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

Hyundai Engineering   / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hyundai-engineering-co-ltd" target="_blank" data-smartkarma-citation="entities:33008:1" rel="noopener">Hyundai Engineering Co Ltd (HEC KS)</a> has launched its IPO to raise US$0.8-1.0 billion at the price range of KRW57,900-75,700 per share.</li>
<li>In <a href="https://www.smartkarma.com/insights/hyundai-engineering-ipo-initiation-building-on-good-foundations" target="_blank" data-smartkarma-citation="insights:63360" rel="noopener">Hyundai Engineering IPO Initiation: Building on Good Foundations</a>, we stated that HEC has attractive fundamentals with a strong backlog, healthy book-to-bill, improving 3Q21 revenue growth and improving margins. </li>
<li>In this note, we look at the syndicate's valuation methodology and present our valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive. </li>
</ul>



Hyundai Engineering Co Ltd (HEC KS) has launched its IPO to raise US$0.8-1.0 billion at the price range of KRW57,900-75,700 per share.
In Hyundai Engineering IPO Initiation: Building on Good Foundations, we stated that HEC has attractive fundamentals with a strong backlog, healthy book-to-bill, improving 3Q21 revenue growth and improving margins. 
In this note, we look at the syndicate's valuation methodology and present our valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive. 


Hyundai Engineering IPO: Valuation Insights

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hyundai-engineering-co-ltd" target="_blank" data-smartkarma-citation="entities:33008:1" rel="noopener">Hyundai Engineering Co Ltd (HEC KS)</a>/HEC is a leading global EPC (Engineering, Procurement and Construction) contractor. It is seeking to raise up to $1 billion.  </li>
<li>HEC is offering 16.0 million shares with a primary/secondary split of 25/75 at an indicative price range of KRW57,900-66,800 per share.</li>
<li>HEG has attractive fundamentals with a strong backlog, healthy book-to-bill, improving 3Q21 revenue growth and improving margins. </li>
</ul>



Hyundai Engineering Co Ltd (HEC KS)/HEC is a leading global EPC (Engineering, Procurement and Construction) contractor. It is seeking to raise up to $1 billion.  
HEC is offering 16.0 million shares with a primary/secondary split of 25/75 at an indicative price range of KRW57,900-66,800 per share.
HEG has attractive fundamentals with a strong backlog, healthy book-to-bill, improving 3Q21 revenue growth and improving margins. 


Hyundai Engineering IPO Initiation: Building on Good Foundations

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>Our base case valuation of Hyundai Engineering Co Ltd is EV of 3.3 trillion won, implied market cap of 5.4 trillion won, and target price of 67,475 won per share. </li>
<li>This is within the IPO price range of 57,900 won and 75,700 won per share. Given the lack of upside, we have a Negative view of this IPO.</li>
<li>Our base case valuation is based on 6.3x EV/EBITDA valuation multiple using 2022 estimated EBITDA of 526 billion won.</li>
</ul>


Our base case valuation of Hyundai Engineering Co Ltd is EV of 3.3 trillion won, implied market cap of 5.4 trillion won, and target price of 67,475 won per share. 
This is within the IPO price range of 57,900 won and 75,700 won per share. Given the lack of upside, we have a Negative view of this IPO.
Our base case valuation is based on 6.3x EV/EBITDA valuation multiple using 2022 estimated EBITDA of 526 billion won.


Hyundai Engineering IPO Valuation Analysis

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC 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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hyundai-engineering-co-ltd" target="_blank" data-smartkarma-citation="entities:33008:1" rel="noopener">Hyundai Engineering Co Ltd (HEC KS)</a> is looking to raise up to US$1bn in its upcoming Korea IPO.</li>
<li>Whilst the firm has a relatively high concentration of international orders in its backlog, 40% in 9M21, it has been on the down trend since 2016.</li>
<li>In this note, we discuss peer comparison, our assumptions and valuation against domestic and international peers.</li>
</ul>



Hyundai Engineering Co Ltd (HEC KS) is looking to raise up to US$1bn in its upcoming Korea IPO.
Whilst the firm has a relatively high concentration of international orders in its backlog, 40% in 9M21, it has been on the down trend since 2016.
In this note, we discuss peer comparison, our assumptions and valuation against domestic and international peers.


Hyundai Engineering Pre-IPO - Unjustifiable Premium to Most Domestic Peers

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hyundai-engineering-co-ltd" target="_blank" data-smartkarma-citation="entities:33008:1" rel="noopener">Hyundai Engineering Co Ltd (HEC KS)</a> is looking to raise up to US$1bn in its upcoming Korea IPO. </li>
<li>Hyundai Engineering is an engineering firm that covers the entire life-cycle, from procurement, development, maintenance post-completion of the building/project.</li>
<li>As per Korea Construction Association in 2021, it ranks 6th position, with a construction capacity of KRW8.5 tn.</li>
</ul>



Hyundai Engineering Co Ltd (HEC KS) is looking to raise up to US$1bn in its upcoming Korea IPO. 
Hyundai Engineering is an engineering firm that covers the entire life-cycle, from procurement, development, maintenance post-completion of the building/project.
As per Korea Construction Association in 2021, it ranks 6th position, with a construction capacity of KRW8.5 tn.


Hyundai Engineering Pre-IPO - Order Backlog Aids Visibility However, Margins Have Been Fluctuating

South Korea

Hyundai Engineering & Construction Co., Ltd., a general construction company, provides civil engineering, architectural, industrial, and electrical engineering services.  The Company constructs roadways, dams, bridges, ports, industrial plants, apartment complexes, and cultural facilities.

Hyundai Engineering & Construction (000720 KS)

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Hyundai Engineering & Construction (000720 KS)

Hyundai Engineering IPO: Valuation Insights

HEC has launched its IPO to raise US$0.8-1.0 bn. Our valuation analysis suggests that HEC is fairly valued at the low end of the IPO price range....

Arun George

Hyundai Engineering IPO Initiation: Building on Good Foundations

HEC is seeking to raise up to $1 billion. HEG has attractive fundamentals with a strong backlog, healthy book-to-bill, improving 3Q21 revenue...

Arun George

Hyundai Engineering IPO Valuation Analysis

Our target price of Hyundai Engineering Co is 67,475 won per share which is within the IPO price range of 57,900 won and 75,700 won. Given the lack...

Douglas Kim

Hyundai Engineering Pre-IPO - Unjustifiable Premium to Most Domestic Peers

Hyundai Engineering Co Ltd (HEC KS) is looking to raise up to US$1bn in its upcoming Korea IPO. In this note, we discuss peer comparison, our...

Clarence Chu

Hyundai Engineering Pre-IPO - Order Backlog Aids Visibility However, Margins Have Been Fluctuating

Hyundai Engineering Co Ltd (HEC KS) is looking to raise up to US$1bn in its upcoming Korea IPO. As per Korea Construction Association in 2021, it...

Clarence Chu

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