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

<ul>
<li>We analyse the changes of A-H premium on 150 stocks over the last week. The average A-H premium was 98.8% as of Nov 8th.</li>
<li>The average A-H premium changed by -0.1ppt week-on-week, led by utilities, real estate, financials and offset by consumer staples, information technology, energy.</li>
<li>We highlight weekly changes in A-H premium for BAIYUNSHAN PH, SMIC, PICC, CHINA LIFE, FDZJ.</li>
</ul>


We analyse the changes of A-H premium on 150 stocks over the last week. The average A-H premium was 98.8% as of Nov 8th.
The average A-H premium changed by -0.1ppt week-on-week, led by utilities, real estate, financials and offset by consumer staples, information technology, energy.
We highlight weekly changes in A-H premium for BAIYUNSHAN PH, SMIC, PICC, CHINA LIFE, FDZJ.


A-H Premium Weekly (Nov 8th):Baiyunshan, SMIC, PICC, CHINA LIFE, FDZJ

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li>Hong Kong markets continue to outperform this year with the HSCEI up 30% year to date.  Market breadth continues to be healthy with 80% of stocks over &gt; 200 DMA.</li>
<li>
<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> announced its new hybrid technology which gives vehicles a range of more than 870 miles (1400 Kms).  The company has delivered more than 120k vehicles YTD.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-merchants-securities-co-4f5d644c-0051-426f-9706-eaa74b0ba280" target="_blank" data-smartkarma-citation="entities:22738:1" rel="noopener">China Merchants Securities Co Ltd (H) (6099 HK)</a> benefits from increased market turnover.   <a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings (9987 HK)</a> beat consensus for 3Q24 earnings and will continue its buyback program.</li>
</ul>


Hong Kong markets continue to outperform this year with the HSCEI up 30% year to date.  Market breadth continues to be healthy with 80% of stocks over &gt; 200 DMA.

XPeng (9868 HK) announced its new hybrid technology which gives vehicles a range of more than 870 miles (1400 Kms).  The company has delivered more than 120k vehicles YTD.

China Merchants Securities Co Ltd (H) (6099 HK) benefits from increased market turnover.   Yum China Holdings (9987 HK) beat consensus for 3Q24 earnings and will continue its buyback program.


The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (November 7)

Pop Mart International Group L / Equity Bottom-Up

<ul>
<li>HSCI index has seen an outperformance of the consumer discretionary sector since the stimulus announcement while materials and energy sectors have lagged.</li>
<li>
<a href="https://www.smartkarma.com/entities/pop-mart-international-group-l" target="_blank" data-smartkarma-citation="entities:29016:1" rel="noopener">Pop Mart International Group L (9992 HK)</a> announced a blow out 3Q24 revenue number with international revenue up by over 400%. DB raised the its target price to $88.
</li>
<li>
<a href="https://www.smartkarma.com/entities/citic-securities-h" target="_blank" data-smartkarma-citation="entities:463:1" rel="noopener">Citic Securities (H) (6030 HK)</a> was maintained a BUY by Huatai, raising its target price to $28.81.   JP Morgan maintained  OVERWEIGHT on <a href="https://www.smartkarma.com/entities/new-oriental-education-techn" target="_blank" data-smartkarma-citation="entities:32210:1" rel="noopener">New Oriental Education &amp; Technology (9901 HK).</a>
</li>
</ul>


HSCI index has seen an outperformance of the consumer discretionary sector since the stimulus announcement while materials and energy sectors have lagged.

Pop Mart International Group L (9992 HK) announced a blow out 3Q24 revenue number with international revenue up by over 400%. DB raised the its target price to $88.


Citic Securities (H) (6030 HK) was maintained a BUY by Huatai, raising its target price to $28.81.   JP Morgan maintained  OVERWEIGHT on New Oriental Education &amp; Technology (9901 HK).



BUY/SELL/HOLD: Hong Kong Stock Updates (October 30)

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Although the H-share securities companies have retreated significantly from their peaks, there are still "fats" in their share prices in the near term, relative to the market turnover.</li>
<li>
<a href="https://www.smartkarma.com/entities/citic-securities-h" target="_blank" data-smartkarma-citation="entities:463:1" rel="noopener">Citic Securities (H) (6030 HK)</a> looks vulnerable given its high valuations, low H-A share discount, limited correction from its peak, and significant rebound from the trough.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-merchants-securities-co-4f5d644c-0051-426f-9706-eaa74b0ba280" target="_blank" data-smartkarma-citation="entities:22738:1" rel="noopener">China Merchants Securities (6099 HK)</a> appears exposed though valuations are not high. It has the best YTD performance and rebound from the trough, and its H-A share discount is light.   </li>
</ul>


Although the H-share securities companies have retreated significantly from their peaks, there are still "fats" in their share prices in the near term, relative to the market turnover.

Citic Securities (H) (6030 HK) looks vulnerable given its high valuations, low H-A share discount, limited correction from its peak, and significant rebound from the trough.

China Merchants Securities (6099 HK) appears exposed though valuations are not high. It has the best YTD performance and rebound from the trough, and its H-A share discount is light.   


China Strategy: Screening the H-Share Securities Companies

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.

Event-Driven

Haitong Securities Co Ltd (H) / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/guotai-junan-securities-co-ltd-5dfaf2c5-76d3-4f34-a77d-118787fd7091" target="_blank" data-smartkarma-citation="entities:23752:1" rel="noopener">Guotai Junan Securities (2611 HK)</a> and <a href="https://www.smartkarma.com/entities/haitong-securities-co-ltd-h" target="_blank" data-smartkarma-citation="entities:5665:1" rel="noopener">Haitong Securities Co Ltd (H) (6837 HK)</a> all-scrip merger is set at an exchange ratio of 0.62x. </li>
<li>The merger is conditional on the GJTA/Haitong shareholder vote, which is low risk. Regulatory approvals are a formality as they involve two entities with SOE backgrounds. </li>
<li>The share exchange ratio is attractive compared to historical price ratios and precedent transactions. The recent material re-rating of peers is irrelevant to the vote as the offer is all-scrip. </li>
</ul>



Guotai Junan Securities (2611 HK) and Haitong Securities Co Ltd (H) (6837 HK) all-scrip merger is set at an exchange ratio of 0.62x. 
The merger is conditional on the GJTA/Haitong shareholder vote, which is low risk. Regulatory approvals are a formality as they involve two entities with SOE backgrounds. 
The share exchange ratio is attractive compared to historical price ratios and precedent transactions. The recent material re-rating of peers is irrelevant to the vote as the offer is all-scrip. 


Haitong Securities (6837 HK)/GTJA (2611 HK) Merger Is a Done Deal

China

GF Securities Co Ltd. is a securities firm. The Company offers investment banking services including equity and bond underwriting, mergers and acquisitions consulting, financial consulting, brokerage services, and asset management services.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

GF Securities (H) (1776 HK)

A-H Premium Weekly (Nov 8th):Baiyunshan, SMIC, PICC, CHINA LIFE, FDZJ

We analyzed A-H premium changes in the past week and highlight A-H premium changes for baiyunshan, SMIC, PICC, CHINA LIFE, FDZJ.

Ke Yan, CFA, FRM

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (November 7)

Hong Kong markets are among the top performers this year. Short selling has declined as Southbound buying increases. Xpeng introduced a new hybrid...

David Mudd

BUY/SELL/HOLD: Hong Kong Stock Updates (October 30)

The consumer discretionary sector shows increased momentum in Hong Kong. Pop Mart beat on 3Q revenue with 440% growth in revenue outside China....

David Mudd

Haitong Securities (6837 HK)/GTJA (2611 HK) Merger Is a Done Deal

The share exchange ratio is attractive. Regulatory approvals are a formality. The GJTA/Haitong shareholder vote is low risk. Timing is the key risk.

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

A-H Premium Weekly (Nov 8th):Baiyunshan, SMIC, PICC, CHINA LIFE, FDZJ

We analyzed A-H premium changes in the past week and highlight A-H premium changes for baiyunshan, SMIC, PICC, CHINA LIFE, FDZJ.

Ke Yan, CFA, FRM

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (November 7)

Hong Kong markets are among the top performers this year. Short selling has declined as Southbound buying increases. Xpeng introduced a new hybrid...

David Mudd

BUY/SELL/HOLD: Hong Kong Stock Updates (October 30)

The consumer discretionary sector shows increased momentum in Hong Kong. Pop Mart beat on 3Q revenue with 440% growth in revenue outside China....

David Mudd

China Strategy: Screening the H-Share Securities Companies

​H-share securities companies still have room for corrections despite recent retreats, with Citic Securities and China Merchants Securities looking...

Osbert Tang, CFA

Haitong Securities (6837 HK)/GTJA (2611 HK) Merger Is a Done Deal

The share exchange ratio is attractive. Regulatory approvals are a formality. The GJTA/Haitong shareholder vote is low risk. Timing is the key risk.

Arun George

H-share securities companies still have room for corrections despite recent retreats, with Citic Securities and China Merchants Securities looking...