IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

iClick Interactive Asia Group / Event-Driven

<p><a href="https://www.smartkarma.com/entities/iclick-interactive-asia-group-limited" target="_blank" data-smartkarma-citation="entities:27314:1" rel="noopener">iClick Interactive Asia Group (ICLK US)</a> is a leading enterprise and marketing cloud platform in China. It is a platinum provider to <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> in social advertising and provides one-stop solutions in user acquisition and engagement.</p><p>On 18 September, iClick announced a second non-binding privatisation proposal from Infinity Equity Management. The bid of $7.50 in cash per ADS represents a premium of 32.7% to the undisturbed price of $5.65 (on 23 September prior to the first proposal from PAG and Oasis). </p><p>As a reminder, on 24 September, iClick announced a non-binding privatisation proposal from PAG and Oasis Management of $6.75 in cash per ADS. Infinity’s offer represents an 11.1% bump to the offer from PAG and Oasis.  </p><p>As iClick is incorporated in the Cayman Islands, for the privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. Infinity has not disclosed a shareholding. iClick’s three largest shareholders are Wing Hong Sammy Hsieh (co-founder and Chairman), Jian Tang (co-founder and CEO) and <a href="https://www.smartkarma.com/entities/baozun-inc" target="_blank" data-smartkarma-citation="entities:24184:1" rel="noopener">Baozun Inc. (BZUN US)</a>. Mr Hsieh and Mr Tang together represent around 62% of voting interests. </p><p>Borrowing a page from PAG and Oasis’ playbook, Infinity’s letter to the board mentions an intention to acquire all the shares other than those “<em>other than management owned shares and those existing shareholders of the Company who elect to roll over</em>.” The wording suggests that Infinity is vying with PAG and Oasis to get the upper hand in discussions with the co-founders and Baozun. </p><p>In <a href="https://www.smartkarma.com/insights/iclick-s-privatisation-bid-from-pag-and-oasis" target="_blank" data-smartkarma-citation="insights:58109" rel="noopener">IClick’s Privatisation Bid from PAG and Oasis</a>, we stated that the PAG and Oasis offer is unattractive in comparison to historical share prices and multiples. We also noted that the PAG and Oasis offer is designed to take advantage of the sell-off in Chinese tech names by enriching insiders at the expense of minorities.</p><div class="content-highlight"><p>While we did not expect a competing bid, Infinity’s offer while providing a bump to PAG and Oasis' offer still leaves minorities short-changed. Nevertheless, the emergence of two bidders suggests that there is a decent chance of another bidding round. At the last close of $6.50 per ADS, the gross spread to the Infinity offer price is 15.4%.  </p></div>

iClick Interactive Asia Group (ICLK US) is a leading enterprise and marketing cloud platform in China. It is a platinum provider to Tencent (700 HK) in social advertising and provides one-stop solutions in user acquisition and engagement.On 18 September, iClick announced a second non-binding privatisation proposal from Infinity Equity Management. The bid of $7.50 in cash per ADS represents a premium of 32.7% to the undisturbed price of $5.65 (on 23 September prior to the first proposal from PAG and Oasis). As a reminder, on 24 September, iClick announced a non-binding privatisation proposal from PAG and Oasis Management of $6.75 in cash per ADS. Infinity’s offer represents an 11.1% bump to the offer from PAG and Oasis.  As iClick is incorporated in the Cayman Islands, for the privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. Infinity has not disclosed a shareholding. iClick’s three largest shareholders are Wing Hong Sammy Hsieh (co-founder and Chairman), Jian Tang (co-founder and CEO) and Baozun Inc. (BZUN US). Mr Hsieh and Mr Tang together represent around 62% of voting interests. Borrowing a page from PAG and Oasis’ playbook, Infinity’s letter to the board mentions an intention to acquire all the shares other than those “other than management owned shares and those existing shareholders of the Company who elect to roll over.” The wording suggests that Infinity is vying with PAG and Oasis to get the upper hand in discussions with the co-founders and Baozun. In IClick’s Privatisation Bid from PAG and Oasis, we stated that the PAG and Oasis offer is unattractive in comparison to historical share prices and multiples. We also noted that the PAG and Oasis offer is designed to take advantage of the sell-off in Chinese tech names by enriching insiders at the expense of minorities.While we did not expect a competing bid, Infinity’s offer while providing a bump to PAG and Oasis' offer still leaves minorities short-changed. Nevertheless, the emergence of two bidders suggests that there is a decent chance of another bidding round. At the last close of $6.50 per ADS, the gross spread to the Infinity offer price is 15.4%.  

IClick’s Improved Privatisation Bid from a Second Suitor

<p><a href="https://www.smartkarma.com/entities/iclick-interactive-asia-group-limited" target="_blank" data-smartkarma-citation="entities:27314:1" rel="noopener">iClick Interactive Asia Group (ICLK US)</a> is a leading enterprise and marketing cloud platform in China. It is a platinum provider to <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> in social advertising and provides one-stop solutions in user acquisition and engagement. iClick was listed on Nasdaq in December 2017 at $8.00 per ADS and raised net proceeds of $23.3 million.  </p><p>On 24 September, iClick announced a non-binding privatisation proposal from PAG and Oasis Management. The bid of $6.75 in cash per ADS represents a premium of 19.5% to the undisturbed price (on 23 September). </p><p>As iClick is incorporated in the Cayman Islands, for the privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. PAG and Oasis have not disclosed a shareholding. iClick’s three largest shareholders are Wing Hong Sammy Hsieh (co-founder and Chairman), Jian Tang (co-founder and CEO) and <a href="https://www.smartkarma.com/entities/baozun-inc" target="_blank" data-smartkarma-citation="entities:24184:1" rel="noopener">Baozun Inc. (BZUN US)</a>. Mr Hsieh and Mr Tang together represent around 62% of voting interests. </p><p>PAG and Oasis’ letter to the board mentions an intention to acquire all the shares other than those “<em>shares held by the members of management and other strategic shareholders of the Company that may be rolled over in connection with the proposed transaction.</em>” The wording suggests that PAG and Oasis are in advanced stages of discussions with the co-founders and <a href="https://www.smartkarma.com/entities/baozun" target="_blank" data-smartkarma-citation="entities:29712:1" rel="noopener">Baozun (9991 HK)</a>. </p><p>iClick’s shares reached an all-time high of $18.30 per ADS on 18 February 2021 on the back of the announcement that Baozun acquired 4% of outstanding shares and 10% voting interest at $13.262 per ADS. In part due to China’s regulatory clampdown on tech names, the shares have since headed downwards to reach a YTD low of $4.16 per ADS on 20 August. </p><div class="content-highlight"><p>The offer is unattractive in comparison to historical share prices and multiples, in our view. The offer is designed to take advantage of the sell-off in Chinese tech names by enriching insiders at the expense of minorities. The timing of the offer announcement points to PAG and Oasis’ confidence in gaining the co-founders and/or Bazoun’s support as rollover shareholders. We think that there is a decent chance that privatisation succeeds. At the last close of $5.91 per ADS, the gross spread to the offer price is 14.2%.  </p></div>

iClick Interactive Asia Group (ICLK US) is a leading enterprise and marketing cloud platform in China. It is a platinum provider to Tencent (700 HK) in social advertising and provides one-stop solutions in user acquisition and engagement. iClick was listed on Nasdaq in December 2017 at $8.00 per ADS and raised net proceeds of $23.3 million.  On 24 September, iClick announced a non-binding privatisation proposal from PAG and Oasis Management. The bid of $6.75 in cash per ADS represents a premium of 19.5% to the undisturbed price (on 23 September). As iClick is incorporated in the Cayman Islands, for the privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. PAG and Oasis have not disclosed a shareholding. iClick’s three largest shareholders are Wing Hong Sammy Hsieh (co-founder and Chairman), Jian Tang (co-founder and CEO) and Baozun Inc. (BZUN US). Mr Hsieh and Mr Tang together represent around 62% of voting interests. PAG and Oasis’ letter to the board mentions an intention to acquire all the shares other than those “shares held by the members of management and other strategic shareholders of the Company that may be rolled over in connection with the proposed transaction.” The wording suggests that PAG and Oasis are in advanced stages of discussions with the co-founders and Baozun (9991 HK). iClick’s shares reached an all-time high of $18.30 per ADS on 18 February 2021 on the back of the announcement that Baozun acquired 4% of outstanding shares and 10% voting interest at $13.262 per ADS. In part due to China’s regulatory clampdown on tech names, the shares have since headed downwards to reach a YTD low of $4.16 per ADS on 20 August. The offer is unattractive in comparison to historical share prices and multiples, in our view. The offer is designed to take advantage of the sell-off in Chinese tech names by enriching insiders at the expense of minorities. The timing of the offer announcement points to PAG and Oasis’ confidence in gaining the co-founders and/or Bazoun’s support as rollover shareholders. We think that there is a decent chance that privatisation succeeds. At the last close of $5.91 per ADS, the gross spread to the offer price is 14.2%.  

IClick’s Privatisation Bid from PAG and Oasis

APAC IPOs & Placements

Zhen Zhou, Toh

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.

Equity Capital Markets

EBeauty Holdings / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/ebeauty-holdings" target="_blank" data-smartkarma-citation="entities:33505:1" rel="noopener">EBeauty Holdings (1894926D HK)</a> (EBH) is looking to raise US$500m in its upcoming Hong Kong IPO. </p></div><div><p>EBH is a beauty brand e-commerce enablement service provider. The company’s portfolio of clients counts established and emerging brand partners across various origins and product categories. These brand partners include Clarins, Clé de Peau Beauté, L’OCCITANE, Perfume GIVENCHY, Sisley and Valmont.</p></div><div>
<p>In this note, we take a look at updates in the PHIP filing and compare EBH to its peer.</p>
<p>We have covered the IPO earlier in:</p>
<ul><li>
<a href="https://www.smartkarma.com/insights/ebeauty-holdings-pre-ipo-largest-e-commerce-enablement-but-competition-is-intensifying" target="_blank" data-smartkarma-citation="insights:53516" rel="noopener">EBeauty Holdings (悠可集团) Pre-IPO - Largest E-Commerce Enablement but Competition Is Intensifying</a> </li></ul>
</div>

EBeauty Holdings (1894926D HK) (EBH) is looking to raise US$500m in its upcoming Hong Kong IPO. EBH is a beauty brand e-commerce enablement service provider. The company’s portfolio of clients counts established and emerging brand partners across various origins and product categories. These brand partners include Clarins, Clé de Peau Beauté, L’OCCITANE, Perfume GIVENCHY, Sisley and Valmont.
In this note, we take a look at updates in the PHIP filing and compare EBH to its peer.
We have covered the IPO earlier in:

EBeauty Holdings (悠可集团) Pre-IPO - Largest E-Commerce Enablement but Competition Is Intensifying 


EBeauty Holdings (悠可集团) Pre-IPO - PHIP Updates and Peer Comparison

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<div class="content-highlight">
<p>Our valuation analysis suggests an implied market cap of $4.1 billion, representing an implied price of $15.8 per share for Aihuishou. This would represent an upside of 5% from the high end of the IPO price of $15 per share. Given the lack of upside, we would avoid this IPO deal. We based our valution based on 2.0x EV/S multiple (2022E), which is based on the average EV/S multiple of its peers in 2022. If the IPO is priced at the low end of the IPO price range, then it could be more attractive, but we are not too convinced of the investment merits of this company.</p>
<p>Among the many risks, we are especially concerned about the extreme price competition for electronic goods (including smartphones) and we do not believe that if the company could generate significant profits in this sector if it focuses just on the consumer electronics sector. In addition, we are not so sure about the company's capability in expanding profitably into other non-consumer electronics related areas going forward. </p>
</div><p>Established in 2011 as an online platform buying and selling second-hand phones and other consumer electronics, Aihuishou focuses on the electronics.</p><p><a href="https://www.smartkarma.com/entities/aihuishou" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">Aihuishou (RERE US)</a> plans to raise $227 million in the upcoming IPO by offering 16.2 million ADS at a price range of $13 to $15 per share. Insiders plan to buy $100 million worth of ADS shares in this IPO. Aihuishou would have a market cap of $3.6 billion at the mid-point of the IPO price range. </p>


Our valuation analysis suggests an implied market cap of $4.1 billion, representing an implied price of $15.8 per share for Aihuishou. This would represent an upside of 5% from the high end of the IPO price of $15 per share. Given the lack of upside, we would avoid this IPO deal. We based our valution based on 2.0x EV/S multiple (2022E), which is based on the average EV/S multiple of its peers in 2022. If the IPO is priced at the low end of the IPO price range, then it could be more attractive, but we are not too convinced of the investment merits of this company.
Among the many risks, we are especially concerned about the extreme price competition for electronic goods (including smartphones) and we do not believe that if the company could generate significant profits in this sector if it focuses just on the consumer electronics sector. In addition, we are not so sure about the company's capability in expanding profitably into other non-consumer electronics related areas going forward. 
Established in 2011 as an online platform buying and selling second-hand phones and other consumer electronics, Aihuishou focuses on the electronics.Aihuishou (RERE US) plans to raise $227 million in the upcoming IPO by offering 16.2 million ADS at a price range of $13 to $15 per share. Insiders plan to buy $100 million worth of ADS shares in this IPO. Aihuishou would have a market cap of $3.6 billion at the mid-point of the IPO price range. 

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

<div>
<p>Trip.com raised around US$1.2bn in its secondary listing in Hong Kong.</p>
<p>We have covered the background of the deal in our earlier notes:</p>
<ul>
<li>
<a href="https://www.smartkarma.com/insights/trip-com-secondary-listing-probably-needs-to-correct" target="_blank" rel="noopener">Trip.com Secondary Listing - Probably Needs to Correct,</a> and</li>
<li><a href="https://www.smartkarma.com/insights/trip-com-secondary-listing-quick-take-doing-the-bare-minimum-needs-some-more-correction" target="_blank" rel="noopener">Trip.com Secondary Listing Quick Take - Doing the Bare Minimum - Needs Some More Correction.</a></li>
</ul>
</div><div><p>In this note, we'll talk about the updates since then.</p></div>


Trip.com raised around US$1.2bn in its secondary listing in Hong Kong.
We have covered the background of the deal in our earlier notes:


Trip.com Secondary Listing - Probably Needs to Correct, and
Trip.com Secondary Listing Quick Take - Doing the Bare Minimum - Needs Some More Correction.

In this note, we'll talk about the updates since then.

Trip.com Secondary Trading Note - Delivered a Good Correction but Seems to Be Widely Distributed

United States

Baozun Inc. provides e-commerce solutions. The Company's services include website design, development and hosting, information technology infrastructure, customer service, warehousing, and logistics services, as well as digital marketing. Baozun serves customers in China.

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Baozun Inc. (BZUN US)

IClick’s Improved Privatisation Bid from a Second Suitor

iClick announced another privatisation proposal, this time from Infinity Equity at $7.50 in cash per ADS. The emergence of two bidders suggests...

Arun George

IClick’s Privatisation Bid from PAG and Oasis

The $6.75 per ADS offer is designed to take advantage of the market sell-off by enriching insiders at the expense of minorities. If the co-founders...

Arun George

EBeauty Holdings (悠可集团) Pre-IPO - PHIP Updates and Peer Comparison

EBeauty Holdings (1894926D HK) (EBH) is looking to raise US$500m in its upcoming Hong Kong IPO. EBH is a beauty brand e-commerce enablement...

Zhen Zhou, Toh

Aihuishou IPO Valuation Analysis

Our valuation analysis suggests an implied price of $15.8 per share for Aihuishou. This would represent an upside of 5% from the high end of the...

Douglas Kim

Trip.com Secondary Trading Note - Delivered a Good Correction but Seems to Be Widely Distributed

Trip.com raised around US$1.2bn in its secondary listing in Hong Kong. In this note, we'll talk about the trading dynamics.

Sumeet Singh

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