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

<p>In our weekly HK Connect Flow series, we aim to highlight key stocks and sectors which the mainland investors traded via the southbound Hong Kong Connect, as analyzed by our proprietary data engine.</p><p>Since the opening of Hong Kong Connect scheme in 2014, southbound Chinese money started to play an increasingly important role in the Hong Kong stock market. In a Hong Kong exchange report released in July 2019, the exchange highlighted that flows from mainland China accounted for 12% of the total trading volume in the market and is ahead of the US investors' 10% and UK investors' 7% share respectively. </p><p>We split the stocks eligible for the Hong Kong Connect trade into three groups: HSCEI component stocks, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.</p><p>In this insight, we will highlight inflows into Tencent Holdings Limited (700 HK), as well as outflows from Meituan (3690 HK), and Smoore International Holdings Limited (6969 HK).</p>

In our weekly HK Connect Flow series, we aim to highlight key stocks and sectors which the mainland investors traded via the southbound Hong Kong Connect, as analyzed by our proprietary data engine.Since the opening of Hong Kong Connect scheme in 2014, southbound Chinese money started to play an increasingly important role in the Hong Kong stock market. In a Hong Kong exchange report released in July 2019, the exchange highlighted that flows from mainland China accounted for 12% of the total trading volume in the market and is ahead of the US investors' 10% and UK investors' 7% share respectively. We split the stocks eligible for the Hong Kong Connect trade into three groups: HSCEI component stocks, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.In this insight, we will highlight inflows into Tencent Holdings Limited (700 HK), as well as outflows from Meituan (3690 HK), and Smoore International Holdings Limited (6969 HK).

Hong Kong Connect Flows: Tencent/Meituan Flow Divergence

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

Equity Bottom-Up

<ul>
<li>“Initiatives” lost RMB6 billion in operation in 4Q20, as Meituan joined a price war of community group purchase.</li>
<li>We do not believe Meituan will win, as there are many strong competitors.</li>
<li>We set a down side of 13%~15% for the end of 2022.</li>
</ul>


“Initiatives” lost RMB6 billion in operation in 4Q20, as Meituan joined a price war of community group purchase.
We do not believe Meituan will win, as there are many strong competitors.
We set a down side of 13%~15% for the end of 2022.


Meituan (3690 HK): Q4, “Community Group Purchase” Broke Bottom Line

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Equity Capital Markets

<div><p>Bilibili raised around US$3bn in its secondary listing in Hong Kong. </p></div><div>
<p>We have covered the background of the deal in our earlier notes:</p>
<ul>
<li><a href="https://www.smartkarma.com/insights/bilibili-secondary-listing-early-look-will-probably-be-more-like-jd-and-netease" target="_blank" rel="noopener">Bilibili Secondary Listing Early Look - Will Probably Be More like JD and NetEase,</a></li>
<li><a href="https://www.smartkarma.com/insights/bilibili-secondary-listing-early-look-4q20-results-quick-note" target="_blank" rel="noopener">Bilibili Secondary Listing Early Look - 4Q20 Results Quick Note and</a></li>
<li><a href="https://www.smartkarma.com/insights/bilibili-secondary-listing-volatile-but-should-be-hot" target="_blank" rel="noopener">Bilibili Secondary Listing - Volatile but Should Be Hot</a></li>
</ul>
</div><div><p>In this note, we'll talk about the updates since then.</p></div>

Bilibili raised around US$3bn in its secondary listing in Hong Kong. 
We have covered the background of the deal in our earlier notes:

Bilibili Secondary Listing Early Look - Will Probably Be More like JD and NetEase,
Bilibili Secondary Listing Early Look - 4Q20 Results Quick Note and
Bilibili Secondary Listing - Volatile but Should Be Hot

In this note, we'll talk about the updates since then.

Bilibili Secondary Trading - Hot Demand, Baba Takes Another Bite, but Still Set for a Weak Listing

<div><p>Linklogis, a technology solution provider for supply chain finance in China, is aiming to raise around US$1bn in its Hong Kong IPO. Its investors include Tencent, GIC and Standard Chartered Bank.</p></div><div><p>We have covered various aspects of the deal in our earlier insights,</p></div><div><ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/linklogis-pre-ipo-the-positives-fast-growing-blockchain-driven-supply-chain-financier" target="_blank" rel="noopener">Linklogis Pre-IPO - The Positives - Fast Growing Blockchain Driven Supply Chain Financier,</a> </li>
<li><a href="https://www.smartkarma.com/insights/linklogis-pre-ipo-the-negatives-inconsistent-growth-and-margins-well-funded-competitors" target="_blank" rel="noopener">Linklogis Pre-IPO - The Negatives - Inconsistent Growth and Margins, Well Funded Competitors, and</a></li>
<li><a href="https://www.smartkarma.com/insights/linklogis-pre-ipo-earnings-forecast-peer-comparison-and-first-stab-at-valuation" target="_blank" rel="noopener">Linklogis Pre-IPO - Earnings Forecast, Peer Comparison and First Stab at Valuation</a></li>
<li><a href="https://www.smartkarma.com/insights/linklogis-pre-ipo-phip-updates-nothing-to-complain-about" target="_blank" rel="noopener">Linklogis Pre-IPO - PHIP Updates - Nothing to Complain About</a></li>
</ul></div><div><p>In this note, we'll talk about deal dynamics and final valuation.</p></div>

Linklogis, a technology solution provider for supply chain finance in China, is aiming to raise around US$1bn in its Hong Kong IPO. Its investors include Tencent, GIC and Standard Chartered Bank.We have covered various aspects of the deal in our earlier insights,

Linklogis Pre-IPO - The Positives - Fast Growing Blockchain Driven Supply Chain Financier, 
Linklogis Pre-IPO - The Negatives - Inconsistent Growth and Margins, Well Funded Competitors, and
Linklogis Pre-IPO - Earnings Forecast, Peer Comparison and First Stab at Valuation
Linklogis Pre-IPO - PHIP Updates - Nothing to Complain About
In this note, we'll talk about deal dynamics and final valuation.

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<p>Across our active Global fund universe, Value managers have seen $41bn in outflows over the past 5-years, compared to $65bn of inflows in to Growth funds.</p><p>With Value funds capturing some long awaited outperformance this year, we analyse the current holdings set up among the 63 active Value funds in our analysis.</p><p>Overweights in EMEA persist against underweights in Asia and the Americas.  Financials, Materials and Industrials are the key overweights versus underweights in Information Technology.</p><p>US Financials are the standout overweight, with <a href="https://www.smartkarma.com/entities/citigroup-inc" target="_blank" data-smartkarma-citation="entities:279:1" rel="noopener">Citigroup Inc (C US)</a> and <a href="https://www.smartkarma.com/entities/american-express-co" target="_blank" data-smartkarma-citation="entities:916:1" rel="noopener">American Express Co (AXP US)</a> the key positions.  The FAAMG group of stocks remain key underweight holdings, though <a href="https://www.smartkarma.com/entities/microsoft-corp" target="_blank" data-smartkarma-citation="entities:15273:1" rel="noopener">Microsoft Corp (MSFT US)</a> is the most widely held of the group. <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> is almost totally avoided and in Asia, <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> , <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a> and <a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">Pinduoduo (PDD US)</a> screen as 'Unloved' by global active Value managers.</p>

Across our active Global fund universe, Value managers have seen $41bn in outflows over the past 5-years, compared to $65bn of inflows in to Growth funds.With Value funds capturing some long awaited outperformance this year, we analyse the current holdings set up among the 63 active Value funds in our analysis.Overweights in EMEA persist against underweights in Asia and the Americas.  Financials, Materials and Industrials are the key overweights versus underweights in Information Technology.US Financials are the standout overweight, with Citigroup Inc (C US) and American Express Co (AXP US) the key positions.  The FAAMG group of stocks remain key underweight holdings, though Microsoft Corp (MSFT US) is the most widely held of the group. Tesla Motors (TSLA US) is almost totally avoided and in Asia, Meituan (3690 HK) , JD.com Inc (ADR) (JD US) and Pinduoduo (PDD US) screen as 'Unloved' by global active Value managers.

China

Meituan operates as a web based shopping platform for locally found consumer products and retail services. The Company offers deals of the day by selling vouchers on local services and entertainment, dining, delivery, and other services. Meituan provides its services throughout China.

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Meituan (3690 HK)

Hong Kong Connect Flows: Tencent/Meituan Flow Divergence

We highlight inflows into Tencent Holdings Limited (700 HK), as well as outflows from Meituan (3690 HK), and Smoore International Holdings Limited...

Ke Yan, CFA, FRM

Meituan (3690 HK): Q4, “Community Group Purchase” Broke Bottom Line

“Initiatives” lost RMB6 billion in operation in 4Q20, as Meituan joined a price war of community group purchase.We do not believe Meituan will win,...

Ming Lu

Bilibili Secondary Trading - Hot Demand, Baba Takes Another Bite, but Still Set for a Weak Listing

Bilibili raised around US$3bn in its secondary listing in Hong Kong. In this note, we'll talk about the updates since our previous note.

Sumeet Singh

Linklogis IPO - Pricey for a Reason

Linklogis, a technology solution provider for supply chain finance in China, is aiming to raise around US$1bn in its Hong Kong IPO. Its investors...

Sumeet Singh

Where Are Global Value Funds Positioned?

With Value funds capturing some long awaited outperformance this year, we analyse the current holdings set up among the active Global Value funds...

Steven Holden

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