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

Central China Management / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/central-china-management-company-limited" target="_blank" data-smartkarma-citation="entities:33328:1" rel="noopener">Central China Management Company Limited (9982 HK)</a> (CCM) is looking to raise up to US$135m in its Hong Kong IPO.</p><p>Central China Management (CCM) is a project management company for property development projects in China. The company manages property management projects on behalf of Project Owners throughout the entire property development process.</p><p>In this note, we will look at company fundamentals, share our thoughts on the business, and discuss valuation.</p>

Central China Management Company Limited (9982 HK) (CCM) is looking to raise up to US$135m in its Hong Kong IPO.Central China Management (CCM) is a project management company for property development projects in China. The company manages property management projects on behalf of Project Owners throughout the entire property development process.In this note, we will look at company fundamentals, share our thoughts on the business, and discuss valuation.

Central China Management (中原建业) IPO - Concentrated Exposure

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Hygeia Healthcare Group / Equity Capital Markets

<div>
<p>For primary listings in Hong Kong, there are standard rules as to the lock-up duration. There are exceptions - lock-ups can be entered into and negotiated with underwriters, as is often the case for secondary listings.</p>
<p>There are other quirks such as specific lock-ups with respect to share incentive schemes, such as in <a href="https://www.smartkarma.com/entities/shenzhen-hepalink-pharmaceutical-h" target="_blank" data-smartkarma-citation="entities:29142:1" rel="noopener">Shenzhen HepaLink Pharmaceutical (H) (9989 HK)</a>, which have their own unique lock-up period - although in this case, the % of shares out (0.31%) affected  is largely immaterial. </p>
</div>
<div>
<p>According to <a href="https://en-rules.hkex.com.hk/rulebook/1007-0" target="_blank" rel="noopener">Main Board Rule 10.07(1)</a> (or <a href="https://en-rules.hkex.com.hk/rulebook/1316a" target="_blank" rel="noopener">GEM rule 13.16A(1)</a>), if a person/group of persons is/are listed as the controlling shareholder(s) of the issuer's listing application, they must adhere to a 6-month lock-up from the date of listing.</p>
</div>
<div>
<p>For cornerstone investors, the following is often stated in the share offer document:</p>
</div>
<div>
<blockquote>
<p>Each of the Cornerstone Investors has agreed that it will not, whether directly or indirectly, at any time during the period of six months from and including the Listing Date (the “Lock-up Period”), dispose of any of the Offer Shares they have purchased pursuant to the relevant Cornerstone Investment Agreements, save for certain limited circumstances ... <br>Hepalink's <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0624/2020062400097.pdf" target="_blank" rel="noopener">Global Offering Doc</a> (page 403)</p>
</blockquote>
</div>
<div>
<p>Every week in my <a href="https://www.smartkarma.com/compose/insight/46538/Last%20Week%20in%20Event%20SPACE:%20Japan%20Post,%20JD.com,%20Toyota,%20NTT,%20Jardines,%20Indices/Exec.%20Orders,%20Tianneng.%20Read%20more:%20https:/skr.ma/vhr6W" target="_blank" rel="noopener">Event SPACE</a> wrap, I flag large moves (~10%) in CCASS holdings over the past week or so, moves that are often outside normal market transactions.  These may be indicative of share pledges.  Or potential takeovers. Or simply help understand volume swings. </p>
</div>
<div>
<p>Large movement(s) concerning recently listed companies are likely lock-up related. </p>
</div>
<div>
<p>This monthly insight looks at companies that have been listed for around six months, as a guide to when insiders/controlling shareholders are permitted to sell, potentially creating an overhang which could depress prices.</p>
<p>I've also constructed a chart highlighting the performance of IPOs leading up to their lock-up, and compared this to the HSI index. The results are interesting. Spoiler - recent IPOs underperform. </p>
</div>
<div>
<p>A summary of Main Board listings in 2020 is also attached at the bottom of this insight.</p>
<p>More below the fold.</p>
</div>


For primary listings in Hong Kong, there are standard rules as to the lock-up duration. There are exceptions - lock-ups can be entered into and negotiated with underwriters, as is often the case for secondary listings.
There are other quirks such as specific lock-ups with respect to share incentive schemes, such as in Shenzhen HepaLink Pharmaceutical (H) (9989 HK), which have their own unique lock-up period - although in this case, the % of shares out (0.31%) affected  is largely immaterial. 


According to Main Board Rule 10.07(1) (or GEM rule 13.16A(1)), if a person/group of persons is/are listed as the controlling shareholder(s) of the issuer's listing application, they must adhere to a 6-month lock-up from the date of listing.


For cornerstone investors, the following is often stated in the share offer document:



Each of the Cornerstone Investors has agreed that it will not, whether directly or indirectly, at any time during the period of six months from and including the Listing Date (the “Lock-up Period”), dispose of any of the Offer Shares they have purchased pursuant to the relevant Cornerstone Investment Agreements, save for certain limited circumstances ...  Hepalink's Global Offering Doc (page 403)



Every week in my Event SPACE wrap, I flag large moves (~10%) in CCASS holdings over the past week or so, moves that are often outside normal market transactions.  These may be indicative of share pledges.  Or potential takeovers. Or simply help understand volume swings. 


Large movement(s) concerning recently listed companies are likely lock-up related. 


This monthly insight looks at companies that have been listed for around six months, as a guide to when insiders/controlling shareholders are permitted to sell, potentially creating an overhang which could depress prices.
I've also constructed a chart highlighting the performance of IPOs leading up to their lock-up, and compared this to the HSI index. The results are interesting. Spoiler - recent IPOs underperform. 


A summary of Main Board listings in 2020 is also attached at the bottom of this insight.
More below the fold.


Hong Kong IPOs: Lock-Up Expiries (December 2020 Edition)

GreenTown Management Holdings / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/greentown-management-holdings" target="_blank" data-smartkarma-citation="entities:28895:1" rel="noopener">GreenTown Management Holdings (9979 HK)</a> (GTMH) raised US$154m at HK$2.50 per share, slightly below the midpoint of its IPO price range. We have covered the IPO in:</p>
<ul>
<li>
<a href="https://www.smartkarma.com/insights/greentown-management-holdings-ipo-cheap-for-a-reason" target="_blank" data-smartkarma-citation="insights:40804" rel="noopener">GreenTown Management Holdings (绿城管理) IPO - Cheap for a Reason</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/greentown-management-holdings-pre-ipo-peer-comparison-and-preliminary-thoughts-on-valuation" target="_blank" data-smartkarma-citation="insights:40707" rel="noopener">GreenTown Management Holdings (绿城管理) Pre-IPO - Peer Comparison and Preliminary Thoughts on Valuation</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/greentown-management-pre-ipo-sacrificed-margins-in-pursuit-of-growth-muddled-by-jvs" target="_blank" data-smartkarma-citation="insights:37210" rel="noopener">GreenTown Management (绿城管理) Pre-IPO - Sacrificed Margins in Pursuit of Growth, Muddled by JVs</a> </li>
</ul>
<p>In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.</p>

GreenTown Management Holdings (9979 HK) (GTMH) raised US$154m at HK$2.50 per share, slightly below the midpoint of its IPO price range. We have covered the IPO in:


GreenTown Management Holdings (绿城管理) IPO - Cheap for a Reason 

GreenTown Management Holdings (绿城管理) Pre-IPO - Peer Comparison and Preliminary Thoughts on Valuation 

GreenTown Management (绿城管理) Pre-IPO - Sacrificed Margins in Pursuit of Growth, Muddled by JVs 

In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.

GreenTown Management Holdings (绿城管理) Trading Update - Sub Rate Pales in Comparison to Recent IPOs

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.

<div><p><a href="https://www.smartkarma.com/entities/greentown-management-holdings" target="_blank" data-smartkarma-citation="entities:28895:1" rel="noopener">GreenTown Management Holdings (9979 HK)</a> is the largest project management company in the Chinese real estate market as measured by accumulated contracted GFA from 2017 to 2019, newly contracted GFA in 2019 and total revenue in 2019, according to China Index Academy. Greentown has launched its IPO at an indicative price range of HK$2.20-3.00 per share. At the mid-point of the IPO price range, Greentown will raise net proceeds of HK$1,145.1 million ($148 million). </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/greentown-management-ipo-initiation-managing-complexity" target="_blank" rel="noopener">our initiation note</a>, we stated that Greentown’s fundamentals are attractive as the positives (market leader, strong LFL growth, stable LFL segmental margin) outweigh the negatives (near-term disruption due to COVID-19 outbreak, a decline in newly contracted GFA, margin dilutive growth). Our valuation analysis suggests that the price range is attractive. </p></div></div></div>

GreenTown Management Holdings (9979 HK) is the largest project management company in the Chinese real estate market as measured by accumulated contracted GFA from 2017 to 2019, newly contracted GFA in 2019 and total revenue in 2019, according to China Index Academy. Greentown has launched its IPO at an indicative price range of HK$2.20-3.00 per share. At the mid-point of the IPO price range, Greentown will raise net proceeds of HK$1,145.1 million ($148 million). In our initiation note, we stated that Greentown’s fundamentals are attractive as the positives (market leader, strong LFL growth, stable LFL segmental margin) outweigh the negatives (near-term disruption due to COVID-19 outbreak, a decline in newly contracted GFA, margin dilutive growth). Our valuation analysis suggests that the price range is attractive. 

Greentown Management IPO: Valuation Insights

<p><a href="https://www.smartkarma.com/entities/greentown-management-holdings" target="_blank" data-smartkarma-citation="entities:28895:1" rel="noopener">GreenTown Management Holdings (9979 HK)</a> (GTMH) is looking to raise up to US$185m in its upcoming Hong Kong IPO.</p><p>GTMH is a project management company in China with presence in 84 cities across 25 provinces, municipalities, and autonomous regions. It was the largest project management company in China in terms of accumulated contracted GFA between 2016 to 2018.</p><p>We have previously covered the company in:</p><ul>
<li>
<a href="https://www.smartkarma.com/insights/greentown-management-holdings-pre-ipo-peer-comparison-and-preliminary-thoughts-on-valuation" target="_blank" data-smartkarma-citation="insights:40707" rel="noopener">GreenTown Management Holdings (绿城管理) Pre-IPO - Peer Comparison and Preliminary Thoughts on Valuation</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/greentown-management-pre-ipo-sacrificed-margins-in-pursuit-of-growth-muddled-by-jvs" target="_blank" data-smartkarma-citation="insights:37210" rel="noopener">GreenTown Management (绿城管理) Pre-IPO - Sacrificed Margins in Pursuit of Growth, Muddled by JVs</a> </li>
</ul>

GreenTown Management Holdings (9979 HK) (GTMH) is looking to raise up to US$185m in its upcoming Hong Kong IPO.GTMH is a project management company in China with presence in 84 cities across 25 provinces, municipalities, and autonomous regions. It was the largest project management company in China in terms of accumulated contracted GFA between 2016 to 2018.We have previously covered the company in:

GreenTown Management Holdings (绿城管理) Pre-IPO - Peer Comparison and Preliminary Thoughts on Valuation 

GreenTown Management (绿城管理) Pre-IPO - Sacrificed Margins in Pursuit of Growth, Muddled by JVs 


GreenTown Management Holdings (绿城管理) IPO - Cheap for a Reason

China

GTMH is a project management company in China with presence in 84 cities across 25 provinces, municipalities, and autonomous regions. It was the largest project management company in China in terms of accumulated contracted GFA between 2016 to 2018.


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GreenTown Management Holdings (9979 HK)

Central China Management (中原建业) IPO - Concentrated Exposure

Central China Management Company Limited (9982 HK) (CCM) is looking to raise up to US$135m in its Hong Kong IPO. CCM is a project management...

Zhen Zhou, Toh

Hong Kong IPOs: Lock-Up Expiries (December 2020 Edition)

There exist the "moral hazard" around the expiry of lock-up periods. In 2020, IPO's have on average underperformed the HSI heading into the lock...

David Blennerhassett

GreenTown Management Holdings (绿城管理) Trading Update - Sub Rate Pales in Comparison to Recent IPOs

GreenTown Management Holdings (9979 HK) (GTMH) raised US$154m at HK$2.50 per share, slightly below the midpoint of its IPO price range. We have...

Zhen Zhou, Toh

Greentown Management IPO: Valuation Insights

GreenTown Management Holdings (9979 HK) is the largest project management company in the Chinese real estate market as measured by accumulated...

Arun George

GreenTown Management Holdings (绿城管理) IPO - Cheap for a Reason

GreenTown Management Holdings (9979 HK) (GTMH) is looking to raise up to US$185m in its upcoming Hong Kong IPO.GTMH is a project management company...

Zhen Zhou, Toh

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