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 Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of October 14th.</li>
<li>We estimate the weekly outflows to be US$886.9 million, led by consumer staples, financials, and offset by communication services, industrials, health care.</li>
<li>We highlight flows for CATL, Gigadevice, Moutai, Wuliangye, Tongwei, CMB, Advanced Micro-Fabrication Equipment (AMEC).</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of October 14th.
We estimate the weekly outflows to be US$886.9 million, led by consumer staples, financials, and offset by communication services, industrials, health care.
We highlight flows for CATL, Gigadevice, Moutai, Wuliangye, Tongwei, CMB, Advanced Micro-Fabrication Equipment (AMEC).


Northbound Flows (Oct 14th): Moutai, Wuliangye, Tongwei, CMB, AMEC

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>China started mulling an expansion of its Stock Connect relationships in late 2021 with plans to allow GDR issuance in Switzerland and eventually Germany.</li>
<li>New GDR issuance rules came into effect in February and companies started planning to issue GDRs in Switzerland in March.</li>
<li>The new SIX Listing Rules went into effect 25 July. Two companies priced GDRs on 22 July and two more yesterday. US$1.5bn so far. There are 6 more near-term.</li>
</ul>


China started mulling an expansion of its Stock Connect relationships in late 2021 with plans to allow GDR issuance in Switzerland and eventually Germany.
New GDR issuance rules came into effect in February and companies started planning to issue GDRs in Switzerland in March.
The new SIX Listing Rules went into effect 25 July. Two companies priced GDRs on 22 July and two more yesterday. US$1.5bn so far. There are 6 more near-term.


Chinese GDRs on the SIX Exchange - More Names, Smaller Discounts, Smaller Size, Less Liquidity

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Thematic (Sector/Industry)

<ul>
<li>A record 80.7% of China managers have exposure to the Semiconductor sector at an average weight of 3.68%, or +2.58% overweight the MSCI China benchmark.</li>
<li>Over the last 6-months, Semiconductor allocations have remained largely unchanged, whilst rebalancing occurs among other key industry groups.</li>
<li>With record overweights and stalling ownership growth, active China managers should consider whether overweight is the right stance, at this juncture.</li>
</ul>


A record 80.7% of China managers have exposure to the Semiconductor sector at an average weight of 3.68%, or +2.58% overweight the MSCI China benchmark.
Over the last 6-months, Semiconductor allocations have remained largely unchanged, whilst rebalancing occurs among other key industry groups.
With record overweights and stalling ownership growth, active China managers should consider whether overweight is the right stance, at this juncture.


MSCI China Funds: Semiconductor Growth Stalls

Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

Novatek Microelectronics Corp / Equity Bottom-Up

<ul>
<li>Novatek reached NT$36.5bn, 50.7% and NT$18.3 for revenue, GM and ESP respectively. </li>
<li>Its revenue and GM would be NT$34.5~35.8bn and 46~49% range in 2Q22, which revenue was declined 2~5.5% QoQ and increase 1.2~4.7% YoY.</li>
<li>There are hopes for China 618-shopping Festival, US back-to-school and China double 11 shopping Festival, etc.</li>
</ul>


Novatek reached NT$36.5bn, 50.7% and NT$18.3 for revenue, GM and ESP respectively. 
Its revenue and GM would be NT$34.5~35.8bn and 46~49% range in 2Q22, which revenue was declined 2~5.5% QoQ and increase 1.2~4.7% YoY.
There are hopes for China 618-shopping Festival, US back-to-school and China double 11 shopping Festival, etc.


Novatek (3034.TT): 2Q22 Revenue Declined 2~5.5% QoQ, but the Stock Price Could Be Reacted Earlier.

King Yuan Electronics Co, Ltd. / Equity Bottom-Up

<ul>
<li>KYEC reached revenue, GM, OPM and Diluted EPS of NT$8,984mn, 35.8%, 25.6% and NT$1.47 respectively in 1Q22.</li>
<li>KYEC could reach to ~10% revenue QoQ growth in 2Q22 because of some orders delayed in Suzhou for COVID-19 controlling measure in 1Q22.</li>
<li>The mainland China smartphone is not strong in 2Q22, but the smartphone chipset testing demand could still be the largest demand in KYEC. </li>
</ul>


KYEC reached revenue, GM, OPM and Diluted EPS of NT$8,984mn, 35.8%, 25.6% and NT$1.47 respectively in 1Q22.
KYEC could reach to ~10% revenue QoQ growth in 2Q22 because of some orders delayed in Suzhou for COVID-19 controlling measure in 1Q22.
The mainland China smartphone is not strong in 2Q22, but the smartphone chipset testing demand could still be the largest demand in KYEC. 


KYEC (2449.TT): It Could Reach ~10% QoQ Growth in 2Q22 Because Some Orders Were Delayed in 1Q22.

China

Will Semiconductor Co.,Ltd. Shanghai manufactures image sensor products and semiconductor products. The Company produces and sells complementary metal oxide semiconductors, protecting devices, power devices, power management integrated circuits, radio frequency devices, microphone sensors, and more. Will Semiconductor Shanghai markets its products worldwide.

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Will Semiconductor Shan (603501 CH)

Northbound Flows (Oct 14th): Moutai, Wuliangye, Tongwei, CMB, AMEC

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for CATL, Gigadevice, Moutai, Wuliangye, Tongwei, CMB,...

Ke Yan, CFA, FRM

Chinese GDRs on the SIX Exchange - More Names, Smaller Discounts, Smaller Size, Less Liquidity

China amended its rules for GDR issuance in February 2022 and planned issuance in Switzerland to start this summer. Official issuance was permitted...

Travis Lundy

MSCI China Funds: Semiconductor Growth Stalls

With near record overweights and stalling ownership growth, active China managers should consider whether overweight Semiconductors is the right...

Steven Holden

Novatek (3034.TT): 2Q22 Revenue Declined 2~5.5% QoQ, but the Stock Price Could Be Reacted Earlier.

Novatek's revenue declined 2~5.5% QoQ . There are hopes for China 618-shopping Festival, US back-to-school and China double 11 shopping Festival...

Patrick Liao

KYEC (2449.TT): It Could Reach ~10% QoQ Growth in 2Q22 Because Some Orders Were Delayed in 1Q22.

KYEC could reach to ~10% revenue QoQ growth in 2Q22. The mainland China smartphone is not strong in 2Q22, but the smartphone chipset testing demand...

Patrick Liao

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