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.

Event-Driven

<ul>
<li>On 26th Aug 2022, PCAOB and CSRC announced that they had entered into an agreement granting US authorities access to investigate public accounting firms headquartered in China and HK.</li>
<li>On 2nd Apr 2022, CSRC put out a draft for public comments on the revision of certain provisions which would allow easier access by overseas regulators to China ADRs audits.</li>
<li>In this note, we'll talk about the latest developments and its implications.</li>
</ul>


On 26th Aug 2022, PCAOB and CSRC announced that they had entered into an agreement granting US authorities access to investigate public accounting firms headquartered in China and HK.
On 2nd Apr 2022, CSRC put out a draft for public comments on the revision of certain provisions which would allow easier access by overseas regulators to China ADRs audits.
In this note, we'll talk about the latest developments and its implications.


China ADRs Delisting - Tide Is Turning - Non-HK Listed ADRs Are Already Outperforming

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<div><ul><li>Structural changes in China cloud market. There are three structural changes in China cloud market since the internet sector crackdown in 2021.</li><li>China cloud development roadmap is different compared to the US</li><li>Cloud supply chain turmoil amid rising geopolitical tension.</li></ul></div>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Structural changes in China cloud market. There are three structural changes in China cloud market since the internet sector crackdown in 2021.China cloud development roadmap is different compared to the USCloud supply chain turmoil amid rising geopolitical tension.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Software & IT Services – A mixed outlook for China cloud amid rising China-US tension

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.

<ul>
<li>
<a href="https://www.bloomberg.com/news/articles/2022-07-27/mbk-partners-is-said-to-weigh-rival-bid-for-chinese-data-center-firm-vnet" target="_blank" rel="noopener">Bloomberg reported</a> that MBK Partners is in talks to team up with a partner on a joint offer for <a href="https://www.smartkarma.com/entities/21-vianet-group-inc-adr" target="_blank" data-smartkarma-citation="entities:8489:1" rel="noopener">21Vianet Group (VNET US)</a>. Considerations are at a preliminary stage.</li>
<li>A potential bid would compete against The Hina Group and Industrial Bank’s $8.00 per ADS offer. The Board has not provided an update on its stance on this offer.   </li>
<li>Takeover interest is unsurprisingly due to VNET’s depressed share price, unchanged FY22 guidance and ongoing data centre M&amp;A activity.     </li>
</ul>



Bloomberg reported that MBK Partners is in talks to team up with a partner on a joint offer for 21Vianet Group (VNET US). Considerations are at a preliminary stage.
A potential bid would compete against The Hina Group and Industrial Bank’s $8.00 per ADS offer. The Board has not provided an update on its stance on this offer.   
Takeover interest is unsurprisingly due to VNET’s depressed share price, unchanged FY22 guidance and ongoing data centre M&amp;A activity.     


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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a> is a leading carrier-neutral hyperscale data center solution provider in Asia Pacific emerging markets with a focus on China, India and Southeast Asia.</li>
<li>Bloomberg and several other news media outlets reported that the company has attracted takeover interest from other firms in the industry including rival GDS and PAG.</li>
<li>CD’s shares are down more than 65% since its IPO primarily driven by the ongoing regulatory crackdown on tech firms in China alongside US-China trade tensions.</li>
</ul>



Chindata Group (CD US) is a leading carrier-neutral hyperscale data center solution provider in Asia Pacific emerging markets with a focus on China, India and Southeast Asia.
Bloomberg and several other news media outlets reported that the company has attracted takeover interest from other firms in the industry including rival GDS and PAG.
CD’s shares are down more than 65% since its IPO primarily driven by the ongoing regulatory crackdown on tech firms in China alongside US-China trade tensions.


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>According to Bloomberg, Bain Capital-backed <a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a> is being scoped out by industry players.</li>
<li>
<a href="https://www.smartkarma.com/entities/gds-holdings-adr" target="_blank" data-smartkarma-citation="entities:23649:1" rel="noopener">GDS Holdings (ADR) (GDS US)</a> is rumoured to be interested in merging with Chindata. PE outfit PAG and <a href="https://www.smartkarma.com/entities/eqt-ab" target="_blank" data-smartkarma-citation="entities:28922:1" rel="noopener">EQT AB (EQT SS)</a>-backed EdgeConneX are also, reportedly, in the mix.</li>
<li>Chindata's shares popped but are still 64% below its IPO price. This rumour follows data center provider <a href="https://www.smartkarma.com/entities/21-vianet-group-inc-adr" target="_blank" data-smartkarma-citation="entities:8489:1" rel="noopener">21Vianet (VNET US)</a>'s recent proposal from Hina Group and Shanghai's Industrial Bank. </li>
</ul>


According to Bloomberg, Bain Capital-backed Chindata Group (CD US) is being scoped out by industry players.

GDS Holdings (ADR) (GDS US) is rumoured to be interested in merging with Chindata. PE outfit PAG and EQT AB (EQT SS)-backed EdgeConneX are also, reportedly, in the mix.
Chindata's shares popped but are still 64% below its IPO price. This rumour follows data center provider 21Vianet (VNET US)'s recent proposal from Hina Group and Shanghai's Industrial Bank. 


Cloud Chronicles: Chindata Attracting Bytes

China

GDS Holdings Limited operates as a holding company. The Company, through its subsidiaries, develops and operates data centers. GDS Holdings offers risk and security management, information technology planing, remote monitoring, cloud hosting, virtualization, disaster recovery, and remote data protection services.

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GDS Holdings (ADR) (GDS US)

China ADRs Delisting - Tide Is Turning - Non-HK Listed ADRs Are Already Outperforming

On 26th Aug 2022, PCAOB and CSRC announced that they had entered into an agreement granting US authorities access to investigate public accounting...

Sumeet Singh

China Software & IT Services – A mixed outlook for China cloud amid rising China-US tension

Structural changes in China cloud market. There are three structural changes in China cloud market since the internet sector crackdown in 2021.

CMB International

VNET Draws the Interest of MBK Partners

Takeover interest is unsurprisingly due to VNET’s depressed share price, unchanged FY22 guidance and ongoing data centre M&A activity. Buy some...

Arun George

Chindata: Plenty of Upside Left

CD’s shares are down more than 65% since its IPO due to the ongoing regulatory crackdown and our analysis reveals that there is plenty of upside...

Shifara Samsudeen, ACMA, CGMA

Cloud Chronicles: Chindata Attracting Bytes

Although no formal sale process has occurred, Chindata is worth picking up here. Despite regulatory concerns, it is trading too cheaply to peers,...

David Blennerhassett

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