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 the weekly Hong Kong Connect flows with our data engine for holding position as of February 23rd.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight the weekly Hong Kong Connect flows for CNOOC, China Mobile.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of February 23rd.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight the weekly Hong Kong Connect flows for CNOOC, China Mobile.


Hong Kong Connect Flows (Feb 23rd): CNOOC, China Mobile

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

Event-Driven

Hygon Information Technology C / Event-Driven

<ul>
<li>The changes for the <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR50 (STAR50 INDEX)</a> and STAR100 Index were announced post market close on Friday.</li>
<li>The coming week is a full one with capping cutoffs, review cutoffs, announcements and implementations apart from futures expiries.</li>
<li>With China open after Lunar New Year, the National Team is back pouring money into ETFs with the largest inflows to the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300</a>, <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500</a>, <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext</a> and <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">STAR50</a> indices.</li>
</ul>


The changes for the SSE STAR50 (STAR50 INDEX) and STAR100 Index were announced post market close on Friday.
The coming week is a full one with capping cutoffs, review cutoffs, announcements and implementations apart from futures expiries.
With China open after Lunar New Year, the National Team is back pouring money into ETFs with the largest inflows to the CSI 300, CSI 500, ChiNext and STAR50 indices.


Index Rebalance & ETF Flow Recap: HSCEI, HSCI, HSTECH, HSIII, STTF, Top50, Div+, FXI, FnGuide

Tongcheng Travel Holdings  / Event-Driven

<ul>
<li>As expected, <a href="https://www.smartkarma.com/entities/tongcheng-travel-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng Travel Holdings (780 HK)</a> will replace <a href="https://www.smartkarma.com/entities/gds-holdings-ltd" target="_blank" data-smartkarma-citation="entities:32157:1" rel="noopener">GDS Holdings (9698 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index (HSTECH INDEX)</a> at the close on 1 March.</li>
<li>Estimated one-way turnover is 3.9% leading to a round-trip trade of HK$7.74bn (US$988m). There is nearly 14x ADV to buy in <a href="https://www.smartkarma.com/entities/tongcheng-travel-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng Travel Holdings (780 HK)</a>. </li>
<li>Positioning in <a href="https://www.smartkarma.com/entities/tongcheng-travel-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng Travel (780 HK)</a> does not appear to be very high, while positioning in <a href="https://www.smartkarma.com/entities/gds-holdings-ltd" target="_blank" data-smartkarma-citation="entities:32157:1" rel="noopener">GDS Holdings (9698 HK)</a> is very high with a couple of deletions coming up.</li>
</ul>


As expected, Tongcheng Travel Holdings (780 HK) will replace GDS Holdings (9698 HK) in the Hang Seng TECH Index (HSTECH INDEX) at the close on 1 March.
Estimated one-way turnover is 3.9% leading to a round-trip trade of HK$7.74bn (US$988m). There is nearly 14x ADV to buy in Tongcheng Travel Holdings (780 HK). 
Positioning in Tongcheng Travel (780 HK) does not appear to be very high, while positioning in GDS Holdings (9698 HK) is very high with a couple of deletions coming up.


HSTECH Index Rebalance: Tongcheng (780 HK) In; GDS (9698 HK) Out; Round Trip Trade US$1bn

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC IPOs & Placements

Equity Capital Markets

Octillion Energy Holdings / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/octillion-energy-holdings" target="_blank" data-smartkarma-citation="entities:40394:1" rel="noopener">Octillion Energy Holdings (OE HK)</a> is looking to raise US$400m in its upcoming Hong Kong IPO.</li>
<li>Octillion’s main revenue driver has been its EV battery systems with battery cells over the track record period, with a healthy balance sheet to support its cash burn. </li>
<li>However, its revenue growth fell off a cliff in 1H23 due to its heavy reliance on a single customer, which doesn’t appear sustainable, in our view.</li>
</ul>



Octillion Energy Holdings (OE HK) is looking to raise US$400m in its upcoming Hong Kong IPO.
Octillion’s main revenue driver has been its EV battery systems with battery cells over the track record period, with a healthy balance sheet to support its cash burn. 
However, its revenue growth fell off a cliff in 1H23 due to its heavy reliance on a single customer, which doesn’t appear sustainable, in our view.


Octillion Energy Holdings Pre-IPO - Over-Reliance on Top Customer and Lack of Competitive Edge

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.</li>
<li>The index changes for HSTECH index for the March 2024 index rebal event will be announced on 16th February 2024. </li>
<li>In this insight, we take a final look at the expected index changes and our latest flow expectations.</li>
</ul>


The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
The index changes for HSTECH index for the March 2024 index rebal event will be announced on 16th February 2024. 
In this insight, we take a final look at the expected index changes and our latest flow expectations.


Quiddity HSTECH Mar 24 Flow Expectations: US$415mn One-Way if the Low-Conviction Change Takes Place

China

Li Auto Inc. manufactures automobiles. The Company designs, develops, and sells smart new energy electric sport utility vehicles. Li Auto conducts businesses in China.

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Li Auto (2015 HK)

Hong Kong Connect Flows (Feb 23rd): CNOOC, China Mobile

We analyzed southbound Hong Kong connect flows in the past week and highlighted the weekly flows for CNOOC, China Mobile.

Ke Yan, CFA, FRM

Index Rebalance & ETF Flow Recap: HSCEI, HSCI, HSTECH, HSIII, STTF, Top50, Div+, FXI, FnGuide

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

HSTECH Index Rebalance: Tongcheng (780 HK) In; GDS (9698 HK) Out; Round Trip Trade US$1bn

Tongcheng Travel replaces GDS Holdings in the HSTECH at the close on 1 March. GDS is also a delete from a global index on 29 Feb, Positioning in...

Brian Freitas

Octillion Energy Holdings Pre-IPO - Over-Reliance on Top Customer and Lack of Competitive Edge

Octillion Energy Holdings (OE HK) is looking to raise US$400m in its upcoming Hong Kong IPO. Its revenue growth fell off a cliff in 1H23 due to its...

Ethan Aw

Quiddity HSTECH Mar 24 Flow Expectations: US$415mn One-Way if the Low-Conviction Change Takes Place

I see US$415mn one-way index flows assuming Tongcheng Travel (780 HK) gets added and GDS Holdings (9698 HK) gets deleted. However, I see these as...

Janaghan Jeyakumar, CFA

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