Weekly Equity Capital Markets Newsletter Piper Jaffray Asia Securities Limited May 02, 2011
Global Equity Market Performance
Global Equity Market Update Piper Jaffray Asia Capital Markets Group
U.S. stocks rallied last week on the back of robust corporate J. West Riggs (Head of Asia ECM), [email protected], Tel: 852 3755 - 2333 earnings and prospects of ample liquidity from the Federal Reserve, Derrick Lau (MD ECM), [email protected], Tel: 852 3755 - 2338 driving NASDAQ to a 10-year high and the Dow and S&P to their highest levels since 2008. Stocks advanced as companies such as Michael Cheung (Principal), [email protected], Tel: 852 3755 - 2323 Caterppyillar and Goodyear Tire & Rubber p osted better-than-expected AdLi(Ait)Amanda Lui (Associate), [email protected]@pjc.com, Tel: 852 3755 - 2318 earnings. Further, Federal Reserve’s Chairman Ben Bernanke’s assessment that Fed will probably keep lower interest rates for an Michael Basset (Associate), [email protected], Tel: 852 3755 - 2322 extended period in order to bolster a moderate economic expansion Gaby Zhang (Analyst), [email protected], Tel: 852 3755 - 2321 – drove benchmark indices to post their best monthly performance since December 2010. For the last week, the Dow gained 2.4 percent to close at 12,810.5, while the NASDAQ increased 1.9 Global Market Performance percent to close at 2,873.5 and the S&P500 rose 2.0 percent to close Performance (%) at 1,363.6. Last price 1 day 1 week 1 month 2011YTD European stocks broadly advanced last week and posted their best monthly performance since December 2011; however , volumes Global Indices remained subdued amidst the celebration of the royal wedding in Dow Jones 12,810.5 0.4% 2.4% 3.7% 9.8% the U.K. Stocks advanced on the back of better-than-estimated S&P500 1,363.6 0.2% 2.0% 2.7% 7.2% earnings results from companies such as Ericsson and Volkswagen. 2,873.5 National Benchmark indices rose in all of Europe’s 18 western NASDAQ 0.04% 1.9% 3.5% 6.8% markets, except Austria and Denmark. For the last week France’s FTSE 6,069.9 0.03% 0.9% 2.0% 2.9% CAC 40 gained 2.1 percent, while Germany’s DAX rallied 3 percent. Asian Indices The FTSE inched up 0.9 percent last week to close at 6,069.9. Hang Seng 23,720.8 (0.4%) (1.7%) 1.1% 1.2% Asian stocks for the most part ended in the red last week. Stocks HSCEI 13,208.7 (0.8%) (3.3%) 0.4% 2.5% declined on the back of slower growth in the U.S. economy and South Korean industrial production, which signalled that corporate Shanghai A 3,049.2 0.8% (%)(3.3%) (%)(1.5%) 3.7% earnings may falter. However, strong earnings reports from Nikkei 225 9,849.7 1.6% 1.7% 1.5% (3.7%) domestic corporates such as Komatsu and the U.S. Federal Reserve’s pledge to keep the short-term rates near zero both helped Nikkei to gain 1.7 percent last week to close at 9,849.7, its highest Global Indices Performance (Rebased to 100) level since March 2011. 200 HK Weekly Market Update 180 Hong Kong stocks declined last week, paring their monthly gains, dragged down by China’ s stock market. Stocks declined as investors 160 remained risk averse on the fear that China may levy further policy- tightening measures. The Hang Seng Index declined 1.7 percent last 140 week to close at 23,720.8. 120 Among Index constituents, 15 gained and 28 declined while two remained unchanged. Among gainers, China Coal Energy increased 100 3.8 percent, China Resources Power was up 2.9 percent and Li & 80 Fung Group gained 1.7 percent. Among losers, China Resources Land slid 6.8 percent, China Overseas Land & Investment fell by 5.0 60 percent and China Life Insurance declined 4.8 percent. 1-Jan-09 19-Jun-09 6-Dec-09 24-May-10 10-Nov-10 29-Apr-11
HSBC’s China Purchasing Managers' Index, designed to preview S&P 500 NASDAQ FTSE Hang Seng Shanghai A conditions across a broad range of industries, was 51.8 in April 2011—signalling a steady growth across the manufacturing sector in the region. Furthermore, Hong Kong reported a provisional US$9.7 HSI Sectoral Weekly Performance billion of fiscal surplus for FY 2011. 1.0% 0.4% HSI Weekly Performance 0.5% 0.0% 15 25,000 24,007.4 (0.5%) 23,892.8 23,805.6 23,720.8 24,000 (1.0%) 10 (1.5%) 10.0 23,000 8.3 9.3 9.0 (2.0%) (1.7%) 5 22,000 (2.0%) (2.5%) (2.2%) 26-Apr-11 27-Apr-11 28-Apr-11 29-Apr-11 Turnover (in US$ billion) Close Utilities Finance Comm/Indu Property Source: DataStream, Reuters, Hang Seng Index Website
1 Weekly Equity Capital Markets Newsletter Piper Jaffray Asia Securities Limited May 02, 2011
Piper Jaff r ay Chin a In dex
PJ China Index Performance Since January 2009 Sector Breakdown and Performance
Current Level: 2,569.49 Financial/Real Estate 6% Telecom, Media & 3,000 Health Care Technology 12% 27% 2,500
Clean Tech/Energy 14% 2,000
Business Services and 1,500 Industrial Growth Consum er 25% 16% 1,000 3.0%
1.8% 2.0% 500 0.7% 1-Jan-09 19-Jun-09 6-Dec-09 24-May-10 10-Nov-10 29-Apr-11 1.0%
0.0% PJ China Index (1.0%) (0.4%) (0.7%) Week-to-date change13.16 -2.69% (1.2%) (%)(2.0%) 2011 Year-to-date change (89.67) -3.37% (3.0%) LTM change 417.14 19.38% (4.0%) (3.7%) 6-month change 12.87 0.50% Telecom, Media & Technology Clean Tech/Energy 2011 Year-to-date high (pts) 2,794.73 12-Jan-11 Financial/Real Estate Health Care Consumer Business Services and Industrial Growth 2011 Year-to-date low (pts) 2,417.49 18-Mar-11
Top Five Weekly Gainers and Losers
50.0% 39.6% 40.0% 28.6% 30.0% 19.2% 16.6% 20.0% 14.6% 10.0% 0.0% (10.0%) (20.0%) (30.0%) (20.0%) (22.6%) (25.3%) (40.0%) (30.1%) (50.0%) (48.6%) (60.0%)
KU6 Media Sky-mobi Feihe The9 China-Biotics SkyPeople Fruit China Shengda Gulf Resources Sino Clean RINO ItInternati ona l JiJuice PkiPackaging Energy ItInternati ona l Group Note: Piper Jaffray China Index is a modified market capitalization weighted index comprised of U.S. exchange listed securities of companies with significant exposure to the Chinese economy and market capitalization between US$100m and US$2b. The index was developed with a base level of 1,000 as of January 1, 09 (Please refer to the last page of this report for constituents) Source: Bloomberg
2 Weekly Equity Capital Markets Newsletter Piper Jaffray Asia Securities Limited May 02, 2011 Macro Indicators and Global Currencies Performance – Since January 2009
Gold (UBS-IB) Copper (NYC) CBOE Volatility Index (VIX)
US$/oz US$/lb Current Level: US$1,563.60 per ounce Current Level: US$4.223 per pound Current Level: 14.75
1,600 5 60
1,500 50 1,400 4
1,300 40
1,200 3 30 1,100
1,000 2 20 900
800 1 10 1-Jan-09 19-Jun-09 6-Dec-09 24-May-10 10-Nov-10 29-Apr-11 2-Jan-09 20-Jun-09 6-Dec-09 25-May-10 10-Nov-10 29-Apr-11 2-Jan-09 20-Jun-09 6-Dec-09 25-May-10 10-Nov-10 29-Apr-11
Spot WTI Crude Stowe Global Coal Index Baltic Dry Index
US$/barrel Current Level: US$113.93 per barrel Current Level: 6,939.10 Current Level: 1,269
120 8,000 5,000
110 70007,000 4,000 100 6,000 90 3,000 80 5,000
70 4,000 2,000 60 3,000 50 1,000 2,000 40
30 1,000 0 22Jan09-Jan-09 20- Jun-09 66Dec09-Dec-09 25-May -10 10-Nov -10 29-Apr -11 2Jan092-Jan-09 20- Jun- 09 6Dec096-Dec-09 25- May- 10 10-Nov - 10 29- Apr- 11 22Jan09-Jan-09 20- Jun- 09 66Dec09-Dec-09 25- May- 10 10-Nov - 10 29- Apr- 11
Euro Sterling Japanese Yen
EUR/US$ GBP/US$ JPY/US$
Current Level: 1.4799 Current Level: 1.6701 Current Level: 81.21 1.6 1.8 105
151.5 171.7 100
1.4 1.6 95
1.3 1.5 90
1.2 1.4 85
1.1 1.3 80
1.0 1.2 75 1-Jan-09 19-Jun-09 6-Dec-09 24-May-10 10-Nov-10 29-Apr-11 1-Jan-09 19-Jun-09 6-Dec-09 24-May-10 10-Nov-10 29-Apr-11 1-Jan-09 19-Jun-09 5-Dec-09 24-May-10 9-Nov-10 28-Apr-11
Source: DataStream, Reuters
3 Weekly Equity Capital Markets Newsletter Piper Jaffray Asia Securities Limited May 02, 2011
HK an d U .S . China IPO A cti vit y
HK and U.S. China IPO Activity by Month
18 25,000
15 20,000
12 Capital Raised (US$m)
15, 000
9 # of IPOs # of
10, 000
6
5, 000 3
0 0 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 N ov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 O ct-10 N ov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11
US China IPOs HK IPOs US China IPOs Capital Raised HK IPOs Capital Raised
U.S. China IPO Activity Past Week
Deal Value Price Range IPO Price IPO Price Lead Pricing Date Ticker Issuer Co-Manager(s) (US$m) (US$) (US$) to Current Manager(s) No U.S. China IPO activity last week
HK IPO Activity Past Week Deal Value Price Range IPO Price IPO Price Pricing Date Listing Date Ticker Issuer Lead Manager(s) (US$m) (RMB) (RMB) to Current
20/04/2011 29/04/2011 87001 Hui Xian REIT $1,605.0 5.24 - 5.58 5.24 (9.36%) BOCI; CITIC; HSBC
Note: IPO activity includes deal values equal to or greater than US$25m Source: Dealogic, Hong Kong Stock Exchange
4 Weekly Equity Capital Markets Newsletter Piper Jaffray Asia Securities Limited May 02, 2011
HK an d U. S. China Fo llow-OAtiitOn Activity
HK and U.S. China Follow-on Activity by Month
30 14,000
12,000 25
10,000
20 Capital Raised (US$m)
8,000
15
6,000 # of Follow-ons # of
10
4,000
5 2,000
0 0 Mar-09 App9r-09 Mayy9-09 JJ9un-09 JJ9ul-09 Augg9-09 Sepp9-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11
US China FOs HK FOs US China FOs Capital Raised HK FOs Capital Raised
U.S. China Follow-on Activity Past Week Price From Date Ticker Issuer Deal Value Deal Type Lead Co- Previous Price to (US$m) Manager(s) Manager(s) Close Current No U.S. China FO activity last week
HK Follow-on Activity Past Week Price From Date Ticker Issuer Deal Value Deal Type Lead Manager(s) Previous Price to (US$m) Close Current Shandong Weigao 27/04/2011 1066 $226.9 Placing of New Shares CICC; Morgan Stanley (7.60%) 3.40% Group Medical Polymer
27/04/2011 773 China Metal Recycling $81.8 Placing of Existing Shares BofA Merrill Lynch (4.51%) 1.70%
Sino Prosper State Gold 27/04/2011 766 $53.8 Top-Up Placement CLSA; Samsung (12.64%) 13.16% Resources
27/04/2011 806 Value Partners $45.3 Placing of Existing Shares UBS (8.98%) 1.30%
28/04/2011 1031 Kingston Financial $43.8 Placing of New Shares Kingston (13.45%) 15.53%
Note: Follow-on activity includes deal values equal to or greater than US$25m Source: Dealogic, Hong Kong Stock Exchange
5 Weekly Equity Capital Markets Newsletter Piper Jaffray Asia Securities Limited May 02, 2011
IPO Pipeli ne
U.S. China and Hong Kong IPO Pipeline
U.S.US ChinaChina IPOIPO PIPELINEPIPELINE Funds to be Price Target Lead Issuer Co-Manager(s) Raised Range Pricing Business Exchange Underwriter(s) (($)US$m) (($)US$) Date China Zenix Auto William Blair; Commercial vehicle Morgan Stanley $135.4 $9.50 - $11.50 05/10/2011 NYSE International Oppenheimer wheel manufacturer CICC; Jiayuan.com BofA Merrill Lynch; Oppenheimer; $78.1 $10.00 - $12.00 05/10/2011 Online dating platform NASDAQ International Citi Stifel Nicolaus Weisel Provider of consumer- centric mobile Internet Oppenheimer; NetQin Mobile Piper Jaffray $75.0 $9.50 - $11.50 05/04/2011 services focusing on NYSE Canaccord Genuity security and productivity Provider of website Morgan Stanley; portal and value-added Phoenix New Media Cowen; CICC $166.0 $12.00 - $14.00 05/11/2011 NYSE Deutsche; Macquarie telecommunications services Morgan Stanley; Deutsche; Credit Pacific Crest; Social networking Renren $690.3 $9.00 - $11.00 05/03/2011 NYSE Suisse; BofA Merrill Oppenheimer internet platform Lynch; Jefferies
Credit Suisse; Tudou Holdings Oppenheimer $120.0 TBA TBA Online video company NASDAQ Deutsche
HK IPO PIPELINE Sponsor(s)/ Funds to be Price Target Issuer Lead Raised Range Pricing Business Exchange Underwriter(s) (US$m) (HK$) Date Shanghai CICC; Credit Suisse; Week of Manufacturer of Pharmaceuticals Deutsche; Goldman $1,800.0 TBA Mainboard 05/13/2011 pharmaceuticals Holdings Sachs
Note: IPO Pipeline activity includes deal values equal to or greater than US$25m Source: Dealogic, Hong Kong Stock Exchange
6 Weekly Equity Capital Markets Newsletter Piper Jaffray Asia Securities Limited May 02, 2011
IPO Withdrawn
U.S. China and Hong Kong IPO Withdrawn
U.S. China IPO WITHDRAWN Sponsor(s)/ Funds to be Issuer Lead Co-Manager(s) Raised Business Exchange Underwriter(s) (US$m) No U.S. China IPO withdrawn last week
HK IPO WITHDRAWN
Sponsor(s)/ FundsFunds to be to Raisedbe Raised Issuer BusinessBusiness ExchangeExchange Lead Underwriter(s) (US$m)(US$m)
Auto air-conditioner China Auto System Technologies Goldman Sachs; CIMB $80.8 Mainboard compressor manufacturer
BOCI; Deutsche; JP Morgan; Manufacturer of curtain Yuanda China Holdings TBA Mainboard Standard Chartered walls
Note: IPO Withdrawn activity includes deal values equal to or greater than US$25m Source: Dealogic, Hong Kong Stock Exchange
7 Weekly Equity Capital Markets Newsletter Piper Jaffray Asia Securities Limited May 02, 2011
AdiAppendix
Piper Jaffray China Index Constituents
Telecom, Media & Technology Consumer (Contd.) ACTS ACTIONS SEMICONDUCTOR CO-ADR FEED AGFEED INDUSTRIES INC AMAP AUTONAVI HOLDINGS LTD-ADR FUQI FUQI INTERNATIONAL INC AMCN AIRMEDIA GROUP INC-ADR GAGA LE GAGA HOLDINGS LTD-ADR ASIA ASIAINFO-LINKAGE INC GRO AGRIA CORP - ADR BITA BITAUTO HOLDINGS LTD-ADR HMIN HOME INNS & HOTELS MANAG-ADR BONA BONA FILM GROUP LTD-SPON ADR HOGS ZHONGPIN INC CCIH CHINACACHE INTERNAT-SPON ADR HTHT CHINA LODGING GROUP-SPON ADS CCME CHINA MEDIAEXPRESS HOLDINGS JADE LJ INTERNATIONAL INC CDCS CDC SOFTWARE CORP-ADR JOBS 51JOB INC-ADR CHINA CDC CORP-CL A LAS LENTUO INTERNATI-SPON ADS CHRM CHARM COMMUNICATIONS INC-ADR MCOX MECOX LANE LTD-ADR CIS CAMELOT INFORMATION SYS-ADS QKLS QKL STORES INC CNIT CHINA INFORMATION TECHNOLOGY SEED ORIGIN AGRITECH LTD CNTF CHINA TECHFAITH WIRELESS-ADR SPU SKYPEOPLE FRUIT JUICE INC COGO COGO GROUP INC SVN 7 DAYS GROUP HOLDINGS LT-ADR CTFO CHINA TRANSINFO TECHNOLOGY UTA UNIVERSAL TRAVEL GROUP CYOU CHANGYOU.COM LTD-ADR XNY CHINA XINIYA FASHIO-SPON ADR DANG E-COMMERCE CHINA-SPON ADR YUII YUHE INTERNATIONAL INC FTLK FUNTALK CHINA HOLDINGS LTD GA GIANT INTERACTIVE GROUP-ADR Health Care GAME SHANDA GAMES LTD-SPONS ADR AOB AMERICAN ORIENTAL BIOENGINEE HOLI HOLLYSYS AUTOMATION TECHNOLOGY CBPO CHINA BIOLOGIC PRODUCTS INC HSFT HISOFT TECHNOLOGY INT-ADR CCM CONCORD MEDICAL - SPON ADR ISS ISOFTSTONE HOLDINGS LTD-ADS CHBT CHINA-BIOTICS INC JRJC CHINA FINANCE ONLINE CO-ADR CHDX CHINDEX INTERNATIONAL INC KONG KONGZHONG CORP-ADR CMED CHINA MEDICAL TECH-SPON ADR KUTV KU6 MEDIA CO LTD-SPN ADR CO CHINA CORD BLOOD CORP LONG ELONG INC-SPONSORED ADR CPC CHEMSPEC INTL LTD - ADR MOBI SKY-MOBI LTD-SP ADR CSKI CHINA SKY ONE MEDICAL INC NCTY THE9 LTD-ADR KH CHINA KANGHUI HOLD-SPON ADR OIIM O2MICRO INTERNATIONAL-ADR NPD CHINA NEPSTAR CHAIN DRUG-ADR PWRD PERFECT WORLD CO-SPON ADR SCR SIMCERE PHARMACEUTICAL-ADR QXM QIAO XING MOBILE COMMUNICATI SHP SHANGPHARMA CORP-ADR RDA RDA MICROELECTRON-SPON ADR SSRX 3SBIO INC-ADR SFUN SOUFUN HOLDINGS LTD-ADR SVA SINOVAC BIOTECH LTD SPRD SPREADTRUM COMMUNICATI-ADR TCM TONGJITANG CHINESE MEDIC-ADR STV CHINA DIGITAL TV HOLDING-ADR WWIN WINNER MEDICAL GROUP INC TSTC TELESTONE TECHNOLOGIES CORP WX WUXI PHARMATECH INC-ADR UTSI UTSTARCOM INC VIMC VIMICRO INTERNATIONAL CO-ADR Business Services and Industrial Growth VISN VISIONCHINA MEDIA INC-ADR AMBO AMBOW EDUCATION HOLDING-ADR VIT VANCEINFO TECHNOLOGIES-ADR CAAS CHINA AUTOMOTIVE SYSTEMS INC XING QIAO XING UNIVERSAL RESOURCE CAGC CHINA AGRITECH INC CAST CHINACAST EDUCATION CORP Clean Tec h / Energy CBAK CHINA BAK BATTERY INC APWR A-POWER ENERGY GENERATION CCCL CHINA CERAMICS CO LTD CBEH CHINA INTEGRATED ENERGY INC CEDU CHINAEDU CORP-ADR CHC CHINA HYDROELECTRIC CP-ADS CFSG CHINA FIRE & SECURITY GROUP CHNG CHINA NATURAL GAS INC CGA CHINA GREEN AGRICULTURE INC CREG CHINA RECYCLING ENERGY CORP CHNR CHINA NATURAL RESOURCES INC CSIQ CANADIAN SOLAR INC CHOP CHINA GERUI ADVANCED MATERIA CSUN CHINA SUNERGY CO LTD-ADR CPGI CHINA SHENGDA PACKAGING GROU CTE SINOTECH ENERGY LTD-SPON ADR CSR CHINA SECURITY & SURVEILLANC CTEK CLEANTECH INNOVATIONS INC CVVT CHINA VALVES TECHNOLOGY INC DGW DUOYUAN GLOBAL WATER INC-ADR CXDC CHINA XD PLASTICS CO LTD DQ DAQO NEW ENERGY CORP-ADR CYD CHINA YUCHAI INTL LTD HEAT SMARTHEAT INC DL CHINA DISTANCE EDUCATION-ADR JASO JA SOLAR HOLDINGS CO LTD-ADR FSIN FUSHI COPPERWELD INC JKS JINKOSOLAR HOLDING CO-ADR GEDU GLOBAL EDUCATION & TECH-ADR LDK LDK SOLAR CO LTD -ADR GFRE GULF RESOURCES INC MY CHINA MING YANG WIND POW-ADS GSI GENERAL STEEL HOLDINGS INC SCEI SINO CLEAN ENERGY INC HRBN HARBIN ELECTRIC INC SOL RENESOLA LTD-ADR JST JINPAN INTERNATIONAL LTD SOLF SOLARFUN POWER HOLD-SPON ADR KEYP KEYUAN PETROCHEMICALS INC STP SUNTECH POWER HOLDINGS-ADR KNDI KANDI TECHNOLOGIES CORP TSL TRINA SOLAR LTD-SPON ADR LIWA LIHUA INTERNATIONAL INC YGE YINGLI GREEN ENERGY HOLD-ADR LLEN L&L ENERGY INC NTE NAM TAI ELECTRONICS INC Financial / Real Estate RINO RINO INTERNATIONAL CORP AUTC AUTOCHINA INTERNATIONAL LTD SCOK SINOCOKING COAL AND COKE CHE CISG CNINSURE INC-ADR SDTH SHENGDATECH INC CRIC CHINA REAL ESTATE INFORM-ADR SORL SORL AUTO PARTS INC CTC IFM INVESTMENTS LTD-ADS SSW SEASPAN CORP EJ E-HOUSE CHINA HOLDINGS-ADS SYUT SYNUTRA INTERNATIONAL INC HGSH CHINA HGS REAL ESTATE INC VALV SHENGKAI INNOVATIONS INC NOAH NOAH HOLDINGS LTD-SPON ADS WATG WONDER AUTO TECHNOLOGY INC SYSW SYSWIN INC-SPON ADS WH WSP HOLDINGS LTD-ADR XIN XINYUAN REAL ESTATE CO L-ADR XRS TAL EDUCATION GROUP- ADR XUE XUEDA EDUCATION GR-SPON ADR Consumer YONG YONGYE INTERNATIONAL INC ADY FEIHE INTERNATIONAL INC AERL ASIA ENTERTAINMENT & RESOURC ATV ACORN INTERNATIONAL INC-ADR BORN CHINA NEW BORUN CORP-ADR CCSC COUNTRY STYLE COOKI-SPON ADR CNYD CHINA YIDA HOLDINGS CO DEER DEER CONSUMER PRODUCTS INC EDS EXCEED CO LTD
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Note: Piper Jaffray China Index is a modified market capitalization weighted index comprised of U.S. exchange listed securities of companies with significant exposure to the Chinese economy and market capitalization over US$100m to US$2b. The index was developed with a base level of 1,000 as of January 1, 09
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