Equity Analyst, LightStream Research

Aqila Ali

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.

Equity Capital Markets

Intron Technology / Equity Capital Markets

The Intron Technology Holdings IPO application commenced on the 29th of June 2018 and is expected to end by 12:00 noon tomorrow on the Stock Exchange of Hong Kong Limited ("SEHK"). Established in 2001, Intron is one of the fastest growing automotive electronic solution providers in China. The IPO price range is between HKD2.9 and HKD3.33 per share. The IPO deal size could be around HKD780m, assuming a price of HKD3.12 (the mid-point of the proposed Offer Price range), with no over-allotment option being exercised. BNP Paribas Securities (Asia) is the sole sponsor of this global offering.
This insight covers Intron technology’s background, its business model, the growth prospects and the risks it holds in the market. We have also looked into the financial performance and position of the company and its valuation based on the offer price range. Based on our analysis, we think the company could see significant upside over the medium term. Intron’s continuous improvement in automotive electronic solutions is likely to cement its position in the market. Growth in the Chinese automotive market and the government’s support towards electrification will be key to sustaining growth in the long-run. For now, we think the company is a steady one with product categories steady enough to fight competition in the market. The company, if successful in the growing automotive market, is likely to trade a FY1 PE of 18x and EV/EBITDA multiple of 14x.
<div class="content-caption">
Deal Specifics of Intron’s Global Offering
</div>
<table class="table table-striped">
<tbody>
<tr>
<td colspan="2">
Details:
</td>
</tr>
<tr>
<td>
Application Period
</td>
<td>
June 29th, 2018 - Noon, July 5th 2018
</td>
</tr>
<tr>
<td>
Price Determination Date
</td>
<td>
On or Before 5pm, July 5th 2018
</td>
</tr>
<tr>
<td>
Result Announcement Date
</td>
<td>
On or Before July 11th 2018
</td>
</tr>
<tr>
<td>
Dealings in Shares commence on
</td>
<td>
July 12th 2018
</td>
</tr>
<tr>
<td>
Expected IPO price per share:  
</td>
<td>
Between HKD2.9 and HKD3.33
</td>
</tr>
<tr>
<td>
Number of Shares for IPO:
</td>
<td>
250m shares
</td>
</tr>
<tr>
<td>
No. of International Placing Shares
</td>
<td>
 
225m shares
</td>
</tr>
<tr>
<td>
No. of HK Offer Shares
</td>
<td>
 25m shares
</td>
</tr>
<tr>
<td>
Lead managers of the IPO: 
</td>
<td>
 
BNP Paribas Securities (Asia)
</td>
</tr>
<tr>
<td>
IPO base deal size: 
</td>
<td>
Approx.HKD780m (based on Median)
</td>
</tr>
<tr>
<td>
Major Shareholder  
</td>
<td>
 
Directors Luk Wing Ming and Chan Cheung Ngai-
</td>
</tr>
<tr>
<td>
Expected market cap after IPO:
</td>
<td>
Between HKD2,900mn - HKD3,330m
</td>
</tr>
<tr>
<td>
Use of Proceeds
</td>
<td>
* HKD211.5m (30%)- recruiting additional research and development professionals;
* HKD211.5m (30%)- investing in and acquiring testing and other equipment and technology software;
* HKD211.5m (30%) - finance acquisitions of research and development capabilities;
* the balance of HKD70.6m (10%) as additional working capital.
</td>
</tr>
</tbody>
</table>
<div class="content-remarks">
Source: Company Disclosures
</div>

The Intron Technology Holdings IPO application commenced on the 29th of June 2018 and is expected to end by 12:00 noon tomorrow on the Stock Exchange of Hong Kong Limited ("SEHK"). Established in 2001, Intron is one of the fastest growing automotive electronic solution providers in China. The IPO price range is between HKD2.9 and HKD3.33 per share. The IPO deal size could be around HKD780m, assuming a price of HKD3.12 (the mid-point of the proposed Offer Price range), with no over-allotment option being exercised. BNP Paribas Securities (Asia) is the sole sponsor of this global offering.
This insight covers Intron technology’s background, its business model, the growth prospects and the risks it holds in the market. We have also looked into the financial performance and position of the company and its valuation based on the offer price range. Based on our analysis, we think the company could see significant upside over the medium term. Intron’s continuous improvement in automotive electronic solutions is likely to cement its position in the market. Growth in the Chinese automotive market and the government’s support towards electrification will be key to sustaining growth in the long-run. For now, we think the company is a steady one with product categories steady enough to fight competition in the market. The company, if successful in the growing automotive market, is likely to trade a FY1 PE of 18x and EV/EBITDA multiple of 14x.

Deal Specifics of Intron’s Global Offering





Details:




Application Period


June 29th, 2018 - Noon, July 5th 2018




Price Determination Date


On or Before 5pm, July 5th 2018




Result Announcement Date


On or Before July 11th 2018




Dealings in Shares commence on


July 12th 2018




Expected IPO price per share:  


Between HKD2.9 and HKD3.33




Number of Shares for IPO:


250m shares




No. of International Placing Shares


 
225m shares




No. of HK Offer Shares


 25m shares




Lead managers of the IPO: 


 
BNP Paribas Securities (Asia)




IPO base deal size: 


Approx.HKD780m (based on Median)




Major Shareholder  


 
Directors Luk Wing Ming and Chan Cheung Ngai-




Expected market cap after IPO:


Between HKD2,900mn - HKD3,330m




Use of Proceeds


* HKD211.5m (30%)- recruiting additional research and development professionals;
* HKD211.5m (30%)- investing in and acquiring testing and other equipment and technology software;
* HKD211.5m (30%) - finance acquisitions of research and development capabilities;
* the balance of HKD70.6m (10%) as additional working capital.





Source: Company Disclosures


Intron Technology IPO: The Evolving Chinese Automotive Market Likely to Power The IPO

Hong Kong

Intron Technology Holdings Limited manufactures automobile parts. The Company produces oil pumps, motors, colling fan control systems, body control, and powertrain systems. Intron Technology Holdings markets its products in Hong Kong.

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Intron Technology (1760 HK)

Intron Technology IPO: The Evolving Chinese Automotive Market Likely to Power The IPO

The Intron Technology Holdings IPO application commenced on the 29th of June 2018 and is expected to end by 12:00 noon tomorrow on the Stock...

Aqila Ali

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