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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Hang Seng China Enterprises Index / Event-Driven

<ul>
<li>With the 2021 futures expiring in 2 weeks, the focus now shifts to the HSCEI dividend futures expiring in 2022 where we see a fair value of 240.76 DIPS.</li>
<li>The current market is trading very close to our fair value for 2022 but there are a lot of potential catalysts that could result in a big move lower.</li>
<li>There are fewer catalysts for the 2022 futures to move higher. The regulatory changes in China plus the HFCAA could lead to the 2023 futures trading cheaper to 2022.</li>
</ul>


With the 2021 futures expiring in 2 weeks, the focus now shifts to the HSCEI dividend futures expiring in 2022 where we see a fair value of 240.76 DIPS.
The current market is trading very close to our fair value for 2022 but there are a lot of potential catalysts that could result in a big move lower.
There are fewer catalysts for the 2022 futures to move higher. The regulatory changes in China plus the HFCAA could lead to the 2023 futures trading cheaper to 2022.


HSCEI Dividend Futures: 2022 Close to Fair; Sell 22/23 Steepener

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.

Equity Capital Markets

Weilong Delicious Global Holdi / Equity Capital Markets

<ul>
<li>Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO.</li>
<li>According to F&amp;S, WDG ranked first among spicy snack food enterprises in China, with a market share of 5.7%, and in the seasoned flour product and spicy vegetable snacks categories.</li>
<li>In this note, we will undertake a peer comparison and look at valuations.</li>
</ul>


Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO.
According to F&amp;S, WDG ranked first among spicy snack food enterprises in China, with a market share of 5.7%, and in the seasoned flour product and spicy vegetable snacks categories.
In this note, we will undertake a peer comparison and look at valuations.


Weilong Delicious Global Pre-IPO - Peer Comparison and Valuation

<ul>
<li>Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO.</li>
<li>According to F&amp;S, WDG ranked first among spicy snack food enterprises in China, with a market share of 5.7%, and in the seasoned flour product and spicy vegetable snacks categories.</li>
<li>In this note, we will look at the updates from its recently filed PHIP.</li>
</ul>


Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO.
According to F&amp;S, WDG ranked first among spicy snack food enterprises in China, with a market share of 5.7%, and in the seasoned flour product and spicy vegetable snacks categories.
In this note, we will look at the updates from its recently filed PHIP.


Weilong Delicious Global Pre-IPO - PHIP Updates - Mixed Bag 1H21 Performance

Cisarua Mountain Dairy / Equity Capital Markets

<ul>
<li>Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs. </li>
<li>Hong Kong IPO pipeline looks strong with Weilong Delicious Global, CANbridge Pharmaceuticals,  Asymchem Laboratories, and China Tourism Group either close to approval or seeking approval with HKEX soon.</li>
<li>Indonesia ECM is looking busier than ever this year with the launch of Cisarua Mountain Dairy (Cimory) and PT Avia Avian IPO bookbuilds this week.</li>
</ul>


Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs. 
Hong Kong IPO pipeline looks strong with Weilong Delicious Global, CANbridge Pharmaceuticals,  Asymchem Laboratories, and China Tourism Group either close to approval or seeking approval with HKEX soon.
Indonesia ECM is looking busier than ever this year with the launch of Cisarua Mountain Dairy (Cimory) and PT Avia Avian IPO bookbuilds this week.


ECM Weekly (14th November 2021) - Cimory, Infervision, Daiwa House REIT, Weilong Delicious

Forensic Analyst

Jason Yap, CFA

Forensic Accounting

Haidilao International Holding / Forensic Accounting

On 5 November 2021, <a href="https://www.smartkarma.com/entities/haidilao-international-holding-ltd" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao (6862 HK)</a> announced its decision to shut down or suspend the operation of 300 poor performing stores within the next 2 months, which is approximately one-fifth of total restaurants.Haidilao opened 308 stores in 2019 and 544 in 2020, and added 299 new stores in H1 2021.  As at 30 June 2021, Haidilao had approximately 1,600 stores.  After closing 300 stores, Haidilao remains China's largest hot pot chain with around 1,300 stores. Amidst concerns of over-expansion, Haidilao's share price has declined by 75% since its February 2021 peak, wiping out HKD333.5 billion (USD42.9 billion) of its market cap. On hindsight, Zhang Yong, founder of Haidilao, conceded that the expansion plan had been "<a href="https://www.globaltimes.cn/page/202111/1238261.shtml" target="_blank" rel="noopener">too confident</a>". In this Insight, we discuss whether Haidilao's store closures were fait accompli given the early warning signs of deteriorating performance, which becomes apparent as we examine Haidilao's performance on a store by store basis. Apart from pandemic disruptions, this deterioration would have been compounded by increased competition and permanent changes in consumption habits that have resulted from the pandemic (such as preference for products designed for convenient home cooking).

On 5 November 2021, Haidilao (6862 HK) announced its decision to shut down or suspend the operation of 300 poor performing stores within the next 2 months, which is approximately one-fifth of total restaurants.Haidilao opened 308 stores in 2019 and 544 in 2020, and added 299 new stores in H1 2021.  As at 30 June 2021, Haidilao had approximately 1,600 stores.  After closing 300 stores, Haidilao remains China's largest hot pot chain with around 1,300 stores. Amidst concerns of over-expansion, Haidilao's share price has declined by 75% since its February 2021 peak, wiping out HKD333.5 billion (USD42.9 billion) of its market cap. On hindsight, Zhang Yong, founder of Haidilao, conceded that the expansion plan had been "too confident". In this Insight, we discuss whether Haidilao's store closures were fait accompli given the early warning signs of deteriorating performance, which becomes apparent as we examine Haidilao's performance on a store by store basis. Apart from pandemic disruptions, this deterioration would have been compounded by increased competition and permanent changes in consumption habits that have resulted from the pandemic (such as preference for products designed for convenient home cooking). 

Haidilao (6862 HK)'s Store Closures - A Fait Accompli?

China

Haidilao International Holding Ltd. operates Chinese cuisine restaurant brand focusing on hot pot cuisine. The Company provides hot pots, soup bases, dipping sauces, drinks, prepared food, and other products. Haidilao International Holding opens restaurants in Taiwan, Hong Kong, Singapore, South Korea, Japan, and the United States.

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Haidilao International Holding (6862 HK)

HSCEI Dividend Futures: 2022 Close to Fair; Sell 22/23 Steepener

The HSCEI 2022 dividend futures are trading close to fair but there are a lot more negative catalysts that will have a bigger impact than positive...

Brian Freitas

Weilong Delicious Global Pre-IPO - Peer Comparison and Valuation

Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO. In this note, we undertake a...

Sumeet Singh

Weilong Delicious Global Pre-IPO - PHIP Updates - Mixed Bag 1H21 Performance

Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO. In this note we talk about...

Sumeet Singh

ECM Weekly (14th November 2021) - Cimory, Infervision, Daiwa House REIT, Weilong Delicious

Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs.

Sumeet Singh

Haidilao (6862 HK)'s Store Closures - A Fait Accompli?

We discuss whether Haidilao's store closures were inevitable given the early warning signs of deteriorating performance, which becomes apparent...

Jason Yap, CFA

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