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

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of August 9th.</li>
<li>We estimate the weekly outflows to be US$2,018.4 million, led by information technology, consumer discretionary, financials, and offset by health care, consumer staples, utilities.</li>
<li>We highlight flows for Suzhou Dongshan Precision Manufacturing, Midea, CATL, Zhongji Innolight.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of August 9th.
We estimate the weekly outflows to be US$2,018.4 million, led by information technology, consumer discretionary, financials, and offset by health care, consumer staples, utilities.
We highlight flows for Suzhou Dongshan Precision Manufacturing, Midea, CATL, Zhongji Innolight.


Northbound Flows (Aug 9th): Suzhou Dongshan Precision Manufacturing, Midea, CATL, Zhongji Innolight

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>Seven out of the 16 leading PCB manufacturers in China have announced profit alerts by mid-July, with an avg. 75% to 105% YoY and 21% to 43% QoQ increase in net profit for 2Q24.</li><li>We think the strong performance is supported by inventory restocking and upgrade cycle driven by the AI boom.</li><li>These positive announcements added momentum for the PCB sector, with an avg. 9% month-to-date increase in share price (for the seven companies with profit alerts announcements).</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Seven out of the 16 leading PCB manufacturers in China have announced profit alerts by mid-July, with an avg. 75% to 105% YoY and 21% to 43% QoQ increase in net profit for 2Q24.We think the strong performance is supported by inventory restocking and upgrade cycle driven by the AI boom.These positive announcements added momentum for the PCB sector, with an avg. 9% month-to-date increase in share price (for the seven companies with profit alerts announcements).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Semiconductors - PCB sector: 1H24 earnings preview

<ul><li>Following marginal growth of 1.0% YoY in 2022, the global PCB market declined by 15% YoY in 2023 to US$69.5bn, due to subdued demand across end markets and the digestion of excess inventory.</li><li>The quarterly revenue of the top 40 PCB suppliers fell YoY consecutively in 2023, but managed to grow QoQ in 3Q/4Q, suggesting the industry is bottoming out gradually.</li><li>For 2024, we expect the PCB sector to have a modest recovery, following its emergence from the trough in 2H23. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Following marginal growth of 1.0% YoY in 2022, the global PCB market declined by 15% YoY in 2023 to US$69.5bn, due to subdued demand across end markets and the digestion of excess inventory.The quarterly revenue of the top 40 PCB suppliers fell YoY consecutively in 2023, but managed to grow QoQ in 3Q/4Q, suggesting the industry is bottoming out gradually.For 2024, we expect the PCB sector to have a modest recovery, following its emergence from the trough in 2H23. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China PCB Sector - Modest Growth in Global PCB Sales

Equity Bottom-Up

<ul><li>Shennan Circuits released its 3Q results. Revenue was RMB3.4bn, with YoY growth of -2.4% and QoQ growth of 5.5%.</li><li>Net profit (NP) was RMB434mn, with YoY growth of 1.1% and QoQ growth of 62.3% (including a one-time government subsidy o RMB151mn).</li><li>Gross margin slightly expanded to 23.4% in 3Q from 23.0% and 22.8% in 1Q and 2Q, driven by 1) a favorable product mix, 2) cost optimization, and 3) improved utilization in the substrate segment.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Shennan Circuits released its 3Q results. Revenue was RMB3.4bn, with YoY growth of -2.4% and QoQ growth of 5.5%.Net profit (NP) was RMB434mn, with YoY growth of 1.1% and QoQ growth of 62.3% (including a one-time government subsidy o RMB151mn).Gross margin slightly expanded to 23.4% in 3Q from 23.0% and 22.8% in 1Q and 2Q, driven by 1) a favorable product mix, 2) cost optimization, and 3) improved utilization in the substrate segment.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Shennan Circuit (002916 CH) – Pending Industry Recovery with In-Line 3Q Results

<ul><li>The worldwide PCB market experienced a significant decline of 20% YoY in 1H23, mainly due to falling demand for electronics products under global macroeconomic pressure.</li><li>This is in line with our previous prediction that “we expect the global PCB market will persistently encounter macroeconomic challenges due to weakened consumer demand and the ongoing destocking cycle among downstream industries.”</li><li>Shennan Circuit (002916 CH), a pure PCB manufacturer, is not immune to the market weakness. Maintain HOLD, with lowered TP of RMB72.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The worldwide PCB market experienced a significant decline of 20% YoY in 1H23, mainly due to falling demand for electronics products under global macroeconomic pressure.This is in line with our previous prediction that “we expect the global PCB market will persistently encounter macroeconomic challenges due to weakened consumer demand and the ongoing destocking cycle among downstream industries.”Shennan Circuit (002916 CH), a pure PCB manufacturer, is not immune to the market weakness. Maintain HOLD, with lowered TP of RMB72.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Shennan Circuit (002916 CH) – Soft 1H23 Numbers Suggest No Immediate Turnaround

China

Shennan Circuits Co.,Ltd. manufactures printed circuit boards. The Company produces packaging base plates, substrates, electronic assemblies, system in package, and other products. Shennan Circuits markets its products across worldwide.

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Shennan Circuits (002916 CH)

Northbound Flows (Aug 9th): Suzhou Dongshan Precision Manufacturing, Midea, CATL, Zhongji Innolight

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlighted flows for Suzhou Dongshan Precision Manufacturing, Midea,...

Ke Yan, CFA, FRM

Semiconductors - PCB sector: 1H24 earnings preview

Seven out of the 16 leading PCB manufacturers in China have announced profit alerts by mid-July, with an avg. 75% to 105% YoY and 21% to 43% QoQ...

CMB International

China PCB Sector - Modest Growth in Global PCB Sales

Following marginal growth of 1.0% YoY in 2022, the global PCB market declined by 15% YoY in 2023 to US$69.5bn, due to subdued demand across end...

CMB International

Shennan Circuit (002916 CH) – Pending Industry Recovery with In-Line 3Q Results

Net profit (NP) was RMB434mn, with YoY growth of 1.1% and QoQ growth of 62.3% (including a one-time government subsidy o RMB151mn).

CMB International

Shennan Circuit (002916 CH) – Soft 1H23 Numbers Suggest No Immediate Turnaround

Shennan Circuit (002916 CH), a pure PCB manufacturer, is not immune to the market weakness. Maintain HOLD, with lowered TP of RMB72.

CMB International

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