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.

Equity Capital Markets

Zhejiang Leapmotor Technologie / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zhejiang-leapmotor-technology" target="_blank" data-smartkarma-citation="entities:35968:1" rel="noopener">Leapmotor (2007699D HK)</a>, a Chinese EV manufacturer, will start its listing hearing for a US$1.5 billion HKEx IPO this week, according to press reports.</li>
<li>In <strong><em><a href="https://www.smartkarma.com/insights/leapmotor-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:79449" rel="noopener">Leapmotor IPO: The Bull Case</a></em></strong>, we highlighted the key elements of the bull case. In this note, we outline the bear case. </li>
<li>The key elements of the bear case rest on a slow ramp-up, lower revenue, high EBIT and FCF loss margin compared to peers at a similar stage of development.</li>
</ul>



Leapmotor (2007699D HK), a Chinese EV manufacturer, will start its listing hearing for a US$1.5 billion HKEx IPO this week, according to press reports.
In Leapmotor IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case. 
The key elements of the bear case rest on a slow ramp-up, lower revenue, high EBIT and FCF loss margin compared to peers at a similar stage of development.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/zhejiang-leapmotor-technology" target="_blank" data-smartkarma-citation="entities:35968:1" rel="noopener">Leapmotor (2007699D HK)</a>, a Chinese EV manufacturer, will start its listing hearing for a US$1.5 billion HKEx IPO this week, according to press reports.</li>
<li>Leapmotor ranked fifth among the global pure-play EV companies and fourth among the pure-play EV companies based in China as measured by sales volume in 2021. </li>
<li>The key elements of the bull case rest on a solid roadmap, executive capabilities, explosive growth, declining loss margin and declining FCF burn.</li>
</ul>



Leapmotor (2007699D HK), a Chinese EV manufacturer, will start its listing hearing for a US$1.5 billion HKEx IPO this week, according to press reports.
Leapmotor ranked fifth among the global pure-play EV companies and fourth among the pure-play EV companies based in China as measured by sales volume in 2021. 
The key elements of the bull case rest on a solid roadmap, executive capabilities, explosive growth, declining loss margin and declining FCF burn.


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>This morning - 26 July - <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba (ADR) (BABA US)</a> / <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> issued an <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0726/2022072600077.pdf" target="_blank" rel="noopener">announcement</a> it would pursue a primary listing on the HKEX.</li>
<li>When Alibaba listed in NY, it was on ADRs. When it listed in HK, it was the shares underlying the ADRs but it was a quickie secondary listing.</li>
<li>It will now seek a dual primary listing as others have. This will make BABA Southbound-eligible and will slightly improve BABA's HSI funding trade prospects in future. </li>
</ul>


This morning - 26 July - Alibaba (ADR) (BABA US) / Alibaba Group (9988 HK) issued an announcement it would pursue a primary listing on the HKEX.
When Alibaba listed in NY, it was on ADRs. When it listed in HK, it was the shares underlying the ADRs but it was a quickie secondary listing.
It will now seek a dual primary listing as others have. This will make BABA Southbound-eligible and will slightly improve BABA's HSI funding trade prospects in future. 


Alibaba to Pursue Dual Primary Listing in HK - Impact on Stock Connect, Indices, Etc

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> currently has a Secondary Listing in Hong Kong and is looking to become dual primary listed in Hong Kong and the U.S.</li>
<li>The main change will be inclusion in the Southbound Stock Connect program where mainland investors will be able to buy the stock.</li>
<li>
<a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> is capped at 8% in the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI INDEX</a> and is close to 8% of the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI INDEX</a>, there will be negligible impact on the dividend futures.</li>
</ul>



Alibaba Group (9988 HK) currently has a Secondary Listing in Hong Kong and is looking to become dual primary listed in Hong Kong and the U.S.
The main change will be inclusion in the Southbound Stock Connect program where mainland investors will be able to buy the stock.

Alibaba Group (9988 HK) is capped at 8% in the HSCEI INDEX and is close to 8% of the HSI INDEX, there will be negligible impact on the dividend futures.


Alibaba (9988 HK): Dual Primary Listing Implications

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.</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 Tencent and BYD that dominated the inflows last week.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight Tencent and BYD that dominated the inflows last week.


Hong Kong Connect Flows: 11 Weeks of Inflows

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)

Leapmotor IPO: The Bear Case

The key elements of the bear case rest on a slow ramp-up, lower revenue, high EBIT and FCF loss margin compared to peers at a similar stage of...

Arun George

Leapmotor IPO: The Bull Case

The key elements of the bull case rest on a solid roadmap, executive capabilities, explosive growth, declining loss margin and declining FCF burn.

Arun George

Alibaba to Pursue Dual Primary Listing in HK - Impact on Stock Connect, Indices, Etc

Alibaba this morning announced it will seek a Dual Primary Listing on the HKEX. This makes PCAOB-induced US exit easier, and will make the stock...

Travis Lundy

Alibaba (9988 HK): Dual Primary Listing Implications

Alibaba is looking to change its HK listing from Secondary to Dual Primary. This will make the stock eligible for Southbound Stock Connect. A...

Brian Freitas

Hong Kong Connect Flows: 11 Weeks of Inflows

Southbound connect recorded 11 weeks of consecutive inflows. We highlight Tencent and BYD that dominated the inflows last week.

Ke Yan, CFA, FRM

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