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.

Equity Capital Markets

Yatsen Holding Ltd / Equity Capital Markets

<div><p>Yatsen Holding raised around US$617m in its US IPO. The company is backed by Hillhouse, Tencent and Tiger Global. </p></div><div><p>I have covered various aspects of the deal in my earlier notes, links to which are below:</p></div><div><ul><li><a href="https://www.smartkarma.com/insights/yatsen-pre-ipo-growing-fast-but-slowing-down" target="_blank" rel="noopener">Yatsen Pre-IPO - Growing Fast but Slowing Down</a></li></ul></div><ul><li><a href="https://www.smartkarma.com/insights/yatsen-ipo-pricey-but-it-comes-with-strong-investor-backing" target="_blank" rel="noopener">Yatsen IPO - Pricey but It Comes with Strong Investor Backing</a></li></ul><p>In this insight, talk about deal dynamics and provide a table with implied valuation at different ADS levels.</p>

Yatsen Holding raised around US$617m in its US IPO. The company is backed by Hillhouse, Tencent and Tiger Global. I have covered various aspects of the deal in my earlier notes, links to which are below:Yatsen Pre-IPO - Growing Fast but Slowing DownYatsen IPO - Pricey but It Comes with Strong Investor BackingIn this insight, talk about deal dynamics and provide a table with implied valuation at different ADS levels.

Yatsen IPO Trading - A Little More Pricey Now

China Specialist, Auto and Industrial Specialist

Victoria Li

Equity Bottom-Up

<p><strong>Xpeng is our Top Buy among China's EV makers. Why? </strong><strong>Because </strong></p><p><strong>1)Xpeng's flagship model is the best product so far among peers; </strong></p><p><strong>2)The company is well positioned into high growth potential niche market; </strong></p><p><strong>3)Its high input on R&amp;D secures one new model launching per year in the future; </strong></p><p><strong>4) Low cashflow risk during company ramp up period due to its good cost control;</strong></p><p><strong>5) speeding up demand growth of China's EV demand.</strong></p><p><strong>By using Tesla's peak P/S rate of 16x happened when it net profit turned positive, Xpeng's fair value stands at US$71 for the next 12 months.</strong></p>

Xpeng is our Top Buy among China's EV makers. Why? Because 1)Xpeng's flagship model is the best product so far among peers; 2)The company is well positioned into high growth potential niche market; 3)Its high input on R&amp;D secures one new model launching per year in the future; 4) Low cashflow risk during company ramp up period due to its good cost control;5) speeding up demand growth of China's EV demand.By using Tesla's peak P/S rate of 16x happened when it net profit turned positive, Xpeng's fair value stands at US$71 for the next 12 months.

Thematic (Sector/Industry)

<p><strong>With more EV brands launching their flagship models, market recognition on EV cars is changing and differentiating from ICE cars in China. More customers are attracted by EV cars themselves due to their unique features, including L3 autonomous driving and smart upgradable control system. This is going to be a long-lasting driver of demand of EV cars in China, more impactful longer-term than shorter term policies like number plate restrictions </strong></p><p><strong>Shanghai's tightened non-local plate vehicle restriction is speeding up EV demand locally and might contribute 1.7mn new EV car sales. If other top tier cities with restrictions on ICE vehicle plates follow, a national wide EV sales booming.</strong></p><p><strong>The circular recently issued by State Council indicates China's annual EV PV sales volume might grow with a CAGR of 37% in the next 5 years from 1mn cars to 5mn cars. Government's circular would create a more friendly business environment for EV makers.</strong></p><p><strong>We prefer Xpeng (XPEV.US), followed by NIO (NIO.US). Current share prices might have priced in strong sales in 2021E, after recent rally. We suggest buy on dips.</strong></p>

With more EV brands launching their flagship models, market recognition on EV cars is changing and differentiating from ICE cars in China. More customers are attracted by EV cars themselves due to their unique features, including L3 autonomous driving and smart upgradable control system. This is going to be a long-lasting driver of demand of EV cars in China, more impactful longer-term than shorter term policies like number plate restrictions Shanghai's tightened non-local plate vehicle restriction is speeding up EV demand locally and might contribute 1.7mn new EV car sales. If other top tier cities with restrictions on ICE vehicle plates follow, a national wide EV sales booming.The circular recently issued by State Council indicates China's annual EV PV sales volume might grow with a CAGR of 37% in the next 5 years from 1mn cars to 5mn cars. Government's circular would create a more friendly business environment for EV makers.We prefer Xpeng (XPEV.US), followed by NIO (NIO.US). Current share prices might have priced in strong sales in 2021E, after recent rally. We suggest buy on dips.

<p><strong>EV demand is booming with Shanghai's new restriction rules on non-Shanghai number plate cars. It is estimated there's 1.7mn cars in use in Shanghai use non-Shanghai plates, vs. China's EV PV car sales volume was 1.06mn in 2019. </strong></p><p><strong>We believe Tesla (TSLA.US) and Xiaopeng (XPEV.US) would benefit more than other brands.</strong></p><p><strong>Overall car demand in China has come in better than expected in first four weeks of October. CPCA data says China's PV retail sales increased by 17% in the first 25 days of October.</strong></p><p><strong>Reiterate BUY on Geely (0175.HK). </strong></p>

EV demand is booming with Shanghai's new restriction rules on non-Shanghai number plate cars. It is estimated there's 1.7mn cars in use in Shanghai use non-Shanghai plates, vs. China's EV PV car sales volume was 1.06mn in 2019. We believe Tesla (TSLA.US) and Xiaopeng (XPEV.US) would benefit more than other brands.Overall car demand in China has come in better than expected in first four weeks of October. CPCA data says China's PV retail sales increased by 17% in the first 25 days of October.Reiterate BUY on Geely (0175.HK). 

China Auto: Oct Better than Expected, EV Demand Booming

<div>
<p><a href="https://www.smartkarma.com/entities/lufax-holdings" target="_blank" data-smartkarma-citation="entities:29690:1" rel="noopener">Lufax Holdings (LU US)</a> (Lufax) raised around US$2.4bn via its US listing. The company is backed by <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a> (Ping An).</p>
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<p>Lufax is a technology-empowered personal financial services platform in China. The company aims to address the demand for personal lending among small business owners, as well as salaried workers in China. It also provides wealth management solutions to China’s middle class and affluent population.</p>
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<div>
<p>I covered the various aspects of the deal in my earlier notes:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/lufax-pre-ipo-the-positives-able-to-grow-despite-the-headwinds" target="_blank" rel="noopener">Lufax Pre-IPO - The Positives - Able to Grow Despite the Headwinds</a></li>
<li><a href="https://www.smartkarma.com/insights/lufax-pre-ipo-the-negatives-remains-in-flux" target="_blank" rel="noopener">Lufax Pre-IPO - The Negatives - Remains in Flux</a></li>
<li><a href="https://www.smartkarma.com/insights/lufax-pre-ipo-peer-review-bigger-than-ant-s-credittech-in-revenue" target="_blank" rel="noopener">Lufax Pre-IPO - Peer Review - Bigger than Ant’s CreditTech, in Revenue</a></li>
</ul>
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<ul>
<li><a href="https://www.smartkarma.com/insights/lufax-ipo-stuck-with-the-earlier-fundraising-valuation" target="_blank" rel="noopener">Lufax IPO - Stuck with the Earlier Fundraising Valuation</a></li>
</ul>
<div>
<p>In this insight, talk about deal dynamics and provide a table with implied valuation at different ADS levels.</p>
</div>


Lufax Holdings (LU US) (Lufax) raised around US$2.4bn via its US listing. The company is backed by Ping An Insurance (H) (2318 HK) (Ping An).


Lufax is a technology-empowered personal financial services platform in China. The company aims to address the demand for personal lending among small business owners, as well as salaried workers in China. It also provides wealth management solutions to China’s middle class and affluent population.


I covered the various aspects of the deal in my earlier notes:



Lufax Pre-IPO - The Positives - Able to Grow Despite the Headwinds
Lufax Pre-IPO - The Negatives - Remains in Flux
Lufax Pre-IPO - Peer Review - Bigger than Ant’s CreditTech, in Revenue



Lufax IPO - Stuck with the Earlier Fundraising Valuation


In this insight, talk about deal dynamics and provide a table with implied valuation at different ADS levels.


Lufax IPO Trading - Possible FTSE Inclusion Might Help in the Short-Term

China

XPeng Inc. designs, produces, and distributes electric vehicles. The Company designs, develops, manufactures and markets smart smart electric vehicles, as well as finance, parts, and maintenance services. XPeng serves customers in China.

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XPeng (XPEV US)

Yatsen IPO Trading - A Little More Pricey Now

Yatsen Holding raised around US$617m in its US IPO, by pricing its IPO at the top-end of its range. The company is backed by Hillhouse, Tencent and...

Sumeet Singh

Xpeng (XPEV.US): New Star Rising

By using Tesla's peak P/S rate of 16x happened when it net profit turned positive, Xpeng's fair value stands at US$71 for the next 12 months. Xpeng...

Victoria Li

China EV: New Era, Smart Era!

With more EV brands launching their flagship models, market recognition on EV cars is changing and differentiating from ICE cars in China....

Victoria Li

China Auto: Oct Better than Expected, EV Demand Booming

EV demand is booming with Shanghai's new restriction rules. It is estimated there's 1.7mn cars in use in Shanghai use non-Shanghai plates, vs....

Victoria Li

Lufax IPO Trading - Possible FTSE Inclusion Might Help in the Short-Term

Lufax Holdings (LU US) raised around US$2.4bn via its US listing. The company is backed by Ping An (2318 HK). It might go into the FTSE on fast...

Sumeet Singh

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