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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p><a href="https://www.smartkarma.com/entities/li-auto-inc" target="_blank" data-smartkarma-citation="entities:28812:1" rel="noopener">Li Auto Inc. (LI US)</a> has got approval from the <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> for a dual primary listing. Media reports indicate that the company could raise between US$1bn-2bn in the offering. Based on the <a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a> timeline, Li Auto could list around 6-9 August.</p><p><a href="https://www.smartkarma.com/entities/xpeng-inc" target="_blank" data-smartkarma-citation="entities:29217:1" rel="noopener">Xpeng (XPEV US)</a> / <a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a> raised US$1.8bn via a dual primary listing earlier this month and <a href="https://www.smartkarma.com/entities/li-auto-inc" target="_blank" data-smartkarma-citation="entities:28812:1" rel="noopener">Li Auto Inc. (LI US)</a> is following closely behind. Maybe <a href="https://www.smartkarma.com/entities/nio-inc" target="_blank" data-smartkarma-citation="entities:27399:1" rel="noopener">NIO Inc (NIO US)</a> comes next.</p><p>We expect <a href="https://www.smartkarma.com/entities/li-auto-inc" target="_blank" data-smartkarma-citation="entities:28812:1" rel="noopener">Li Auto Inc. (LI US)</a> to get Fast Entry to the Hang Seng Composite Index (HSCI) though, as a WVR security, the stock will only be eligible for Stock Connect once it has completed 6 months of listing plus 20 trading days.</p><p>Li Auto could also be included in the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> at the December review. This will lead to a further drop in the HSCEI 2022 dividend futures since we do not expect <a href="https://www.smartkarma.com/entities/li-auto-inc" target="_blank" data-smartkarma-citation="entities:28812:1" rel="noopener">Li Auto Inc. (LI US)</a> to pay dividends in the near future, while the potential deletion is a higher dividend yielding stock.</p>

Li Auto Inc. (LI US) has got approval from the HKEX (388 HK) for a dual primary listing. Media reports indicate that the company could raise between US$1bn-2bn in the offering. Based on the XPeng (9868 HK) timeline, Li Auto could list around 6-9 August.Xpeng (XPEV US) / XPeng (9868 HK) raised US$1.8bn via a dual primary listing earlier this month and Li Auto Inc. (LI US) is following closely behind. Maybe NIO Inc (NIO US) comes next.We expect Li Auto Inc. (LI US) to get Fast Entry to the Hang Seng Composite Index (HSCI) though, as a WVR security, the stock will only be eligible for Stock Connect once it has completed 6 months of listing plus 20 trading days.Li Auto could also be included in the Hang Seng China Enterprises Index (HSCEI INDEX) at the December review. This will lead to a further drop in the HSCEI 2022 dividend futures since we do not expect Li Auto Inc. (LI US) to pay dividends in the near future, while the potential deletion is a higher dividend yielding stock.

Li Auto (LI US) Dual Primary Listing: HSCI Fast Entry; HSCEI Dec Inclusion & Div Futures Lower

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

<p><a href="https://www.smartkarma.com/entities/li-auto-inc" target="_blank" data-smartkarma-citation="entities:28812:1" rel="noopener">Li Auto Inc. (LI US)</a> is the first company to successfully commercialise EREVs (extended-range electric vehicles) in China, the Li ONE. Li ONE is a six-seat, large premium electric SUV which began volume production and deliveries in November 2019 and December 2019, respectively. In 2020, Li ONE was the best-selling new energy SUV in China with a sales volume market share of 9.7%, according to CIC. </p><p>Li Auto has received approval for an HKEx secondary listing to raise $1.0-1.5 billion, according to press reports. The secondary listing comes on the back of a listing on Nasdaq in July 2020 ($1.0 billion net raise at $11.50 per ADS) as well as a follow-on offering in December 2020 ($1.4 billion gross raise at $29.00 per ADS). The secondary listing also follows peer, <a href="https://www.smartkarma.com/entities/xpeng-inc" target="_blank" data-smartkarma-citation="entities:29217:1" rel="noopener">Xpeng (XPEV US)</a>, which raised net proceeds of $1.8 billion on 7 July. <a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a> H-shares are trading -9% below the offer price largely due to the recent regulatory onslaught which has engulfed Chinese companies with exposure to the technology and education sector along with listing in the US. </p><div class="content-highlight"><p>Despite rising competition from new entrants, Li Auto is delivering on its IPO promise by maintaining a market-leading share in its niche, investing in a roadmap to reduce its single model reliance, a positive gross margin and cash generation trajectory. On balance, for investors willing to brave the current regulatory-driven weak sentiment on Chinese names, Li Auto’s fundamentals and valuation are attractive, in our view. </p></div>

Li Auto Inc. (LI US) is the first company to successfully commercialise EREVs (extended-range electric vehicles) in China, the Li ONE. Li ONE is a six-seat, large premium electric SUV which began volume production and deliveries in November 2019 and December 2019, respectively. In 2020, Li ONE was the best-selling new energy SUV in China with a sales volume market share of 9.7%, according to CIC. Li Auto has received approval for an HKEx secondary listing to raise $1.0-1.5 billion, according to press reports. The secondary listing comes on the back of a listing on Nasdaq in July 2020 ($1.0 billion net raise at $11.50 per ADS) as well as a follow-on offering in December 2020 ($1.4 billion gross raise at $29.00 per ADS). The secondary listing also follows peer, Xpeng (XPEV US), which raised net proceeds of $1.8 billion on 7 July. XPeng (9868 HK) H-shares are trading -9% below the offer price largely due to the recent regulatory onslaught which has engulfed Chinese companies with exposure to the technology and education sector along with listing in the US. Despite rising competition from new entrants, Li Auto is delivering on its IPO promise by maintaining a market-leading share in its niche, investing in a roadmap to reduce its single model reliance, a positive gross margin and cash generation trajectory. On balance, for investors willing to brave the current regulatory-driven weak sentiment on Chinese names, Li Auto’s fundamentals and valuation are attractive, in our view. 

APAC IPOs & Placements

Zhen Zhou, Toh

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.

<p><a href="https://www.smartkarma.com/entities/li-auto-inc" target="_blank" data-smartkarma-citation="entities:28812:1" rel="noopener">Li Auto Inc. (LI US)</a>  is looking to raise up to US$1.5bn via a dual primary listing in Hong Kong. News of Chinese EVs exploring their Hong Kong listing option was reported in March 2021.</p><p>We covered Li Auto’s US listing in 2020:</p><ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/li-auto-pre-ipo-taking-the-long-way-around" target="_blank" data-smartkarma-citation="insights:41253" rel="noopener">Li Auto (理想汽车) Pre-IPO - Taking the Long Way Around</a> </li>
<li><a href="https://www.smartkarma.com/insights/li-auto-visit-li-auto-store-and-find-out-license-game" target="_blank" data-smartkarma-citation="insights:41299" rel="noopener">Li Auto (理想汽车): A to Visit Li Auto's Store and Find Out about the License Game</a></li>
<li>
<a href="https://www.smartkarma.com/insights/li-auto-pre-ipo-peer-comparison-margins-may-look-like-byd-but-sells-like-nio" target="_blank" data-smartkarma-citation="insights:41515" rel="noopener">Li Auto (理想汽车) Pre-IPO - Peer Comparison - Margins May Look like BYD, but Sells like NIO</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/li-auto-ipo-worth-a-ride-at-the-low-end" target="_blank" data-smartkarma-citation="insights:41596" rel="noopener">Li Auto (理想汽车) IPO - Worth a Ride, at the Low -End</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/li-auto-trading-update-no-mention-of-hillhouse-s-investment" target="_blank" data-smartkarma-citation="insights:41746" rel="noopener">Li Auto (理想汽车) Trading Update - No Mention of Hillhouse's Investment</a> </li>
</ul><p>We also covered its December 2020 follow-on offering:</p><ul><li>
<a href="https://www.smartkarma.com/insights/li-auto-placement-opportunistic-but-still-a-worth-a-bet-among-ev-peers" target="_blank" data-smartkarma-citation="insights:45988" rel="noopener">Li Auto (理想汽车) Placement - Opportunistic but Still a Worth a Bet Among EV Peers</a> </li></ul><p>In this note, we will share our thoughts on fundamentals and discuss deal dynamics.</p>

Li Auto Inc. (LI US)  is looking to raise up to US$1.5bn via a dual primary listing in Hong Kong. News of Chinese EVs exploring their Hong Kong listing option was reported in March 2021.We covered Li Auto’s US listing in 2020:

Li Auto (理想汽车) Pre-IPO - Taking the Long Way Around 
Li Auto (理想汽车): A to Visit Li Auto's Store and Find Out about the License Game

Li Auto (理想汽车) Pre-IPO - Peer Comparison - Margins May Look like BYD, but Sells like NIO 

Li Auto (理想汽车) IPO - Worth a Ride, at the Low -End 

Li Auto (理想汽车) Trading Update - No Mention of Hillhouse's Investment 
We also covered its December 2020 follow-on offering:
Li Auto (理想汽车) Placement - Opportunistic but Still a Worth a Bet Among EV Peers In this note, we will share our thoughts on fundamentals and discuss deal dynamics.

Li Auto HK Listing - Needs to Be Done at Discount Given XPeng’s Poor Debut

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Alibaba Group Holding  / Equity Capital Markets

<p>In our previous note <a href="https://www.smartkarma.com/insights/china-adrs-kanzhun-full-truck-and-didi-regulators-sending-a-message" target="_blank" rel="noopener">China ADRs - Kanzhun, Full Truck and Didi - Regulators Sending a Message,</a> we spoke about the recent crackdown on the three US listed firms. Since then more news has been coming in along the same theme of a general crackdown on overseas listings for Chinese companies. </p>
<div>
<p>We have looked at the ADRs in the past, in our previous notes:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-deep-dive-yin-and-yang" target="_blank" rel="noopener">China ADRs Secondary Listing Deep-Dive: Yin and Yang,</a> published in Feb 2020,  we looked at the background and rules around undertaking a secondary listing in Hong Kong and then came up with a short-list of companies that might undertake a secondary listing. </li>
<li>
<a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-covid-19-has-increased-the-tension-but-narrowed-the-short-list" target="_blank" rel="noopener">In China ADRs Secondary Listing: COVID-19 Has Increased the Tension but Narrowed the Short List</a> published in May 2020, we looked at the recent developments and provided an revised short-list</li>
<li>In <a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-holding-foreign-companies-accountable-act-i-m-coming-home" target="_blank" rel="noopener">China ADRs Secondary Listing - Holding Foreign Companies Accountable Act - I’m Coming Home</a>, published in May 2020, we spoke about the implication of the act which had made its way through the senate.</li>
<li>In <a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-pipeline-looks-rich-have-three-years-to-move" target="_blank" rel="noopener">China ADRs Secondary Listing - Pipeline Looks Rich, Have Three Years to Move</a>, published in Feb 2021 we looked at the ADR pipeline and spoke about the updates from the Holding Foreign Companies Accountable Act becoming law and the updates at Hong Kong end as well. </li>
<li>In <a href="https://www.smartkarma.com/insights/china-adrs-sec-notice-instead-of-three-probably-have-four-years-till-2025-correction-overdone" target="_blank" rel="noopener">China ADRs - SEC Notice - Instead of Three, Probably Have Four Years till 2025 - Correction Overdone, </a> we spoke about the new SEC notice and its implications. </li>
<li>In <a href="https://www.smartkarma.com/insights/china-adrs-a-new-act-aims-to-put-an-end-to-china-adr-ipos" target="_blank" rel="noopener">China ADRs - A New Act Aims to Put an End to China ADR IPOs</a>, we spoke about the No IPOs for Unaccountable Actors Act, which aims to prohibit IPO on U.S. exchanges for Chinese companies. </li>
</ul>
</div>
<div>
<p>In this note, we'll talk about the implications of the recent China regulatory announcements.</p>
</div>

In our previous note China ADRs - Kanzhun, Full Truck and Didi - Regulators Sending a Message, we spoke about the recent crackdown on the three US listed firms. Since then more news has been coming in along the same theme of a general crackdown on overseas listings for Chinese companies. 

We have looked at the ADRs in the past, in our previous notes:




China ADRs Secondary Listing Deep-Dive: Yin and Yang, published in Feb 2020,  we looked at the background and rules around undertaking a secondary listing in Hong Kong and then came up with a short-list of companies that might undertake a secondary listing. 

In China ADRs Secondary Listing: COVID-19 Has Increased the Tension but Narrowed the Short List published in May 2020, we looked at the recent developments and provided an revised short-list
In China ADRs Secondary Listing - Holding Foreign Companies Accountable Act - I’m Coming Home, published in May 2020, we spoke about the implication of the act which had made its way through the senate.
In China ADRs Secondary Listing - Pipeline Looks Rich, Have Three Years to Move, published in Feb 2021 we looked at the ADR pipeline and spoke about the updates from the Holding Foreign Companies Accountable Act becoming law and the updates at Hong Kong end as well. 
In China ADRs - SEC Notice - Instead of Three, Probably Have Four Years till 2025 - Correction Overdone,  we spoke about the new SEC notice and its implications. 
In China ADRs - A New Act Aims to Put an End to China ADR IPOs, we spoke about the No IPOs for Unaccountable Actors Act, which aims to prohibit IPO on U.S. exchanges for Chinese companies. 



In this note, we'll talk about the implications of the recent China regulatory announcements.


China ADRs - Now the Message Is Loud and Getting Clearer

<div>
<p><a href="https://www.smartkarma.com/entities/xpeng-motors" target="_blank" data-smartkarma-citation="entities:29217:1" rel="noopener">Xpeng Motors (XPEV US)</a> raised around US$2bn via a listing in Hong Kong. In this note, we will talk about the trading dynamics and the updates since our last note, <a href="https://www.smartkarma.com/insights/xpeng-motors-hk-listing-will-probably-be-hot-given-strong-momentum-but-past-deal-didn-t-do-well" target="_blank" rel="noopener">Xpeng Motors HK Listing - Will Probably Be Hot Given Strong Momentum but past Deal Didn’t Do Well.</a></p>
</div>
<div>
<p>We have covered the IPO in:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/xpeng-motors-pre-ipo-lots-to-like-with-solid-backing-from-investors" target="_blank" data-smartkarma-citation="insights:42126" rel="noopener">Xpeng Motors (小鹏汽车) Pre-IPO - Lots to like with Solid Backing from Investors</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/xpeng-motors-visited-a-store-fairly-priced-but-with-recharging-problem" target="_blank" data-smartkarma-citation="insights:42283" rel="noopener">Xpeng Motors (小鹏汽车): Visited a Store, Fairly Priced, But with Recharging Problem</a> </li>
<li><a href="https://www.smartkarma.com/insights/xpeng-motors-pre-ipo-car-comparison-and-p7-performance-test" target="_blank" data-smartkarma-citation="insights:42386" rel="noopener">Xpeng Motors (小鹏汽车) Pre-IPO - Car Comparison and P7 Performance Test</a></li>
<li>
<a href="https://www.smartkarma.com/insights/xpeng-motors-pre-ipo-peer-comparison-and-valuation" target="_blank" data-smartkarma-citation="insights:42389" rel="noopener">Xpeng Motors (小鹏汽车) Pre-IPO - Peer Comparison and Valuation</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/xpeng-ipo-riding-the-momentum" target="_blank" data-smartkarma-citation="insights:42503" rel="noopener">Xpeng Motors (小鹏汽车) IPO - Riding the Momentum</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/xpeng-motors-trading-nio-leading-the-charge" target="_blank" data-smartkarma-citation="insights:42616" rel="noopener">Xpeng Motors (小鹏汽车) Trading - NIO Leading the Charge</a> </li>
</ul>
</div>
<div>
<p>And the previous placement in:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/xpeng-motors-placement-level-the-playing-field" target="_blank" rel="noopener">Xpeng Motors (小鹏汽车) Placement - Level the Playing Field</a></li>
</ul>
</div>


Xpeng Motors (XPEV US) raised around US$2bn via a listing in Hong Kong. In this note, we will talk about the trading dynamics and the updates since our last note, Xpeng Motors HK Listing - Will Probably Be Hot Given Strong Momentum but past Deal Didn’t Do Well.


We have covered the IPO in:




Xpeng Motors (小鹏汽车) Pre-IPO - Lots to like with Solid Backing from Investors 

Xpeng Motors (小鹏汽车): Visited a Store, Fairly Priced, But with Recharging Problem 
Xpeng Motors (小鹏汽车) Pre-IPO - Car Comparison and P7 Performance Test

Xpeng Motors (小鹏汽车) Pre-IPO - Peer Comparison and Valuation 

Xpeng Motors (小鹏汽车) IPO - Riding the Momentum 

Xpeng Motors (小鹏汽车) Trading - NIO Leading the Charge 



And the previous placement in:



Xpeng Motors (小鹏汽车) Placement - Level the Playing Field



Xpeng Motors HK Trading - More Hot with Instis that Retail

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 (LI US)

Li Auto (LI US) Dual Primary Listing: HSCI Fast Entry; HSCEI Dec Inclusion & Div Futures Lower

Li Auto is looking to dual-primary list in HK. The stock should get Fast Entry to the HSCI and join Southbound Stock Connect in Q1 2022. Li Auto...

Brian Freitas

Li Auto Secondary Listing: Volts Wagons

Li Auto has received approval for an HKEx secondary listing to raise $1.0-1.5 billion, according to press reports. Li Auto’s fundamentals and...

Arun George

Li Auto HK Listing - Needs to Be Done at Discount Given XPeng’s Poor Debut

Li Auto Inc. (LI US) is looking to raise up to US$1.5bn via a dual primary listing in Hong Kong. News of Chinese EVs exploring their Hong Kong...

Zhen Zhou, Toh

China ADRs - Now the Message Is Loud and Getting Clearer

In our previous note we spoke about the recent crackdown on the three US listed firms. Since then more news has been coming in along the same theme...

Sumeet Singh

Xpeng Motors HK Trading - More Hot with Instis that Retail

Xpeng Motors (XPEV US) raised around US$2bn via a listing in Hong Kong. In this note, we will talk about the trading dynamics and the updates since...

Sumeet Singh

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