Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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

<ul>
<li>Ferretti is a leading yacht builder based in Italy. The company is looking to raise up to USD 500 m via a Hong Kong listing.</li>
<li>We look at the company's key product segments, operating metrics, financials, and industry.</li>
<li>We provide our quick thoughts on the industry, valuation, and our concerns.</li>
</ul>


Ferretti is a leading yacht builder based in Italy. The company is looking to raise up to USD 500 m via a Hong Kong listing.
We look at the company's key product segments, operating metrics, financials, and industry.
We provide our quick thoughts on the industry, valuation, and our concerns.


Ferretti Group Pre-IPO: Might Disappoint Again

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

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.

The Italian luxury yacht maker, <a href="https://www.smartkarma.com/entities/ferretti-spa" target="_blank" data-smartkarma-citation="entities:28335:1" rel="noopener">Ferretti SpA (FER IM)</a>  has filed for an initial public offering on the Milan Stock Exchange to raise net proceeds of approximately EUR120m at the midpoint of the IPO price range. The company makes luxury yachts and speedboats under several well-known brands including Wally, Ferreti Yachts, Pershing, Itama and Riva. The company previously traded publicly, however, it was delisted in 2003 and was acquired by private equity firm Weichai Group (China) in 2012. Weichai Group currently owns approximately 86% of the company while Piero Ferrari (through F Investments SA) holds 11.14% of the company. The Chinese group managed to turn around the company into a profitable entity in 2016 while it also helped pay-off the debt.<table class="table table-striped"><tbody>
<tr>
<td><h2>Ferreti IPO Details</h2></td>
<td> </td>
</tr>
<tr>
<td>New Shares Offered</td>
<td style="text-align: right;">40,000,000</td>
</tr>
<tr>
<td>Existing Shares Offered</td>
<td style="text-align: right;">47,000,000</td>
</tr>
<tr>
<td>Greenshoe Option</td>
<td style="text-align: right;">                       8,700,000</td>
</tr>
<tr>
<td>Total Shares Outstanding</td>
<td style="text-align: right;">290,734,954</td>
</tr>
<tr>
<td>Offer as a % of Total Shares Outstanding (incl. greenshoe)</td>
<td style="text-align: right;">33%</td>
</tr>
<tr>
<td>Offer Price (EUR)</td>
<td style="text-align: right;">2.5-3.7</td>
</tr>
<tr>
<td>Offer Period</td>
<td style="text-align: right;">01-10th October</td>
</tr>
<tr>
<td>Price Setting</td>
<td style="text-align: right;">by 15th October</td>
</tr>
<tr>
<td>Trading Date</td>
<td style="text-align: right;">16th October</td>
</tr>
<tr>
<td> </td>
<td style="text-align: right;"> </td>
</tr>
<tr>
<td>IPO Price - Midpoint (EUR)</td>
<td style="text-align: right;">3.1</td>
</tr>
<tr>
<td>Market Capitalisation (EURm)</td>
<td style="text-align: right;">901.3</td>
</tr>
<tr>
<td>Enterprise Value (EURm)</td>
<td style="text-align: right;">976.7</td>
</tr>
</tbody></table><div class="content-caption">Source: Company Disclosures, LSR</div>Ferreti’s revenues have grown over time while the company also has shifted its focus to high-priced, more profitable segments such as manufacturing large-foot yachts. The company currently operates exclusively in the inboard segment of the market and it acquired Wally Yachts in early 2019, through which the company is planning on entering the outboard and sail segments of the market. In terms of the company’s profitability, it has been generating profits over the last three years and we expect the company margins to improve in the next 2-3 years due to a shift in product mix towards high-margin yachts. On the other hand, the company’s borrowings have significantly increased over the last two years while Ferreti also owns its parent EUR211m in debt (not included under debt). We are concerned about the increasing debt position of the company. Ferreti operates in the luxury goods and services market which is not recession proof and thus at the IPO price range, the stock looks overpriced compared to its peers in the luxury goods/service market.Investors are increasingly worrying about another economic downturn as the wealthy have suddenly pulled back their spending on luxury items. Even during the last recession, the order books were healthy and strong at the beginning of the recession, however, there were cancellations and delays which caused a significant decline in the industry’s revenue. The volatile markets and slowdown in global economic growth have caused a decline in luxury spending which puts this IPO at risk of underperformance.We discuss the details below.

The Italian luxury yacht maker, Ferretti SpA (FER IM)  has filed for an initial public offering on the Milan Stock Exchange to raise net proceeds of approximately EUR120m at the midpoint of the IPO price range. The company makes luxury yachts and speedboats under several well-known brands including Wally, Ferreti Yachts, Pershing, Itama and Riva. The company previously traded publicly, however, it was delisted in 2003 and was acquired by private equity firm Weichai Group (China) in 2012. Weichai Group currently owns approximately 86% of the company while Piero Ferrari (through F Investments SA) holds 11.14% of the company. The Chinese group managed to turn around the company into a profitable entity in 2016 while it also helped pay-off the debt.

Ferreti IPO Details
 


New Shares Offered
40,000,000


Existing Shares Offered
47,000,000


Greenshoe Option
                       8,700,000


Total Shares Outstanding
290,734,954


Offer as a % of Total Shares Outstanding (incl. greenshoe)
33%


Offer Price (EUR)
2.5-3.7


Offer Period
01-10th October


Price Setting
by 15th October


Trading Date
16th October


 
 


IPO Price - Midpoint (EUR)
3.1


Market Capitalisation (EURm)
901.3


Enterprise Value (EURm)
976.7

Source: Company Disclosures, LSRFerreti’s revenues have grown over time while the company also has shifted its focus to high-priced, more profitable segments such as manufacturing large-foot yachts. The company currently operates exclusively in the inboard segment of the market and it acquired Wally Yachts in early 2019, through which the company is planning on entering the outboard and sail segments of the market. In terms of the company’s profitability, it has been generating profits over the last three years and we expect the company margins to improve in the next 2-3 years due to a shift in product mix towards high-margin yachts. On the other hand, the company’s borrowings have significantly increased over the last two years while Ferreti also owns its parent EUR211m in debt (not included under debt). We are concerned about the increasing debt position of the company. Ferreti operates in the luxury goods and services market which is not recession proof and thus at the IPO price range, the stock looks overpriced compared to its peers in the luxury goods/service market.Investors are increasingly worrying about another economic downturn as the wealthy have suddenly pulled back their spending on luxury items. Even during the last recession, the order books were healthy and strong at the beginning of the recession, however, there were cancellations and delays which caused a significant decline in the industry’s revenue. The volatile markets and slowdown in global economic growth have caused a decline in luxury spending which puts this IPO at risk of underperformance.We discuss the details below. 

Ferreti Group IPO: Good Business but Sailing in Stormy Economic Seas

Italy

Ferretti S.P.A. manufactures and markets powerboats and yachts. The Company designs fly bridge motor yachts, open cruisers, sport fisherman motor yachts, lobster boats, mega-yachts, and fiberglass maxi yachts. Ferretti serves customers globally.

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Ferretti SpA (9638 HK)

Ferretti Group Pre-IPO: Might Disappoint Again

Ferretti Group is world's leading yacht maker seeking for a USD 500m listing in Hong Kong. It has attempted listing multiple times and we think the...

Ke Yan, CFA, FRM

Ferreti Group IPO: Good Business but Sailing in Stormy Economic Seas

The Italian luxury yacht maker, Ferretti SpA (FER IM) has filed for an initial public offering on the Milan Stock Exchange to raise net proceeds...

Shifara Samsudeen, ACMA, CGMA

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52-week Range

Market Cap (USDm)

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