In this briefing:
- Sun Car Insurance Agency (盛世大联) IPO: Over Valued Vs P&C Companies
- China Tower. How Far Will It Rally?
- The China A-Share Revolution
- China Blood Products: Deals Highlight Values
- CanSino Biologics (康希诺) IPO: Valuation Attractive, Lilly Asia Doubling Up (Part 4)
1. Sun Car Insurance Agency (盛世大联) IPO: Over Valued Vs P&C Companies
Sun Car Insurance Agency is a leading automobile insurance agency and B2B2C automobile after-sales service provider in China. The company is listed in the NEEQ board since 2014 and is raising up to USD 167 million to list in Hong Kong. In this insight we cover:
- The company’s two major business lines, the automobile insurance agency and automobile butler services
- The industry backdrop
- The company’s shareholder
- Our thought on valuation
2. China Tower. How Far Will It Rally?
China Tower (788 HK) has rallied strongly in recent months and the question raised repeatedly in recent client meetings was “how much further is China Tower likely to rally?”. Chris Hoare sees China Tower’s position as unusual as the price moves are not driven by earnings upgrades or changed 5G expectations. Rather is is a sustained move post the IPO when the information in the market was incomplete and expectations were much lower. We were negative at the time of the IPO but changed our views as more information became available. We remain positive on the scope for revaluation in China Tower given its rapid revenue growth and low valuations vs EM peers. While the recent results were somewhat disappointing, we see good upside as the market factors is lower capex and higher returns.
3. The China A-Share Revolution
Copley Fund Research analyse the holdings of long-only Global Emerging Market equity funds. All of the Funds in this analysis are actively managed and the majority benchmark the MSCI Emerging Markets Index. The current fund sample spans 180 funds with a combined AUM of $350bn.
In this report, we analyse China A-Share holdings. We gather the latest published filings for all funds and aggregate together as of 02/28/2019. We show the most recent snapshot in positioning, time series data going back to 2011 and recent allocation shifts by the managers in our analysis.
Relative benchmark positioning is measured against the I-Shares MSCI Emerging Markets ETF (EEM) – proportionally adjusted to remove any cash holdings. We will refer to this as ‘the benchmark’ throughout the analysis.
4. China Blood Products: Deals Highlight Values
Grifols SA (GRF SM) and Shanghai RAAS Blood Products Co Ltd (002252.SZ) recently announced an asset exchange that effectively combines the companies’ blood products operations in China. This transaction marks the third investment (two are cross-border) into the industry in the last two years. Despite some challenges arising from recent healthcare reforms, the industry has favorable supply/demand dynamics and high barriers to entry. US-listed China Biologic Products (CBPO US) trades at a significant discount to the implied private market values, but requires patience as management adjusts to the new operating environment.
5. CanSino Biologics (康希诺) IPO: Valuation Attractive, Lilly Asia Doubling Up (Part 4)
CanSino Biologics started its book building today to raise up to USD 160 million to list in Hong Kong. In our previous insights (links provided below), we provided a detailed analysis of the company’s core drug candidates, its shareholders and our thoughts on valuation. In this insight, we will cover the following topics:
- Recap of our valuation
- Highlight of cornerstone investors
- Our thoughts on the deal
Our coverage on Cansino IPO
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