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.

Equity Capital Markets

<p>Netjoy, a leading short video marketing solution player, launched book building to raise up to USD 183m via a listing in Hong Kong.</p><p>Netjoy rode the wave of emergence of short video platforms such as Tiktok and Kuaishou. It specialises in short video marketing. Online gaming is the main spender on ads through Netjoy.</p><p>We note that key operating metrics such as revenue per click and revenue per advertiser has been trending down during the track record period. The company's shareholders are mainly individuals with no significant investments from institutional investors. </p><p>We look at the company's financial and operating performance in 1H2020. We think the company is in transition from low margin business into higher margin business. Revenue declined significantly but its margin improved. The company lost business from online gaming customers while gaining traction with financial service and e-Commerce customers. </p><p>We think the deal is fairly valued and the cornerstone investors are mediocre. Its peer Joy Spreader didn't perform well despite strong retail interests. We will avoid the deal.</p><h2>Our previous coverage on Netjoy</h2><ul><li dir="ltr"><p><a href="https://www.smartkarma.com/insights/netjoy-pre-ipo-growth-stalled-for-the-short-video-marketer" target="_blank" rel="noopener">Netjoy (云想科技) Pre-IPO: Growth stalled for the short video marketer</a></p></li></ul>

Netjoy, a leading short video marketing solution player, launched book building to raise up to USD 183m via a listing in Hong Kong.Netjoy rode the wave of emergence of short video platforms such as Tiktok and Kuaishou. It specialises in short video marketing. Online gaming is the main spender on ads through Netjoy.We note that key operating metrics such as revenue per click and revenue per advertiser has been trending down during the track record period. The company's shareholders are mainly individuals with no significant investments from institutional investors. We look at the company's financial and operating performance in 1H2020. We think the company is in transition from low margin business into higher margin business. Revenue declined significantly but its margin improved. The company lost business from online gaming customers while gaining traction with financial service and e-Commerce customers. We think the deal is fairly valued and the cornerstone investors are mediocre. Its peer Joy Spreader didn't perform well despite strong retail interests. We will avoid the deal.Our previous coverage on NetjoyNetjoy (云想科技) Pre-IPO: Growth stalled for the short video marketer

Netjoy (云想科技) IPO: Alarming 1H2020, Avoid

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.

<p><a href="https://www.smartkarma.com/entities/netjoy" target="_blank" data-smartkarma-citation="entities:29729:1" rel="noopener">Netjoy (2131 HK)</a> is an ad tech company which connects advertising customers and media partners. It is the third-largest online marketing solutions provider in China as measured by gross billing generated from short video advertisements in 2019, with a market share of 3.4%, according to iResearch. Netjoy has launched a Hong Kong IPO to raise net proceeds of HK$1,166.6 million ($150 million), at the mid-point of the IPO price range. </p><div class="content-highlight"><p>The IPO performance of Chinese ad tech companies has been mixed. Consequently, backing the winners is crucial to generate investment returns in the Chinese ad tech sector. For investors seeking Chinese adtech exposure, we think Netjoy’s fundamentals are attractive. We will discuss the IPO valuation in our next piece. </p></div>

Netjoy (2131 HK) is an ad tech company which connects advertising customers and media partners. It is the third-largest online marketing solutions provider in China as measured by gross billing generated from short video advertisements in 2019, with a market share of 3.4%, according to iResearch. Netjoy has launched a Hong Kong IPO to raise net proceeds of HK$1,166.6 million ($150 million), at the mid-point of the IPO price range. The IPO performance of Chinese ad tech companies has been mixed. Consequently, backing the winners is crucial to generate investment returns in the Chinese ad tech sector. For investors seeking Chinese adtech exposure, we think Netjoy’s fundamentals are attractive. We will discuss the IPO valuation in our next piece. 

China and US Equity Analyst

Roger Xie

Equity Bottom-Up

<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> September ADT (Average Daily Turnover) remain strong. This in in contrast to usual weak seasonality in trading activities into Q4. For the first 9 months this year, HKEx ADT has reaccelerated the year-over-year growth rate to 38.9% , fueled by  IPO listings and investors' sanguine view on China. </li>
<li>HKEx had a busy month for the IPO market with 9 new listings in September. The most noticeable IPOs are <a href="https://www.smartkarma.com/entities/nongfu-spring" target="_blank" data-smartkarma-citation="entities:28955:1" rel="noopener">Nongfu Spring (9633 HK), </a><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 Inc (9987 HK),</a><a href="https://www.smartkarma.com/entities/ming-yuan-cloud-group" target="_blank" data-smartkarma-citation="entities:29268:1" rel="noopener">Ming Yuan Cloud Group (909 HK)</a>, and <a href="https://www.smartkarma.com/entities/joy-spreader-interactive-technology" target="_blank" data-smartkarma-citation="entities:29271:1" rel="noopener">Joy Spreader Interactive Technology (6988 HK).</a> We expect mega IPO and Chinese ADR homecoming to reshape the landscape of Hong Kong capital market. And Ant Group has just won approval from the China Securities Regulatory Commission (CSRC) for its blockbuster initial public offering in Hong Kong.</li>
<li>Derivative volumes improved 19% quarter-over-quarter in 3Q, on the back of Heng Seng Index and China Enterprises Index futures. We expect volume will be boosted by MSCI suite of products and reach critical mass in the next 12 months. A-share futures should be the most important driver of HKEx derivative volume. We estimate that MSCI China A-share future could contribute additional 6% revenue for <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> after its launch. We remain bullish on <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> and reiterate TP of HKD 400. </li>
</ul>



HKEX (388 HK) September ADT (Average Daily Turnover) remain strong. This in in contrast to usual weak seasonality in trading activities into Q4. For the first 9 months this year, HKEx ADT has reaccelerated the year-over-year growth rate to 38.9% , fueled by  IPO listings and investors' sanguine view on China. 
HKEx had a busy month for the IPO market with 9 new listings in September. The most noticeable IPOs are Nongfu Spring (9633 HK), Yum China Holdings Inc (9987 HK),Ming Yuan Cloud Group (909 HK), and Joy Spreader Interactive Technology (6988 HK). We expect mega IPO and Chinese ADR homecoming to reshape the landscape of Hong Kong capital market. And Ant Group has just won approval from the China Securities Regulatory Commission (CSRC) for its blockbuster initial public offering in Hong Kong.
Derivative volumes improved 19% quarter-over-quarter in 3Q, on the back of Heng Seng Index and China Enterprises Index futures. We expect volume will be boosted by MSCI suite of products and reach critical mass in the next 12 months. A-share futures should be the most important driver of HKEx derivative volume. We estimate that MSCI China A-share future could contribute additional 6% revenue for HKEX (388 HK) after its launch. We remain bullish on HKEX (388 HK) and reiterate TP of HKD 400. 


HKEx (388.HK): September Trading Volume Indicated Strong Activities Trend into Q4

APAC IPOs & Placements

Zhen Zhou, Toh

Ming Yuan Cloud Group / Equity Capital Markets

<div>
<p><a href="https://www.smartkarma.com/entities/ming-yuan-cloud-group" target="_blank" data-smartkarma-citation="entities:29268:1" rel="noopener">Ming Yuan Cloud Group (909 HK)</a> (MYCG) raised US$796m at HK$16.50 per share, at the top-end of its IPO price range.</p>
<p>MYCG is a software solution provider in China with a focus on real estate. The company provides enterprise resource planning (ERP) solutions and SaaS products to property developers and other industry participants in the real estate value chain in China. As per Frost &amp; Sullivan (F&amp;S), the company is ranked first among software providers for property developers in China and has a dominant 24.6% market share in terms of contract value in 2019.</p>
<p>In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.</p>
<p>Our previous coverage of the IPO:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li dir="ltr">
<p><a href="https://www.smartkarma.com/insights/ming-yuan-cloud-pre-ipo-leaning-on-regional-partners-for-growth-but-hefty-commissions-paid" target="_blank" data-smartkarma-citation="insights:42977" rel="noopener">Ming Yuan Cloud (明源云) Pre-IPO - Leaning on Regional Partners for Growth but Hefty Commissions Paid</a> </p>
</li>
<li dir="ltr">
<a href="https://www.smartkarma.com/insights/ming-yuan-cloud-ipo-better-disclosure-and-a-leader-in-the-industry" target="_blank" data-smartkarma-citation="insights:43229" rel="noopener">Ming Yuan Cloud (明源云) IPO - Better Disclosure and a Leader in the Industry</a> </li>
</ul>
</div>


Ming Yuan Cloud Group (909 HK) (MYCG) raised US$796m at HK$16.50 per share, at the top-end of its IPO price range.
MYCG is a software solution provider in China with a focus on real estate. The company provides enterprise resource planning (ERP) solutions and SaaS products to property developers and other industry participants in the real estate value chain in China. As per Frost &amp; Sullivan (F&amp;S), the company is ranked first among software providers for property developers in China and has a dominant 24.6% market share in terms of contract value in 2019.
In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.
Our previous coverage of the IPO:




Ming Yuan Cloud (明源云) Pre-IPO - Leaning on Regional Partners for Growth but Hefty Commissions Paid 


Ming Yuan Cloud (明源云) IPO - Better Disclosure and a Leader in the Industry 



Ming Yuan Cloud (明源云) Trading - Max Clawback Triggered but Still Decent Amount Left for Insti

Joy Spreader Interactive Technology / Equity Capital Markets

<div>
<p><a href="https://www.smartkarma.com/entities/joy-spreader-interactive-technology" target="_blank" data-smartkarma-citation="entities:29271:1" rel="noopener">Joy Spreader Interactive Technology (6988 HK)</a> (JST) raised US$202m in its Hong Kong IPO at HK$2.88 per share, slightly above the midpoint of its price range.</p>
</div>
<div>
<p>JST is a performance-based we-media marketing service provider in China. JST connects marketers and we-media publishers via its technology and platforms. The services provided to marketers include analyzing and distributing their products on the we-media network which will help marketers acquire users.</p>
</div>
<div>
<p>In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.</p>
</div>
<div>
<p>Our previous coverage of the IPO:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li dir="ltr">
<p><a href="https://www.smartkarma.com/insights/joy-spreader-pre-ipo-found-a-niche-in-games-but-still-just-a-middleman" target="_blank" data-smartkarma-citation="insights:43073" rel="noopener">Joy Spreader (乐享互动) Pre-IPO - Found a Niche in Games but Still Just a Middleman</a> </p>
</li>
<li dir="ltr">
<a href="https://www.smartkarma.com/insights/joy-spreader-ipo-fairly-valued-at-best" target="_blank" data-smartkarma-citation="insights:43139" rel="noopener">Joy Spreader (乐享互动) IPO - Fairly Valued at Best</a> </li>
</ul>
</div>


Joy Spreader Interactive Technology (6988 HK) (JST) raised US$202m in its Hong Kong IPO at HK$2.88 per share, slightly above the midpoint of its price range.


JST is a performance-based we-media marketing service provider in China. JST connects marketers and we-media publishers via its technology and platforms. The services provided to marketers include analyzing and distributing their products on the we-media network which will help marketers acquire users.


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


Our previous coverage of the IPO:




Joy Spreader (乐享互动) Pre-IPO - Found a Niche in Games but Still Just a Middleman 


Joy Spreader (乐享互动) IPO - Fairly Valued at Best 



Joy Spreader (乐享互动) Trading - Retail Frenzy Triggers Max Clawback

China

Joy Spreader Interactive Technology. Ltd operates as a media marketing service provider. The Company provides performance-based marketing services. Joy Spreader Interactive Technology also supplies intelligent recommendation platform.

Joy Spreader Interactive Technology (6988 HK)

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

Joy Spreader Interactive Technology (6988 HK)

Netjoy (云想科技) IPO: Alarming 1H2020, Avoid

We think the deal is fairly valued and the cornerstone investors are mediocre. Its peer Joy Spreader didn't perform well despite strong retail...

Ke Yan, CFA, FRM

Netjoy IPO Initiation: Joy Divisions

Netjoy has launched an HK IPO to raise net proceeds of HK$1,166.6 million ($150 million), at the mid-point. For investors seeking Chinese adtech...

Arun George

HKEx (388.HK): September Trading Volume Indicated Strong Activities Trend into Q4

We expect Hong Kong Exchange has strong trading activities in Q4, in contrast to usual weak seasonality. Now is a better time to go long on HKEx...

Roger Xie

Ming Yuan Cloud (明源云) Trading - Max Clawback Triggered but Still Decent Amount Left for Insti

Our previous coverage of the IPO: Ming Yuan Cloud (明源云) Pre-IPO - Leaning on Regional Partners for Growth but Hefty Commissions Paid Ming...

Zhen Zhou, Toh

Joy Spreader (乐享互动) Trading - Retail Frenzy Triggers Max Clawback

Joy Spreader Interactive Technology (6988 HK) (JST) is looking to raise up to US$225m in its upcoming Hong Kong IPO. JST is a performance-based...

Zhen Zhou, Toh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)