IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Chongqing Hongjiu Fruit   / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chongqing-hongjiu-fruit" target="_blank" data-smartkarma-citation="entities:36023:1" rel="noopener">Chongqing Hongjiu Fruit (CHF HK)</a>, a multi-brand fruit company in China, is pre-marketing an HKEX IPO to raise US$200-300 million.</li>
<li>The fundamentals are uninspiring as it is delivering profitable growth with a heavy cash burn. The rising but tiny market share suggests a lack of sustainable competitive advantage.</li>
<li>Hongjiu Fruit aims to be the first HKEx-listed fruit distributor. Investors can likely avoid a bitter aftertaste by remaining on the sidelines.</li>
</ul>



Chongqing Hongjiu Fruit (CHF HK), a multi-brand fruit company in China, is pre-marketing an HKEX IPO to raise US$200-300 million.
The fundamentals are uninspiring as it is delivering profitable growth with a heavy cash burn. The rising but tiny market share suggests a lack of sustainable competitive advantage.
Hongjiu Fruit aims to be the first HKEx-listed fruit distributor. Investors can likely avoid a bitter aftertaste by remaining on the sidelines.


HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>The winners in the tension are the defense companies including <a href="https://www.smartkarma.com/entities/avic-shenyang-aircraft-co-ltd" target="_blank" data-smartkarma-citation="entities:12150:1" rel="noopener">Avic Shenyang Aircraft (600760 CH)</a>, <a href="https://www.smartkarma.com/entities/avichina-industry-technology-h" target="_blank" data-smartkarma-citation="entities:16315:1" rel="noopener">AviChina Industry &amp; Technology H (2357 HK)</a> and <a href="https://www.smartkarma.com/entities/cssc-offshore-marine-engg-group-co-ltd" target="_blank" data-smartkarma-citation="entities:5089:1" rel="noopener">Cssc Offshore &amp; Marine Engg (317 HK)</a>. </li>
<li>Pelosi's Taiwan visit may ignite another round of nationalistic consumption. This will benefit <a href="https://www.smartkarma.com/entities/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning (2331 HK)</a> and <a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports (2020 HK)</a> but is negative to <a href="https://www.smartkarma.com/entities/topsports-international" target="_blank" data-smartkarma-citation="entities:28153:1" rel="noopener">Topsports International (6110 HK)</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-international-corp-smic" target="_blank" data-smartkarma-citation="entities:14231:1" rel="noopener">SMIC (981 HK)</a> is a long-term beneficiary. There may be adverse spillover effects on Taiwanese companies like <a href="https://www.smartkarma.com/entities/tingyi-cayman-islands-holding-corp" target="_blank" data-smartkarma-citation="entities:14016:1" rel="noopener">Tingyi (322 HK)</a>, <a href="https://www.smartkarma.com/entities/want-want-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:355:1" rel="noopener">Want Want (151 HK)</a> and <a href="https://www.smartkarma.com/entities/uni-president-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:14927:1" rel="noopener">Uni President China (220 HK)</a>. </li>
</ul>


The winners in the tension are the defense companies including Avic Shenyang Aircraft (600760 CH), AviChina Industry &amp; Technology H (2357 HK) and Cssc Offshore &amp; Marine Engg (317 HK). 
Pelosi's Taiwan visit may ignite another round of nationalistic consumption. This will benefit Li Ning (2331 HK) and Anta Sports (2020 HK) but is negative to Topsports International (6110 HK). 

SMIC (981 HK) is a long-term beneficiary. There may be adverse spillover effects on Taiwanese companies like Tingyi (322 HK), Want Want (151 HK) and Uni President China (220 HK). 


China-US Tension Escalation: Winners and Losers on Pelosi's Taiwan Visit

Weilong Delicious Global Holdi / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/weilong-delicious-global-holdings-ltd" target="_blank" data-smartkarma-citation="entities:33378:1" rel="noopener">Weilong Delicious Global (WDG HK)</a> has refiled its PHIP with an aim to raise US$500 million, half of its previous ambition to raise US$1 billion. </li>
<li>We have previously discussed the IPO in <a href="https://www.smartkarma.com/insights/weilong-delicious-ipo-initiation-tasty-bite" target="_blank" data-smartkarma-citation="insights:60830" rel="noopener">Weilong Delicious IPO Initiation: Tasty Bite</a> and <a href="https://www.smartkarma.com/insights/weilong-delicious-ipo-mixed-update" target="_blank" data-smartkarma-citation="insights:61217" rel="noopener">Weilong Delicious IPO: Mixed Update</a>. </li>
<li>The PHIP which discloses the 2021 results and recent developments point to reducing growth rates and cost pressures. We would pass on the IPO.</li>
</ul>



Weilong Delicious Global (WDG HK) has refiled its PHIP with an aim to raise US$500 million, half of its previous ambition to raise US$1 billion. 
We have previously discussed the IPO in Weilong Delicious IPO Initiation: Tasty Bite and Weilong Delicious IPO: Mixed Update. 
The PHIP which discloses the 2021 results and recent developments point to reducing growth rates and cost pressures. We would pass on the IPO.


Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>The broad global indexes are decisively below our "lines in the sand" of $54 on MSCI ACWI ex-US (ACWX-US), $75.25 on MSCI EAFE (EFA-US), and $99 on MSCI ACWI (ACWI-US).</li>
<li>As noted in our Feb. 15 Int'l Macro Vision, we are bearish at the index level as long as we are below the aforementioned levels.</li>
<li>Global 10-year sovereign yields remain elevated, leading to outperformance from value Sectors (Energy/Materials/Financials) which remain our preferred area of the market. We also continue to like defensive areas, especially Staples.</li>
</ul>


The broad global indexes are decisively below our "lines in the sand" of $54 on MSCI ACWI ex-US (ACWX-US), $75.25 on MSCI EAFE (EFA-US), and $99 on MSCI ACWI (ACWI-US).
As noted in our Feb. 15 Int'l Macro Vision, we are bearish at the index level as long as we are below the aforementioned levels.
Global 10-year sovereign yields remain elevated, leading to outperformance from value Sectors (Energy/Materials/Financials) which remain our preferred area of the market. We also continue to like defensive areas, especially Staples.


Buying Metals/Mining and Consumer Staples

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

<ul>
<li>Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO.</li>
<li>According to F&amp;S, WDG ranked first among spicy snack food enterprises in China, with a market share of 5.7%, and in the seasoned flour product and spicy vegetable snacks categories.</li>
<li>In this note, we will undertake a peer comparison and look at valuations.</li>
</ul>


Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO.
According to F&amp;S, WDG ranked first among spicy snack food enterprises in China, with a market share of 5.7%, and in the seasoned flour product and spicy vegetable snacks categories.
In this note, we will undertake a peer comparison and look at valuations.


Weilong Delicious Global Pre-IPO - Peer Comparison and Valuation

China

Uni-President China's products include beverages and food. 

The Group recorded a revenue of RMB22,761.8 million in 2020, representing an increase of 3.4% as compared with that of the corresponding period last year, and profits after tax of RMB1,625.7 million, representing an increase of 19.0% as compared with that of last year. 

We recorded a double-digit growth in the food business as the increasing brand value of daily-consumed noodles “Soup Daren（湯達人）” was highly recognized by consumers and the brand philosophy of the high-end Chinese cuisine “Kai Xiao Zao （開小灶）” was continuously promoted to create and extend the consumption scenarios, thereby contributing to such multifold growth in revenue. 

The beverages business was gradually recovering despite the impacts caused by the epidemic. “Uni Assam Milk Tea（統一阿薩姆奶茶）” was favoured by consumers as
usual with a unwavering leading position in the milk tea market and positive growth in revenue. Sugar-free tea “Chai Li Won（茶裏王）” aligned with consumers’ lifestyle concept of “sugar-free” to improve its brand recognition. On its road to value marketing, the Group remained steadfast in developing brands that are loved and trusted by consumers.

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Uni President China (220 HK)

Hongjiu Fruit IPO: A Bitter Fruit

The fundamentals are uninspiring as it is delivering profitable growth with a heavy cash burn. Investors can likely avoid a bitter aftertaste by...

Arun George

China-US Tension Escalation: Winners and Losers on Pelosi's Taiwan Visit

Chinese defense companies are the major winners in the escalation of the China-US tension following Pelosi's visit to Taiwan. We think Topsports,...

Osbert Tang, CFA

Weilong Delicious IPO: In a Pickle

The PHIP which discloses the 2021 results and recent developments point to reducing growth rates and cost pressures. We would pass on the IPO.

Arun George

Buying Metals/Mining and Consumer Staples

Commodity prices remain in a secular bull market, and now even gold is joining the rally. This is bullish for global metals/mining stocks (precious...

Vermilion Research

Weilong Delicious Global Pre-IPO - Peer Comparison and Valuation

Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO. In this note, we undertake a...

Sumeet Singh

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