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.

Event-Driven

After the market close on Feb 21st, Friday, Hang Seng announced the results of the index review for the 4Q2019. In our previous note (link<a href="https://www.smartkarma.com/insights/trade-idea-buy-the-candidates-of-hsci-review-and-hk-connect" target="_blank" rel="noopener"> here</a>), we recommend long a basket of stocks that have the potential to be included in the HSCI index, which will be followed by the inclusion into the Hong Kong Connect scheme in a matter of a few weeks' time. Hong Kong Connect Scheme allows mainland investors to purchase Chinese companies listed in Hong Kong without much capital control. We will provide an update of the list of stocks to be included in the HSCI and the trade idea.

After the market close on Feb 21st, Friday, Hang Seng announced the results of the index review for the 4Q2019. In our previous note (link here), we recommend long a basket of stocks that have the potential to be included in the HSCI index, which will be followed by the inclusion into the Hong Kong Connect scheme in a matter of a few weeks' time. Hong Kong Connect Scheme allows mainland investors to purchase Chinese companies listed in Hong Kong without much capital control. We will provide an update of the list of stocks to be included in the HSCI and the trade idea.

Trade Idea (Update): What's Next After HSCI Review Announcement

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Thematic (Sector/Industry)

Eighteen sales and marketing executives at Crown Resorts were reported as being detained in China, likely due to illegally soliciting Chinese to gamble in overseas casinos. Our contacts in the industry have already seen immediate termination of marketing efforts in mainland China by Macau casinos, which imply lower near-term gaming revenue in our view. A loss of higher-margin direct VIP business could also mean lower overall VIP margin for the Macau casinos, as junket VIP margins are one to two percentage points lower compared with direct VIP margins. Near-term sentiment will be unfavorable for the Macau gaming stocks. However, we gauge that marketing activities in mainland China will resurface as the dust settles, though casinos will take a lower-profile approach.To reflect the short-term impact, if we reduced 2016 full-year VIP, mass and slot revenue by 7.5% for our Macau gaming coverage, there would still be no impact on fair value estimates. Therefore, we maintain our long-term forecast and long-term-based, DCF-generated fair value estimates. Our narrow moat ratings also remain unchanged.Analyst: Chelsey Tam

Eighteen sales and marketing executives at Crown Resorts were reported as being detained in China, likely due to illegally soliciting Chinese to gamble in overseas casinos. Our contacts in the industry have already seen immediate termination of marketing efforts in mainland China by Macau casinos, which imply lower near-term gaming revenue in our view. A loss of higher-margin direct VIP business could also mean lower overall VIP margin for the Macau casinos, as junket VIP margins are one to two percentage points lower compared with direct VIP margins. Near-term sentiment will be unfavorable for the Macau gaming stocks. However, we gauge that marketing activities in mainland China will resurface as the dust settles, though casinos will take a lower-profile approach.To reflect the short-term impact, if we reduced 2016 full-year VIP, mass and slot revenue by 7.5% for our Macau gaming coverage, there would still be no impact on fair value estimates. Therefore, we maintain our long-term forecast and long-term-based, DCF-generated fair value estimates. Our narrow moat ratings also remain unchanged.Analyst: Chelsey Tam

Negative Near-Term Read-Throughs from the Detainment of Crown Resorts' Marketing Executives in China

Hong Kong

Crystal International Group Limited manufactures apparels. The Company produces casual clothes, jeans, personal under wears, sweaters, sports garments, and other products. Crystal International Group markets its products in Hong Kong.

Theme International Holdings Limited, through its subsidiaries, manufactures, retails, and trades garments. The Company also invests in properties.

Viva Goods Company Limited operates as a sports company. The company provides sports related services such as multi-brand sports apparels and footwear operation, events production and management, and sports-related consultancy and sports community development. Viva Goods conducts business in Hong Kong.

Texhong Textile Group Limited manufactures and sells yarn and grey fabrics. The Company's main focus is promoting and selling spandex stretch yarn and spandex stretch grey fabrics.

Citychamp Watch & Jewellery Group Limited, through its subsidiaries, manufactures and distributes watches, timepieces and enamelled copper wires. The Company also invests in and develops properties.

Pak Tak International Limited, through its subsidiaries, manufactures (through its own producing facilities or sub-contracting to garment manufacturers), on an OEM basis, and export men's, ladies' and children knitted garments to the United States and Europe. The Company also manufactures non-knitted garment for international airlines and retail chain store "Target" in the United States.

Eagle Nice (International) Holdings Limited, through its subsidiaries, designs and manufactures sportswear for men, women, and children on an OEM (Original Equipment Manufacturing) basis.  The sportswear supplies by the Company includes sports pants, jackets, tracksuits, sweaters, and T-shirts.

Regina Miracle International Holdings Limited is an intimate and sports apparel designer and manufacturer. The Company's biggest customers include Adidas, Reebok, Under Armour, and Champion. Regina Miracle International operates in Southeast Asia.

Pacific Textiles Holdings Limited manufactures customized knitted fabrics. The Company's fabrics are used in a broad range of fabrics, including men's, women's, and children's clothing, sportswear, swimwear, and inner-wear.

Nameson Holdings is a Knitwear manufacturer in PRC

Billion Industrial Holdings Ltd. manufactures polyester filament yarn.  The Company produces drawn textured yarn and fully drawn yarn, which are used in apparel, footwear and home furnishings.

SEIKO HOLDINGS CORPORATION (Hattori Seiko) designs, manufactures, and sells electronic devices, watches and clocks in Japan and overseas. The Company also sells jewelry, ophthalmic lenses, golf clubs and computer peripherals.

Arvind, Ltd. manufactures cotton textiles. The Company's products include indigo dyed denim fabrics and high quality cotton fabrics for shirts and pants. Arvind also has a network of overseas subsidiaries for manufacturing and marketing its products.

Safari Industries India Ltd. manufactures and sells travel goods.

WACOAL HOLDINGS CORPORATION manufactures women's underwear.  The Company also manufactures outerwear, sports, and children's wear.  Wacoal has direct-sales network and overseas operations in Southeast Asia, the US, and Europe.

Rajesh Exports Limited exports gold and gold jewelry. The company also has a manufacturing facility that manufactures gold. The company's product range includes, bracelets, earrings, hasli sets, necklaces, chains, kaan chains, micro hasli, bangles, rings, pendants, and patta sets.

Alok Industries Limited manufactures home textiles, apparel fabrics, garments, and polyester yarns. The Company sells its products in India and elsewhere around the world.

Oxford Industries, Inc. is an international manufacturer and wholesale marketer of branded and private label apparel for men, women, and children.  The Company's private label customers include national chains, specialty catalogs, mass merchandisers, department stores, specialty stores, and Internet retailers.

G-III Apparel Group, Ltd. is a manufacturer and distributor of outerwear, dresses, sportswear, swimwear, beachwear and women's suits, as well as handbags and luggage. The Company manufactures and distributes under licensed brands, their own brands, and private label brands. G-III also has licensing agreements with several sports leagues and universities.

Wolverine World Wide, Inc. manufactures and markets branded footwear and performance leathers.  The Company's products include shoes, slippers, occupational and safety footwear, and performance outdoor footwear, among others.

Stella International Holdings Limited develops and manufactures footwear products for casual and fashion footwear companies worldwide.

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Stella International (1836 HK)

Trade Idea (Update): What's Next After HSCI Review Announcement

After the market close on Feb 21st, Friday, Hang Seng announced the results of the index review for the 4Q2019. In our previous note (link here),...

Ke Yan, CFA, FRM

Negative Near-Term Read-Throughs from the Detainment of Crown Resorts' Marketing Executives in China

Eighteen sales and marketing executives at Crown Resorts were reported as being detained in China, likely due to illegally soliciting Chinese to...

Morningstar, Inc.

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