Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Bottom-Up

<ul>
<li>Baidu, a Chinese multinational technology giant, chose Hesai Group to be the exclusive LiDAR supplier for its robotaxi fleet in China.  </li>
<li>Baidu is uniquely positioned for growth in a self-driving robotaxis and its autonomous ride-hailing platform, Apollo Go Robotaxi, gains real traction.   </li>
<li>Hesai Group may ship at least 300K LiDARs for Baidu’s sixth generation Apollo RT6 robotaxis that would translate into a revenue of up to $300M.</li>
</ul>


Baidu, a Chinese multinational technology giant, chose Hesai Group to be the exclusive LiDAR supplier for its robotaxi fleet in China.  
Baidu is uniquely positioned for growth in a self-driving robotaxis and its autonomous ride-hailing platform, Apollo Go Robotaxi, gains real traction.   
Hesai Group may ship at least 300K LiDARs for Baidu’s sixth generation Apollo RT6 robotaxis that would translate into a revenue of up to $300M.


Baidu Teams Up With Hesai Group For Its Robotaxi Platform Yichi 06: A Big Win For Hesai Group

<ul>
<li>Hesai Group shares significantly underperformed in 2024 with shares down ~47% over the year versus a ~23% gain on the Nasdaq Composite.</li>
<li>Moreover, a San Francisco-based Ouster, one of the key competitors among LiDAR makers, outperformed Hesai Group and the NASDAQ on a year-to-date basis.</li>
<li>I believe Hesai Group should initiate a share buyback program as RoboSense has recently announced on-market share repurchase plan to create value for its shareholders.  </li>
</ul>


Hesai Group shares significantly underperformed in 2024 with shares down ~47% over the year versus a ~23% gain on the Nasdaq Composite.
Moreover, a San Francisco-based Ouster, one of the key competitors among LiDAR makers, outperformed Hesai Group and the NASDAQ on a year-to-date basis.
I believe Hesai Group should initiate a share buyback program as RoboSense has recently announced on-market share repurchase plan to create value for its shareholders.  


Will Hesai Group Announce Its First-Ever Buyback To Restore Confidence in the Stock?

<ul>
<li>Hesai Group, one of the global leaders in the LiDAR and perception solutions market, completed its IPO in February 2023 and listed ADSs on the Nasdaq Global Select Market.</li>
<li>The stock peaked at $30+ during the first trading day and fell ~67% over the following 8 months as selling pressure intensified and investor sentiment worsened.</li>
<li>The stock has taken another leg down following U.S. DoD’s decision to include Hesai Group in 1260H list of Chinese military-linked companies. Hesai believes this inclusion is unjust and meritless.</li>
</ul>


Hesai Group, one of the global leaders in the LiDAR and perception solutions market, completed its IPO in February 2023 and listed ADSs on the Nasdaq Global Select Market.
The stock peaked at $30+ during the first trading day and fell ~67% over the following 8 months as selling pressure intensified and investor sentiment worsened.
The stock has taken another leg down following U.S. DoD’s decision to include Hesai Group in 1260H list of Chinese military-linked companies. Hesai believes this inclusion is unjust and meritless.


Hesai Group: Time To Cover Shorts As The Stock Found A Bottom and Delisting Risk Is Real

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>
<a href="https://www.smartkarma.com/entities/robosense-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:39903:1" rel="noopener">Robosense Technology (2498 HK)</a> raised around US$126m in its Hong Kong IPO in Jan 2024. The lockup on its shareholders will expire soon.</li>
<li>The company provides LiDAR and perception solutions to its customers. As of March 2024, it had design wins for mass production of LiDAR products with 22 automotive OEMs and suppliers.</li>
<li>In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.</li>
</ul>



Robosense Technology (2498 HK) raised around US$126m in its Hong Kong IPO in Jan 2024. The lockup on its shareholders will expire soon.
The company provides LiDAR and perception solutions to its customers. As of March 2024, it had design wins for mass production of LiDAR products with 22 automotive OEMs and suppliers.
In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.


Robosense IPO Lock-Up Expiry - US$2.8bn Lockup Expiry for 99% of the Stock, CCASS Movement

Equity Capital Markets

<ul>
<li>2023 marked our eighth year covering Equity Capital Markets in Asia Pacific. In 2023, IPOs didn’t pick up much from the low base of 2022  while placements showed upward momentum.</li>
<li>We ended 2023 with an accuracy rate of 73.7% across 57 IPOs that we covered and 79.3% across 115 placements.</li>
<li>For those not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific, including China ADRs.</li>
</ul>


2023 marked our eighth year covering Equity Capital Markets in Asia Pacific. In 2023, IPOs didn’t pick up much from the low base of 2022  while placements showed upward momentum.
We ended 2023 with an accuracy rate of 73.7% across 57 IPOs that we covered and 79.3% across 115 placements.
For those not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific, including China ADRs.


Aequitas 2023 IPOs and Placements Performance Review - IPOs Forming a Low Base, Placements Pick Up

United States

Allied Motion Technologies, Inc. designs, manufactures, and sells motion control products into applications that serve various industry sectors.  The Company supplies precision and specialty motion control components and systems to a range of customers throughout the world.

LSI Industries Inc. designs, manufactures, and markets a variety of lighting fixtures, menu board systems, and graphic products.  The Company sells its products to the petroleum/convenience store market, the multi-site retail market such as restaurants and automobile dealerships, and the commercial/industrial lighting market.

Preformed Line Products Company designs and manufactures systems used in the construction and maintenance of networks for the energy, communications, cable provider, and information industries.  The Company's products support, protect, connect, terminate, and secure cables and wires.  Preformed Line Products also manufactures products serving the voice and data transmission markets.

FuelCell Energy, Inc. develops and commercializes fuel cell power plants for electric power generation. The Company also has contracts to develop its fuel cells for use of alternative fuels and for marine transportation applications. FuelCell has research and development contracts with government and industry.

Power Solutions International, Inc. manufactures engines for off-highway industrial equipment.  The engines primarily operate on alternative fuels such as natural gas and propane.  The Company sells engines for stationary generators, oil and gas equipment, forklifts, aerial work platforms, industrial sweepers, arbor equipment, agricultural and turf equipment and other equipment.

TPI Composites, Inc. designs and manufactures composite wind blades for the wind energy market. The Company also provides composite vehicle structures to solve the complex problem of reducing weight and cost in transportation applications. TPI Composites serves customers worldwide.

GrafTech International Ltd. manufactures and provides natural and synthetic graphite and carbon based products and services. The Company offers graphite electrodes, petroleum needle coke, crystalline form of carbon, and energy solutions for manufacture of steel, aluminum, silicon metal, automotive products, and electronics. GrafTech International serves customers worldwide.

Babcock & Wilcox Enterprises, Inc. provides power generation equipment. The Company offers water-tube boilers, environmental systems, steam, and other related products. Babcock & Wilcox Enterprises serves industries worldwide.

Energous Corporation is a development stage technology company. The Company is developing technology that can enable wireless charging and powering of electronic devices at distance. Energous's technology powers devices by surrounding them with a three dimensional pocket of energy formed by radio frequencies.

The Manitowoc Company, Inc. is a diversified industrial manufacturer of cranes and related products. The Company's products include lattice-boom cranes, tower cranes, mobile telescopic cranes, and boom trucks.

Longwell Company manufactures power cords. The Company's products include power cord sets, power supply cords, cable assemblies, wires and cables, connectors, micro heat sinks and heat pipes, as well as tubing.

Beijing Dinghan Technology Co., Ltd. develops, manufactures and sells electrical equipments for rail transit electricity systems. The Company also provides related technical support services.

Yantai Longyuan Power Technology Co.,Ltd. manufactures, sells and installs electricity generation equipment.  The Company's products include plasma ignition and combustion equipment, and oil ignition equipment.

Yantai Longyuan Power Technology Co (300105 CH)

Harbin Jiuzhou Electric Co., Ltd. develops, manufactures and sells power transmission and conversion equipment.  The Company's products include high-voltage frequency converter, DC power system, substation, and control system.

Harbin Jiuzhou Electric Co,Ltd. (300040 CH)

Jiangsu Zongyi Co., Ltd.  builds solar power plants, manufactures solar cells, and design chips. The company also provide software and network services.

Hangzhou Zhongheng Electric Co Ltd. develops and supplies electrical products. The Company's products include electric power operating power systems, outdoor communication power supply systems, and indoor communication power supply systems.

Hangzhou Zhongheng Electric Co, Ltd. (002364 CH)

Tellhow Sci-Tech Co., Ltd. develops and manufactures intelligent power station products, intelligent building electrical equipment, and photoelectric products.  The Company's products include emergency power supply equipment, power transmission equipment, central air-conditioners, and other related products.

Korea Electric Terminal Co., Ltd. specializes in manufacturing a wide range of connectors used in automobiles, home appliances, and telecommunications devices, The Company also produces fiber-optic products, such as jumper cord assemblies, attenuators, couplers, and multiplexers.

Fujian Nanping Sun Cable Co Ltd designs and produces power wires, wire harnesses, plugs, wire clamps, and wires which are used in the internal or external of computers, TVs, speakers, and home appliances.

Dalian Insulator Group Company Limited develops, manufactures and sells procelain and composite insulator for high-voltage transmission lines, procelain and composite insulator for power stations, and porcelain fittings.

Hesai Group provides 3D light detection and ranging solutions. The Company's LiDAR products enables a broad spectrum of applications across passenger and commercial vehicles with advanced driver assistance systems, as well as autonomous vehicle fleets providing passenger and freight mobility services.

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Hesai Group (HSAI US)

Baidu Teams Up With Hesai Group For Its Robotaxi Platform Yichi 06: A Big Win For Hesai Group

In my insight, I discuss recent exclusive partnership between Baidu and Hesai Group, and update LiDAR deliveries estimates for Hesai Group

Andrei Zakharov

Will Hesai Group Announce Its First-Ever Buyback To Restore Confidence in the Stock?

Hesai Group, a leading LiDAR technology company, is suffering from depressed valuation and I believe an initiation of share buyback program may...

Andrei Zakharov

Hesai Group: Time To Cover Shorts As The Stock Found A Bottom and Delisting Risk Is Real

Hesai Group priced its IPO at $19/ADS in February 2023 and shares have materially underperformed Nasdaq and S&P 500, with shares down ~77% vs. IPO...

Andrei Zakharov

Robosense IPO Lock-Up Expiry - US$2.8bn Lockup Expiry for 99% of the Stock, CCASS Movement

The pre-IPO shareholders came out of lockup today, leading to a 67% drop in the share price with an accompanying spike in volumes.

Sumeet Singh

Aequitas 2023 IPOs and Placements Performance Review - IPOs Forming a Low Base, Placements Pick Up

2023 was our eight year of covering Asia ECM. We ended 2023 with an accuracy rate of 73.7% across 57 IPOs that we covered and 79.3% across 115...

Sumeet Singh

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