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

Jinke Property Group / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/jinke-smart-services" target="_blank" data-smartkarma-citation="entities:29214:1" rel="noopener">Jinke Smart Services (9666 HK)</a> is a Chinese property management company which is a subsidiary of <a href="https://www.smartkarma.com/entities/jinke-property-group-co-ltd" target="_blank" data-smartkarma-citation="entities:13291:1" rel="noopener">Jinke Property Group (000656 CH)</a>. From 2015 to 2020, Jinke was ranked first among the Top 100 property management companies as measured by overall strengths in the Southwestern China Region, according to China Index Academy. Jinke has launched a Hong Kong IPO to raise net proceeds of HK$5,738.1 million ($740 million) at the mid-point of the IPO price range. </p><div class="content-highlight"><p>Property developers continue to spin-off their property management arms due to tight credit conditions. However, sentiment on property management IPOs seems to have turned as recent IPOs 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> and <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> are trading 20% and 5% below their IPO prices, respectively. The poor post-IPO performance despite good fundamentals was likely due to investors unwilling to pay a growth premium compared to an ever-expanding selection of listed peers. Overall, on a fundamental view, we believe that Jinke is attractive.</p></div>

Jinke Smart Services (9666 HK) is a Chinese property management company which is a subsidiary of Jinke Property Group (000656 CH). From 2015 to 2020, Jinke was ranked first among the Top 100 property management companies as measured by overall strengths in the Southwestern China Region, according to China Index Academy. Jinke has launched a Hong Kong IPO to raise net proceeds of HK$5,738.1 million ($740 million) at the mid-point of the IPO price range. Property developers continue to spin-off their property management arms due to tight credit conditions. However, sentiment on property management IPOs seems to have turned as recent IPOs of KWG Living Group (3913 HK) and Shimao Services Holdings (873 HK) are trading 20% and 5% below their IPO prices, respectively. The poor post-IPO performance despite good fundamentals was likely due to investors unwilling to pay a growth premium compared to an ever-expanding selection of listed peers. Overall, on a fundamental view, we believe that Jinke is attractive.

Jinke Smart Services IPO Initiation: Street Smart

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.

Shimao Services Holdings Limited / Equity Capital Markets

<p><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> (SSH) raised about US$1.3bn by pricing its IPO at HK$16.60 per share, the upper end of the price range.</p>
<div>
<p>SSH is the property management unit of Shimao Group Holdings (813 HK) and was recently backed by Sequoia and Tencent. It provides property management community living services and, as of 31 December, 2019, has an aggregated GFA under management and contracted GFA of 68.2m sqm and 100.9m sqm, respectively.</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>
</div>
<div>
<p>Our previous coverage of the IPO:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/shimao-services-pre-ipo-phip-updates-impressive-6m-2020-results" target="_blank" data-smartkarma-citation="insights:44166" rel="noopener">Shimao Services (世茂服务) Pre-IPO - PHIP Updates - Impressive 6M 2020 Results</a> </li>
<li><a href="https://www.smartkarma.com/insights/shimao-services-pre-ipo-community-vas-segment-is-the-star" target="_blank" rel="noopener">Shimao Services (世茂服务) Pre-IPO - Community VAS segment is the star </a></li>
<li>
<a href="https://www.smartkarma.com/insights/shimao-services-ipo-paying-for-growth" target="_blank" data-smartkarma-citation="insights:44306" rel="noopener">Shimao Services (世茂服务) IPO - Paying for Growth</a> </li>
</ul>
</div>

Shimao Services Holdings (873 HK) (SSH) raised about US$1.3bn by pricing its IPO at HK$16.60 per share, the upper end of the price range.

SSH is the property management unit of Shimao Group Holdings (813 HK) and was recently backed by Sequoia and Tencent. It provides property management community living services and, as of 31 December, 2019, has an aggregated GFA under management and contracted GFA of 68.2m sqm and 100.9m sqm, respectively.
In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.


Our previous coverage of the IPO:




Shimao Services (世茂服务) Pre-IPO - PHIP Updates - Impressive 6M 2020 Results 
Shimao Services (世茂服务) Pre-IPO - Community VAS segment is the star 

Shimao Services (世茂服务) IPO - Paying for Growth 



Shimao Services (世茂服务) IPO Trading - Limited Upside from Here

KWG Living Group / Equity Capital Markets

<p><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> (KLG) raised US$390m at HK$7.89 per share, the upper end of the initial IPO price range. </p>
<p>KLG is the property management services arm of KWG Group. The company provides management services for residential and commercial properties and, as of December 2019, managed 106 residential properties with a total GFA under management of 18.3m sqm.</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>
<div>
<p>Our previous coverage of the IPO:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/kwg-living-pre-ipo-updates-from-phip-resilient-performance-and-better-disclosure" target="_blank" data-smartkarma-citation="insights:44125" rel="noopener">KWG Living (合景悠活) Pre-IPO - Updates from PHIP - Resilient Performance and Better Disclosure</a> </li>
<li>
<a href="https://www.smartkarma.com/entities/loblaw-cos-ltd" target="_blank" data-smartkarma-citation="entities:25150:1" rel="noopener"></a><a href="https://www.smartkarma.com/insights/kwg-living-pre-ipo-strong-growth-and-margin-expansion-but-overly-reliant-on-kwg-group" target="_blank" data-smartkarma-citation="insights:41974" rel="noopener">KWG Living (合景悠活) Pre-IPO - Strong Growth and Margin Expansion but Overly Reliant on KWG Group</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/kwg-living-ipo-not-cheap-but-strong-lineup-of-investors-helps" target="_blank" data-smartkarma-citation="insights:44247" rel="noopener">KWG Living (合景悠活) IPO - Not Cheap but Strong Lineup of Investors Helps</a> </li>
</ul>
</div>

KWG Living Group (3913 HK) (KLG) raised US$390m at HK$7.89 per share, the upper end of the initial IPO price range. 
KLG is the property management services arm of KWG Group. The company provides management services for residential and commercial properties and, as of December 2019, managed 106 residential properties with a total GFA under management of 18.3m sqm.
In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.

Our previous coverage of the IPO:




KWG Living (合景悠活) Pre-IPO - Updates from PHIP - Resilient Performance and Better Disclosure 

KWG Living (合景悠活) Pre-IPO - Strong Growth and Margin Expansion but Overly Reliant on KWG Group 

KWG Living (合景悠活) IPO - Not Cheap but Strong Lineup of Investors Helps 



KWG Living (合景悠活) IPO Trading - Good Demand but Peers Have Traded Lower Since Bookbuild

Sunac Services Holdings / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/sunac-services-holdings" target="_blank" data-smartkarma-citation="entities:29239:1" rel="noopener">Sunac Services Holdings (1820476D HK)</a> is a Chinese property management company. Sunac is the fastest-growing large-scale property management service provider in China, according to China Index Academy. Sunac is pre-marketing an IPO to raise $1 billion, according to press reports.</p><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/sunac-services-ipo-initiation-next-in-line" target="_blank" rel="noopener">our initiation note</a>, we stated that Sunac’s fundamentals over the track record period are attractive. The PHIP discloses the 1H20 results which include New Century (consolidated from 8 May), along with a few data points on the post-period trading. The PHIP data points support our view that Sunac is a well-run property management company. </p></div>

Sunac Services Holdings (1820476D HK) is a Chinese property management company. Sunac is the fastest-growing large-scale property management service provider in China, according to China Index Academy. Sunac is pre-marketing an IPO to raise $1 billion, according to press reports.In our initiation note, we stated that Sunac’s fundamentals over the track record period are attractive. The PHIP discloses the 1H20 results which include New Century (consolidated from 8 May), along with a few data points on the post-period trading. The PHIP data points support our view that Sunac is a well-run property management company. 

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Shimao Property Holdings / Equity Capital Markets

<p>The IPO price for <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> (SSH), the latest in a long line of property management service companies to be listed, will be announced tomorrow. Shares will commence trading this Friday.</p>
<p>SSH is the spin-off of <a href="https://www.smartkarma.com/entities/shimao-property-holdings-limited" target="_blank" data-smartkarma-citation="entities:8375:1" rel="noopener">Shimao Property Holdings (813 HK)</a>, who will own 66.5% in SSH after the IPO, down from 90% currently.</p>
<p>Similar to <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>, SSH's implied PER is in keeping with its generous growth the last two years, and arguably can be justified, to some degree, when comparing PER/Growth to peer comps.</p>
<p>However, Shimao Property looks expensive when de-consolidating out the implied market cap of SSH.</p>
<p>As always, more below the fold. </p>

The IPO price for Shimao Services Holdings (873 HK) (SSH), the latest in a long line of property management service companies to be listed, will be announced tomorrow. Shares will commence trading this Friday.
SSH is the spin-off of Shimao Property Holdings (813 HK), who will own 66.5% in SSH after the IPO, down from 90% currently.
Similar to KWG Living Group (3913 HK), SSH's implied PER is in keeping with its generous growth the last two years, and arguably can be justified, to some degree, when comparing PER/Growth to peer comps.
However, Shimao Property looks expensive when de-consolidating out the implied market cap of SSH.
As always, more below the fold. 

Shimao Services: KWG Living-Like Valuation; Parent Trading Rich

China

Country Garden Services Holdings Company Limited provides real estate development services. The Company develops residential apartments, multi-functional complex buildings, government and public facilities, industrial parks, highway service stations, and schools. Country Garden Services Holdings serves clients in China.

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Country Garden Services (6098 HK)

Jinke Smart Services IPO Initiation: Street Smart

Jinke has launched a Hong Kong IPO to raise net proceeds of HK$5,738.1 million ($740 million) at the mid-point of the IPO price range. On a...

Arun George

Shimao Services (世茂服务) IPO Trading - Limited Upside from Here

SSH is the property management unit of Shimao Group (813 HK) and was recently backed by Sequoia and Tencent. IPO demand was decent despite having...

Zhen Zhou, Toh

KWG Living (合景悠活) IPO Trading - Good Demand but Peers Have Traded Lower Since Bookbuild

KLG is the property management services arm of KWG Group. In this note, we will look at the deal dynamics and provide a table with implied...

Zhen Zhou, Toh

Sunac Services IPO: PHIP Data Points

The PHIP discloses the 1H20 results which include New Century, along with a few post-period data points. The PHIP data points support our view that...

Arun George

Shimao Services: KWG Living-Like Valuation; Parent Trading Rich

Shimao Property's trades at a significant premium to the implied P/B for property developers, net of their management services investment holding.

David Blennerhassett

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