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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<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 26 February. The constituent changes will be effective after the close of trading on 12 March.</p><p>For the Hang Seng Composite Index (HSCI) there are 36 inclusions and 29 deletions, taking the number of index constituents up to 500.</p><p>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 get inflows from mainland investors. Secondary Listings are not eligible for inclusion in the Stock Connect program.</p><p>Of the 36 inclusions, 4 are already a part of Stock Connect by virtue of having listed A-shares, 2 are Secondary listings and will not be included in Stock Connect, 9 will be added to Shanghai and Shenzhen Stock Connect, while 21 stocks will only be added to Shenzhen Stock Connect.</p><p>Of the 29 index deletions, 13 are not a part of Stock Connect, 7 will continue to remain a part of Stock Connect by virtue of having listed A-shares, while 9 will be deleted from the Stock Connect program.</p><p>We identify 4 stocks that could sell off ahead of their removal from the Stock Connect Buy list, while Biotech stocks could be in focus ahead of their inclusion in the Stock Connect Buy and 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 26 February. The constituent changes will be effective after the close of trading on 12 March.For the Hang Seng Composite Index (HSCI) there are 36 inclusions and 29 deletions, taking the number of index constituents up to 500.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 get inflows from mainland investors. Secondary Listings are not eligible for inclusion in the Stock Connect program.Of the 36 inclusions, 4 are already a part of Stock Connect by virtue of having listed A-shares, 2 are Secondary listings and will not be included in Stock Connect, 9 will be added to Shanghai and Shenzhen Stock Connect, while 21 stocks will only be added to Shenzhen Stock Connect.Of the 29 index deletions, 13 are not a part of Stock Connect, 7 will continue to remain a part of Stock Connect by virtue of having listed A-shares, while 9 will be deleted from the Stock Connect program.We identify 4 stocks that could sell off ahead of their removal from the Stock Connect Buy list, while Biotech stocks could be in focus ahead of their inclusion in the Stock Connect Buy and Sell list.

HSCI Index Rebalance & Stock Connect: Inclusions & Exclusions

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 Resources Mixc Lifestyle / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/china-resources-mixc-lifestyle-services" target="_blank" data-smartkarma-citation="entities:29285:1" rel="noopener">China Resources Mixc Lifestyle Services (1209 HK)</a> (CRML) raised US$1.5bn in its Hong Kong IPO, priced at HK$22.30 per share, the top-end of its price range.</p><p>CRML is the property management arm of China Resources Land (CR Land). The company provides property management and value-added services (VAS) to residential properties. It also manages and operates a portfolio of commercial properties that includes shopping malls and office buildings. As of 30th June 2020, the company has a total GFA under management (including residential and commercial) of 106.6m sqm.</p><div><p>In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.</p></div><div>
<p>We have previously covered the IPO in:</p>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/cr-mixc-lifestyle-services-pre-ipo-a-balance-of-residential-and-commercial-properties" target="_blank" data-smartkarma-citation="insights:43376" rel="noopener">CR Mixc Lifestyle Services (华润万象生活) Pre-IPO - A Balance of Residential and Commercial Properties</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/cr-mixc-lifestyle-services-pre-ipo-soe-linked-parentage-didn-t-help" target="_blank" data-smartkarma-citation="insights:45187" rel="noopener">CR Mixc Lifestyle Services (华润万象生活) Pre-IPO - SOE-Linked Parentage Didn’t Help</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/cr-mixc-lifestyle-services-ipo-needs-time-to-prove-itself" target="_blank" data-smartkarma-citation="insights:45644" rel="noopener">CR Mixc Lifestyle Services (华润万象生活) IPO - Needs Time to Prove Itself</a> </li>
</ul>
</div>

China Resources Mixc Lifestyle Services (1209 HK) (CRML) raised US$1.5bn in its Hong Kong IPO, priced at HK$22.30 per share, the top-end of its price range.CRML is the property management arm of China Resources Land (CR Land). The company provides property management and value-added services (VAS) to residential properties. It also manages and operates a portfolio of commercial properties that includes shopping malls and office buildings. As of 30th June 2020, the company has a total GFA under management (including residential and commercial) of 106.6m sqm.In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.
We have previously covered the IPO in:


CR Mixc Lifestyle Services (华润万象生活) Pre-IPO - A Balance of Residential and Commercial Properties 

CR Mixc Lifestyle Services (华润万象生活) Pre-IPO - SOE-Linked Parentage Didn’t Help 

CR Mixc Lifestyle Services (华润万象生活) IPO - Needs Time to Prove Itself 



CR Mixc Lifestyle Services (华润万象生活) IPO Trading - Better Demand than Recent Peers' IPOs

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Evergrande Property Services / Event-Driven

<div>
<p>The IPO for <a href="https://www.smartkarma.com/entities/evergrande-property-services" target="_blank" data-smartkarma-citation="entities:30921:1" rel="noopener">Evergrande Property Services (6666 HK)</a> ("EPS"), joins the ever-expanding listing of property management service company to seek a listing. The Offer Price is expected to be announced on the 1 December, with the commencement of trading in the shares on the 2 December.</p>
</div>
<div>
<p>EPS is the spin-off of <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande Real Estate Group (3333 HK)</a>, which will own 59.04% in EPS after the IPO, down from 71.939% currently, before over-allotment. Both EPS and Evergrande will raise $7.4bn if using HK$9.13/share, the mid-point of the indicative Offer Price range.</p>
</div>
<div>
<p>As with the recent listing of <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>, <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>, and <a href="https://www.smartkarma.com/entities/sunac-services-holdings" target="_blank" data-smartkarma-citation="entities:29239:1" rel="noopener">Sunac Services (1516 HK)</a>, EPS is targeting a high-end PER, backed by recent strong earnings growth and expanding gross/profit margins. At the high-end of the IPO range, only <a href="https://www.smartkarma.com/entities/sunac-services-holdings" target="_blank" data-smartkarma-citation="entities:29239:1" rel="noopener">Sunac Services (1516 HK)</a> and <a href="https://www.smartkarma.com/entities/ever-sunshine-lifestyle-services-group-limited" target="_blank" data-smartkarma-citation="entities:28932:1" rel="noopener">Ever Sunshine Lifestyle Services (1995 HK)</a>'s FY20(L) PER surpass EPS'.</p>
</div>
<div>
<p>For Evergrande, its recent capital actions (share issuance and market buybacks) appear unrelated to fundamental value creation for its shareholders. </p>
</div>
<div>
<p>More below the fold. </p>
</div>


The IPO for Evergrande Property Services (6666 HK) ("EPS"), joins the ever-expanding listing of property management service company to seek a listing. The Offer Price is expected to be announced on the 1 December, with the commencement of trading in the shares on the 2 December.


EPS is the spin-off of Evergrande Real Estate Group (3333 HK), which will own 59.04% in EPS after the IPO, down from 71.939% currently, before over-allotment. Both EPS and Evergrande will raise $7.4bn if using HK$9.13/share, the mid-point of the indicative Offer Price range.


As with the recent listing of KWG Living Group (3913 HK), Shimao Services Holdings (873 HK), and Sunac Services (1516 HK), EPS is targeting a high-end PER, backed by recent strong earnings growth and expanding gross/profit margins. At the high-end of the IPO range, only Sunac Services (1516 HK) and Ever Sunshine Lifestyle Services (1995 HK)'s FY20(L) PER surpass EPS'.


For Evergrande, its recent capital actions (share issuance and market buybacks) appear unrelated to fundamental value creation for its shareholders. 


More below the fold. 


Evergrande Services (6666 HK): Evergrande Needs This More Than You

<div>
<p>The IPO for <a href="https://www.smartkarma.com/entities/sunac-services-holdings" target="_blank" data-smartkarma-citation="entities:29239:1" rel="noopener">Sunac Services Holdings (1516 HK)</a> ("SSH"), the latest property management service company to seek listing, is open for applications. The Offer Price is expected to be announced on the 18 November, with the commencement of trading in the shares on the 19 November.</p>
</div>
<div>
<p>SSH is the spin-off of <a href="https://www.smartkarma.com/entities/sunac-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:240:1" rel="noopener">Sunac China Holdings (1918 HK)</a>, who will own 72% in SSH after the IPO, down from 100% prior to a recent capitalisation.</p>
</div>
<div>
<p>As with <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>, and <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>, SSH's punchy implied PER is, to some degree, supported by its strong growth (and absolute size), although on a FY20E (LTM) metric, SSH's valuation is only surpassed by <a href="https://www.smartkarma.com/entities/ever-sunshine-lifestyle-services-group-limited" target="_blank" data-smartkarma-citation="entities:28932:1" rel="noopener">Ever Sunshine Lifestyle Services (1995 HK)</a>.</p>
</div>
<div>
<p>Sunac China, on the other hand, is expensive when de-consolidating out the implied market cap of SSH.</p>
</div>
<div>
<p>More below the fold. </p>
</div>


The IPO for Sunac Services Holdings (1516 HK) ("SSH"), the latest property management service company to seek listing, is open for applications. The Offer Price is expected to be announced on the 18 November, with the commencement of trading in the shares on the 19 November.


SSH is the spin-off of Sunac China Holdings (1918 HK), who will own 72% in SSH after the IPO, down from 100% prior to a recent capitalisation.


As with KWG Living Group (3913 HK), and Shimao Services Holdings (873 HK), SSH's punchy implied PER is, to some degree, supported by its strong growth (and absolute size), although on a FY20E (LTM) metric, SSH's valuation is only surpassed by Ever Sunshine Lifestyle Services (1995 HK).


Sunac China, on the other hand, is expensive when de-consolidating out the implied market cap of SSH.


More below the fold. 


Sunac Services (1516 HK): Lofty Metrics In A Congested Space

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> (KLG) raised US$390m at HK$7.89 per share, the upper end of the initial IPO price range. </p>
<p>KLG is the property management services arm of KWG Group. The company provides management services for residential and commercial properties and, as of December 2019, managed 106 residential properties with a total GFA under management of 18.3m sqm.</p>
<p>In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.</p>
<div>
<p>Our previous coverage of the IPO:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/kwg-living-pre-ipo-updates-from-phip-resilient-performance-and-better-disclosure" target="_blank" data-smartkarma-citation="insights:44125" rel="noopener">KWG Living (合景悠活) Pre-IPO - Updates from PHIP - Resilient Performance and Better Disclosure</a> </li>
<li>
<a href="https://www.smartkarma.com/entities/loblaw-cos-ltd" target="_blank" data-smartkarma-citation="entities:25150:1" rel="noopener"></a><a href="https://www.smartkarma.com/insights/kwg-living-pre-ipo-strong-growth-and-margin-expansion-but-overly-reliant-on-kwg-group" target="_blank" data-smartkarma-citation="insights:41974" rel="noopener">KWG Living (合景悠活) Pre-IPO - Strong Growth and Margin Expansion but Overly Reliant on KWG Group</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/kwg-living-ipo-not-cheap-but-strong-lineup-of-investors-helps" target="_blank" data-smartkarma-citation="insights:44247" rel="noopener">KWG Living (合景悠活) IPO - Not Cheap but Strong Lineup of Investors Helps</a> </li>
</ul>
</div>

KWG Living Group (3913 HK) (KLG) raised US$390m at HK$7.89 per share, the upper end of the initial IPO price range. 
KLG is the property management services arm of KWG Group. The company provides management services for residential and commercial properties and, as of December 2019, managed 106 residential properties with a total GFA under management of 18.3m sqm.
In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.

Our previous coverage of the IPO:




KWG Living (合景悠活) Pre-IPO - Updates from PHIP - Resilient Performance and Better Disclosure 

KWG Living (合景悠活) Pre-IPO - Strong Growth and Margin Expansion but Overly Reliant on KWG Group 

KWG Living (合景悠活) IPO - Not Cheap but Strong Lineup of Investors Helps 



KWG Living (合景悠活) IPO Trading - Good Demand but Peers Have Traded Lower Since Bookbuild

China

ECP is a commercial property management service provider focused on the Greater Bay Area.

Excellence Commercial Property & Facilities Management (6989 HK)

Excellence Commercial Property & Facilities Management

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Excellence Commercial Property & Facilities Management (6989 HK)

HSCI Index Rebalance & Stock Connect: Inclusions & Exclusions

There are 36 inclusions/ 29 exclusions for the Hang Seng Composite Index. 9 stocks will be deleted from the Stock Connect Buy list & there are a...

Brian Freitas

CR Mixc Lifestyle Services (华润万象生活) IPO Trading - Better Demand than Recent Peers' IPOs

China Resources Mixc Lifestyle Services (1209 HK) (CRML) raised US$1.5bn in its Hong Kong IPO, priced at HK$22.30 per share, the top-end of its...

Zhen Zhou, Toh

Evergrande Services (6666 HK): Evergrande Needs This More Than You

I find Evegrande to be effectively un-investable. I'm also not a buyer of Evergradne Services. The significant improvement in fundamentals in 2020...

David Blennerhassett

Sunac Services (1516 HK): Lofty Metrics In A Congested Space

SSH is not cheap, regardless of its top four market cap status. The recent share price performance of recent listings - and the sector as a whole -...

David Blennerhassett

KWG Living (合景悠活) IPO Trading - Good Demand but Peers Have Traded Lower Since Bookbuild

KLG is the property management services arm of KWG Group. In this note, we will look at the deal dynamics and provide a table with implied...

Zhen Zhou, Toh

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