In this briefing:
- Baking in a Trade Deal and China Fade the Fact Levels
- HK Connect Discovery Weekly: China Tower, Geely, COFCO Meat (2019-02-15)
- Last Week in GER Research: API/Sigma, M1, Eclipx/Mcmillan and Hansoh IPO
- Trade Talks/Tech Trouble/ Rural Revival/Data Digest /Bad Bonds
- ECM Weekly (16 February 2019) – ByteDance, Embassy Office REIT, AB InBev Asia, CStone, Dexin
1. Baking in a Trade Deal and China Fade the Fact Levels
Shanghai composite breakout above 2,650 is a bullish catalyst for HK and pushing into secondary resistance. Typically, a re test of the breakout zone is often seen.
Shanghai A50 futures face a formidable barrier that has capped rally attempts for the last 7 months.
H share and the HSI are both exhibiting signs of distribution into strength. Choppy rising patterns warn that the rise is getting extended with breadth starting to struggle.
Tencent is exhibiting upside momentum deterioration amid divergence.
We question just how much trade deal euphoria is now priced into the HK market (and for that matter global cycle) and must take into account odds of a deadline extension deflating the current rally as the reality sets in that major trade issues remain unsettled.
Any trade deal would give us an exhaustive spike higher while an extension would knock us back to re cycle supports.
2. HK Connect Discovery Weekly: China Tower, Geely, COFCO Meat (2019-02-15)
In our Discover HK Connect series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as analyzed by our proprietary data engine. We will discuss the stocks that experienced the most inflow and outflow by mainland investors in the past seven days.
We split the stocks eligible for the Hong Kong Connect trade into three groups: component stocks in the HSCEI index, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.
In this week’s HK Connect Discovery, we highlight the continuous inflow to China Tower prior to lock-up expiry, positive news development for automobile stocks, and the pork cycle beneficiary.
3. Last Week in GER Research: API/Sigma, M1, Eclipx/Mcmillan and Hansoh IPO
In this version of the GER weekly research wrap, we assess the bump prospects in the Australian Pharma Industries (API AU) / Sigma Healthcare (SIG AU) potential merger. Arun updates on M1 Ltd (M1 SP) which could be delisted following an unconditional offer. In addition, we dig into the trading update for Eclipx (ECX AU) and assess the risks that Mcmillan Shakespeare (MMS AU) could walk away from the deal. Finally, we initiate on the IPO of Hansoh Pharmaceutical (HANSOH HK). A calendar of upcoming catalysts is also attached.
More details can be found below.
Best of luck for the new week – Rickin, Venkat and Arun
4. Trade Talks/Tech Trouble/ Rural Revival/Data Digest /Bad Bonds
China News That Matters
- Will tariff hike be delayed to May?
- Like rugby without the All Blacks!
- Funding the farmers – with better financial services
- Good signs, bad signs
- High time for a check-up
In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.
5. ECM Weekly (16 February 2019) – ByteDance, Embassy Office REIT, AB InBev Asia, CStone, Dexin
Aequitas Research puts out a weekly update on the deals that have been covered by Smartkarma Insight Providers recently, along with updates for upcoming IPOs.
It has been a fairly quiet week in the ECM space.
We are hearing that Douyu (game streaming like HUYA Inc (HUYA US), Tiger Brokers (backed by Jim Rogers), Genshuixue (education) have either filed confidentially or seeking to list in the US.
In Hong Kong, Bank of Guizhou is said to be planning for a US$1bn IPO and we heard that Zhejiang New Century Hotel Management is pre-marketing for its US$200m IPO. The PHIP has already been filed on the Hong Kong Exchange.
For upcoming IPOs, Dexin China Holdings (2019 HK) opened its books on Thursday, seeking to raise up to US$220m. We covered the IPO in Dexin China (德信中国) IPO Review – Key Issues Remain but 9M Results Showed Strong Growth.
In India, Embassy Office Parks REIT (EOP IN) pushed back its IPO to March – April. Sumeet Singh has already written a pre-IPO note, Embassy Office Parks REIT – Good Assets but Projections Might Be a Tad Too Bullish.
Last but not least, in Korea, Douglas Kim has already written an note on the Homeplus REIT (HREIT KS)‘s US$1.5bn IPO in Homeplus REIT IPO – The Largest Ever REIT IPO in Korea.
Other pre-IPO notes on upcoming mega IPOs that Aequitas Research have covered include ByteDance (字节跳动) IPO: How Jinri Toutiao Paves The Way for a Bigger Empire (Part 1), ByteDance (字节跳动) IPO: Tiktok the No.1 Short Video App for a Good Reason (Part 2), and Ab InBev Asia Pre-IPO – A Brief History of the Asia Pacific Operations – Eeking Out Growth in China.
Accuracy Rate:
Our overall accuracy rate is 72.1% for IPOs and 63.8% for Placements
(Performance measurement criteria is explained at the end of the note)
New IPO filings
- Reliance General Insurance (re-filed, India)
Below is a snippet of our IPO tool showing upcoming events for the next week. The IPO tool is designed to provide readers with timely information on all IPO related events (Book open/closing, listing, initiation, lock-up expiry, etc) for all the deals that we have worked on. You can access the tool here or through the tools menu.
News on Upcoming IPOs
- PineBridge-backed Uniparts gets SEBI nod to float IPO
- Cal-Comp Philippines eyes IPO by third quarter
- JERA new president says IPO is an option
- Singapore’s Zalora explores listing to fuel expansion
- S. Korea’s Homeplus files for up to $1.5 bln REIT IPO
- Korean bio unicorn in the making, Voronoi, to join the Kosdaq this year
Smartkarma Community’s this week Analysis on Upcoming IPO
- Homeplus REIT IPO – The Largest Ever REIT IPO in Korea
- Ecopro BM IPO: Valuation Analysis
- Embassy Office Parks REIT – Good Assets but Projections Might Be a Tad Too Bullish
- CStone Pharma (基石药业) IPO: Thoughts on Valuation (Part 2)
- Hansoh Pharma IPO Preview: A Decent Story Tarnished by a Huge Pre-IPO Dividend
- Ab InBev Asia Pre-IPO – A Brief History of the Asia Pacific Operations – Eeking Out Growth in China
- ByteDance (字节跳动) IPO: How Jinri Toutiao Paves The Way for a Bigger Empire (Part 1)
- ByteDance (字节跳动) IPO: Tiktok the No.1 Short Video App for a Good Reason (Part 2)
- Dreamtech IPO: Valuation Analysis
- Dexin China (德信中国) IPO Review – Key Issues Remain but 9M Results Showed Strong Growth
List of pre-IPO Coverage on Smartkarma
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
