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

<p>ANE, an express freight network operator in China for less-than-truckload (LTL) market, aims to raise around US$500m in its Hong Kong IPO. The company is backed by a host of financial investors including Centurium, Carlyle, CDH, CPE, NWS, Ping An, Goldman Sachs and Yili.</p><p>As per iResearch, ANE’s network was the largest in China in terms of total freight volume over 2017-20 with a market share of 17.2% in 2020.</p><p>By Dec 2020, it had collaborated with approximately 26,400 freight partners and agents to serve 3.6m shippers across approximately 96% of the counties and townships in China. Both the freight partners and freight agents operate under its brand and are required to adhere to its service guidelines and policies. ANE’s overall volume and top line growth has been decent. However, not all of its offerings have been growing, while some of its revenue growth was driven by accounting changes. </p><p>We covered various aspects of the deal in our earlier note <a href="https://www.smartkarma.com/insights/ane-logistics-pre-ipo-margins-expanding-but-appears-to-be-falling-behind" target="_blank" rel="noopener">ANE Logistics Pre-IPO - Margins expanding but appears to be falling behind</a>. </p><p>In this note we will talk about the updated financials from the PHIP.</p>

ANE, an express freight network operator in China for less-than-truckload (LTL) market, aims to raise around US$500m in its Hong Kong IPO. The company is backed by a host of financial investors including Centurium, Carlyle, CDH, CPE, NWS, Ping An, Goldman Sachs and Yili.As per iResearch, ANE’s network was the largest in China in terms of total freight volume over 2017-20 with a market share of 17.2% in 2020.By Dec 2020, it had collaborated with approximately 26,400 freight partners and agents to serve 3.6m shippers across approximately 96% of the counties and townships in China. Both the freight partners and freight agents operate under its brand and are required to adhere to its service guidelines and policies. ANE’s overall volume and top line growth has been decent. However, not all of its offerings have been growing, while some of its revenue growth was driven by accounting changes. We covered various aspects of the deal in our earlier note ANE Logistics Pre-IPO - Margins expanding but appears to be falling behind. In this note we will talk about the updated financials from the PHIP.

ANE Logistics Pre-IPO - PHIP Updates - Underlying Growth Is Far from Clear

<p>Prudential aims to raise around US$2.8bn via an international and public offering in Hong Kong. The deal has been in the pipeline for a while and hence, is very well flagged.</p><p>In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</p>

Prudential aims to raise around US$2.8bn via an international and public offering in Hong Kong. The deal has been in the pipeline for a while and hence, is very well flagged.In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Prudential Hong Kong Offering - Well Flagged Pivot to Asia, Mind the Liquidity Gap

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

<div>
<p>In this analysis, we provide a detailed overview of investor positioning among 96 active Asia Ex-Japan funds with combined AUM of $80bn.  Highlights:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>The big four of China &amp; HK, Taiwan, South Korea and India dominate holdings in Asia Ex-Japan.  The 4 countries combined account for 85.4% of total allocations, though all but India are held underweight versus the MSCI Asia Ex-Japan index.</li>
<li>China &amp; HK's weight in Asia Ex-Japan funds stands at a 4-year low of 42.96% having fallen heavily from the high of 52% back in August 2020.</li>
<li>Allocations in Indian stocks hit a new all-time high last month of 13.54%.  India has been the go-to overweight holding since the election of Narendra Modi in 2014, though managers are much more closely aligned to benchmark today.</li>
<li>
<p>Indonesian allocations are close to their lowest levels on record.  Only 82.8% of the Asia Ex-Japan managers in our analysis have exposure to Indonesia,  with Comgest, Barings and Vontobel closing exposure over the last 6-months.</p>
</li>
<li>Information Technology dominates the holdings picture, being both the largest sector holding and the largest sector overweight by some distance.  Opposing this are net underweights in Health Care (-1.61%), Materials (-1.25%) and Financials (-1.17%). </li>
<li>The key antagonist in China's tech crackdown, Consumer Discretionary weights have fallen from a high of 21.35% in October 2020 to 16.84% today.  In tandem, active managers have moved from an overweight of 2.18% to an underweight of -0.12%.  Confidence has certainly taken a knock.</li>
</ul>
<p>Also analyzed in more detail:  Thailand, Health Care, Indian Financials, South Korean Consumer Staples, China Financials, <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a> , <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> , <a href="https://www.smartkarma.com/entities/midea-group-co-ltd-a" target="_blank" data-smartkarma-citation="entities:16185:1" rel="noopener">Midea Group Co Ltd A (000333 CH)</a> and <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></p>
<p><em>Analysis taken from our Asia Ex-Japan research, covering 96 active Asia Ex-Japan funds with combined AUM of $80bn. </em></p>
</div>


In this analysis, we provide a detailed overview of investor positioning among 96 active Asia Ex-Japan funds with combined AUM of $80bn.  Highlights:



The big four of China &amp; HK, Taiwan, South Korea and India dominate holdings in Asia Ex-Japan.  The 4 countries combined account for 85.4% of total allocations, though all but India are held underweight versus the MSCI Asia Ex-Japan index.
China &amp; HK's weight in Asia Ex-Japan funds stands at a 4-year low of 42.96% having fallen heavily from the high of 52% back in August 2020.
Allocations in Indian stocks hit a new all-time high last month of 13.54%.  India has been the go-to overweight holding since the election of Narendra Modi in 2014, though managers are much more closely aligned to benchmark today.

Indonesian allocations are close to their lowest levels on record.  Only 82.8% of the Asia Ex-Japan managers in our analysis have exposure to Indonesia,  with Comgest, Barings and Vontobel closing exposure over the last 6-months.

Information Technology dominates the holdings picture, being both the largest sector holding and the largest sector overweight by some distance.  Opposing this are net underweights in Health Care (-1.61%), Materials (-1.25%) and Financials (-1.17%). 
The key antagonist in China's tech crackdown, Consumer Discretionary weights have fallen from a high of 21.35% in October 2020 to 16.84% today.  In tandem, active managers have moved from an overweight of 2.18% to an underweight of -0.12%.  Confidence has certainly taken a knock.

Also analyzed in more detail:  Thailand, Health Care, Indian Financials, South Korean Consumer Staples, China Financials, Baidu (BIDU US) , Sea Ltd (SE US) , Midea Group Co Ltd A (000333 CH) and JD.com Inc (ADR) (JD US).
Analysis taken from our Asia Ex-Japan research, covering 96 active Asia Ex-Japan funds with combined AUM of $80bn. 


Asia Ex-Japan Positioning:  India & Tech at Record Highs

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <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/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning (2331 HK)</a>, <a href="https://www.smartkarma.com/entities/china-merchants-bank-co-ltd-3388a037-4214-4997-b45d-520518cfdb57" target="_blank" data-smartkarma-citation="entities:10987:1" rel="noopener">China Merchants Bank H (3968 HK)</a>, <a href="https://www.smartkarma.com/entities/dongyue-group-ltd" target="_blank" data-smartkarma-citation="entities:20429:1" rel="noopener">Dongyue Group (189 HK)</a> and <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>, <a href="https://www.smartkarma.com/entities/sunny-optical-tech" target="_blank" data-smartkarma-citation="entities:13363:1" rel="noopener">Sunny Optical (2382 HK)</a>, <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> and <a href="https://www.smartkarma.com/entities/jd-health-international-inc" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a>. Shorts increased in the Communication Services and Materials sectors while decreasing in the Financials, Information Technology and Health Care sectors.</p></div><div><p>In Japan, stocks increased on <a href="https://www.smartkarma.com/entities/pan-pacific-international-holdings-corporation" target="_blank" data-smartkarma-citation="entities:13475:1" rel="noopener">Pan Pacific International Holdings (7532 JP)</a>, <a href="https://www.smartkarma.com/entities/sekisui-house-ltd" target="_blank" data-smartkarma-citation="entities:4508:1" rel="noopener">Sekisui House (1928 JP)</a>, <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/toyo-seikan-group-holdings-l" target="_blank" data-smartkarma-citation="entities:11858:1" rel="noopener">Toyo Seikan Group Holdings L (5901 JP)</a> and <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon Inc (7751 JP)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/money-forward-inc" target="_blank" data-smartkarma-citation="entities:25919:1" rel="noopener">Money Forward (3994 JP)</a>, <a href="https://www.smartkarma.com/entities/eneos-holdings-inc" target="_blank" data-smartkarma-citation="entities:638:1" rel="noopener">ENEOS Holdings (5020 JP)</a>, <a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">SBI Holdings (8473 JP)</a>, <a href="https://www.smartkarma.com/entities/yamaha-corp" target="_blank" data-smartkarma-citation="entities:17841:1" rel="noopener">Yamaha Corp (7951 JP)</a> and <a href="https://www.smartkarma.com/entities/lasalle-logiport-reit" target="_blank" data-smartkarma-citation="entities:22658:1" rel="noopener">Lasalle Logiport REIT (3466 JP)</a>. Shorts increased in most sectors led by the Consumer Discretionary, Industrials, Real Estate, Information Technology and Materials stocks.</p></div><div><p>In Korea, shorts increased on <a href="https://www.smartkarma.com/entities/amorepacific-corp" target="_blank" data-smartkarma-citation="entities:20854:1" rel="noopener">Amorepacific Corp (090430 KS)</a>, <a href="https://www.smartkarma.com/entities/kakao-corp" target="_blank" data-smartkarma-citation="entities:15002:1" rel="noopener">Kakao Corp (035720 KS)</a>, <a href="https://www.smartkarma.com/entities/hmm-co-ltd" target="_blank" data-smartkarma-citation="entities:13494:1" rel="noopener">HMM Co., Ltd. (011200 KS)</a>, <a href="https://www.smartkarma.com/entities/lg-electronics-inc" target="_blank" data-smartkarma-citation="entities:8814:1" rel="noopener">LG Electronics (066570 KS)</a> and <a href="https://www.smartkarma.com/entities/shinpoong-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:7296:1" rel="noopener">Shinpoong Pharmaceutical (019170 KS)</a>   while shorts were covered on <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/hanwha-solutions" target="_blank" data-smartkarma-citation="entities:8656:1" rel="noopener">Hanwha Solutions (009830 KS)</a>, <a href="https://www.smartkarma.com/entities/kt-corp" target="_blank" data-smartkarma-citation="entities:1112:1" rel="noopener">KT Corp (030200 KS)</a>, <a href="https://www.smartkarma.com/entities/lg-chem-ltd" target="_blank" data-smartkarma-citation="entities:3583:1" rel="noopener">LG Chem Ltd (051910 KS)</a> and <a href="https://www.smartkarma.com/entities/ncsoft-corp" target="_blank" data-smartkarma-citation="entities:5169:1" rel="noopener">NCSOFT Corp (036570 KS)</a>.</p></div><div><p>In Taiwan, shorts increased on <a href="https://www.smartkarma.com/entities/wan-hai-lines-ltd" target="_blank" data-smartkarma-citation="entities:14262:1" rel="noopener">Wan Hai Lines (2615 TT)</a>, <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/fubon-financial-holding-co" target="_blank" data-smartkarma-citation="entities:11869:1" rel="noopener">Fubon Financial Holding Co (2881 TT)</a>, <a href="https://www.smartkarma.com/entities/mediatek-inc" target="_blank" data-smartkarma-citation="entities:772:1" rel="noopener">Mediatek Inc (2454 TT)</a> and <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 TT)</a>     while shorts covered on <a href="https://www.smartkarma.com/entities/united-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:6450:1" rel="noopener">United Microelectronics Corp (2303 TT)</a>, <a href="https://www.smartkarma.com/entities/catcher-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:4957:1" rel="noopener">Catcher Technology (2474 TT)</a>, <a href="https://www.smartkarma.com/entities/focaltech-systems-co-ltd" target="_blank" data-smartkarma-citation="entities:11240:1" rel="noopener">Focaltech Systems (3545 TT)</a>, <a href="https://www.smartkarma.com/entities/nuvoton-technology-corp" target="_blank" data-smartkarma-citation="entities:15913:1" rel="noopener">Nuvoton Technology (4919 TT)</a> and <a href="https://www.smartkarma.com/entities/chailease-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:6579:1" rel="noopener">Chailease Holding (5871 TT)</a>.</p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Meituan (3690 HK), Li Ning (2331 HK), China Merchants Bank H (3968 HK), Dongyue Group (189 HK) and Kuaishou Technology (1024 HK) while there was short covering on Alibaba Group (9988 HK), Ping An Insurance (H) (2318 HK), Sunny Optical (2382 HK), Xiaomi Corp (1810 HK) and JD Health (6618 HK). Shorts increased in the Communication Services and Materials sectors while decreasing in the Financials, Information Technology and Health Care sectors.In Japan, stocks increased on Pan Pacific International Holdings (7532 JP), Sekisui House (1928 JP), Toshiba Corp (6502 JP), Toyo Seikan Group Holdings L (5901 JP) and Canon Inc (7751 JP) while there was short covering on Money Forward (3994 JP), ENEOS Holdings (5020 JP), SBI Holdings (8473 JP), Yamaha Corp (7951 JP) and Lasalle Logiport REIT (3466 JP). Shorts increased in most sectors led by the Consumer Discretionary, Industrials, Real Estate, Information Technology and Materials stocks.In Korea, shorts increased on Amorepacific Corp (090430 KS), Kakao Corp (035720 KS), HMM Co., Ltd. (011200 KS), LG Electronics (066570 KS) and Shinpoong Pharmaceutical (019170 KS)   while shorts were covered on Samsung Electronics (005930 KS), Hanwha Solutions (009830 KS), KT Corp (030200 KS), LG Chem Ltd (051910 KS) and NCSOFT Corp (036570 KS).In Taiwan, shorts increased on Wan Hai Lines (2615 TT), TSMC (2330 TT), Fubon Financial Holding Co (2881 TT), Mediatek Inc (2454 TT) and Novatek Microelectronics Corp (3034 TT)     while shorts covered on United Microelectronics Corp (2303 TT), Catcher Technology (2474 TT), Focaltech Systems (3545 TT), Nuvoton Technology (4919 TT) and Chailease Holding (5871 TT).

Asia Shorts: Meituan, CMB, Li Ning, Sekisui, Toyo Seikan, Toshiba, Kakao, HMM, LGE, Wan Hai, TSMC

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

<p><strong><em>*Another Weak Number: </em></strong>Waterdrop, Inc. (WDH.US) [Waterdrop] reported its second set of earnings results since its IPO, coming in at a negative CNY 656 mn  - declining CNY 286 mn or 77.3% linked quarter bringing cumulative losses since the IPO to over CNY 1.0 bn or about 38% of IPO funds raised. Challenges came from overall cost growth of CNY 411 mn (30.6%) due primarily to sales and marketing spend; and    </p><p><strong><em>*”Notice” To Online Insurers: </em></strong>The China Banking and Insurance Regulatory Commission’s (CBIRC) roll out of the internet insurance revision plan “<em>Notice on Carrying out Special Rectification of Internet Insurance Disorders</em>”, aims to scrutinize mainland China’s insurance technology platforms, ordering firms and agencies to end improper marketing and pricing practices, and improve privacy protections. This will be a direct challenge for Waterdrop and other mainland Chinese insurers. </p>

*Another Weak Number: Waterdrop, Inc. (WDH.US) [Waterdrop] reported its second set of earnings results since its IPO, coming in at a negative CNY 656 mn  - declining CNY 286 mn or 77.3% linked quarter bringing cumulative losses since the IPO to over CNY 1.0 bn or about 38% of IPO funds raised. Challenges came from overall cost growth of CNY 411 mn (30.6%) due primarily to sales and marketing spend; and    *”Notice” To Online Insurers: The China Banking and Insurance Regulatory Commission’s (CBIRC) roll out of the internet insurance revision plan “Notice on Carrying out Special Rectification of Internet Insurance Disorders”, aims to scrutinize mainland China’s insurance technology platforms, ordering firms and agencies to end improper marketing and pricing practices, and improve privacy protections. This will be a direct challenge for Waterdrop and other mainland Chinese insurers. 

China

Ping An Insurance (Group) Company of China Limited provides a variety of insurance service in China.  The Company writes property, casualty, and life insurance.  Ping An Insurance also offers financial services.

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Ping An Insurance (H) (2318 HK)

ANE Logistics Pre-IPO - PHIP Updates - Underlying Growth Is Far from Clear

ANE, an express freight network operator in China for less-than-truckload (LTL) market, aims to raise around US$500m in its Hong Kong IPO.

Sumeet Singh

Prudential Hong Kong Offering - Well Flagged Pivot to Asia, Mind the Liquidity Gap

Prudential aims to raise around US$2.8bn via an international and public offering in Hong Kong. The deal has been in the pipeline for a while.

Sumeet Singh

Asia Ex-Japan Positioning: India & Tech at Record Highs

In this analysis, we provide a detailed overview of investor positioning among 96 active Asia Ex-Japan funds with combined AUM of $80bn.

Steven Holden

Asia Shorts: Meituan, CMB, Li Ning, Sekisui, Toyo Seikan, Toshiba, Kakao, HMM, LGE, Wan Hai, TSMC

The Insight looks at movements in short interest across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

Waterdrop – Someone Plug The Dike

WATERDROP: WDH reported its second set of earnings since the IPO, coming in at a negative CNY 656 mn - declining 77.3% QOQ bringing cumulative...

Thomas J. Monaco

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