inclusions and 23 exclusions for the Hang Seng Composite Index (HSCI). Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program could see large inflows from mainland investors.In this Insight, we take a look at the exclusion names that have high Southbound shareholdings and could see some selling ahead of the move to a 'sell-only' Southbound list, and at inclusion names that could see Southbound inflows over the weeks after inclusion into the Stock Connect buy/sell list.

HSCI Index Rebalance - Stock Connect Flows Coming Up

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

CIFI Ever Sunshine Services Gr / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/ever-sunshine-lifestyle-serv" target="_blank" data-smartkarma-citation="entities:28932:1" rel="noopener">Ever Sunshine Lifestyle Serv (1995 HK)</a> (ESLS) aims to raise around US$200m via a top-up placement. The company intends to use the proceeds for M&amp;A and strategic investments.</p><p>The shares were listed in Dec 2018 and are up 7.1x since then and are now trading ahead of their peer group. Recently, the company underwent a change in control transaction with <a href="https://www.smartkarma.com/entities/cifi-holdings-group-co-ltd" target="_blank" data-smartkarma-citation="entities:18387:1" rel="noopener">CIFI Holdings (884 HK)</a> increasing its stake and its voting rights in order to consolidate ESLS.</p><p>In this insight, we'll run the deal through our ECM framework and comment on deal dynamics.</p>

Ever Sunshine Lifestyle Serv (1995 HK) (ESLS) aims to raise around US$200m via a top-up placement. The company intends to use the proceeds for M&amp;A and strategic investments.The shares were listed in Dec 2018 and are up 7.1x since then and are now trading ahead of their peer group. Recently, the company underwent a change in control transaction with CIFI Holdings (884 HK) increasing its stake and its voting rights in order to consolidate ESLS.In this insight, we'll run the deal through our ECM framework and comment on deal dynamics.

Ever Sunshine Lifestyle Placement - Up 7x in 18 Months, Look Expensive but Momentum Is Strong

China

CIFI Ever Sunshine Services Group Limited operates as a property management service provider. The Company provides residential properties, non-residential properties, sales assistance services, housing repair services, pre-delivery inspection services, and community value-added services. CIFI Ever Sunshine Services Group serves customers in China.

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CIFI Ever Sunshine Services Gr (1995 HK)

KWG Living IPO: Strong Financials and Growth Prospects Justify a Premium

We compare the company's implied valuation matrices and KPIs with property management service peers in China. Though KWG Living's shares seem...

Shifara Samsudeen, ACMA, CGMA

Shimao Services IPO: Valuation Insights

At the proposed IPO price range of HK$14.80-17.20 per share, Shimao will have a market cap of $4.5-5.2 billion. Our valuation analysis suggests...

Arun George

KWG Living Group IPO: Valuation Insights

At the mid-point of the IPO price range, KWG will raise net proceeds of $356 million. Overall, we think that the valuation implied by the IPO price...

Arun George

HSCI Index Rebalance - Stock Connect Flows Coming Up

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 14 August....

Brian Freitas

Ever Sunshine Lifestyle Placement - Up 7x in 18 Months, Look Expensive but Momentum Is Strong

Ever Sunshine Lifestyle Serv (1995 HK) (ESLS) aims to raise around US$200m via a top-up placement. The company intends to use the proceeds for...

Sumeet Singh

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