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.

Equity Bottom-Up

<ul>
<li>China announced game approval for the April batch. The number of games approved remained at a higher level than 2023.</li>
<li>The pace of China game approval appears to have accelerated to the same level as pre-tightening, though the number of approvals appears to be slower than March.</li>
<li>While Tencent scored zero, Netease got approval for one game.</li>
</ul>


China announced game approval for the April batch. The number of games approved remained at a higher level than 2023.
The pace of China game approval appears to have accelerated to the same level as pre-tightening, though the number of approvals appears to be slower than March.
While Tencent scored zero, Netease got approval for one game.


Tencent/Netease: Game Approval Rotate to Netease in April

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>A shares were up small on the week, largely due to a big rally on Friday (led by record Northbound buying). HK Stocks had a HUGE week. </li>
<li>Net SOUTHBOUND buying was +HK10.3bn. Net buys every day and now 20 days straight, but buying was foreign-led.</li>
<li>Little market news. More geopolitical news. Big SOE bank H-shares see relentless buying. HSTECH +13.4%, HSI +8.8%, HSCEI +9.1%.</li>
</ul>


A shares were up small on the week, largely due to a big rally on Friday (led by record Northbound buying). HK Stocks had a HUGE week. 
Net SOUTHBOUND buying was +HK10.3bn. Net buys every day and now 20 days straight, but buying was foreign-led.
Little market news. More geopolitical news. Big SOE bank H-shares see relentless buying. HSTECH +13.4%, HSI +8.8%, HSCEI +9.1%.


HK Connect SOUTHBOUND Flows (To 26 Apr 2024); Strong Net Buying on Banks/Energy Telco SOEs. Again.

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

<ul>
<li>
<a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Global (DIDI US)</a> has begun to generate positive EBITDA after several challenging years post-IPO.  With a high degree of operating leverage, the company is poised to grow quickly.
</li>
<li>Didi which maintains a 70% market share in the ride-hailing industry in China is expanding into Tier 3 cities where there is a large untapped opportunity.</li>
<li>The company has indicated that it wants to list in Hong Kong in 2025 providing a catalyst for share price re-rating next year.</li>
</ul>



DiDi Global (DIDI US) has begun to generate positive EBITDA after several challenging years post-IPO.  With a high degree of operating leverage, the company is poised to grow quickly.

Didi which maintains a 70% market share in the ride-hailing industry in China is expanding into Tier 3 cities where there is a large untapped opportunity.
The company has indicated that it wants to list in Hong Kong in 2025 providing a catalyst for share price re-rating next year.


2025 High Conviction Idea - DIDI Global, Smooth Ride to Higher Profits

<ul>
<li>A shares were up on the week, while Hs were down. BIG divergence among liquid names. </li>
<li>Net SOUTHBOUND buying was +HK32.1bn. SOUTHBOUND ended its consecutive post-CNY daily net buy streak on 25 March, then started a new one. No net sell days since.</li>
<li>Little market news. More geopolitical news. SOE bank H-shares are seeing relentless net and gross buying, very very little selling.</li>
</ul>


A shares were up on the week, while Hs were down. BIG divergence among liquid names. 
Net SOUTHBOUND buying was +HK32.1bn. SOUTHBOUND ended its consecutive post-CNY daily net buy streak on 25 March, then started a new one. No net sell days since.
Little market news. More geopolitical news. SOE bank H-shares are seeing relentless net and gross buying, very very little selling.


HK Connect SOUTHBOUND Flows (To 19 Apr 2024); Strong Net Buying on Energy/Finance/Telco SOEs. Again.

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.

<ul><li>Tencent remains on track of margins expansion, underpinned by increased revenue contribution from high-margin businesses and operating leverage.</li><li>The company is also committed to enhancing shareholder return, with daily share repurchase amount reaching HK$1bn (c.13% of average daily turnover) since 4Q23 earning release in March.</li><li>For 1Q24E, we forecast total revenue to increase by 6% YoY to RMB158.6bn, while non-IFRS net income to grow by 31% YoY to RMB43.1bn, primarily driven by the solid GPM expansion (+c.3ppt YoY). </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.

Tencent remains on track of margins expansion, underpinned by increased revenue contribution from high-margin businesses and operating leverage.The company is also committed to enhancing shareholder return, with daily share repurchase amount reaching HK$1bn (c.13% of average daily turnover) since 4Q23 earning release in March.For 1Q24E, we forecast total revenue to increase by 6% YoY to RMB158.6bn, while non-IFRS net income to grow by 31% YoY to RMB43.1bn, primarily driven by the solid GPM expansion (+c.3ppt YoY). 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.

Tencent (700 HK) - Expect Solid Earnings Growth and Enhancing Shareholder Return in FY24

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent Holdings (ADR) (TCEHY US)

Tencent/Netease: Game Approval Rotate to Netease in April

China's NPPA released latest batch of game approval for the month of April. While Tencent didn't obtain any approval, Netease obtained one approval...

Ke Yan, CFA, FRM

HK Connect SOUTHBOUND Flows (To 26 Apr 2024); Strong Net Buying on Banks/Energy Telco SOEs. Again.

A decent flow week. Net buying every day. That's 20 days in a row. Some may be Central Huijin buying. HK stocks had a HUGE up week. It was probably...

Travis Lundy

2025 High Conviction Idea - DIDI Global, Smooth Ride to Higher Profits

Didi Global has become EBITDA positive and is expanding rapidly into Tier 3 cities where it has an technical and market share advantage. The...

David Mudd

HK Connect SOUTHBOUND Flows (To 19 Apr 2024); Strong Net Buying on Energy/Finance/Telco SOEs. Again.

Strong HK SOUTHBOUND Connect buying, again. HKD $32.1bn which is very strong. Energy, Finance, and Telco SOEs continue to dominate. Some may be...

Travis Lundy

Tencent (700 HK) - Expect Solid Earnings Growth and Enhancing Shareholder Return in FY24

Tencent remains on track of margins expansion, underpinned by increased revenue contribution from high-margin businesses and operating leverage.

CMB International

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