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

Evergrande Property Services / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/evergrande-property-services" target="_blank" data-smartkarma-citation="entities:30921:1" rel="noopener">Evergrande Property Services (6666 HK)</a> raised US$1.8bn in its Hong Kong IPO, priced at HK$8.80 per share, towards the low-end of the initial price range.</p><p>Evergrande Services (EGS) is the property management arm of <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande Real Estate Group (3333 HK)</a>. The company has presence in 280 cities across 22 provinces in China with a total GFA under management of about 25m sqm and contracted GFA of 513m sqm as of 30th June, 2020.</p><p>In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.</p><p>We have previously covered the IPO in:</p><ul>
<li>
<a href="https://www.smartkarma.com/insights/evergrande-services-pre-ipo-bad-parenting" target="_blank" data-smartkarma-citation="insights:45461" rel="noopener">Evergrande Services (恒大物业) Pre-IPO - Bad Parenting</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/evergrande-services-ipo-overhang-issues" target="_blank" data-smartkarma-citation="insights:45607" rel="noopener">Evergrande Services (恒大物业) IPO - Overhang Issues</a> </li>
</ul>

Evergrande Property Services (6666 HK) raised US$1.8bn in its Hong Kong IPO, priced at HK$8.80 per share, towards the low-end of the initial price range.Evergrande Services (EGS) is the property management arm of Evergrande Real Estate Group (3333 HK). The company has presence in 280 cities across 22 provinces in China with a total GFA under management of about 25m sqm and contracted GFA of 513m sqm as of 30th June, 2020.In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.We have previously covered the IPO in:

Evergrande Services (恒大物业) Pre-IPO - Bad Parenting 

Evergrande Services (恒大物业) IPO - Overhang Issues 


Evergrande Services (恒大物业) IPO Trading - Slightly Weaker Demand

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

<p><br/> The Asia HY Trade Book for the month of November includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative value charts and lists of the bonds in the Lucror Asia HY index.<br/></p>

  The Asia HY Trade Book for the month of November includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative value charts and lists of the bonds in the Lucror Asia HY index. 

Asia HY Trade Book - November 2020 - Lucror Analytics

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: Tokyo Dome, ESR/Sabana, NTT Docomo, Evergrande, LG Corp, China Resources

China Resources Mixc Lifestyle / Equity Capital Markets

<div>
<p><a href="https://www.smartkarma.com/entities/china-resources-mixc-lifestyle-services" target="_blank" data-smartkarma-citation="entities:29285:1" rel="noopener">China Resources Mixc Lifestyle Services (1209 HK)</a> ("CRM") is the latest property management service company to seek a listing. The Offer Price is expected to be announced on the 8 December, with the commencement of trading in the shares on the 9 December.</p>
</div>
<div>
<p>CRM is the spin-off of <a href="https://www.smartkarma.com/entities/china-resources-land-ltd" target="_blank" data-smartkarma-citation="entities:418:1" rel="noopener">China Resources Land (1109 HK)</a>, which will own 75% in CRM after the IPO, down from 100% currently, before over-allotment.</p>
<p>CRM intends to raise HK$11.2bn (US$1.4bn) if using HK$20.45/share, the mid-point of the indicative Offer Price range.</p>
</div>
<div>
<p>Even at the bottom end of its IPO range, CRM's FY20(L) PER surpasses all peers. It also has below-average revenue growth and gross margins. </p>
</div>
<div>
<p>For CR Land, it is trading marginally above its P/B premium to peers from a historical standpoint, and its implied stub P/B is an outlier compared to other parents of property management spin-offs. </p>
</div>
<div>
<p>More below the fold. </p>
</div>


China Resources Mixc Lifestyle Services (1209 HK) ("CRM") is the latest property management service company to seek a listing. The Offer Price is expected to be announced on the 8 December, with the commencement of trading in the shares on the 9 December.


CRM is the spin-off of China Resources Land (1109 HK), which will own 75% in CRM after the IPO, down from 100% currently, before over-allotment.
CRM intends to raise HK$11.2bn (US$1.4bn) if using HK$20.45/share, the mid-point of the indicative Offer Price range.


Even at the bottom end of its IPO range, CRM's FY20(L) PER surpasses all peers. It also has below-average revenue growth and gross margins. 


For CR Land, it is trading marginally above its P/B premium to peers from a historical standpoint, and its implied stub P/B is an outlier compared to other parents of property management spin-offs. 


More below the fold. 


China Resources Mixc (1209 HK): This Is An Avoid

Evergrande Property Services / Event-Driven

<div>
<p>The IPO for <a href="https://www.smartkarma.com/entities/evergrande-property-services" target="_blank" data-smartkarma-citation="entities:30921:1" rel="noopener">Evergrande Property Services (6666 HK)</a> ("EPS"), joins the ever-expanding listing of property management service company to seek a listing. The Offer Price is expected to be announced on the 1 December, with the commencement of trading in the shares on the 2 December.</p>
</div>
<div>
<p>EPS is the spin-off of <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande Real Estate Group (3333 HK)</a>, which will own 59.04% in EPS after the IPO, down from 71.939% currently, before over-allotment. Both EPS and Evergrande will raise $7.4bn if using HK$9.13/share, the mid-point of the indicative Offer Price range.</p>
</div>
<div>
<p>As with the recent listing of <a href="https://www.smartkarma.com/entities/kwg-living-group" target="_blank" data-smartkarma-citation="entities:29231:1" rel="noopener">KWG Living Group (3913 HK)</a>, <a href="https://www.smartkarma.com/entities/shimao-services-holdings-limited" target="_blank" data-smartkarma-citation="entities:29199:1" rel="noopener">Shimao Services Holdings (873 HK)</a>, and <a href="https://www.smartkarma.com/entities/sunac-services-holdings" target="_blank" data-smartkarma-citation="entities:29239:1" rel="noopener">Sunac Services (1516 HK)</a>, EPS is targeting a high-end PER, backed by recent strong earnings growth and expanding gross/profit margins. At the high-end of the IPO range, only <a href="https://www.smartkarma.com/entities/sunac-services-holdings" target="_blank" data-smartkarma-citation="entities:29239:1" rel="noopener">Sunac Services (1516 HK)</a> and <a href="https://www.smartkarma.com/entities/ever-sunshine-lifestyle-services-group-limited" target="_blank" data-smartkarma-citation="entities:28932:1" rel="noopener">Ever Sunshine Lifestyle Services (1995 HK)</a>'s FY20(L) PER surpass EPS'.</p>
</div>
<div>
<p>For Evergrande, its recent capital actions (share issuance and market buybacks) appear unrelated to fundamental value creation for its shareholders. </p>
</div>
<div>
<p>More below the fold. </p>
</div>


The IPO for Evergrande Property Services (6666 HK) ("EPS"), joins the ever-expanding listing of property management service company to seek a listing. The Offer Price is expected to be announced on the 1 December, with the commencement of trading in the shares on the 2 December.


EPS is the spin-off of Evergrande Real Estate Group (3333 HK), which will own 59.04% in EPS after the IPO, down from 71.939% currently, before over-allotment. Both EPS and Evergrande will raise $7.4bn if using HK$9.13/share, the mid-point of the indicative Offer Price range.


As with the recent listing of KWG Living Group (3913 HK), Shimao Services Holdings (873 HK), and Sunac Services (1516 HK), EPS is targeting a high-end PER, backed by recent strong earnings growth and expanding gross/profit margins. At the high-end of the IPO range, only Sunac Services (1516 HK) and Ever Sunshine Lifestyle Services (1995 HK)'s FY20(L) PER surpass EPS'.


For Evergrande, its recent capital actions (share issuance and market buybacks) appear unrelated to fundamental value creation for its shareholders. 


More below the fold. 


Evergrande Services (6666 HK): Evergrande Needs This More Than You

China

China Evergrande Group is an integrated residential property developer. The Company, through its subsidiaries, operates in property development, investment, management, finance, internet, health, culture, and tourism markets.

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Evergrande (3333 HK)

Evergrande Services (恒大物业) IPO Trading - Slightly Weaker Demand

Evergrande Property Services (6666 HK) raised US$1.8bn in its Hong Kong IPO, priced at HK$8.80 per share, towards the low-end of the initial price...

Zhen Zhou, Toh

Asia HY Trade Book - November 2020 - Lucror Analytics

The Asia HY Trade Book for the month of November includes a summary of our recommendations, as well as our high-conviction ideas. The report also...

Lucror Analytics

Last Week in Event SPACE: Tokyo Dome, ESR/Sabana, NTT Docomo, Evergrande, LG Corp, China Resources

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

China Resources Mixc (1209 HK): This Is An Avoid

I'm also not a buyer of CRM. It is not cheap, even more expensive than some recent property management IPO's I have written about, ones I found...

David Blennerhassett

Evergrande Services (6666 HK): Evergrande Needs This More Than You

I find Evegrande to be effectively un-investable. I'm also not a buyer of Evergradne Services. The significant improvement in fundamentals in 2020...

David Blennerhassett

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