In this briefing:
- HK Connect Discovery Weekly: Geely, Great Wall Motor and Sands China (2019-02-22)
- Celltrion Healthcare: Well, We Were Warned
- ECM Weekly (23 February 2019) – Futu, CStone, Dexin, New Century, AB InBev, MabPharma
1. HK Connect Discovery Weekly: Geely, Great Wall Motor and Sands China (2019-02-22)
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 strong inflow to automobile stocks and Sands China.
2. Celltrion Healthcare: Well, We Were Warned
Celltrion Healthcare (091990 KS) reported preliminary 2018 results that were dramatically short of expectations as the company cut shipments to reduce distributors’ inventories. Management had announced plans to shift to a direct sales model to get better control over pricing decisions, but the magnitude of Q4’s shortfall (94% decline in revenue) raises questions about the role of “channel stuffing” in boosting prior periods’ results. In addition, we expect some spillover effect on Celltrion Inc (068270 KS)‘s Q4’s results. This Insight discusses the results in brief and contrasts Celltrion Healthcare’s results with those of Samsung Bioepis.
We continue to avoid these stocks.
3. ECM Weekly (23 February 2019) – Futu, CStone, Dexin, New Century, AB InBev, MabPharma
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.
Starting with listings in Hong Kong next week, CStone Pharma (2616 HK) and Dexin China Holdings (2019 HK) will list on the 26th of February. Dexin is said to have priced at the mid-point of its price range while CStone is priced above its mid-point.
We also heard that Haitong Unitrust International Leasing was given the green light by CSRC for its Hong Kong IPO. The company had previously re-filed its draft prospectus in September last year. Shanghai Dongzheng Automotive Finance has also received approval from CSRC for its IPO.
There had also been a small property developer, YinCheng, that had launched its US$100m IPO. Jinxin Fertility had also just filed its draft prospectus with the HKEX.
Back in the US, we are hearing that Futu Holdings Ltd (FHL US) could be starting its bookbuild as early as next week. Sumeet Singh had previously analyzed the company in his insight, Futu Holdings Pre-IPO – Great Metrics but in a Commoditised Industry, and he will be following up with another insight next week.
In Japan, there is an Aruhi Corp (7198 JP) placement in which Carlyle looking to sell their entire stake in the company. Sumeet Singh had covered in Aruhi Placement – Bigger than the IPO but Good Track Record and Price Performance Should Help. The placement would be more attractive if it corrects down over the next few days but the removal of overhang from Carlyle seemed to be very well received by the market and the share price had even traded up 13% on Wednesday this week.
Accuracy Rate:
Our overall accuracy rate is 72.1% for IPOs and 63.7% for Placements
(Performance measurement criteria is explained at the end of the note)
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New IPO filings
- Jinxin Fertility Group (US$600m, Hong Kong)
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.
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News on Upcoming IPOs
- Fund Companies Ask Hong Kong to Relax IPO Investment Rules
- Chinese Tech Giants Seek Further IPO Rule Changes in Hong Kong
- Sembcorp could delay India energy IPO due to market conditions
- PNB Metlife IPO likely next fiscal
Smartkarma Community’s this week Analysis on Upcoming IPO
- New Century Hotel Mgmt IPO Preview: Two-Speed Businesses
- New Century Hotel (浙江開元酒店) Pre-IPO – Improved Profitability Not Driven by Underlying Operations
- Ab InBev Asia Pre-IPO – Quick Note – More like CR Beer Rather than Tsingtao
- MabPharma (迈博医药) IPO: Assembled for a Trade?
- Hyundai Autoever IPO Preview
- Hyundai Autoever IPO Pricing: Likely to Be a Dull Event Given No Growth Story & Glovis Merger
- HLX02: Innovation Could Overtake
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