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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a>’s shares declined by -8% on <a href="https://di.hkex.com.hk/di/NSForm2.aspx?fn=CS20220829E00231&amp;amp;sa2=ns&amp;amp;sid=2508&amp;amp;sd=30/08/2021&amp;amp;ed=30/08/2022&amp;amp;sa1=cl&amp;amp;scsd=30/08/2021&amp;amp;sced=30/08/2022&amp;amp;sc=01211&amp;amp;src=Main&amp;amp;lang=EN&amp;amp;tk=ds" target="_blank" rel="noopener">disclosure</a> that <a href="https://www.smartkarma.com/entities/berkshire-hathaway-inc-cl-b" target="_blank" data-smartkarma-citation="entities:8635:1" rel="noopener">Berkshire Hathaway Inc Cl B (BRK/B US)</a> trimmed its stake from 20.04% to 19.92% of outstanding H Shares. </li>
<li>Berkshire will likely follow its <a href="https://www.smartkarma.com/entities/petrochina-co-ltd-h" target="_blank" data-smartkarma-citation="entities:262:1" rel="noopener">PetroChina (857 HK)</a> playbook and materially sell down over the next few months. Buffet stated that the PetroChina exit was “a decision based on valuation.”</li>
<li>Berkshire will apply the same investment discipline to the BYD stake. While the shares are trading at a discount to historical multiples, the Berkshire stake is an overhang.</li>
</ul>



BYD (1211 HK)’s shares declined by -8% on disclosure that Berkshire Hathaway Inc Cl B (BRK/B US) trimmed its stake from 20.04% to 19.92% of outstanding H Shares. 
Berkshire will likely follow its PetroChina (857 HK) playbook and materially sell down over the next few months. Buffet stated that the PetroChina exit was “a decision based on valuation.”
Berkshire will apply the same investment discipline to the BYD stake. While the shares are trading at a discount to historical multiples, the Berkshire stake is an overhang.


Berkshire BYD’s Selldown Likely to Follow Its PetroChina Playbook

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.</li>
<li>Overall, the net outflow over the past week was ~US$0.21bn, split (-US$0.24bn) for Shanghai and (+US$0.3bn) for Shenzhen.</li>
<li>The largest inflows were into <a href="https://www.smartkarma.com/entities/china-international-marine-cntnrs-gp-ltd" target="_blank" data-smartkarma-citation="entities:11752:1" rel="noopener">China International Marine (2039 HK)</a> and <a href="https://www.smartkarma.com/entities/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning (2331 HK)</a>. The largest outflows were in <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>and <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>.</li>
</ul>


Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
Overall, the net outflow over the past week was ~US$0.21bn, split (-US$0.24bn) for Shanghai and (+US$0.3bn) for Shenzhen.
The largest inflows were into China International Marine (2039 HK) and Li Ning (2331 HK). The largest outflows were in Meituan (3690 HK)and Kuaishou Technology (1024 HK).


Shanghai/​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (22 August 2022)

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sensetime-group-inc" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime Group (20 HK)</a>'s Free-Float Adjustment Factor (FAF) increases from 3% to 40% following lock-up expiry and the stock will replace <a href="https://www.smartkarma.com/entities/china-pacific-insurance-group" target="_blank" data-smartkarma-citation="entities:6177:1" rel="noopener">China Pacific Insurance (2601 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI INDEX</a>. </li>
<li>Using prices from the close on 19 August, estimated one-way turnover is 3.82% and will result in a one-way trade of HK$2,751m at the close on 2 September.</li>
<li>Increase in the FAF on a couple of stocks saves them from index deletion in September but is probably not enough to save them from index deletion in December.</li>
</ul>



SenseTime Group (20 HK)'s Free-Float Adjustment Factor (FAF) increases from 3% to 40% following lock-up expiry and the stock will replace China Pacific Insurance (2601 HK) in the HSCEI INDEX. 
Using prices from the close on 19 August, estimated one-way turnover is 3.82% and will result in a one-way trade of HK$2,751m at the close on 2 September.
Increase in the FAF on a couple of stocks saves them from index deletion in September but is probably not enough to save them from index deletion in December.


HSCEI Index Rebalance: SenseTime (20 HK) Added As FAF Increases Dramatically

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 analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Aug 19th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Ck Asset (1113 HK), ASMPT (522 HK), FIH Mobile Limited (2038 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were AIA(1299 HK), Great Wall Motor (2333 HK), CK Asset (1113 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Aug 19th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Ck Asset (1113 HK), ASMPT (522 HK), FIH Mobile Limited (2038 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were AIA(1299 HK), Great Wall Motor (2333 HK), CK Asset (1113 HK).


Hong Kong Buybacks Weekly: CK Asset, ASMPT

<ul>
<li>We analyse the changes of A/H premium on 142 stocks over the last week. The average A/H premium of 142 A/H stocks are 116.5%, increased by 3.0ppt over last week.</li>
<li>The average A/H premium changed by 3.0ppt week on week, led by Real Estate, financials, and consumer discretionary sectors.</li>
<li>We highlight A/H premium changes of Great Wall Motor, Guangzhou Auto, Hisense Home, Tianqi Lithium, Jiangxi Copper, Angang Steel, Maanshan Iron, BBMG, Alcoa, Zoomlion, Cansino, Holly Futures, and ABC. </li>
</ul>


We analyse the changes of A/H premium on 142 stocks over the last week. The average A/H premium of 142 A/H stocks are 116.5%, increased by 3.0ppt over last week.
The average A/H premium changed by 3.0ppt week on week, led by Real Estate, financials, and consumer discretionary sectors.
We highlight A/H premium changes of Great Wall Motor, Guangzhou Auto, Hisense Home, Tianqi Lithium, Jiangxi Copper, Angang Steel, Maanshan Iron, BBMG, Alcoa, Zoomlion, Cansino, Holly Futures, and ABC. 


A-H Premium Weekly: Tianqi Lithium at New Low Post H-Share IPO

China

Great Wall Motor Company Limited, through its subsidiaries, manufactures and sells pick-up trucks and sport-utility vehicles (SUVs) in China under branded names. The Company also researches and develops, and manufactures principal automotive parts and components for use in the assembly of pick-up trucks and SUVs.

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Great Wall Motor (2333 HK)

Berkshire BYD’s Selldown Likely to Follow Its PetroChina Playbook

Berkshire will likely follow its PetroChina playbook and materially sell down over the next few months. While the valuation is undemanding, the...

Arun George

Shanghai/Shenzhen Southbound Connect: Weekly Moves (22 August 2022)

Inside is a recap of movements in the Shanghai/Shenzhen-HK Connect. Overall, the net outflow over the past week was ~US$0.21bn, split (-US$0.24bn)...

David Blennerhassett

HSCEI Index Rebalance: SenseTime (20 HK) Added As FAF Increases Dramatically

SenseTime's FAF increases from 3% to 40% & the stock will replace CPIC in the HSCEI. Passive trackers will need to buy 7 days of ADV on SenseTime...

Brian Freitas

Hong Kong Buybacks Weekly: CK Asset, ASMPT

We highlight top 3 companies by backback amount last week in Hong Kong: Ck Asset (1113 HK), ASMPT (522 HK), FIH Mobile Limited (2038 HK). For the...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Berkshire BYD’s Selldown Likely to Follow Its PetroChina Playbook

Berkshire will likely follow its PetroChina playbook and materially sell down over the next few months. While the valuation is undemanding, the...

Arun George

Shanghai/​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (22 August 2022)

Inside is a recap of movements in the Shanghai/Shenzhen-HK Connect. Overall, the net outflow over the past week was ~US$0.21bn, split (-US$0.24bn)...

David Blennerhassett

HSCEI Index Rebalance: SenseTime (20 HK) Added As FAF Increases Dramatically

SenseTime's FAF increases from 3% to 40% & the stock will replace CPIC in the HSCEI. Passive trackers will need to buy 7 days of ADV on SenseTime...

Brian Freitas

Hong Kong Buybacks Weekly: CK Asset, ASMPT

We highlight top 3 companies by backback amount last week in Hong Kong: Ck Asset (1113 HK), ASMPT (522 HK), FIH Mobile Limited (2038 HK). For the...

Ke Yan, CFA, FRM

A-H Premium Weekly: Tianqi Lithium at New Low Post H-Share IPO

The average A/H premium changed by 3.0ppt wow with stock highlight for Great Wall Motor, Guangzhou Auto, Hisense Home, Tianqi Lithium, Jiangxi...

Ke Yan, CFA, FRM

Shanghai/Shenzhen Southbound Connect: Weekly Moves (22 August 2022)