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 Hong Kong Connect flows with our data engine for holding position as of July 12th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We estimate the inflows to be USD 580m and highlight flows for ICBC (1398 HK).</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of July 12th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We estimate the inflows to be USD 580m and highlight flows for ICBC (1398 HK).


Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

Hua Hong Semiconductor / Equity Bottom-Up

<ul>
<li>After hitting a low point in Q4 2023, Research on Hong Kong companies has been slow to pick up reflecting the ongoing skepticism from investors. </li>
<li>Reports on the large China tech companies dominated the top ten companies covered over the last couple of years and in the first half of 2024.</li>
<li>As China continues to dominate and make news in the global EV market, research in that sector has picked up.</li>
</ul>


After hitting a low point in Q4 2023, Research on Hong Kong companies has been slow to pick up reflecting the ongoing skepticism from investors. 
Reports on the large China tech companies dominated the top ten companies covered over the last couple of years and in the first half of 2024.
As China continues to dominate and make news in the global EV market, research in that sector has picked up.


BUY/SELL/HOLD: China/Hong Kong Stock Updates (July 8th)

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Equity Capital Markets

Sichuan Baicha Baidao Industrial / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sichuan-baicha-baidao-industrial-co-ltd" target="_blank" data-smartkarma-citation="entities:40029:1" rel="noopener">Sichuan Baicha Baidao Industrial (2555 HK)</a> (SBBI) raised around US$330m in its HK IPO.</li>
<li>SBBI sells new-style tea drinks through its ChaPanda stores. According to F&amp;S, SBBI ranked third in China’s new-style tea shop market with a market share of 6.8% in FY23.</li>
<li>We have looked at the company’s performance and valuations in our past note. In this note, we talk about the trading dynamics.</li>
</ul>



Sichuan Baicha Baidao Industrial (2555 HK) (SBBI) raised around US$330m in its HK IPO.
SBBI sells new-style tea drinks through its ChaPanda stores. According to F&amp;S, SBBI ranked third in China’s new-style tea shop market with a market share of 6.8% in FY23.
We have looked at the company’s performance and valuations in our past note. In this note, we talk about the trading dynamics.


Sichuan Baicha Baidao IPO Trading - Tepid Demand, While Peers Have Corrected

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Belle Fashion Group / Equity Capital Markets

<ul>
<li>The core of Belle's transformation is to inject “digitalization” into existing massive store assets, with strategy of “omnichannel+multi brands”. Belle also devotes significant resources to online channels and online-to-offline integration.</li>
<li>Benefiting from the DTC retail model, Belle increases the probability of success when launching products. Licensing/acquisition are important ways to empower new brands and promote growth. Belle’s performance has rebounded.</li>
<li>However, the path of transformation hasn't yet been completed. Belle still mainly relies on heavy asset mode and is exposed to inventory risks. There ‘s still room for further improvement.</li>
</ul>


The core of Belle's transformation is to inject “digitalization” into existing massive store assets, with strategy of “omnichannel+multi brands”. Belle also devotes significant resources to online channels and online-to-offline integration.
Benefiting from the DTC retail model, Belle increases the probability of success when launching products. Licensing/acquisition are important ways to empower new brands and promote growth. Belle’s performance has rebounded.
However, the path of transformation hasn't yet been completed. Belle still mainly relies on heavy asset mode and is exposed to inventory risks. There ‘s still room for further improvement.


Pre-IPO Belle Fashion Group - Performance Has Picked Up, but Not yet Reversed

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>After a solid FY23, <a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports Products (2020 HK)</a>'s outlook for FY24 looks equally encouraging. Its various brands are expected to grow by 10-30% YoY still.  </li>
<li>Listing of <a href="https://www.smartkarma.com/entities/amer-sports-inc" target="_blank" data-smartkarma-citation="entities:21751:1" rel="noopener">Amer Sports (AS US)</a> will provide Rmb1.6bn non-recurring gain in 1H24. For the full year, there will be a positive swing in its profit contribution. </li>
<li>Anta Sports can be considered as a sportswear brand incubator, and its premium PERs of 18.3x and 15.9x for FY24 and FY25 reflect the ability to brew new brands. </li>
</ul>


After a solid FY23, Anta Sports Products (2020 HK)'s outlook for FY24 looks equally encouraging. Its various brands are expected to grow by 10-30% YoY still.  
Listing of Amer Sports (AS US) will provide Rmb1.6bn non-recurring gain in 1H24. For the full year, there will be a positive swing in its profit contribution. 
Anta Sports can be considered as a sportswear brand incubator, and its premium PERs of 18.3x and 15.9x for FY24 and FY25 reflect the ability to brew new brands. 


Anta Sports (2020 HK): Sustains Strengths into FY24

China

Zhongsheng Group Holdings Ltd. retails automobiles.  The Company imports and retails primarily luxury and mid- to high-end automobile brands.

Shanghai Yuyuan Tourist Mart Co., Ltd. processes gold and operates jewelry stores.  The Company also manages department stores, provides import and export trading service, produces pharmaceutical products, offers food service, and develops real estate properties.

Suning.com Co., Ltd. operates retail chain stores to sell household appliances, electronic products, office equipment, and communication products. The Company also provides installation and maintenance services.

EEKA Fashion Holdings Limited engages in apparel design and development businesses. The Company produces high-fashion women's apparel products. EEKA Fashion Holdings sells products through domestic department stores and shopping centers.

Pang Da Automobile Trade Company Limited sells, repairs and provides maintenance services for cars and construction machinery.

Wuxi Commercial Mansion Grand Orient Co., Ltd. operates a department store retail business. Its department stores sell a variety of products including home appliances, apparel, textiles, and leather products.  Wuxi Commercial also sells cars. The Company sells its general merchandise through its own website www.eastall.com and has operation in food serve.

Wuxi Commercial Mansion Grand Orient Co (600327 CH)

China Yongda Automobiles Services Holdings Ltd. retails passenger vehicles. The Company sells new and used vehicles and offers automobile rentals. China Yongda Automobiles also provides service.

China Yongda Automobile Services Hldg (3669 HK)

Beijing Bashi Media Co., Ltd. provides urban bus transportation and advertising services.  The Company also provides taxi, inter-provincial transportation, car rental, and other transportation related services.

Fujian Zhangzhou Development Co., Ltd., trades automobile, manages and operates toll roads, produces and distributes tap water, and provides waste management services.

China Meidong Auto Holdings Limited is an automobile dealership and maintenance group in China.

Premier Investments Ltd., through subsidiaries, retails clothing.  The Company retails name brand casual and business clothing for men and women, and stationery and storage products.

Super Retail Group Ltd. operates a chain of retail stores throughout Australia. The Stores sells a wide range of automotive parts and accessories, tools, camping products, gardening and outdoor equipment and boating equipment throughout Australia and New Zealand.

Home Product Center Public Company Limited is a retailer of building materials and home improvement products.

Foot Locker, Inc. is primarily a mall-based athletic retailer that operates athletic retail stores in countries located in North America, Europe, and Australia.  The Company provides athletic footwear and apparel through its Foot Locker, Lady Foot Locker, Kids Foot Locker, and Champs Sports retail stores. Foot Locker also operates a direct-to-consumer channel, Footlocker.com/Eastbay.

Boot Barn Holdings, Inc. sells western and work gear for individuals and families. The Company sells boots, jeans, shirts, hats, belts, jewelry, among other products. Boot Barn operates throughout the Untied States.

Advance Auto Parts, Inc. is a retailer of auto parts and accessories. The Company operates stores in various states, primarily  located in the northeastern, southeastern, and midwestern regions of the United States, and in Puerto Rico and the Virgin Islands.

SHIMAMURA CO., Ltd. operates chain stores selling mainly clothing for men, women, children, and also bedding and furnishing goods.  The Company has stores in mainly suburb areas throughout Japan.

Lovisa Holdings Ltd is a fashion jewelry and retailer. The Company retails fashion jewelry and accessories for women. Lovisa offers its products in Australasia, parts of the Middle East, and parts of Southeast Asia.

Signet Jewelers Ltd. retails jewelry, watches, gifts and accessories.  The Company operates in the United States and the United Kingdom.

Dunelm Group Plc. retails home furnishings throughout the United Kingdom. The Company retails textile products as well as other housewares such as lighting products, pet supplies, and sewing machines.

Topsports International Holdings Limited operates as a sports shoes and apparel retailer. The Company sells sports shoes, sports shirts, and other products. Topsports International Holdings markets its products throughout China.

Topsports International Holdings (6110 HK)

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Topsports International Holdings (6110 HK)

Hong Kong Connect Flows (Jul 12th): ICBC

We analyzed southbound Hong Kong connect flows in the past week. We estimate that there were inflows of USD 580.9 million and highlight flows for...

Ke Yan, CFA, FRM

BUY/SELL/HOLD: China/Hong Kong Stock Updates (July 8th)

Tech NEV companies continue to dominate the research landscape for Hong Kong coverage. Bosideng, China Water Affairs, Topsports, BYD and Xiaomi...

David Mudd

Sichuan Baicha Baidao IPO Trading - Tepid Demand, While Peers Have Corrected

Sichuan Baicha Baidao Industrial (2555 HK) (SBBI) raised around US$330m in its HK IPO. In this note, we talk about the trading dynamics.

Sumeet Singh

Pre-IPO Belle Fashion Group - Performance Has Picked Up, but Not yet Reversed

After years of accumulation/continuous optimization, Belle’s DTC omnichannel retail network has solidified foundation of performance growth. But...

Xinyao (Criss) Wang

Anta Sports (2020 HK): Sustains Strengths into FY24

Anta's 1Q24 sales were lower than the full-year target, with ANTA brand up mid-single digit, FILA brand up high-single digit, and other brands up...

Osbert Tang, CFA

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52-week Range

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