Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

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<p><a href="https://www.smartkarma.com/entities/yuexiu-services-group-limited" target="_blank" data-smartkarma-citation="entities:33482:1" rel="noopener">Yuexiu Services Group (6626 HK)</a> ("YSG") is the latest property management service company to list in Hong Kong. The Offer Price range is HK$4.88-HK$6.52/share. The Offer Price will be announced on the 25 June.</p>
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<p>YSG is the spin-off of <a href="https://www.smartkarma.com/entities/yuexiu-property-co-ltd" target="_blank" data-smartkarma-citation="entities:18097:1" rel="noopener">Yuexiu Property (123 HK)</a>, which will own 68.9% in YSG after the IPO, down from 91.9% currently, before over-allotment.</p>
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<p>YSG will raise HK$2.1bn (US$0.27bn), before over-allotment, at the mid-price of the IPO range.  </p>
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<p>On an FY20 PER metric, YSG is pitched at a small premium to a basket of peers, and generally exceeds similar-sized property management companies.</p>
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<p>More below the fold. </p>
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Yuexiu Services Group (6626 HK) ("YSG") is the latest property management service company to list in Hong Kong. The Offer Price range is HK$4.88-HK$6.52/share. The Offer Price will be announced on the 25 June.


YSG is the spin-off of Yuexiu Property (123 HK), which will own 68.9% in YSG after the IPO, down from 91.9% currently, before over-allotment.


YSG will raise HK$2.1bn (US$0.27bn), before over-allotment, at the mid-price of the IPO range.  


On an FY20 PER metric, YSG is pitched at a small premium to a basket of peers, and generally exceeds similar-sized property management companies.


More below the fold. 


Yuexiu Services (6626 HK): This Looks Fully Priced

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Huijing Holdings Co Ltd / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/huijing-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:28683:1" rel="noopener">Huijing Holdings Co Ltd (9968 HK)</a> is a Chinese residential and commercial real estate developer with a focus on Guangdong Province. It has launched a Hong Kong IPO to raise net proceeds of HK$1,564 million ($200 million) at the mid-point of the price range. </p><div class="content-highlight"><p>As investors have a plethora of options to gain exposure to the China property sector, IPO hopefuls need to bring something new to the table to grab mindshare. Overall, we believe that Huijing’s fundamentals fail to excite and are average at best compared to peers.</p></div>

Huijing Holdings Co Ltd (9968 HK) is a Chinese residential and commercial real estate developer with a focus on Guangdong Province. It has launched a Hong Kong IPO to raise net proceeds of HK$1,564 million ($200 million) at the mid-point of the price range. As investors have a plethora of options to gain exposure to the China property sector, IPO hopefuls need to bring something new to the table to grab mindshare. Overall, we believe that Huijing’s fundamentals fail to excite and are average at best compared to peers.

APAC IPOs & Placements

Zhen Zhou, Toh

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Redsun Properties Group Ltd / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/27245" target="_blank" data-smartkarma-citation="entities:27245:1">Redsun Properties Group Ltd (1996 HK)</a> (RSP) is looking to raise up to US$370m in its upcoming IPO. Proceeds will be mainly used to fund the construction costs of properties under development, repay borrowings, and general working capital.</p><p>Over the years, RSP has been making numerous transactions with these related parties. Just to Redsun Materials City alone, it guaranteed a loan amount of RMB3.5bn and has even pledged the group's prepaid land lease payment, properties under development, and even completed properties.</p><p>In this insight, we will look at the company's overall financial performance, its properties under development, related party transactions and compare its valuations with other Hong Kong-listed China property developers. Last, but not least, we will run the deal through our ECM framework.</p>

Redsun Properties Group Ltd (1996 HK) (RSP) is looking to raise up to US$370m in its upcoming IPO. Proceeds will be mainly used to fund the construction costs of properties under development, repay borrowings, and general working capital.Over the years, RSP has been making numerous transactions with these related parties. Just to Redsun Materials City alone, it guaranteed a loan amount of RMB3.5bn and has even pledged the group's prepaid land lease payment, properties under development, and even completed properties.In this insight, we will look at the company's overall financial performance, its properties under development, related party transactions and compare its valuations with other Hong Kong-listed China property developers. Last, but not least, we will run the deal through our ECM framework.

Redsun Properties IPO Review - Deserves a Discount to Peers for Its Related Party Transactions

Zhenro Properties Group  / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/26178" target="_blank" data-smartkarma-citation="entities:26178:1">Zhenro Properties Group Ltd (6158 HK)</a> is looking to raise approximately US$500 - 600m in its upcoming IPO. Proceeds raised will be mainly used to fund constructions costs of ongoing development projects and repay bank loan.</p><p> In this insight, we will look at the company's land bank, property under development and unsold property, compare the company to Hong Kong-listed real estate developers. We will also run the deal through our ECM framework.</p>

Zhenro Properties Group Ltd (6158 HK) is looking to raise approximately US$500 - 600m in its upcoming IPO. Proceeds raised will be mainly used to fund constructions costs of ongoing development projects and repay bank loan. In this insight, we will look at the company's land bank, property under development and unsold property, compare the company to Hong Kong-listed real estate developers. We will also run the deal through our ECM framework.

Zhenro Property IPO Review - An Aspiring Small Property Developer

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

<ul><li>Low price-to-sales, earnings on an upcycle trend, and improving asset turnover relative to its sector</li><li>As one of the top 10 state-owned property developers in China ranked by revenue, Yuexiu is focused primarily on the wealthiest area of China, Guangdong, which is enjoying both a surge in contract sales, and a healthy recovery in average contract prices</li><li>New management is working in closer alliance with the parent company enabling greater and faster land acquisition and speedier contract sales, all of which will support longer-term growth</li><li>Attractive at 17CE* 10.8% ROE/PB versus Asian Real Estate at 6.6%</li><li>Risk: Weaker than expected Chinese economy</li></ul><p><em>* Consensus Estimates</em></p>

Low price-to-sales, earnings on an upcycle trend, and improving asset turnover relative to its sectorAs one of the top 10 state-owned property developers in China ranked by revenue, Yuexiu is focused primarily on the wealthiest area of China, Guangdong, which is enjoying both a surge in contract sales, and a healthy recovery in average contract pricesNew management is working in closer alliance with the parent company enabling greater and faster land acquisition and speedier contract sales, all of which will support longer-term growthAttractive at 17CE* 10.8% ROE/PB versus Asian Real Estate at 6.6%Risk: Weaker than expected Chinese economy* Consensus Estimates

Yuexiu (123 HK): SOE Developer Focused on the Wealthy Chinese

China

Yuexiu Property Company Ltd., through its subsidiaries, develops, manages and invests in properties. The Company also invests in a Real Estate Investment Trusts.

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Yuexiu Property (123 HK)

Yuexiu Services (6626 HK): This Looks Fully Priced

There are numerous choices in this space. I don't see a compelling investment thesis to go long YSG, especially against larger, and more liquid...

David Blennerhassett

Huijing Holdings IPO Initiation: Ho-Hum

Huijing Holdings Co Ltd (9968 HK) is a Chinese residential and commercial real estate developer with a focus on Guangdong Province. It has launched...

Arun George

Zhenro Property IPO Review - An Aspiring Small Property Developer

Zhenro Properties Group Ltd (6158 HK) is looking to raise approximately US$500 - 600m in its upcoming IPO. Proceeds raised will be mainly used to...

Zhen Zhou, Toh

Yuexiu (123 HK): SOE Developer Focused on the Wealthy Chinese

Low price-to-sales, earnings on an upcycle trend, and improving asset turnover relative to its sector As one of the top 10 state-owned property...

A. Stotz Investment Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Yuexiu Services (6626 HK): This Looks Fully Priced

There are numerous choices in this space. I don't see a compelling investment thesis to go long YSG, especially against larger, and more liquid...

David Blennerhassett

Huijing Holdings IPO Initiation: Ho-Hum

Huijing Holdings Co Ltd (9968 HK) is a Chinese residential and commercial real estate developer with a focus on Guangdong Province. It has launched...

Arun George

Redsun Properties IPO Review - Deserves a Discount to Peers for Its Related Party Transactions

Redsun Properties Group Ltd (1996 HK) (RSP) is looking to raise up to US$370m in its upcoming IPO. Proceeds will be mainly used to fund the...

Zhen Zhou, Toh

Zhenro Property IPO Review - An Aspiring Small Property Developer

Zhenro Properties Group Ltd (6158 HK) is looking to raise approximately US$500 - 600m in its upcoming IPO. Proceeds raised will be mainly used to...

Zhen Zhou, Toh

Yuexiu (123 HK): SOE Developer Focused on the Wealthy Chinese

Low price-to-sales, earnings on an upcycle trend, and improving asset turnover relative to its sector As one of the top 10 state-owned property...

A. Stotz Investment Research