Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

On Friday, it became known that S&amp;P Global ratings had lowered the ratings on Evergrande by two full notches, from B- to CCC, which is now four notches above Default. USD bonds issued by Scenery Journey were lowered from CCC+ to CCC-. That was the second time in about ten days that S&amp;P had lowered rates (after the agency had lower rates after the Guangfa Bank account freezing episode, later resolved, and the issue in Shaoyang City which had accused Evergrande of not depositing pre-sale funds into the escrow accounts properly). According to a Reuters article...<blockquote>"We lowered the ratings because Evergrande's liquidity position is eroding more quickly and by more than we previously expected," the rating agency said.</blockquote><div><div><div><div><blockquote><div id="reuters_desktop_native_1">It added the firm's nonpayment risk is escalating not only for the substantial public bond maturities in 2022, but also for its bank and trust loans and other debt liabilities over the next 12 months.</div></blockquote></div></div></div></div>This move followed Fitch and Moody's which had both dinged the ratings at end June and again on 28 July and 2 August, respectively. To possibly make it worse on the ratings agency front, as of Friday after the close, China's financial regulators are also on the case, trying to root out weakness in "construction of ratings methods and systems" (which could be taken to mean corruption). The PBOC (announcement <a href="http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/4311502/index.html" target="_blank" rel="noopener">link</a> in Chinese), in conjunction with the NDRC, the Ministry of Finance, the CBRC, and the CSRC, jointly issued the "Notice on Promoting the Healthy Development of the Bond Market Credit Rating Industry"On Friday, Caixin Media <a href="https://www.caixinglobal.com/2021-08-06/exclusive-one-court-will-handle-developer-evergrandes-multitude-of-debt-lawsuits-101751875.html" target="_blank" rel="noopener">reported</a> that the Supreme People's Court - the top court in China - had directed that all cases involving debts owed by Evergrande and its related parties be transferred to the Guangzhou Intermediate People's Court. According to Caixin... <blockquote>A court insider said this kind of decision — known as “centralized jurisdiction” — is usually made when a company is involved in a large number of lawsuits across regions and the situation has the potential to cause a significant social impact.</blockquote>The article notes that other companies which have been subject to centralized jurisdiction include Peking University Founder Group, HNA Group - which have been put through bankruptcy and/or restructuring - and China Fortune Land Development which <a href="https://www.caixinglobal.com/2021-02-02/developer-china-fortune-defaults-on-53-billion-yuan-in-debt-101659497.html" target="_blank" rel="noopener">defaulted</a> on repayment of debt in February, and <a href="https://www.caixinglobal.com/2021-03-10/developer-china-fortune-defaults-on-another-13-billion-in-debt-101673624.html" target="_blank" rel="noopener">again</a> in March. Vice Premier Liu He apparently apparently pointed out in a State Council meeting the week before last that Evergrande's problems are one of "liquidity stress" rather than an "insolvency" situation. I'd note that a MinNews <a href="https://min.news/en/economy/aff8aa102018d13ea3af930f62859bdb.html" target="_blank" rel="noopener">article</a> quoting a REDD report says HNA Group, China Fortune Land Development, and China Minsheng Investment were also assessed as having liquidity stress and "non-insolvent debt"Banks have been asked to curb lending and in May were asked to stress-test their Evergrande exposure. Evergrande affiliate Shengjing Bank was fined in May for illegally financing real estate projects.It would appear that Evergrande has decreasing room for manoeuvre. And that room for manoeuvre depends on others' confidence in stability of outcome.

On Friday, it became known that S&amp;P Global ratings had lowered the ratings on Evergrande by two full notches, from B- to CCC, which is now four notches above Default. USD bonds issued by Scenery Journey were lowered from CCC+ to CCC-. That was the second time in about ten days that S&amp;P had lowered rates (after the agency had lower rates after the Guangfa Bank account freezing episode, later resolved, and the issue in Shaoyang City which had accused Evergrande of not depositing pre-sale funds into the escrow accounts properly). According to a Reuters article..."We lowered the ratings because Evergrande's liquidity position is eroding more quickly and by more than we previously expected," the rating agency said.It added the firm's nonpayment risk is escalating not only for the substantial public bond maturities in 2022, but also for its bank and trust loans and other debt liabilities over the next 12 months.This move followed Fitch and Moody's which had both dinged the ratings at end June and again on 28 July and 2 August, respectively. To possibly make it worse on the ratings agency front, as of Friday after the close, China's financial regulators are also on the case, trying to root out weakness in "construction of ratings methods and systems" (which could be taken to mean corruption). The PBOC (announcement link in Chinese), in conjunction with the NDRC, the Ministry of Finance, the CBRC, and the CSRC, jointly issued the "Notice on Promoting the Healthy Development of the Bond Market Credit Rating Industry"On Friday, Caixin Media reported that the Supreme People's Court - the top court in China - had directed that all cases involving debts owed by Evergrande and its related parties be transferred to the Guangzhou Intermediate People's Court. According to Caixin... A court insider said this kind of decision — known as “centralized jurisdiction” — is usually made when a company is involved in a large number of lawsuits across regions and the situation has the potential to cause a significant social impact.The article notes that other companies which have been subject to centralized jurisdiction include Peking University Founder Group, HNA Group - which have been put through bankruptcy and/or restructuring - and China Fortune Land Development which defaulted on repayment of debt in February, and again in March. Vice Premier Liu He apparently apparently pointed out in a State Council meeting the week before last that Evergrande's problems are one of "liquidity stress" rather than an "insolvency" situation. I'd note that a MinNews article quoting a REDD report says HNA Group, China Fortune Land Development, and China Minsheng Investment were also assessed as having liquidity stress and "non-insolvent debt"Banks have been asked to curb lending and in May were asked to stress-test their Evergrande exposure. Evergrande affiliate Shengjing Bank was fined in May for illegally financing real estate projects.It would appear that Evergrande has decreasing room for manoeuvre. And that room for manoeuvre depends on others' confidence in stability of outcome. 

Evergrande's Room for Manoeuvre - A Question of Confidence

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<a href="https://www.smartkarma.com/entities/li-auto-inc" target="_blank" data-smartkarma-citation="entities:28812:1" rel="noopener">Li Auto Inc. (LI US)</a> has got approval from the <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> for a dual primary listing. Media reports indicate that the company could raise between US$1bn-2bn in the offering. Based on the <a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a> timeline, Li Auto could list around 6-9 August.<a href="https://www.smartkarma.com/entities/xpeng-inc" target="_blank" data-smartkarma-citation="entities:29217:1" rel="noopener">Xpeng (XPEV US)</a> / <a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a> raised US$1.8bn via a dual primary listing earlier this month and <a href="https://www.smartkarma.com/entities/li-auto-inc" target="_blank" data-smartkarma-citation="entities:28812:1" rel="noopener">Li Auto Inc. (LI US)</a> is following closely behind. Maybe <a href="https://www.smartkarma.com/entities/nio-inc" target="_blank" data-smartkarma-citation="entities:27399:1" rel="noopener">NIO Inc (NIO US)</a> comes next.We expect <a href="https://www.smartkarma.com/entities/li-auto-inc" target="_blank" data-smartkarma-citation="entities:28812:1" rel="noopener">Li Auto Inc. (LI US)</a> to get Fast Entry to the Hang Seng Composite Index (HSCI) though, as a WVR security, the stock will only be eligible for Stock Connect once it has completed 6 months of listing plus 20 trading days.Li Auto could also be included in the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> at the December review. This will lead to a further drop in the HSCEI 2022 dividend futures since we do not expect <a href="https://www.smartkarma.com/entities/li-auto-inc" target="_blank" data-smartkarma-citation="entities:28812:1" rel="noopener">Li Auto Inc. (LI US)</a> to pay dividends in the near future, while the potential deletion is a higher dividend yielding stock.

Li Auto Inc. (LI US) has got approval from the HKEX (388 HK) for a dual primary listing. Media reports indicate that the company could raise between US$1bn-2bn in the offering. Based on the XPeng (9868 HK) timeline, Li Auto could list around 6-9 August.Xpeng (XPEV US) / XPeng (9868 HK) raised US$1.8bn via a dual primary listing earlier this month and Li Auto Inc. (LI US) is following closely behind. Maybe NIO Inc (NIO US) comes next.We expect Li Auto Inc. (LI US) to get Fast Entry to the Hang Seng Composite Index (HSCI) though, as a WVR security, the stock will only be eligible for Stock Connect once it has completed 6 months of listing plus 20 trading days.Li Auto could also be included in the Hang Seng China Enterprises Index (HSCEI INDEX) at the December review. This will lead to a further drop in the HSCEI 2022 dividend futures since we do not expect Li Auto Inc. (LI US) to pay dividends in the near future, while the potential deletion is a higher dividend yielding stock.

Li Auto (LI US) Dual Primary Listing: HSCI Fast Entry; HSCEI Dec Inclusion & Div Futures Lower

<a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" rel="noopener">Evergrande Real Estate Group (3333 HK)</a> shares rallied enormously sharply in 2017, moving from the mid single digits to HK$30+ by Q3 that year. That year the float in Evergrande was also sharply reduced by the purchases of shares by <a href="https://www.smartkarma.com/entities/chinese-estates-holdings-limited" target="_blank" rel="noopener">Chinese Estates Holdings (127 HK)</a> and its owners. 
When the shares fell back after getting squeezed, Evergrande conducted a buyback which got them within a hair's breadth of the residual minimum free float requirement mandated by the Hong Kong Stock Exchange. The shares stayed higher. 
Eventually, Evergrande saw more of the employee share options with low exercise prices exercised which increased the share count and float so when shares fell in 2020, the company could buy back shares, and it did so after shares fell to new 3yr lows in the covid-crash. It bought shares back from May to June, again reducing float to within a hair's breadth of the free float limit, and in the period, shares rose about 50%. 
Then at the start of H2, with a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0701/2020070100031.pdf" target="_blank" rel="noopener">press release</a> about unaudited June sales results and how strong sales had been in H1, the shares popped 40% (from HK$20 to HK$28/share) in three days, then fell back over 6 weeks, going back below HK$20 when the company <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0813/2020081301678.pdf" target="_blank" rel="noopener">disclosed</a> it was pre-selling stakes in its property management unit before the IPO, and three days later Evergrande actually issued a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0816/2020081600097.pdf" target="_blank" rel="noopener">profit warning</a>, just before releasing H1 results. 
Also in August, but undisclosed at the time, was the fact that several major real estate developers, including Evergrande, had been called on the carpet to discuss their participation in the so-called Three Red Lines pilot program (the three red lines are a liability-to-asset ratio excluding advanced receipts of 70%, net debt-to-equity ratio of 100%, and cash to short-term debt ratio at 1x). Companies which crossed one of three red lines could not increase interest-bearing borrowing by more than 10% in a year. Cross two of them and they were capped at 5% growth. Cross all three of them and the developer could not increase debt at all. This is tough when funding at high single digits to 10+% interest rates are used to carry ever more non-interest-earning land bank. But Evergrande "met" all three so needed to reduce debt and raise cash, discussed in <a href="https://www.smartkarma.com/insights/evergrande-may-be-facing-a-funding-squeeze" target="_blank" rel="noopener">Evergrande May Be Facing a Funding Squeeze</a>. 
There was a story about a "letter", later denied by the company, in September, discussing the importance of the local government helping Evergrande deal with its short-term funding issues, which included the issue of the buyback guarantee offered by Evergrande to minority shareholders of Evergrande's major onshore operating unit Hengda. Evergrande denied the existence of the letter, but despite the fact some Hengda shareholders reportedly wanted out as listing was unlikely, somehow, with the local government's help, Evergrande announced a new agreement meaning repayment in January 2021 was unnecessary. The shares rallied and two weeks later Evergrande raised some capital (discussed in <a href="https://www.smartkarma.com/insights/evergrande-equity-placement-musical-shares" target="_blank" rel="noopener">Evergrande Equity Placement - Musical Shares</a>).
I had my ideas about WHY those shares were placed, and it was not to raise equity to pay down debt. The capital raised was less than expected despite the large discount and the shares quickly fell below placement price.  So just 3 weeks after raising equity, it started buying back shares, reasonably quickly raising the price above where it had sold shares. This was discussed in <a href="https://www.smartkarma.com/insights/evergrande-equity-de-placement-musical-shares" target="_blank" rel="noopener">Evergrande Equity De-Placement: Musical Shares</a>. Then a couple weeks later, we saw <a href="https://www.smartkarma.com/insights/evergrande" target="_blank" rel="noopener">Evergrande Terminate Hengda's Backdoor Listing</a> so the story left was one of an optically "cheap" but heavily indebted developer, lowering selling prices to liquidate inventory, lower debt and raise cash levels, etc. There were sales of shares of recently listed subsidiaries. There were announcements of how much debt had been lowered. But shares fell. 
There were stories in Chinese media and in social media about issues with the company's trade acceptance bills. An <a href="https://www.bloomberg.com/news/articles/2021-07-09/china-urged-evergrande-founder-to-find-quick-fix-for-debt-woes" target="_blank" rel="noopener">article</a> on Bloomberg.com a week ago reported that while Evergrande chairman Hui Ka Yan was in Beijing for the 100th anniversary celebrations 1 July, he met with the Financial Stability and Development Committee, which urged him to solve his company's debt problems pronto. The article is worth reading. It suggested more worry at the top than thought, and even says FSDC officials had suggested bringing in strategic investors. Hui said he was speaking with local investors. 
Bonds have traded lower and lower and the 2024-2025 maturity bonds appear to be trading in the 60s, with shorter-dated bonds trading at 30+% yield to maturity. Wednesday, the shares closed at HK$8.91 - lowest in four years. 
<h3>Yesterday, there was new news. </h3>
The company announced a board meeting for 27 July where the Board would consider a special dividend. 
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<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/218/832/original/Screenshot+2021-07-16+at+10.05.32+AM.png?1626401169" class="editor-image img-responsive" data-smartkarma-image-id="218832"></figure>
</section>

My first reaction was, I admit, one of surprise, but on second thought it should not be THAT surprising.
The immediate public comments I have seen suggested an attempt to squeeze shorts. According to data from the SFC, shorts have risen from levels near-matching covid-crash lows, and now stand at roughly 2.1% of shares out (a bit under 10% of float), but that would not do it.
The single most indebted real estate company in the world, with short-term bonds yielding risk-free-rate plus.... [checks notes] 30+%, where the chairman gets called onto the carpet of the highest financial regulator in China - not the PBOC, CSRC, or CBIRC - above them - urging him to Do Something - sell assets, lower debt, raise equity - deciding to pay a special dividend to its equity holders? 
I expect Hui Ka Yan has his reasons, and I expect those reasons do not include rewarding long-suffering minority shareholders. Or squeezing shorts.

Evergrande Real Estate Group (3333 HK) shares rallied enormously sharply in 2017, moving from the mid single digits to HK$30+ by Q3 that year. That year the float in Evergrande was also sharply reduced by the purchases of shares by Chinese Estates Holdings (127 HK) and its owners. 
When the shares fell back after getting squeezed, Evergrande conducted a buyback which got them within a hair's breadth of the residual minimum free float requirement mandated by the Hong Kong Stock Exchange. The shares stayed higher. 
Eventually, Evergrande saw more of the employee share options with low exercise prices exercised which increased the share count and float so when shares fell in 2020, the company could buy back shares, and it did so after shares fell to new 3yr lows in the covid-crash. It bought shares back from May to June, again reducing float to within a hair's breadth of the free float limit, and in the period, shares rose about 50%. 
Then at the start of H2, with a press release about unaudited June sales results and how strong sales had been in H1, the shares popped 40% (from HK$20 to HK$28/share) in three days, then fell back over 6 weeks, going back below HK$20 when the company disclosed it was pre-selling stakes in its property management unit before the IPO, and three days later Evergrande actually issued a profit warning, just before releasing H1 results. 
Also in August, but undisclosed at the time, was the fact that several major real estate developers, including Evergrande, had been called on the carpet to discuss their participation in the so-called Three Red Lines pilot program (the three red lines are a liability-to-asset ratio excluding advanced receipts of 70%, net debt-to-equity ratio of 100%, and cash to short-term debt ratio at 1x). Companies which crossed one of three red lines could not increase interest-bearing borrowing by more than 10% in a year. Cross two of them and they were capped at 5% growth. Cross all three of them and the developer could not increase debt at all. This is tough when funding at high single digits to 10+% interest rates are used to carry ever more non-interest-earning land bank. But Evergrande "met" all three so needed to reduce debt and raise cash, discussed in Evergrande May Be Facing a Funding Squeeze. 
There was a story about a "letter", later denied by the company, in September, discussing the importance of the local government helping Evergrande deal with its short-term funding issues, which included the issue of the buyback guarantee offered by Evergrande to minority shareholders of Evergrande's major onshore operating unit Hengda. Evergrande denied the existence of the letter, but despite the fact some Hengda shareholders reportedly wanted out as listing was unlikely, somehow, with the local government's help, Evergrande announced a new agreement meaning repayment in January 2021 was unnecessary. The shares rallied and two weeks later Evergrande raised some capital (discussed in Evergrande Equity Placement - Musical Shares).
I had my ideas about WHY those shares were placed, and it was not to raise equity to pay down debt. The capital raised was less than expected despite the large discount and the shares quickly fell below placement price.  So just 3 weeks after raising equity, it started buying back shares, reasonably quickly raising the price above where it had sold shares. This was discussed in Evergrande Equity De-Placement: Musical Shares. Then a couple weeks later, we saw Evergrande Terminate Hengda's Backdoor Listing so the story left was one of an optically "cheap" but heavily indebted developer, lowering selling prices to liquidate inventory, lower debt and raise cash levels, etc. There were sales of shares of recently listed subsidiaries. There were announcements of how much debt had been lowered. But shares fell. 
There were stories in Chinese media and in social media about issues with the company's trade acceptance bills. An article on Bloomberg.com a week ago reported that while Evergrande chairman Hui Ka Yan was in Beijing for the 100th anniversary celebrations 1 July, he met with the Financial Stability and Development Committee, which urged him to solve his company's debt problems pronto. The article is worth reading. It suggested more worry at the top than thought, and even says FSDC officials had suggested bringing in strategic investors. Hui said he was speaking with local investors. 
Bonds have traded lower and lower and the 2024-2025 maturity bonds appear to be trading in the 60s, with shorter-dated bonds trading at 30+% yield to maturity. Wednesday, the shares closed at HK$8.91 - lowest in four years. 
Yesterday, there was new news. 
The company announced a board meeting for 27 July where the Board would consider a special dividend. 




My first reaction was, I admit, one of surprise, but on second thought it should not be THAT surprising.
The immediate public comments I have seen suggested an attempt to squeeze shorts. According to data from the SFC, shorts have risen from levels near-matching covid-crash lows, and now stand at roughly 2.1% of shares out (a bit under 10% of float), but that would not do it.
The single most indebted real estate company in the world, with short-term bonds yielding risk-free-rate plus.... [checks notes] 30+%, where the chairman gets called onto the carpet of the highest financial regulator in China - not the PBOC, CSRC, or CBIRC - above them - urging him to Do Something - sell assets, lower debt, raise equity - deciding to pay a special dividend to its equity holders? 
I expect Hui Ka Yan has his reasons, and I expect those reasons do not include rewarding long-suffering minority shareholders. Or squeezing shorts. 
  

Evergrande's Very Special... Special Dividend?

Hang Seng Indexes has increased the number of index shares and free float for <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> in the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> and <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index (HSTECH INDEX)</a>, with no change made to the capping factor.This will lead to an increase in the index weight for <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> and passive funds benchmarked to the indices will need to buy the stock at the close of trading on 16 July while selling the other index constituents.For July, we estimate passive funds will need to buy 45.52m shares (HK$9.34bn; 2 days of ADV) of <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>. The largest impact of passive selling in terms of days of ADV will be on <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings (5 HK)</a>, <a href="https://www.smartkarma.com/entities/clp-holdings-ltd" target="_blank" data-smartkarma-citation="entities:14433:1" rel="noopener">CLP Holdings (2 HK)</a>, <a href="https://www.smartkarma.com/entities/china-construction-bank-h" target="_blank" data-smartkarma-citation="entities:45:1" rel="noopener">China Construction Bank H (939 HK)</a>, <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a> and <a href="https://www.smartkarma.com/entities/country-garden-holdings-co" target="_blank" data-smartkarma-citation="entities:5225:1" rel="noopener">Country Garden Holdings Co (2007 HK)</a>.However, passive funds will need to sell <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> at the implementation of the quarterly rebalance in September when the capping factor will be lowered to cap the weight of the stock at 8% in the three indices.

Hang Seng Indexes has increased the number of index shares and free float for Alibaba Group (9988 HK) in the Hong Kong Hang Seng Index (HSI INDEX), Hang Seng China Enterprises Index (HSCEI INDEX) and Hang Seng Tech Index (HSTECH INDEX), with no change made to the capping factor.This will lead to an increase in the index weight for Alibaba Group (9988 HK) and passive funds benchmarked to the indices will need to buy the stock at the close of trading on 16 July while selling the other index constituents.For July, we estimate passive funds will need to buy 45.52m shares (HK$9.34bn; 2 days of ADV) of Alibaba Group (9988 HK). The largest impact of passive selling in terms of days of ADV will be on HSBC Holdings (5 HK), CLP Holdings (2 HK), China Construction Bank H (939 HK), Hang Lung Properties (101 HK) and Country Garden Holdings Co (2007 HK).However, passive funds will need to sell Alibaba Group (9988 HK) at the implementation of the quarterly rebalance in September when the capping factor will be lowered to cap the weight of the stock at 8% in the three indices.

Alibaba (9988 HK): Passive Inflow from HSI, HSCEI, HSTECH Trackers in July

APAC IPOs & Placements

Zhen Zhou, Toh

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.

Equity Capital Markets

China Youran Dairy Group Ltd / Equity Capital Markets

<div>
<a href="https://www.smartkarma.com/entities/china-youran-dairy-group-ltd" target="_blank" data-smartkarma-citation="entities:31075:1" rel="noopener">China Youran Dairy Group Ltd (9858 HK)</a> (CYD) raised about US$643m at HK$6.98 per share, the bottom-end of its IPO price range. 
CYD is an integrated provider of products and services in the upstream dairy industry. The company is a leader in the various upstream industries that it operates in even though they are mostly fragmented.
In this note, we will discuss deal dynamics and update valuation.
We have previously covered the IPO in:
</div>
<div>
<ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/china-youran-dairy-pre-ipo-a-leader-pulling-ahead-in-a-fragmented-market" target="_blank" rel="noopener">China Youran Dairy(悠然牧业) Pre-IPO - A Leader Pulling Ahead in a Fragmented Market </a></li>
<li>
<a href="https://www.smartkarma.com/insights/china-youran-dairy-pre-ipo-phip-updates-much-better-disclosure" target="_blank" data-smartkarma-citation="insights:51794" rel="noopener">China Youran Dairy(悠然牧业) Pre-IPO - PHIP Updates - Much Better Disclosure</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/china-youran-dairy-pre-ipo-peer-comparison-youran-is-the-leader" target="_blank" data-smartkarma-citation="insights:51796" rel="noopener">China Youran Dairy(悠然牧业) Pre-IPO - Peer Comparison - Youran Is the Leader</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/china-youran-dairy-ipo-reasonable-valuation-but-there-will-be-significant-overhang" target="_blank" data-smartkarma-citation="insights:52634" rel="noopener">China Youran Dairy(悠然牧业) IPO - Reasonable Valuation but There Will Be Significant Overhang</a> </li>
</ul>
</div>


China Youran Dairy Group Ltd (9858 HK) (CYD) raised about US$643m at HK$6.98 per share, the bottom-end of its IPO price range. 
CYD is an integrated provider of products and services in the upstream dairy industry. The company is a leader in the various upstream industries that it operates in even though they are mostly fragmented.
In this note, we will discuss deal dynamics and update valuation.
We have previously covered the IPO in:



China Youran Dairy(悠然牧业) Pre-IPO - A Leader Pulling Ahead in a Fragmented Market 

China Youran Dairy(悠然牧业) Pre-IPO - PHIP Updates - Much Better Disclosure 

China Youran Dairy(悠然牧业) Pre-IPO - Peer Comparison - Youran Is the Leader 

China Youran Dairy(悠然牧业) IPO - Reasonable Valuation but There Will Be Significant Overhang 



China Youran Dairy(悠然牧业) IPO Trading - Weak Demand

China

Evergrande Property Services Group Limited operates as property management service providers. The Company provides property management services for high-end residential, theme parks, industrial parks, healthcare complexes, and other buildings. Evergrande Property Services Group offers services in China.

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Evergrande Property Services (6666 HK)

Evergrande's Room for Manoeuvre - A Question of Confidence

Evergrande bad news again chips away at the bonds. Late last week saw the 2nd downgrade by S&P in 10 days, and a "centralisation of jurisdiction"...

Travis Lundy

Li Auto (LI US) Dual Primary Listing: HSCI Fast Entry; HSCEI Dec Inclusion & Div Futures Lower

Li Auto is looking to dual-primary list in HK. The stock should get Fast Entry to the HSCI and join Southbound Stock Connect in Q1 2022. Li Auto...

Brian Freitas

Evergrande's Very Special... Special Dividend?

Evergrande has been in a world of hurt, actively selling down assets. It has repaid some short-term bonds, but commercial bills remain an issue. So...

Travis Lundy

Alibaba (9988 HK): Passive Inflow from HSI, HSCEI, HSTECH Trackers in July

Following an increase in the number of CCASS shares and free float, Alibaba's index shares will be increased. Passive HSI/ HSCEI/ HSTECH trackers...

Brian Freitas

China Youran Dairy(悠然牧业) IPO Trading - Weak Demand

China Youran Dairy Group Ltd (9858 HK) (CYD) raised about US$643m at HK$6.98 per share, the bottom-end of its IPO price range.

Zhen Zhou, Toh

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