Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hesai-group" target="_blank" data-smartkarma-citation="entities:36743:1" rel="noopener">Hesai Group (HSAI US)</a> , a global leader in LiDAR technology for autonomous driving and ADAS, filed for a $100M placeholder IPO with Goldman Sachs and Morgan Stanley leading the offering.</li>
<li>The company’s last round was a $70M Series D+ at a $3B pre-money valuation, implying EV/LTM Rev multiple of 19x today, a significant premium to comparable companies in the space.</li>
<li>We remain cautious about buying into the <a href="https://www.smartkarma.com/entities/hesai-group" target="_blank" data-smartkarma-citation="entities:36743:1" rel="noopener">Hesai Group (HSAI US)</a>  IPO due to rich valuation, negative free cash flows, loss-making business, intense competition, and developments in alternative technologies.</li>
</ul>



Hesai Group (HSAI US) , a global leader in LiDAR technology for autonomous driving and ADAS, filed for a $100M placeholder IPO with Goldman Sachs and Morgan Stanley leading the offering.
The company’s last round was a $70M Series D+ at a $3B pre-money valuation, implying EV/LTM Rev multiple of 19x today, a significant premium to comparable companies in the space.
We remain cautious about buying into the Hesai Group (HSAI US)  IPO due to rich valuation, negative free cash flows, loss-making business, intense competition, and developments in alternative technologies.


Hesai Group IPO Preview: Will Rich Valuation Worry Long-Term Investors?

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

Tencent Music Entertainment Group / Event-Driven

<ul>
<li>In this insight, we take a look at the potential index changes and the resultant capping flows for the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index (HSTECH INDEX)</a> in March 2023.</li>
<li>According to our estimation, there could be two changes for the HSTECH in March 2023 and there could be one-way index flows of US$365mn.</li>
<li>The final index changes along with indicative capping and index weights could be published in Mid/Late-February 2023 and implemented in early-March 2023.</li>
</ul>


In this insight, we take a look at the potential index changes and the resultant capping flows for the Hang Seng Tech Index (HSTECH INDEX) in March 2023.
According to our estimation, there could be two changes for the HSTECH in March 2023 and there could be one-way index flows of US$365mn.
The final index changes along with indicative capping and index weights could be published in Mid/Late-February 2023 and implemented in early-March 2023.


Quiddity Flow Expectations HSTECH Mar 23: Two Index Changes Possible

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.

Thematic (Sector/Industry)

<ul><li>IDC released 4Q22 global smartphone shipment with 18% YoY decline (vs -9.3% in 3Q22), mainly due to weak consumer demand, rising inflation and China COVID-19 impact.</li><li>For 2022, global smartphone shipment fell 11% YoY to 1.21bn unit, marking the lowest annual shipment since 2013.</li><li>By brand, Apple/ Samsung/Xiaomi/Oppo/Vivo declined 15%/16%/26%/16%/19% YoY in 4Q22.</li></ul><p><em>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.</em></p>

IDC released 4Q22 global smartphone shipment with 18% YoY decline (vs -9.3% in 3Q22), mainly due to weak consumer demand, rising inflation and China COVID-19 impact.For 2022, global smartphone shipment fell 11% YoY to 1.21bn unit, marking the lowest annual shipment since 2013.By brand, Apple/ Samsung/Xiaomi/Oppo/Vivo declined 15%/16%/26%/16%/19% YoY in 4Q22.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.

China Technology - 4Q22 Global Smartphone Shipment Down 18% YoY

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 statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jan 27th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), Esr (1821 HK), China Yongda Automobiles Services (3669 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), Tencent (700 HK), Esr (1821 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jan 27th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), Esr (1821 HK), China Yongda Automobiles Services (3669 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), Tencent (700 HK), Esr (1821 HK).


Hong Kong Buybacks Weekly (Jan 27th): Aia, Esr, China Yongda

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Jan 13th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short changes in Ping An, Li Ning, Icbc, Jiumaojiu.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Jan 13th.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short changes in Ping An, Li Ning, Icbc, Jiumaojiu.


HK Short Interest Weekly: Ping An, Li Ning, Icbc, Jiumaojiu

China

Xiaomi Corporation manufactures communication equipment and parts. The Company produces and sells mobile phones, smart phone software,  set-top boxes, and related accessories. Xiaomi markets its products worldwide.

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Xiaomi Corp (1810 HK)

Hesai Group IPO Preview: Will Rich Valuation Worry Long-Term Investors?

We remain very cautious about buying into the upcoming Hesai Group IPO and believe the stock may present investors with a better entry point later...

Andrei Zakharov

Quiddity Flow Expectations HSTECH Mar 23: Two Index Changes Possible

I see Tencent Music Entertainment (1698 HK) and Weibo Corp (9898 HK) as ADDs and Ming Yuan Cloud Group (909 HK) and AAC Technologies Holdings (2018...

Janaghan Jeyakumar, CFA

China Technology - 4Q22 Global Smartphone Shipment Down 18% YoY

IDC released 4Q22 global smartphone shipment with 18% YoY decline (vs -9.3% in 3Q22), mainly due to weak consumer demand, rising inflation and...

CMB International

Hong Kong Buybacks Weekly (Jan 27th): Aia, Esr, China Yongda

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Aia (1299 HK), Esr...

Ke Yan, CFA, FRM

HK Short Interest Weekly: Ping An, Li Ning, Icbc, Jiumaojiu

We analyzed the latest HK SFC report for aggregate short position as of Jan 13th and highlight short interest changes in Ping An, Li Ning, Icbc,...

Ke Yan, CFA, FRM

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