Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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

<ul>
<li>Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.</li>
<li>There was a marked pickup in IPO activity with a number of smaller deals, along with two large deals being launched.</li>
<li>There were no major placements last week. In addition, Prosus single handedly took out two prospective large placements.</li>
</ul>


Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
There was a marked pickup in IPO activity with a number of smaller deals, along with two large deals being launched.
There were no major placements last week. In addition, Prosus single handedly took out two prospective large placements.


ECM Weekly (3rd Jul 2022) - Tianqi, Thai Life, Prosus/Naspers, Tencent, SEA, Soosan, SoCar, Carsales

<ul>
<li>Carsales aims to raise around US$835m (A$1.2bn) via a non-renounceable entitlement offer to part fund the purchase of remaining 51% of trader Interactive.</li>
<li>While the acquisition is probably well flagged and will be earnings accretive, the last entitlement offering didn’t do well in the near term.</li>
<li>In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>


Carsales aims to raise around US$835m (A$1.2bn) via a non-renounceable entitlement offer to part fund the purchase of remaining 51% of trader Interactive.
While the acquisition is probably well flagged and will be earnings accretive, the last entitlement offering didn’t do well in the near term.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.


Carsales Entitlement Offer - Well Flagged Deal for a Well Know Asset, but Last Deal Didn’t Do Well

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/icar-asia-ltd" target="_blank" data-smartkarma-citation="entities:17682:1" rel="noopener">ICar Asia Ltd (ICQ AU)</a>'s Scheme Booklet is now <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02464318-3A583287?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">out</a>. The Offer Price is A$0.53/share.</li>
<li>The Scheme Meeting will be held on the 31 January. The Independent Expert has concluded the Offer is fair and reasonable.</li>
<li>A solid premium to the undisturbed price and a multi-year high - this deal is expected to complete. </li>
</ul>



ICar Asia Ltd (ICQ AU)'s Scheme Booklet is now out. The Offer Price is A$0.53/share.
The Scheme Meeting will be held on the 31 January. The Independent Expert has concluded the Offer is fair and reasonable.
A solid premium to the undisturbed price and a multi-year high - this deal is expected to complete. 


ICar (ICQ AU): Scheme Booklet Out. Meeting on 31 January

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Back on the 30 October 2020, automotive portal play <a href="https://www.smartkarma.com/entities/icar-asia-ltd" target="_blank" data-smartkarma-citation="entities:17682:1" rel="noopener">iCar Asia Ltd (ICQ AU)</a> fielded a non-binding <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02301823-3A554168?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">proposal</a> from China-based <a href="https://www.smartkarma.com/entities/autohome-inc" target="_blank" data-smartkarma-citation="entities:33492:1" rel="noopener">Autohome (2518 HK)</a> at A$0.50/share. Minimal updates followed as negotiations between the two parties appeared to have stalled.
On the 13 July this year, iCar <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02394670-3A570637?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it had received a non-binding proposal from privately-held Malaysian-based Carsome Group to acquire 100% of iCar's shares for A$0.55/share by way of a Scheme.
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<div>
In addition,  Carsome entered into an agreement with Catcha Group, iCar's largest shareholder at the time, to acquire 19.9% of shares out in iCar via the issuance of shares in Carsome. That side agreement was conditional on ASIC relief. (ASIC relief was received on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02406897-3A572744?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">13 August</a>, and the share transfer competed on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02416345-3A574854?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">1 September</a>.)
On the 20 July, iCar <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02396948-3A570980?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">granted</a> Carsome due diligence access. This access was not exclusive. Separately, Autohome informed iCar that it had decided to terminate discussions in relation to the acquisition of iCar.
Exclusive DD through to the 8 September was <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02400507-3A571613?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">granted</a> on the 29 July after iCar and Carsome entered into a process deed. On the 9 September, Carsome <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02419518-3A575449?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">requested</a> an extension of the exclusivity period to the 30 September, then to automatically to the 30 October, provided Carsome had completed DD by the 30 Sept. iCar's board <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02422437-3A576014?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">agreed</a> to the extension on the 16 September. 
After completing the DD on the 1 October, Carsome <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02429764-3A577203?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">advised</a> iCar it would <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02429764-3A577203?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">revise down</a> its indicative Offer to A$0.53-$0.54/share. 
Yesterday iCar and Carsome <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02436657-3A578395?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">entered</a> into Scheme Implementation Deed with a Scheme consideration of A$0.53/share.
This looks done. More below the fold. 
</div>


Back on the 30 October 2020, automotive portal play iCar Asia Ltd (ICQ AU) fielded a non-binding proposal from China-based Autohome (2518 HK) at A$0.50/share. Minimal updates followed as negotiations between the two parties appeared to have stalled.
On the 13 July this year, iCar announced it had received a non-binding proposal from privately-held Malaysian-based Carsome Group to acquire 100% of iCar's shares for A$0.55/share by way of a Scheme.


In addition,  Carsome entered into an agreement with Catcha Group, iCar's largest shareholder at the time, to acquire 19.9% of shares out in iCar via the issuance of shares in Carsome. That side agreement was conditional on ASIC relief. (ASIC relief was received on the 13 August, and the share transfer competed on the 1 September.)
On the 20 July, iCar granted Carsome due diligence access. This access was not exclusive. Separately, Autohome informed iCar that it had decided to terminate discussions in relation to the acquisition of iCar.
Exclusive DD through to the 8 September was granted on the 29 July after iCar and Carsome entered into a process deed. On the 9 September, Carsome requested an extension of the exclusivity period to the 30 September, then to automatically to the 30 October, provided Carsome had completed DD by the 30 Sept. iCar's board agreed to the extension on the 16 September. 
After completing the DD on the 1 October, Carsome advised iCar it would revise down its indicative Offer to A$0.53-$0.54/share. 
Yesterday iCar and Carsome entered into Scheme Implementation Deed with a Scheme consideration of A$0.53/share.
This looks done. More below the fold. 


ICar (ICQ AU) & Carsome Enter Into Scheme

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.

<a href="https://www.smartkarma.com/entities/cartrade-tech-ltd" target="_blank" data-smartkarma-citation="entities:33474:1" rel="noopener">Cartrade (0056989Z IN)</a> is a leading online destination for auto consumers in India. CarWale and BikeWale, key brands owned by CarTrade, ranked number one on relative online search popularity when compared to their key competitors over the last three years, according to Google Trends data. CarTrade’s shareholders include Warburg Pincus (34.44% of fully diluted shares), Temasek (26.48%), JP Morgan (11.93%) and March Capital (7.09%). CarTrade is looking to raise Rs28 billion ($375 million) through an IPO in India, according to press reports. The IPO comprises a pure offer for sale of 18.53 million shares by its existing shareholders and promoters. The IPO is set to launch on 9 August.  India was the fifth largest car market in the world in 2019 and is forecasted to become the third-largest auto market in the world as measured by volume in 2025, according to RedSeer. The COVID-19 pandemic has also resulted in a shift in preference towards used cars as people limit their use of public transportation. Indian auto OEMs spent only 14% of their total ad budgets on digital advertising, which is significantly lower than the global average of 42% in 2020, according to RedSeer. <div class="content-highlight">The growing auto market combined with the rising penetration of digital ad spend presents an attractive opportunity for auto transaction platforms such as CarTrade. CarTrade is capitalising on this market opportunity as evidenced by its highly popular platforms, solid organic growth, strong margins and healthy cash generation. Overall, we think that CarTrade is an attractive play on India’s new economy sector.</div>

Cartrade (0056989Z IN) is a leading online destination for auto consumers in India. CarWale and BikeWale, key brands owned by CarTrade, ranked number one on relative online search popularity when compared to their key competitors over the last three years, according to Google Trends data. CarTrade’s shareholders include Warburg Pincus (34.44% of fully diluted shares), Temasek (26.48%), JP Morgan (11.93%) and March Capital (7.09%). CarTrade is looking to raise Rs28 billion ($375 million) through an IPO in India, according to press reports. The IPO comprises a pure offer for sale of 18.53 million shares by its existing shareholders and promoters. The IPO is set to launch on 9 August.  India was the fifth largest car market in the world in 2019 and is forecasted to become the third-largest auto market in the world as measured by volume in 2025, according to RedSeer. The COVID-19 pandemic has also resulted in a shift in preference towards used cars as people limit their use of public transportation. Indian auto OEMs spent only 14% of their total ad budgets on digital advertising, which is significantly lower than the global average of 42% in 2020, according to RedSeer. The growing auto market combined with the rising penetration of digital ad spend presents an attractive opportunity for auto transaction platforms such as CarTrade. CarTrade is capitalising on this market opportunity as evidenced by its highly popular platforms, solid organic growth, strong margins and healthy cash generation. Overall, we think that CarTrade is an attractive play on India’s new economy sector.

CarTrade Tech IPO Initiation: Shifting Gears

Australia

CAR Group Limited operates as a digital marketplace for vehicles. The Company provides a diversified portfolio of brands to sell and buy cars. CAR Group serves customers worldwide.

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CAR Group (CAR AU)

ECM Weekly (3rd Jul 2022) - Tianqi, Thai Life, Prosus/Naspers, Tencent, SEA, Soosan, SoCar, Carsales

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.

Sumeet Singh

Carsales Entitlement Offer - Well Flagged Deal for a Well Know Asset, but Last Deal Didn’t Do Well

Carsales aims to raise around US$835m (A$1.2bn) via a non-renounceable entitlement offer to part fund the purchase of remaining 51% of trader...

Sumeet Singh

ICar (ICQ AU): Scheme Booklet Out. Meeting on 31 January

Trading at a relatively wide gross/annualised spread of 2.9%/16.7%. That looks attractive, however, this is not a super-liquid arb situation.

David Blennerhassett

ICar (ICQ AU) & Carsome Enter Into Scheme

This looks done. Trading at a gross/annualised spread of 2.9%/9.2%, assuming mid-Feb 2022 completion. That looks reasonable.

David Blennerhassett

CarTrade Tech IPO Initiation: Shifting Gears

CarTrade is looking to raise Rs28 billion ($375 million) through an IPO in India. Overall, we think that CarTrade is an attractive play on India’s...

Arun George

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