HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

China Tourism Group Duty Free Corp Ltd / Equity Bottom-Up

<p>We have expressed our positive view on <a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free-corp-ltd" target="_blank" data-smartkarma-citation="entities:12278:1" rel="noopener">China Tourism Group Duty Free Corp Ltd (601888 CH)</a> in various Insights previously. In this Insight, we look at the proposed H-share IPO from the perspective of investors who do not know it well. For seasoned investors in this name, this Insight serves as a summary of our views and provides background details on the proposed IPO.</p><p>Fundamentally speaking, the key positives for CTG Duty Free are: 1.) absolute leadership in China's duty free market, 2.) encouraging growth outlook, and 3.) solid profitability and financial position. Key negatives are: 1.) policy risk and rising competition, 2.) concern on payback of new projects, and 3.) risk of overseas expansion. If the IPO is being priced at the current average H-A discount, it will be on 32.7x FY21F PER, we see this not expensive relative to the premium retailers listed in Hong Kong. </p>

We have expressed our positive view on China Tourism Group Duty Free Corp Ltd (601888 CH) in various Insights previously. In this Insight, we look at the proposed H-share IPO from the perspective of investors who do not know it well. For seasoned investors in this name, this Insight serves as a summary of our views and provides background details on the proposed IPO.Fundamentally speaking, the key positives for CTG Duty Free are: 1.) absolute leadership in China's duty free market, 2.) encouraging growth outlook, and 3.) solid profitability and financial position. Key negatives are: 1.) policy risk and rising competition, 2.) concern on payback of new projects, and 3.) risk of overseas expansion. If the IPO is being priced at the current average H-A discount, it will be on 32.7x FY21F PER, we see this not expensive relative to the premium retailers listed in Hong Kong. 

CTG Duty Free (601888 CH) H-Share Pre-IPO: Fundamentally Speaking

Blue Lotus Research Institute

Andy Fu

China growth and global non-US Internet equities

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>Aging population, coupled with under-development of retirement pensions, is the major headwind against enhancing consumption; </li>
<li>The headroom of urbanization as a driver for enhanced consumption is not as big as depicted;</li>
<li>Residential housing has, over the years, become the social safety net for the Chinese. Therefore, the bust of the property market takes many years, if not decades, to heal. </li>
</ul>


Aging population, coupled with under-development of retirement pensions, is the major headwind against enhancing consumption; 
The headroom of urbanization as a driver for enhanced consumption is not as big as depicted;
Residential housing has, over the years, become the social safety net for the Chinese. Therefore, the bust of the property market takes many years, if not decades, to heal. 


How to Stimulate China's Consumption, Part II

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.

Equity Capital Markets

Mao Geping Cosmetics / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mao-geping-cosmetics-co-ltd" target="_blank" data-smartkarma-citation="entities:41297:1" rel="noopener">Mao Geping Cosmetics</a> is looking to raise around US$300m in its upcoming Hong Kong IPO.</li>
<li>Mao Geping Cosmetics (MGC) operates in the premium beauty segment. Operating via its two brands, MAOGEPING and Love Keeps, MGC offers a wide range of color cosmetics and skincare products.</li>
<li>In this note, we look at the company’s past performance.</li>
</ul>



Mao Geping Cosmetics is looking to raise around US$300m in its upcoming Hong Kong IPO.
Mao Geping Cosmetics (MGC) operates in the premium beauty segment. Operating via its two brands, MAOGEPING and Love Keeps, MGC offers a wide range of color cosmetics and skincare products.
In this note, we look at the company’s past performance.


Mao Geping Cosmetics Pre-IPO - Riding on the Founder’s Reputation

Atour Lifestyle Holdings / Equity Capital Markets

<ul>
<li>Legend Capital (LC), one of the principal shareholders of <a href="https://www.smartkarma.com/entities/atour-lifestyle-holdings-ltd" target="_blank" data-smartkarma-citation="entities:33481:1" rel="noopener">Atour Lifestyle Holdings (ATAT US)</a>, is looking to raise around US$168m through a secondary selldown.</li>
<li>This will be the third selldown by Legend Capital in just over a year’s time. Hence, the deal is well flagged.</li>
<li>In this note, we will talk about the placement and run the deal through our ECM framework.</li>
</ul>


Legend Capital (LC), one of the principal shareholders of Atour Lifestyle Holdings (ATAT US), is looking to raise around US$168m through a secondary selldown.
This will be the third selldown by Legend Capital in just over a year’s time. Hence, the deal is well flagged.
In this note, we will talk about the placement and run the deal through our ECM framework.


Atour Lifestyle Holdings Placement - Well Flagged Deal, past Selldowns Have Done Well

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of June 7th.</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 flows for China Mobile, Tencent, BOC, China Hongqiao, Yankuang Energy.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of June 7th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for China Mobile, Tencent, BOC, China Hongqiao, Yankuang Energy.


Hong Kong Connect Flows (Jun 7th): China Mobile, Tencent, BOC, China Hongqiao, Yankuang Energy

China

Li Ning Company Limited researches, designs, manufactures, distributes, and retails sports footwear, apparel and accessories for sport and leisure use.

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Li Ning (2331 HK)

How to Stimulate China's Consumption, Part II

The underdevelopment of China's pension system leads to reliance on the residential property market as social safety net. The headroom of...

Blue Lotus Research Institute

Mao Geping Cosmetics Pre-IPO - Riding on the Founder’s Reputation

Mao Geping Cosmetics is looking to raise around US$300m in its upcoming Hong Kong IPO. In this note, we talk about the company's past performance.

Sumeet Singh

Atour Lifestyle Holdings Placement - Well Flagged Deal, past Selldowns Have Done Well

Legend Capital (LC), one of the principal shareholders of Atour Lifestyle Holdings (ATAT US), is looking to raise around US$168m through a...

Sumeet Singh

Hong Kong Connect Flows (Jun 7th): China Mobile, Tencent, BOC, China Hongqiao, Yankuang Energy

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for China Mobile, Tencent, BOC, China Hongqiao, Yankuang Energy.

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

CTG Duty Free (601888 CH) H-Share Pre-IPO: Fundamentally Speaking

In relation to CTG Duty Free's H-share IPO, key positives are: 1.) absolute leadership in China's duty free market, 2.) encouraging growth outlook,...

Osbert Tang, CFA

How to Stimulate China's Consumption, Part II

The underdevelopment of China's pension system leads to reliance on the residential property market as social safety net. The headroom of...

Blue Lotus Research Institute

Mao Geping Cosmetics Pre-IPO - Riding on the Founder’s Reputation

Mao Geping Cosmetics is looking to raise around US$300m in its upcoming Hong Kong IPO. In this note, we talk about the company's past performance.

Sumeet Singh

Atour Lifestyle Holdings Placement - Well Flagged Deal, past Selldowns Have Done Well

Legend Capital (LC), one of the principal shareholders of Atour Lifestyle Holdings (ATAT US), is looking to raise around US$168m through a...

Sumeet Singh

Hong Kong Connect Flows (Jun 7th): China Mobile, Tencent, BOC, China Hongqiao, Yankuang Energy

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for China Mobile, Tencent, BOC, China Hongqiao, Yankuang Energy.

Ke Yan, CFA, FRM