Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>Ele.me delivery man burned himself, as his payment was reduced.</li>
<li>Express parcels increased by 31.2% yoy to 83 billion in China in 2020.</li>
<li>Baidu (BIDU) announced that it would establish an electric vehicle joint venture.</li>
</ul>


Ele.me delivery man burned himself, as his payment was reduced.
Express parcels increased by 31.2% yoy to 83 billion in China in 2020.
Baidu (BIDU) announced that it would establish an electric vehicle joint venture.


China Internet Weekly (18Jan2021): BABA Delivery Man Tried Suicide, Baidu Produces Electric Vehicle

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<p>As the US-listed Chinese tech firms such as <a href="https://www.smartkarma.com/entities/bilibili-inc" target="_blank" data-smartkarma-citation="entities:26793:1" rel="noopener">Bilibili Inc (BILI US)</a>, <a href="https://www.smartkarma.com/entities/tencent-music-entertainment" target="_blank" data-smartkarma-citation="entities:27255:1" rel="noopener">Tencent Music (TME US)</a>, <a href="https://www.smartkarma.com/entities/vipshop-holdings-ltd-adr" target="_blank" data-smartkarma-citation="entities:1088:1" rel="noopener">Vipshop Holdings (VIPS US)</a>, and <a href="https://www.smartkarma.com/entities/joyy-inc" target="_blank" data-smartkarma-citation="entities:285:1" rel="noopener">JOYY (YY US)</a> rush for secondary listings on the Hong Kong Stock Exchange amidst the uncertainty surrounding the US policy framework, in this insight, we analyse the ADR/HKEX discount/premium behaviour of the 10 most recent secondary listings on the Hong Kong Stock Exchange.</p>

As the US-listed Chinese tech firms such as Bilibili Inc (BILI US), Tencent Music (TME US), Vipshop Holdings (VIPS US), and JOYY (YY US) rush for secondary listings on the Hong Kong Stock Exchange amidst the uncertainty surrounding the US policy framework, in this insight, we analyse the ADR/HKEX discount/premium behaviour of the 10 most recent secondary listings on the Hong Kong Stock Exchange.

An Analysis of ADR/HKEX Discount Behavior As The US Listed Chinese Tech Rush To Hong Kong

<ul class="">
<li>Tencent’s games had disappeared on Huawei’s app store for one day.</li>
<li>The State Administration of Market Regulation fined Alibaba, JD.com, and Vipshop RMB500,000 each for “unfair pricing”.</li>
<li>The Ministry of Culture and Tourism announced that it would continue the suspension of cross-border group tour during the vacations of the New Year’s Day and the Chinese New Year.</li>
</ul>


Tencent’s games had disappeared on Huawei’s app store for one day.
The State Administration of Market Regulation fined Alibaba, JD.com, and Vipshop RMB500,000 each for “unfair pricing”.
The Ministry of Culture and Tourism announced that it would continue the suspension of cross-border group tour during the vacations of the New Year’s Day and the Chinese New Year.


China Internet Weekly (4Jan2021): Tencent’s Conflict with Huawei, Authorities’ Ban on New Year Tour

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<div>
<p><em>This week in StubWorld ...</em></p>
<p><a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> was listed on the 8 December at an IPO price of <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1207/9539949/2020120700123.pdf" target="_blank" rel="noopener">HK$70.58</a>, towards the top-end of its price range, and has traded up ~88% to HK$132.50/share, with a current market cap of US$52.7bn. </p>
</div>
<div>
<p>JDH is the spin-off of <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (HK) (9618 HK)</a> / <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a>, which owns <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1208/2020120800216.pdf" target="_blank" rel="noopener">68.73%</a> in JDH after the IPO, down from 81.04% pre-IPO.</p>
<p>That stake is worth US$36.5bn, or around 30% of its current market cap, therefore this is not a super strong parent/subsidiary relationship. </p>
<p>Yet the implied stub is trading at a not-undemanding forward PER of 34x, for a company with a three-year net profit CAGR of 44%.</p>
</div>
<div>
<div>
<hr>
<p>Preceding my comments on JD.com are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
</div>
<div>
<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
</div>
</div>


This week in StubWorld ...
JD Health (6618 HK) was listed on the 8 December at an IPO price of HK$70.58, towards the top-end of its price range, and has traded up ~88% to HK$132.50/share, with a current market cap of US$52.7bn. 


JDH is the spin-off of JD.com (HK) (9618 HK) / JD.com Inc (ADR) (JD US), which owns 68.73% in JDH after the IPO, down from 81.04% pre-IPO.
That stake is worth US$36.5bn, or around 30% of its current market cap, therefore this is not a super strong parent/subsidiary relationship. 
Yet the implied stub is trading at a not-undemanding forward PER of 34x, for a company with a three-year net profit CAGR of 44%.




Preceding my comments on JD.com are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.



<p style="text-align: justify;">During the shopping season of the Singles Day:</p><ul>
<li>Alibaba (BABA)’ GMV up 26% YoY.</li>
<li>JD.com (JD)’ GMV up 33% YoY.</li>
<li>Vipshop (VIPS) released its performance for the first time.</li>
<li>However, Pinduoduo (PDD) refused to release any data.</li>
</ul>

During the shopping season of the Singles Day:
Alibaba (BABA)’ GMV up 26% YoY.
JD.com (JD)’ GMV up 33% YoY.
Vipshop (VIPS) released its performance for the first time.
However, Pinduoduo (PDD) refused to release any data.


China Internet Weekly (9Nov2020): Singles’ Day Performance, BABA, JD, VIPS, PDD

China

Vipshop Holdings Ltd. retails branded products at discount over the Internet. The Company retails through flash sales, in which limited quantities of an item are sold at deep discount for a specified period of time.

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Vipshop Holdings (VIPS US)

China Internet Weekly (18Jan2021): BABA Delivery Man Tried Suicide, Baidu Produces Electric Vehicle

Ele.me delivery man burned himself, as his payment was reduced. Baidu (BIDU) announced that it would establish an electric vehicle joint venture.

Ming Lu

An Analysis of ADR/HKEX Discount Behavior As The US Listed Chinese Tech Rush To Hong Kong

As the US-listed Chinese tech firms rush for secondary listings on the Hong Kong Stock Exchange, we analyse the ADR/HKEX discount behaviour of the...

Oshadhi Kumarasiri

China Internet Weekly (4Jan2021): Tencent’s Conflict with Huawei, Authorities’ Ban on New Year Tour

Tencent’s games had disappeared on Huawei’s app store for one day. The authorities fined BABA, JD, VIPS for “unfair pricing”. The authorities...

Ming Lu

StubWorld: JD.com In JD Health's Shadow

JD looks attractive here, down 13.5% from its recent peak. The market is assigning US$9.4bn less to the stub ops since JDH's debut, while JD has...

David Blennerhassett

China Internet Weekly (9Nov2020): Singles’ Day Performance, BABA, JD, VIPS, PDD

During the shopping season of the Singles Day: Alibaba ’ GMV up 26% YoY. JD.com’ GMV up 33% YoY. Vipshop released its performance for the first...

Ming Lu

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