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 monthly Hong Kong Connect flows with our data engine.</li>
<li>We tabulate the top stocks by inflows, outlfows, and holding by mainland investors.</li>
<li>We highlight inflows into Tencent, Wuxi Biologics, HKEx, Country Garden, and outflows from Meituan, ICBC, China Pacific, COSCO Shipping, Xiaomi.</li>
</ul>


We analyze the monthly Hong Kong Connect flows with our data engine.
We tabulate the top stocks by inflows, outlfows, and holding by mainland investors.
We highlight inflows into Tencent, Wuxi Biologics, HKEx, Country Garden, and outflows from Meituan, ICBC, China Pacific, COSCO Shipping, Xiaomi.


Hong Kong Connect Flows Monthly: $7bn Inflows in November

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>Resilient online sales growth during double 11, where Tik Tok, PDD and JD platforms continued to outperform.</li><li>Based on our channel check and CMBI est., the online GMV growth during 2022’s double 11 was at ~14% YoY, inline with CMBI est. and beat market expectation, similar to online sales growth in Sep 2022 and had picked up vs Oct 2022.</li><li>In terms of platforms, YoY growth for Alibaba (Tmall + Tao Bao)/ JD/ PDD/ TikTok increased by ~flattish/ ~teens/ 27%/ 38%.</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>

Resilient online sales growth during double 11, where Tik Tok, PDD and JD platforms continued to outperform.Based on our channel check and CMBI est., the online GMV growth during 2022’s double 11 was at ~14% YoY, inline with CMBI est. and beat market expectation, similar to online sales growth in Sep 2022 and had picked up vs Oct 2022.In terms of platforms, YoY growth for Alibaba (Tmall + Tao Bao)/ JD/ PDD/ TikTok increased by ~flattish/ ~teens/ 27%/ 38%.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 Sportswear Sector – Sequential improvements during double 11

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of November 11th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight inflows into Tencent, Wuxi Biologics, HKEx, Kuaishou Technology.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of November 11th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight inflows into Tencent, Wuxi Biologics, HKEx, Kuaishou Technology.


Hong Kong Connect Flows (Nov 4th): Tencent, Wuxi Biologics, HKEx, Kuaishou

Equity Bottom-Up

<ul><li>Xtep has become more cautious about 4Q22E and FY23E, due to weaken <span style="font-size: var(--content-font-size);">demand and mounting pressure on its inventory. </span></li><li><span style="font-size: var(--content-font-size);">But we maintain BUY and revise </span><span style="font-size: var(--content-font-size);">down its TP to HK$10.52, implying a 19x FY23E P/E (from SOTP valuation </span><span style="font-size: var(--content-font-size);">method), just because its valuation is not too demanding, at 15x FY23E P/E.</span></li><li><div><div><div><p>3Q22 was roughly inline, but slightly softened in Sep 2022.</p></div></div></div></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>

Xtep has become more cautious about 4Q22E and FY23E, due to weaken demand and mounting pressure on its inventory. But we maintain BUY and revise down its TP to HK$10.52, implying a 19x FY23E P/E (from SOTP valuation method), just because its valuation is not too demanding, at 15x FY23E P/E.3Q22 was roughly inline, but slightly softened in Sep 2022.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.

Xtep (1368 HK) – Guidance softens with mounting inventory risks

<div><ul><li>Xtep roughly maintained its FY22E guidance, which consists of faster sales growth but a slightly higher opex for Xtep kids’ brand building.</li><li>Due to likely turnaround, its industry leading growth and attractive valuation (21x), we maintain <span style="font-size: var(--content-font-size);">BUY and kept our SOTP-based TP at HK$17.04, implying ~27x FY23E P/E.</span></li><li><div><div><div><p><strong>1H22E result roughly inline</strong>. Sales increased by 37% YoY to RMB 5.68bn, 2% above CMBI est., still strong after some trade fair order cuts for its distributors in North East China.</p></div></div></div></li></ul></div><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>

Xtep roughly maintained its FY22E guidance, which consists of faster sales growth but a slightly higher opex for Xtep kids’ brand building.Due to likely turnaround, its industry leading growth and attractive valuation (21x), we maintain BUY and kept our SOTP-based TP at HK$17.04, implying ~27x FY23E P/E.1H22E result roughly inline. Sales increased by 37% YoY to RMB 5.68bn, 2% above CMBI est., still strong after some trade fair order cuts for its distributors in North East China.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.

Xtep (1368 HK) – Inventory Not a Worry and Guidance Maintained

China

Xtep International Holdings Ltd. designs, manufactures, and markets sportwear. The Company produces footwear, apparel, and accessories.

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Xtep International (1368 HK)

Hong Kong Connect Flows Monthly: $7bn Inflows in November

We analyzed the Hong Kong Connect Scheme for November and highlight flows for Tencent, Wuxi Biologics, HKEx, Country Garden, Meituan, ICBC, China...

Ke Yan, CFA, FRM

China Sportswear Sector – Sequential improvements during double 11

Based on our channel check and CMBI est., the online GMV growth during 2022’s double 11 was at ~14% YoY, inline with CMBI est. and beat market...

CMB International

Hong Kong Connect Flows (Nov 4th): Tencent, Wuxi Biologics, HKEx, Kuaishou

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for Tencent, Wuxi Biologics, HKEx, Kuaishou.

Ke Yan, CFA, FRM

Xtep (1368 HK) – Guidance softens with mounting inventory risks

But we maintain BUY and revise down its TP to HK$10.52, implying a 19x FY23E P/E (from SOTP valuation method), just because its valuation is not...

CMB International

Xtep (1368 HK) – Inventory Not a Worry and Guidance Maintained

Xtep roughly maintained its FY22E guidance, which consists of faster sales growth but a slightly higher opex for Xtep kids’ brand building.

CMB International

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