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

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<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>
<p>Nayuki will commence trading on Wednesday, 30 June. Nayuki priced its IPO at HK$19.80 and the shares <a href="https://inews.hket.com/article/2993858/%E3%80%90%E5%A5%88%E9%9B%AA%E7%9A%84%E8%8C%B6%E6%9A%97%E7%9B%A4%E3%80%91%E5%A5%88%E9%9B%AA%E7%9A%84%E8%8C%B62150%E5%A0%B4%E5%A4%96%E6%9A%97%E7%9B%A4%E5%8D%8711-%E3%80%80%E4%B8%80%E6%89%8B%E5%B8%B3%E9%9D%A2%E8%B3%BA1100%E5%85%83?mtc=40001&amp;srkw=IPO%E6%9C%80%E5%BF%AB%E6%9C%80%E9%BD%8A" target="_blank" rel="noopener">stood 11% higher</a> at HK$22.00 in the grey market.</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>
<p>In <a href="https://www.smartkarma.com/insights/nayuki-holdings-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:53291" rel="noopener">Nayuki Holdings IPO: Valuation Insights</a>, we noted that Nayuki is attractively valued to its peer group for its forecasted earnings growth i.e. on a PEG basis. We recommended participating at the low end of the IPO price range due to the decent upside compared to our base-case DCF valuation.</p>
</div><div><div><div class="content-highlight"><p>Updating for the final IPO net raise and FX, our base-case DCF derived price target is HK$19.45 per share. Nevertheless, our DCF sensitivity and relative valuation analysis show that the grey market price is justifiable.  </p></div></div></div>


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.
Nayuki will commence trading on Wednesday, 30 June. Nayuki priced its IPO at HK$19.80 and the shares stood 11% higher at HK$22.00 in the grey market.

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.
In Nayuki Holdings IPO: Valuation Insights, we noted that Nayuki is attractively valued to its peer group for its forecasted earnings growth i.e. on a PEG basis. We recommended participating at the low end of the IPO price range due to the decent upside compared to our base-case DCF valuation.
Updating for the final IPO net raise and FX, our base-case DCF derived price target is HK$19.45 per share. Nevertheless, our DCF sensitivity and relative valuation analysis show that the grey market price is justifiable.  

<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.




Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

Equity Bottom-Up

<ul>
<li>I am reluctant to own a restaurant business;</li>
<li>But Snack Empire can be an exceptional hidden gem in this challenging space;</li>
<li>Given the high-quality fundamentals and attractive pricing, the stock can be a decent candidate for multi-bagger collectors.</li>
</ul>


I am reluctant to own a restaurant business;
But Snack Empire can be an exceptional hidden gem in this challenging space;
Given the high-quality fundamentals and attractive pricing, the stock can be a decent candidate for multi-bagger collectors.


Snack Empire: One of The Few Restaurant Businesses That I Would Own

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.

Restaurant Brands Asia / Equity Capital Markets

<div><p>Burger King India (BKI) raised around US$110m via a mix of selling primary and secondary shares in its India IPO. </p></div><div><p>BKI is the national master franchisee of the Burger King brand in India. As of Sep 2020, it operated 261 restaurants, including 8 sub-franchised restaurants, across 57 cities in India. </p></div><div><p>I’ve covered various aspects of the deal in my earlier notes:</p></div><div><ul style="list-style-type: disc;">
<li dir="ltr"><p><a href="https://www.smartkarma.com/insights/burger-king-india-pre-ipo-has-been-growing-fast-and-plans-to-grow-even-faster" target="_blank" rel="noopener">Burger King India Pre-IPO - Has been growing fast and plans to grow even faster</a></p></li>
<li dir="ltr"><p><a href="https://www.smartkarma.com/insights/burger-king-india-pre-ipo-peer-comparison-yields-interesting-nuggets-on-profitability-and-capex" target="_blank" rel="noopener">Burger King India Pre-IPO - Peer comparison yields interesting nuggets on profitability and capex</a></p></li>
</ul></div><ul><li><a href="https://www.smartkarma.com/insights/burger-king-india-ipo-can-still-grow-fast" target="_blank" rel="noopener">Burger King India IPO - Can Still Grow Fast</a></li></ul><div><p>In this note, I’ll talk about the updates for the deal and provide a table with implied valuations at different share price levels.</p></div>

Burger King India (BKI) raised around US$110m via a mix of selling primary and secondary shares in its India IPO. BKI is the national master franchisee of the Burger King brand in India. As of Sep 2020, it operated 261 restaurants, including 8 sub-franchised restaurants, across 57 cities in India. I’ve covered various aspects of the deal in my earlier notes:
Burger King India Pre-IPO - Has been growing fast and plans to grow even faster
Burger King India Pre-IPO - Peer comparison yields interesting nuggets on profitability and capex
Burger King India IPO - Can Still Grow FastIn this note, I’ll talk about the updates for the deal and provide a table with implied valuations at different share price levels.

Burger King India IPO Trading - Can Probably Double from IPO Price

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<p>Burger King India (BKI) aims to raise around US$110m via a mix of selling primary and secondary shares in India. </p>
<p>BKI is the national master franchisee of the Burger King brand in India. As of Sep 2020, it operated 261 restaurants, including 8 sub-franchised restaurants, across 57 cities in India. </p>
<p>BKI’s no. of restaurants have increased by 2.95x over FY17-20, while its revenue has grown even faster at 54% CAGR over FY17-20. Although BKI hasn’t managed to break-even, with the COVID induced lockdown pushing it back into losses.</p>
<p>As compared to its two main listed peers, BKI appears to lie in between on most measures, although its cost structure leaves much to be desired, as of now.</p>
<p>I’ve covered various aspects of the deal in my earlier notes:</p>
<ul>
<li dir="ltr"><p><a href="https://www.smartkarma.com/insights/burger-king-india-pre-ipo-has-been-growing-fast-and-plans-to-grow-even-faster" target="_blank" rel="noopener">Burger King India Pre-IPO - Has been growing fast and plans to grow even faster</a></p></li>
<li dir="ltr"><p><a href="https://www.smartkarma.com/insights/burger-king-india-pre-ipo-peer-comparison-yields-interesting-nuggets-on-profitability-and-capex" target="_blank" rel="noopener">Burger King India Pre-IPO - Peer comparison yields interesting nuggets on profitability and capex</a></p></li>
</ul>
<p>In this note, I’ll cover the updates in the company’s latest filings and run the deal through our ECM framework</p>
</div>


Burger King India (BKI) aims to raise around US$110m via a mix of selling primary and secondary shares in India. 
BKI is the national master franchisee of the Burger King brand in India. As of Sep 2020, it operated 261 restaurants, including 8 sub-franchised restaurants, across 57 cities in India. 
BKI’s no. of restaurants have increased by 2.95x over FY17-20, while its revenue has grown even faster at 54% CAGR over FY17-20. Although BKI hasn’t managed to break-even, with the COVID induced lockdown pushing it back into losses.
As compared to its two main listed peers, BKI appears to lie in between on most measures, although its cost structure leaves much to be desired, as of now.
I’ve covered various aspects of the deal in my earlier notes:

Burger King India Pre-IPO - Has been growing fast and plans to grow even faster
Burger King India Pre-IPO - Peer comparison yields interesting nuggets on profitability and capex

In this note, I’ll cover the updates in the company’s latest filings and run the deal through our ECM framework


Burger King India IPO - Can Still Grow Fast

United States

Wynn Resorts, Limited owns and operates luxury hotels and destination casino resorts in Las Vegas, Nevada, Macau, and China. The Company offers amenities such as guest rooms and suites, restaurants, golf course, and an on-site luxury automotive dealership.

Hyatt Hotels Corp. is a global hospitality company. The Company manages, franchises, owns, and develops branded hotels, resorts and residential and vacation ownership properties around the world.

Norwegian Cruise Line Holdings Ltd. operates a fleet of passenger cruise ships. The Company offers an array of cruise itineraries as well as theme cruises, while markets its services through various distribution channels including retail and travel agents, consumer direct, international sales, as well as incentive sales. Norwegian Cruise extends its services worldwide.

Wingstop Inc. owns and operates restaurants. The Company specializes in cooked-to-order, hand-sauced, and tossed chicken wings. Wingstop serves customers worldwide.

Planet Fitness, Inc. owns and operates a chain of fitness clubs. The Company offers offers personal fitness training programs for its members. Planet Fitness serves customers in the United States.

Scientific Games Corporation provides services, systems, and products to both the pari-mutuel gaming and instant ticket lottery industries.  The Company operates an instant ticket and online lottery products, systems, and services business.  Scientific also operates wagering and communications, venue management, and telecommunications products businesses.

Churchill Downs Incorporated is a horse racing company whose flagship operation, Churchill Downs, is the home of the Kentucky Derby.  The Company has additional racing and simulcast-wagering operations in Kentucky, Indiana, and Florida, as well as interests in various racing services companies.

Caesars Entertainment, Inc. owns and operates as a chain of resorts. The Company offers casino, poker, roulette, and other gaming facilities, as well as provides food and beverages services. Caesars Entertainment serves customers in the United States.

Vail Resorts, Inc. operates resorts in Colorado.  The Company's resorts include Vail Mountain, a ski mountain complex, and Beaver Creek Resort, a family oriented mountain resort.  Vail Resorts also operates Breckenridge Mountain, a destination resort with apres-ski activities, and Keystone Resort, a year-round family vacation destination.

Aramark provides food and facilities management services. The Company offers uniform, refreshments, work apparel, and cleanroom services to healthcare institutions, universities, school districts, stadiums, and businesses. Aramark serves clients worldwide.

Sands China Ltd. develops, owns, and operates integrated resorts, retail malls, and casinos. The Company also manages convention and exhibition halls in Macau.

Genting Singapore Limited, through its subsidiaries, develops resort properties as well as operates casinos. The Company has casinos and integrated resorts in different parts of the world, including Australia, the Americas, Malaysia, the Philippines and the United Kingdom.

Galaxy Entertainment Group Limited, through its subsidiary, operates casino, hotel and other entertainment facilities in Macau. The company also manufactures sells and distributes construction materials.

Indian Hotels Company Limited operates The Taj Group of hotels.  The Company owns or maintains long term leases/licenses for hotels in India, in addition to International hotels.  The Group's hotels are divided into three groups: Luxury, Business, and, Leisure.

China Tourism Group Duty Free Corporation Limited engages in sales of duty free goods and tax goods. The Company sells tobacco, wine and spirits, perfume, cosmetics, fashion and accessories, watches, jewelry, food, luggage products,and other products. China Tourism Group Duty Free also engages in investment and development of tourism destination commercial complexes.

China Tourism Group Duty Free Corp Ltd (601888 CH)

Huazhu Group Limited operates a hotel operator and franchisor. The Company provides hotel leasing, directly hotel operation, and co-development services. Huazhu Group mainly conducts businesses in China.

Accor SA operates hotel chains and offers human resources, marketing, and expense management services.  The Company operates hotels ranging from budget to upscale worldwide.

Sodexo SA designs, manages and delivers comprehensive on-site service solutions for its clients.  The Company offers food, construction management, reception, technical maintenance and housekeeping services; maintains scanners and laboratory equipment; and operates river and harbor cruises and correctional facilities.  Sodexo also designs employee benefit and incentive programs.

InterContinental Hotels Group PLC owns and operates a portfolio of hotel businesses. The Company manages hotel loyalty and priority club rewards programs. InterContinental Hotels Group serves customers worldwide.

Whitbread PLC is a hotel and restaurant group. The Company operates businesses in budget hotels, restaurants and coffee shops.

Domino's Pizza, Inc. operates a network of Company-owned and franchise Domino's Pizza stores, located throughout the United States and in other countries.  The Company also operates regional dough manufacturing and distribution centers in the contiguous United States and outside the United States.

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Domino's Pizza (DPZ US)

Nayuki Holdings IPO: Trading Debut

Nayuki priced its IPO at HK$19.80 and the shares stood 11% higher at HK$22.00 in the grey market. Our DCF sensitivity and relative valuation...

Arun George

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

Snack Empire: One of The Few Restaurant Businesses That I Would Own

Given the high-quality fundamentals and attractive pricing, the stock can be a decent candidate for multi-bagger collectors.

Steven Chen

Burger King India IPO Trading - Can Probably Double from IPO Price

Burger King India (BKI) raised around US$110m in its India IPO. BKI is the national master franchisee of the Burger King brand in India.

Sumeet Singh

Burger King India IPO - Can Still Grow Fast

Burger King India (BKI) aims to raise around US$110m via a mix of selling primary and secondary shares in India. BKI is the national master...

Sumeet Singh

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