Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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 Bottom-Up

<ul>
<li>Travelers increased by 75% YoY and traveling spending increased by 144% YoY in China in 9M2023.</li>
<li>TCOM’s total revenue rose by 31% in 3Q23 over 3Q19 before COVID.</li>
<li>We conclude an upside of 33% and a price target of US$43.70.</li>
</ul>


Travelers increased by 75% YoY and traveling spending increased by 144% YoY in China in 9M2023.
TCOM’s total revenue rose by 31% in 3Q23 over 3Q19 before COVID.
We conclude an upside of 33% and a price target of US$43.70.


Trip.com (TCOM US, 9961 HK): Revenue 30% Above Pre-COVID Level

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>China's announcement of the third batch of international destinations for the resumption of outbound travel will serve as another important catalyst for the rebound of outbound tourism.</li>
<li>The generally weak performance of tourism-related stocks YTD is unjustified. <a href="https://www.smartkarma.com/entities/fosun-tourism-group" target="_blank" data-smartkarma-citation="entities:27439:1" rel="noopener">Fosun Tourism (1992 HK)</a> and <a href="https://www.smartkarma.com/entities/china-travel-international-investment-hong-kong" target="_blank" data-smartkarma-citation="entities:3879:1" rel="noopener">China Travel International (308 HK)</a> have both issued positive profit alerts for 1H23.</li>
<li>
<a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener">Air China Ltd (H) (753 HK)</a> is also an important beneficiary as international passenger capacity recovers. The release of pent-up demand will have positive implications on passenger yield.</li>
</ul>


China's announcement of the third batch of international destinations for the resumption of outbound travel will serve as another important catalyst for the rebound of outbound tourism.
The generally weak performance of tourism-related stocks YTD is unjustified. Fosun Tourism (1992 HK) and China Travel International (308 HK) have both issued positive profit alerts for 1H23.

Air China Ltd (H) (753 HK) is also an important beneficiary as international passenger capacity recovers. The release of pent-up demand will have positive implications on passenger yield.


China Tourism Sector: Anticipating More Upward Strengths

Global Mobility/Transport, Equity Long-Short

Mohshin Aziz

<ul>
<li>China is expanding its list of countries allowed to enter visa-free. A good gesture to make China more friendly to foreigners and one step closer to global best practices </li>
<li>Chinese major airlines and airports can become more desirable global aviation hubs, assuming they play their cards right </li>
<li>Doubt much can change in a year, but the seeds are sown for stiffer competition for airlines with a hub-and-spoke strategy in North Asia</li>
</ul>


China is expanding its list of countries allowed to enter visa-free. A good gesture to make China more friendly to foreigners and one step closer to global best practices 
Chinese major airlines and airports can become more desirable global aviation hubs, assuming they play their cards right 
Doubt much can change in a year, but the seeds are sown for stiffer competition for airlines with a hub-and-spoke strategy in North Asia


China to Provide Visa-Free for Six Countries - Why and The (Possible) Impact

<ul>
<li>Despite <a href="https://www.smartkarma.com/entities/shangri-la-asia-ltd" target="_blank" data-smartkarma-citation="entities:19690:1" rel="noopener">Shangri-La Asia (69 HK)</a>'s good share price performance YTD, it has still not yet fully reflected the strengths of and benefits from China's re-opening. More upside to come.</li>
<li>Occupancy for Hong Kong and mainland China has surged 30-45pp YoY in Mar, and with China's RevPAR for FY22 is down 56.5% from peak, we see massive rebound in profitability.</li>
<li>Share of China's EBITDA was US$258m in FY22, from US$465m in FY16-19, suggests good room for recovery. It is cheap on ~70% discount to revalued NAV, vs. 37% in FY18.</li>
</ul>


Despite Shangri-La Asia (69 HK)'s good share price performance YTD, it has still not yet fully reflected the strengths of and benefits from China's re-opening. More upside to come.
Occupancy for Hong Kong and mainland China has surged 30-45pp YoY in Mar, and with China's RevPAR for FY22 is down 56.5% from peak, we see massive rebound in profitability.
Share of China's EBITDA was US$258m in FY22, from US$465m in FY16-19, suggests good room for recovery. It is cheap on ~70% discount to revalued NAV, vs. 37% in FY18.


Shangri-La Asia (69 HK): Not yet Fully Reflected China's Comeback

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 monthly Shanghai/Shenzhen northbound Connect flows with our data engine.</li>
<li>Industrials (inflows of $3,132 million), Information Technology (inflows of $2,247 million), Health Care (inflows of $1,021 million) led the inflows.</li>
<li>We highlight flows for BOE, Wuliangye, Nari, Wanhua, Luzhou Laojiao, CMB, Longi Green, Foxconn, Ping An, Hithink.</li>
</ul>


We analyze the monthly Shanghai/Shenzhen northbound Connect flows with our data engine.
Industrials (inflows of $3,132 million), Information Technology (inflows of $2,247 million), Health Care (inflows of $1,021 million) led the inflows.
We highlight flows for BOE, Wuliangye, Nari, Wanhua, Luzhou Laojiao, CMB, Longi Green, Foxconn, Ping An, Hithink.


Northbound Flows Monthly (Mar): BOE, Wuliangye, Nari, Wanhua, Luzhou Laojiao

China

Shanghai International Airport Co., Ltd. operates Pudong Airport and Hongquiao airport in Shanghai.   The Company provides a full range of services including air traffic control, terminal management, cargo handling, advertising, space rental, and other related services.

Shanghai International Airport (600009 CH)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Shanghai International Airport (600009 CH)

Trip.com (TCOM US, 9961 HK): Revenue 30% Above Pre-COVID Level

Travelers increased by 75% YoY and traveling spending increased by 144% YoY in China in 9M2023. TCOM’s total revenue rose by 31% in 3Q23 over 3Q19...

Ming Lu

China Tourism Sector: Anticipating More Upward Strengths

China's recent policy to allow visa-free travel for citizens from France, Germany, Italy, the Netherlands, Spain, and Malaysia for up to 15 days...

Osbert Tang, CFA

China to Provide Visa-Free for Six Countries - Why and The (Possible) Impact

China is opening visa-free entry for more countries, aiming to improve its global image and become a preferred aviation hub in North Asia. Could...

Mohshin Aziz

Shangri-La Asia (69 HK): Not yet Fully Reflected China's Comeback

Shangri-la Asia is an excellent play on recovery of China, where 55% of rooms are located. Its overseas assets will gain from surge in outbound...

Osbert Tang, CFA

Northbound Flows Monthly (Mar): BOE, Wuliangye, Nari, Wanhua, Luzhou Laojiao

We analyzed the Hong Kong Connect Scheme for March and highlight flows for BOE, Wuliangye, Nari, Wanhua, Luzhou Laojiao, CMB, Longi Green, Foxconn,...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Trip.com (TCOM US, 9961 HK): Revenue 30% Above Pre-COVID Level

Travelers increased by 75% YoY and traveling spending increased by 144% YoY in China in 9M2023. TCOM’s total revenue rose by 31% in 3Q23 over 3Q19...

Ming Lu

China Tourism Sector: Anticipating More Upward Strengths

China's recent policy to allow visa-free travel for citizens from France, Germany, Italy, the Netherlands, Spain, and Malaysia for up to 15 days...

Osbert Tang, CFA

China to Provide Visa-Free for Six Countries - Why and The (Possible) Impact

​China is opening visa-free entry for more countries, aiming to improve its global image and become a preferred aviation hub in North Asia. Could...

Mohshin Aziz

Shangri-La Asia (69 HK): Not yet Fully Reflected China's Comeback

Shangri-la Asia is an excellent play on recovery of China, where 55% of rooms are located. Its overseas assets will gain from surge in outbound...

Osbert Tang, CFA

Northbound Flows Monthly (Mar): BOE, Wuliangye, Nari, Wanhua, Luzhou Laojiao

We analyzed the Hong Kong Connect Scheme for March and highlight flows for BOE, Wuliangye, Nari, Wanhua, Luzhou Laojiao, CMB, Longi Green, Foxconn,...

Ke Yan, CFA, FRM

China is opening visa-free entry for more countries, aiming to improve its global image and become a preferred aviation hub in North Asia. Could...