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

<p>Hong Kong SFC reported aggregate short position as of Oct 29. The aggregate short value for equities decreased by $10,647m (-14.9%) WoW and decreased by $4,955m (-7.5%) over the preceding four weeks. We note that the weekly short covers were the biggest YTD. <br><br>Most shorted stocks by aggregate short value of positions are Ping An Insurance (Group) Company Of China, Ltd./2318 HK($2,707m, -27.4% WoW), Tencent Holdings Limited/700 HK($1,644m, -32.5% WoW), Meituan/3690 HK($1,552m, -30.5% WoW), Byd Company Limited/1211 HK($1,448m, -11.2% WoW), Baba-Sw/9988 HK($1,366m, -11.9% WoW).</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/240/070/original/Hong_Kong_Market_Short_Position_Value_%28line%29_and_1W_Changes_%28bar%29_%28%24m%292021-11-06+10_03_41.png?1636256051" class="editor-image img-responsive" data-smartkarma-image-id="240070"></figure></section>

Hong Kong SFC reported aggregate short position as of Oct 29. The aggregate short value for equities decreased by $10,647m (-14.9%) WoW and decreased by $4,955m (-7.5%) over the preceding four weeks. We note that the weekly short covers were the biggest YTD.   Most shorted stocks by aggregate short value of positions are Ping An Insurance (Group) Company Of China, Ltd./2318 HK($2,707m, -27.4% WoW), Tencent Holdings Limited/700 HK($1,644m, -32.5% WoW), Meituan/3690 HK($1,552m, -30.5% WoW), Byd Company Limited/1211 HK($1,448m, -11.2% WoW), Baba-Sw/9988 HK($1,366m, -11.9% WoW).

HK Short Interest: Biggest Weekly Short Covers YTD

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

Jardine Matheson Holdings / Equity Bottom-Up

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<p>On the 6th September, <a href="https://www.smartkarma.com/entities/hongkong-land-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15465:1" rel="noopener">Hongkong Land (HKL SP)</a> <a href="https://links.sgx.com/FileOpen/HKLH0906.ashx?App=Announcement&amp;FileID=682657" target="_blank" rel="noopener">announced</a> a US$500mn share buyback program, which will run until 31st December 2022. Based on the average daily volume over the last year of US$9-10mn, this buyback is roughly equivalent to ~15% of daily volume through to 2022 year-end. Pretty punchy.</p>
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<p>In <em><a href="https://skr.ma/aFS5q" target="_blank" rel="noopener">Hongkong Land's (HKL SP) Big Buyback</a></em>, I said the Jardine's group evidently believes it makes good business sense to buy back its own shares in place of deploying capital into HKL's investment and development property portfolio.</p>
<p>Now it's <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a>'s turn to buy back its own shares. </p>
<p>Yesterday the conglomerate <a href="https://links.sgx.com/FileOpen/JMH.ashx?App=Announcement&amp;FileID=685150" target="_blank" rel="noopener">announced</a> a US$250mn buyback which will run through to 30 June next year.</p>
<p>As with HKL, the holding of treasury shares is not permitted in JMH's constitution, therefore any shares repurchased will be cancelled.</p>
<p>I see JMH's discount to NAV at ~30%, around its lowest level since taking <a href="https://www.smartkarma.com/entities/jardine-strategic-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15081:1" rel="noopener">Jardine Strategic Holdings (JS SP)</a> private.</p>
<p>We now have some indication as to what the Keswick family considers a cheap entry-level. </p>
<p>More below the fold.</p>
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On the 6th September, Hongkong Land (HKL SP) announced a US$500mn share buyback program, which will run until 31st December 2022. Based on the average daily volume over the last year of US$9-10mn, this buyback is roughly equivalent to ~15% of daily volume through to 2022 year-end. Pretty punchy.


In Hongkong Land's (HKL SP) Big Buyback, I said the Jardine's group evidently believes it makes good business sense to buy back its own shares in place of deploying capital into HKL's investment and development property portfolio.
Now it's Jardine Matheson Holdings (JM SP)'s turn to buy back its own shares. 
Yesterday the conglomerate announced a US$250mn buyback which will run through to 30 June next year.
As with HKL, the holding of treasury shares is not permitted in JMH's constitution, therefore any shares repurchased will be cancelled.
I see JMH's discount to NAV at ~30%, around its lowest level since taking Jardine Strategic Holdings (JS SP) private.
We now have some indication as to what the Keswick family considers a cheap entry-level. 
More below the fold.






Jardine Matheson's (JM SP) Turn To Buy Back Shares

Event-Driven

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<p><em><strong>This week in StubWorld ...</strong></em></p>
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<p><a href="https://www.smartkarma.com/entities/jardine-cycle-carriage-ltd" target="_blank" data-smartkarma-citation="entities:347:1" rel="noopener">Jardine Cycle &amp; Carriage (JCNC SP)</a>, relative to <a href="https://www.smartkarma.com/entities/astra-international-tbk-pt" target="_blank" data-smartkarma-citation="entities:46:1" rel="noopener">Astra International (ASII IJ)</a>, is around record-lows outside the Covid-affect low last year. This is occurring amid recent corporate developments within the Jardine stable of companies.</p>
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<p>Preceding my comments on JCNC are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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This week in StubWorld ...



Jardine Cycle &amp; Carriage (JCNC SP), relative to Astra International (ASII IJ), is around record-lows outside the Covid-affect low last year. This is occurring amid recent corporate developments within the Jardine stable of companies.



Preceding my comments on JCNC are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


<p>In my prior insight <em><a href="https://skr.ma/h4f6C" target="_blank" rel="noopener">Jardine Matheson: Lessons in Dissent</a></em> on the 29 April, I thought <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a> was unattractive at a 13% discount to NAV, plus near-term news may focus on <a href="https://www.smartkarma.com/entities/jardine-strategic-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15081:1" rel="noopener">Jardine Strategic Holdings (JS SP)</a>'s dissension rights, and Matheson's potential exposure thereon.</p>
<p>Matheson is down ~15% since that note (while the Straits Times Index is down ~4%). </p>
<p>Since that insight, Matheson released its <a href="https://www.jardines.com/assets/files/NewsAndEvents/corporate-press-releases/jardine-matheson/int21.pdf" target="_blank" rel="noopener">interim results</a>, which not only provided clarity on the net debt at the parent level, which was largely guesswork amid the Matheson/<a href="https://www.smartkarma.com/entities/jardine-strategic-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15081:1" rel="noopener">Jardine Strategic Holdings (JS SP)</a> circularity; but also unlisted stub ops - especially Jardine Motors - performed exceptionally in the 1H21.</p>
<p>At a ~23% discount to NAV on adjusted historical NAVs, value <em>is</em> emerging. Yet Matheson is not an obvious buy here.</p>
<p>More below the fold. </p>

In my prior insight Jardine Matheson: Lessons in Dissent on the 29 April, I thought Jardine Matheson Holdings (JM SP) was unattractive at a 13% discount to NAV, plus near-term news may focus on Jardine Strategic Holdings (JS SP)'s dissension rights, and Matheson's potential exposure thereon.
Matheson is down ~15% since that note (while the Straits Times Index is down ~4%). 
Since that insight, Matheson released its interim results, which not only provided clarity on the net debt at the parent level, which was largely guesswork amid the Matheson/Jardine Strategic Holdings (JS SP) circularity; but also unlisted stub ops - especially Jardine Motors - performed exceptionally in the 1H21.
At a ~23% discount to NAV on adjusted historical NAVs, value is emerging. Yet Matheson is not an obvious buy here.
More below the fold. 

Jardine Matheson: Value Gradually Emerging Four Months On

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<p>Nexteer's share price was plagued by the auto chip shortage that causes its share price to fall from HKD 14to 7, a fall of 50% in the span of 3 months, presenting an excellent opportunity to add or initiate a position in the portfolio due to 1) the ending of the chip shortage is near thus auto-related stocks will benefit from the positive sentiment thus multiples will be higher and 2) the management has confirmed that 2H 2021 will have much bigger revenue <strong>(around 9x)</strong> although the reality could be different, nevertheless, it presents growth potential for <a href="https://www.smartkarma.com/entities/nexteer-automotive-group-ltd" target="_blank" data-smartkarma-citation="entities:15483:1" rel="noopener">Nexteer Automotive (1316 HK)</a> .</p>

Nexteer's share price was plagued by the auto chip shortage that causes its share price to fall from HKD 14to 7, a fall of 50% in the span of 3 months, presenting an excellent opportunity to add or initiate a position in the portfolio due to 1) the ending of the chip shortage is near thus auto-related stocks will benefit from the positive sentiment thus multiples will be higher and 2) the management has confirmed that 2H 2021 will have much bigger revenue (around 9x) although the reality could be different, nevertheless, it presents growth potential for Nexteer Automotive (1316 HK) .

Nexteer (1316): Positive Sentiment and Exciting 2H 2021

China

Zhongsheng Group Holdings Ltd. retails automobiles.  The Company imports and retails primarily luxury and mid- to high-end automobile brands.

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Zhongsheng Group (881 HK)

HK Short Interest: Biggest Weekly Short Covers YTD

We high weekly short covers for Zhongsheng (881 HK), Ping An (2318 HK), Tencent (700 HK), and Meituan (3690 HK) based on the latest HK SFC short...

Ke Yan, CFA, FRM

Jardine Matheson's (JM SP) Turn To Buy Back Shares

The Keswick's believe at current levels, there is better value to be had buying its own shares rather than investing elsewhere. As with HKL, JMH is...

David Blennerhassett

StubWorld: JCNC Is A Set-Up Here

Jardines appear to be increasingly more proactive on the corporate front of late. Not being a UK listing, JCNC is unlikely to be tabled a derisory...

David Blennerhassett

Jardine Matheson: Value Gradually Emerging Four Months On

Collapsing the circularity and removing its complexity should drive interest in Matheson. And holdings like HKL are cheap at 0.3x P/B. The pushback...

David Blennerhassett

Nexteer (1316): Positive Sentiment and Exciting 2H 2021

Nexteer's share price was plagued by the auto chip shortage as its share price fell 50% in the span of 3 months, presenting an excellent...

Henry Soediarko

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