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.

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/nayuki-holdings" target="_blank" data-smartkarma-citation="entities:32149:1" rel="noopener">Nayuki Holdings (2150 HK)</a> is the second-largest premium teahouse chain in China accounting for 18.9% of China’s premium modern teahouse market as measured by total retail consumption value in 2020, according to CIC.</p><div><p>At the proposed IPO price range of HK$17.20-19.80 per share, Nayuki will have a market cap of HK$29,500.2-33,959.5 million ($3.8-4.4 billion). At the mid-point of the IPO price range, the net proceeds are HK$4,521.3 million ($582 million). </p></div><div>
<p>Five cornerstone investors will purchase $155 million worth of the offer shares (25.25% of the offer shares at the mid-point of the IPO price range). The cornerstone investors are UBS Asset Management, China Universal Asset Management, GF Fund, China Southern Asset Management and CCB International. </p>
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<p>In <a href="https://www.smartkarma.com/insights/nayuki-holdings-ipo-initiation-a-new-leaf" target="_blank" data-smartkarma-citation="insights:48532" rel="noopener">Nayuki Holdings IPO Initiation: A New Leaf</a>, we noted that premium teahouses have rapidly gained popularity in China as they bring new tea-drinking experiences and benefit from the structural trend of consumer’s consumption upgrades driven by higher disposable income. We opined that Nayuki has the right ingredients to offer investors an attractive play on this market. In <a href="https://www.smartkarma.com/insights/nayuki-holdings-ipo-drinking-habits" target="_blank" data-smartkarma-citation="insights:52873" rel="noopener">Nayuki Holdings IPO: Drinking Habits</a>, we noted that recent results (disclosed in the PHIP) show that Nayuki is well-positioned as a post-COVID-19 recovery play.</p>
<div class="content-highlight"><p>Based on our forecasts, Nayuki is attractively valued to its peer group for its forecasted earnings growth i.e. on a PEG basis. Overall, we are inclined to participate at the low end of the IPO price range due to the decent upside compared to our base-case DCF valuation of HK$19.49 per share.</p></div>
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Nayuki Holdings (2150 HK) is the second-largest premium teahouse chain in China accounting for 18.9% of China’s premium modern teahouse market as measured by total retail consumption value in 2020, according to CIC.At the proposed IPO price range of HK$17.20-19.80 per share, Nayuki will have a market cap of HK$29,500.2-33,959.5 million ($3.8-4.4 billion). At the mid-point of the IPO price range, the net proceeds are HK$4,521.3 million ($582 million). 
Five cornerstone investors will purchase $155 million worth of the offer shares (25.25% of the offer shares at the mid-point of the IPO price range). The cornerstone investors are UBS Asset Management, China Universal Asset Management, GF Fund, China Southern Asset Management and CCB International. 

In Nayuki Holdings IPO Initiation: A New Leaf, we noted that premium teahouses have rapidly gained popularity in China as they bring new tea-drinking experiences and benefit from the structural trend of consumer’s consumption upgrades driven by higher disposable income. We opined that Nayuki has the right ingredients to offer investors an attractive play on this market. In Nayuki Holdings IPO: Drinking Habits, we noted that recent results (disclosed in the PHIP) show that Nayuki is well-positioned as a post-COVID-19 recovery play.
Based on our forecasts, Nayuki is attractively valued to its peer group for its forecasted earnings growth i.e. on a PEG basis. Overall, we are inclined to participate at the low end of the IPO price range due to the decent upside compared to our base-case DCF valuation of HK$19.49 per share.




Independent Research, Food Delivery Space, Newmoon Capital

Newmoon Capital

Independent Research, Food Delivery Space

We look for owner-operators in what we believe are either highly defensible assets or soon to be highly defensible assets, trading at a fraction of their future potential.

Private Capital Markets

<p>Judging from the twitter DMs, several of my points from my previous post have gone over the head of some investors, particularly the one around Signature (white label delivery). Deliveroo is at risk of getting disrupted because a large proportion of its orders/sales are from a small selection of chain restaurants — 10 chains represent 35% of ALL UK orders. Some of such chains include Nando’s, Wagamama, and McDonalds. The top 100 chains could easily be more than 50% of the UK business, if not much more. This is the case (if not moreso) for Uber Eats, and less the case for $TKWY.</p>

Judging from the twitter DMs, several of my points from my previous post have gone over the head of some investors, particularly the one around Signature (white label delivery). Deliveroo is at risk of getting disrupted because a large proportion of its orders/sales are from a small selection of chain restaurants — 10 chains represent 35% of ALL UK orders. Some of such chains include Nando’s, Wagamama, and McDonalds. The top 100 chains could easily be more than 50% of the UK business, if not much more. This is the case (if not moreso) for Uber Eats, and less the case for $TKWY.

Deliveroo Part 6 - White Label Killed the Delivery Star

China and US Equity Analyst

Roger Xie

Equity Bottom-Up

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<li>The successful Hong Kong secondary listing could help <a href="https://www.smartkarma.com/entities/yum-china-holdings-inc" target="_blank" data-smartkarma-citation="entities:23677:1" rel="noopener">Yum China Holdings, Inc (YUMC US)</a> accelerate its strategic expansion plan. According to the management, Yum China plans to allocate the net proceeds as follows: 45% to expand and deepen its restaurant network; 45% to invest in digitalization and supply chain, food innovation; 10% for working capital and general corporate purposes.</li>
<li>Yum China has been accelerating its store expansion plan in the past few years, especially on the KFC brand. Management guided 800-850 gross store openings in 2020E. In addition, store remodeling has been aggressive to further enhance the dining experiences. </li>
<li>We view Yum China with wide moat based on its strong branding in China; a wholly owned supply chain; and advanced digital platform. We have TP $64 for YUMC, which implies  25% upside in next 6-12 month with improving fundamentals. TP is based on 28x 2021e P/E. </li>
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The successful Hong Kong secondary listing could help Yum China Holdings, Inc (YUMC US) accelerate its strategic expansion plan. According to the management, Yum China plans to allocate the net proceeds as follows: 45% to expand and deepen its restaurant network; 45% to invest in digitalization and supply chain, food innovation; 10% for working capital and general corporate purposes.
Yum China has been accelerating its store expansion plan in the past few years, especially on the KFC brand. Management guided 800-850 gross store openings in 2020E. In addition, store remodeling has been aggressive to further enhance the dining experiences. 
We view Yum China with wide moat based on its strong branding in China; a wholly owned supply chain; and advanced digital platform. We have TP $64 for YUMC, which implies  25% upside in next 6-12 month with improving fundamentals. TP is based on 28x 2021e P/E. 


Yum China (YUMC and 9987.HK) Will Accelerate to Gain Market Shared Post COVID-19

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Yum China Holdings  / Equity Capital Markets

<p>As <a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings Inc (9987 HK)</a>, the operator of world-famous restaurant brands such as KFC, Pizza Hut, Taco Bell and Lavazza in China prepares for a secondary listing on the Hong Kong stock exchange, we take you through our estimates and discuss the company’s valuation against its history, and Hong Kong listed peers.</p><p><a href="https://www.smartkarma.com/insights/yum-china-a-quick-run-through-fundamentals-before-the-secondary-listing" target="_blank" rel="noopener">Previously</a>, we looked at the company’s fundamentals, highlighting Yum China’s long-term growth prospects. Although the valuation is currently stretched, considering the company's historical valuation range, we believe there is still upside potential in the medium term, from accelerated restaurant openings using the secondary listing proceeds.</p>

As Yum China Holdings Inc (9987 HK), the operator of world-famous restaurant brands such as KFC, Pizza Hut, Taco Bell and Lavazza in China prepares for a secondary listing on the Hong Kong stock exchange, we take you through our estimates and discuss the company’s valuation against its history, and Hong Kong listed peers.Previously, we looked at the company’s fundamentals, highlighting Yum China’s long-term growth prospects. Although the valuation is currently stretched, considering the company's historical valuation range, we believe there is still upside potential in the medium term, from accelerated restaurant openings using the secondary listing proceeds.

Yum China Secondary Listing: Accelerating EBIT Growth Justifies Elevated Valuation Multiples

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

US Treasury (10 Yr Generic) / Technical Analysis

<p>Considering the absence of breakdowns for the major indexes and for individual Sectors, along with the Fed covering investors’ backs, we continue to have a bullish outlook and we believe that the path of least resistance remains higher. In this report we outline our bullish case and highlight actionable opportunities across all 12 sectors.</p>

Considering the absence of breakdowns for the major indexes and for individual Sectors, along with the Fed covering investors’ backs, we continue to have a bullish outlook and we believe that the path of least resistance remains higher. In this report we outline our bullish case and highlight actionable opportunities across all 12 sectors.

U.S. Equity Strategy - Bullish Outlook Intact

United States

Chipotle Mexican Grill, Inc. owns and operates quick serve Mexican restaurants. The Company manages restaurants throughout the United States.

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Chipotle Mexican Grill (CMG US)

Nayuki Holdings IPO: Valuation Insights

We are inclined to participate at the low end of the IPO price range due to the decent upside compared to our base-case DCF valuation of HK$19.49...

Arun George

Deliveroo Part 6 - White Label Killed the Delivery Star

Deliveroo is at risk of getting disrupted because a large proportion of its orders/sales are from a small selection of chain restaurants — 10...

Newmoon Capital

Yum China (YUMC and 9987.HK) Will Accelerate to Gain Market Shared Post COVID-19

The successful Hong Kong secondary listing could help Yum China Holdings, Inc (YUMC US)

Roger Xie

Yum China Secondary Listing: Accelerating EBIT Growth Justifies Elevated Valuation Multiples

As Yum China, the operator of world-famous restaurant brands such as KFC, Pizza Hut, Taco Bell and Lavazza in China prepares for a secondary...

Oshadhi Kumarasiri

U.S. Equity Strategy - Bullish Outlook Intact

Considering the absence of breakdowns for the major indexes and for individual Sectors, along with the Fed covering investors’ backs, we continue...

Vermilion Research

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