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

<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.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 <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. 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 <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.<div class="content-highlight">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%.  </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

Equity Capital Markets

Joy Spreader Interactive Technology / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/joy-spreader-interactive-technology" target="_blank" data-smartkarma-citation="entities:29271:1" rel="noopener">Joy Spreader Interactive Technology (6988 HK)</a> is an ad tech company which connect marketers (namely, product providers and merchants) with we-media publishers. Joy Spreader has launched a Hong Kong IPO to raise around net proceeds of $140-210 million. <div class="content-highlight">The post-IPO performance of Chinese ad tech companies has been mixed. Consequently, backing the winners is crucial to generate investment returns in the Chinese ad tech sector. For investors seeking Chinese ad tech exposure, we think Joy Spreader’s fundamentals are attractive. We will discuss the IPO valuation in our next piece. </div>

Joy Spreader Interactive Technology (6988 HK) is an ad tech company which connect marketers (namely, product providers and merchants) with we-media publishers. Joy Spreader has launched a Hong Kong IPO to raise around net proceeds of $140-210 million. The post-IPO performance of Chinese ad tech companies has been mixed. Consequently, backing the winners is crucial to generate investment returns in the Chinese ad tech sector. For investors seeking Chinese ad tech exposure, we think Joy Spreader’s fundamentals are attractive. We will discuss the IPO valuation in our next piece. 

Joy Spreader IPO Initiation: For the Joy of It

<a href="https://www.smartkarma.com/entities/weimob-com" target="_blank" data-smartkarma-citation="entities:27394:1" rel="noopener">Weimob.com (2013 HK)</a> is a combination of a SaaS software and an ad tech (targeted marketing) business. Weimob has launched an HK$1.2 billion ($157 million) top-up placement at a range of HK$4.60-4.80.<div class="content-highlight">Weimob’s financial performance is solid due to an accelerating revenue growth accompanied by operational leverage. However, as pointed out in <a href="https://www.smartkarma.com/insights/weimob-ipo-preview-aggressive-accounting-makes-a-big-dent-in-the-growth-story" target="_blank" rel="noopener">our previous notes</a>, investors need to be wary that the reported margins need to be adjusted for the material capitalisation of expenses. Overall, we believe that while Weimob’s financial performance is solid, it is far from attractive at the proposed placement price.</div>

Weimob.com (2013 HK) is a combination of a SaaS software and an ad tech (targeted marketing) business. Weimob has launched an HK$1.2 billion ($157 million) top-up placement at a range of HK$4.60-4.80.Weimob’s financial performance is solid due to an accelerating revenue growth accompanied by operational leverage. However, as pointed out in our previous notes, investors need to be wary that the reported margins need to be adjusted for the material capitalisation of expenses. Overall, we believe that while Weimob’s financial performance is solid, it is far from attractive at the proposed placement price.

Weimob Placement: Opportunistic and Unattractive

IPO and L/S equity, 2015 Starmine top stock picker, Global Equity Research Ltd

Rickin Thakrar

IPO and L/S equity, 2015 Starmine top stock picker

China Tobacco International (HK) / Equity Capital Markets

We slide into 2019 with GER's recap of our latest IPO research. This week, we talk chicken as Arun initiates on the IPO Malaysian poultry producer <a href="https://www.smartkarma.com/entities/27863" target="_blank" data-smartkarma-citation="entities:27863:1">Leong Hup International (LEHUP MK)</a>. Secondly, Venkat initiates on <a href="https://www.smartkarma.com/entities/27859" target="_blank" data-smartkarma-citation="entities:27859:1">China Tobacco International (GHALPZ CH)</a> with a cautious view. In addition, Arun initiates on online broker <a href="https://www.smartkarma.com/entities/27858" target="_blank" data-smartkarma-citation="entities:27858:1">Futu Holdings Ltd (FHL US)</a>  and we remind of Arun's valuation piece on <a href="https://www.smartkarma.com/entities/27394" target="_blank" data-smartkarma-citation="entities:27394:1">Weimob.com (2013 HK)</a> . Quote of the week <blockquote>
Are you insane?
-Sky news presenter to UK MP Boris Johnson ahead of the Brexit parliament vote planned for today
</blockquote>Best of luck for the week and new year- Rickin, Venkat and Arun

We slide into 2019 with GER's recap of our latest IPO research. This week, we talk chicken as Arun initiates on the IPO Malaysian poultry producer Leong Hup International (LEHUP MK). Secondly, Venkat initiates on China Tobacco International (GHALPZ CH) with a cautious view. In addition, Arun initiates on online broker Futu Holdings Ltd (FHL US)  and we remind of Arun's valuation piece on Weimob.com (2013 HK) . Quote of the week 
Are you insane?
-Sky news presenter to UK MP Boris Johnson ahead of the Brexit parliament vote planned for today
Best of luck for the week and new year- Rickin, Venkat and Arun

Last Week in GER IPO Research: Leong Hup, China Tobacco, Futu and Weimob

Another busy week for IPO research from the GER team. This week, we recap the <a href="https://www.smartkarma.com/entities/27255" target="_blank" data-smartkarma-citation="entities:27255:1">Tencent Music Entertainment (TME US)</a> IPO which we noted is more fairly valued post its day one rally. Secondly, we dig into Chinese domiciled IPOs that are listed in the States and find some interesting trends on maximizing the 'pop', knowing when to get out and an assessment of longer-term performance. Arun nails his DCF valuation on <a href="https://www.smartkarma.com/entities/27795" target="_blank" data-smartkarma-citation="entities:27795:1">WuXi AppTec Co. Ltd. (2359 HK)</a> which closed at his base-case valuation while he recommends getting involved at the low-end for <a href="https://www.smartkarma.com/entities/27760" target="_blank" data-smartkarma-citation="entities:27760:1">Shanghai Junshi Bioscience Co. Ltd. (1387344D CH)</a> . Finally, <a href="https://www.smartkarma.com/entities/27808" target="_blank" data-smartkarma-citation="entities:27808:1">Xinyi Energy Holdings Ltd (1671746D HK)</a> spares further wrath as it postpones its IPO - Venkat digs into the reasons why he is cautious on the company. Quote of the week: <blockquote>
Please note the post-apocalyptical fiction section has been moved to current affairs
- Sign in front of a UK bookstore
</blockquote>Video of the week: Santas hit the slopes in Maine<iframe src="//www.youtube.com/embed/27kn--zEWDA" width="640" height="360"></iframe>This is our last wrap of 2018 - we wish you a safe and happy festive period - and we will back in 2019!Best wishes - Rickin, Venkat and Arun

Another busy week for IPO research from the GER team. This week, we recap the Tencent Music Entertainment (TME US) IPO which we noted is more fairly valued post its day one rally. Secondly, we dig into Chinese domiciled IPOs that are listed in the States and find some interesting trends on maximizing the 'pop', knowing when to get out and an assessment of longer-term performance. Arun nails his DCF valuation on WuXi AppTec Co. Ltd. (2359 HK) which closed at his base-case valuation while he recommends getting involved at the low-end for Shanghai Junshi Bioscience Co. Ltd. (1387344D CH) . Finally, Xinyi Energy Holdings Ltd (1671746D HK) spares further wrath as it postpones its IPO - Venkat digs into the reasons why he is cautious on the company. Quote of the week: 
Please note the post-apocalyptical fiction section has been moved to current affairs
- Sign in front of a UK bookstore
Video of the week: Santas hit the slopes in MaineThis is our last wrap of 2018 - we wish you a safe and happy festive period - and we will back in 2019!Best wishes - Rickin, Venkat and Arun

Last Week’s GER IPO Research: Tencent Music, IPO Trading Strategy Deep Dive, WuXi, Junshi & Xinyi

United States

CooTek (Cayman) Inc. provides big data processing solutions. The Company offers its services in China.

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CooTek Cayman Inc (CTK 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

Joy Spreader IPO Initiation: For the Joy of It

Joy Spreader is an ad tech company which connect marketers (namely, product providers and merchants) with we-media publishers. Joy Spreader is set...

Arun George

Weimob Placement: Opportunistic and Unattractive

Weimob.com (2013 HK) is a combination of a SaaS software and an ad tech (targeted marketing) business. Weimob has launched an HK$1.2 billion ($157...

Arun George

Last Week in GER IPO Research: Leong Hup, China Tobacco, Futu and Weimob

We slide into 2019 with GER's recap of our latest IPO research. This week, we talk chicken as Arun initiates on the IPO Malaysian poultry producer...

Rickin Thakrar

Last Week’s GER IPO Research: Tencent Music, IPO Trading Strategy Deep Dive, WuXi, Junshi & Xinyi

Another busy week for IPO research from the GER team. This week, we recap the Tencent Music Entertainment (TME US) IPO which we noted is more...

Rickin Thakrar

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