Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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Legend Holdings Corp H / Equity Capital Markets

<p>Legend Holdings plans to raise US$1.9-2.0bn through an issuance of primary shares, of which nearly 50% has already been placed with cornerstone investors.&nbsp;</p><p>The company has a good track record of investing in a&nbsp;diverse range of businesses, even though it only moved away from its IT investment (Lenovo stake) just over a decade ago. While we would view the company as a means to invest in its diverse unlisted business, however, owing to its medley of stakes in six divergent sectors, it's essentially just a holding company and thus, will likely need to trade at a discount to its NAV. The IPO range implies a 13-19% discount to NAV vs a general cross-cycle average of 20-25% discount for Hong Kong holding companies. Hence, while we would still be buyers for the long term but&nbsp;in the near term the upside for the IPO appears limited, in our view.</p>

Legend Holdings plans to raise US$1.9-2.0bn through an issuance of primary shares, of which nearly 50% has already been placed with cornerstone investors.&nbsp;The company has a good track record of investing in a&nbsp;diverse range of businesses, even though it only moved away from its IT investment (Lenovo stake) just over a decade ago. While we would view the company as a means to invest in its diverse unlisted business, however, owing to its medley of stakes in six divergent sectors, it's essentially just a holding company and thus, will likely need to trade at a discount to its NAV. The IPO range implies a 13-19% discount to NAV vs a general cross-cycle average of 20-25% discount for Hong Kong holding companies. Hence, while we would still be buyers for the long term but&nbsp;in the near term the upside for the IPO appears limited, in our view.

Good track record but little immediate upside left for IPO investors

China

Legend Holdings Corporation, through its subsidiaries, operates in information technology, real estate, financial services, agriculture and food, modern service, and chemical and energy materials sectors in China and internationally.

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Legend Holdings Corp H (3396 HK)

Good track record but little immediate upside left for IPO investors

Legend Holdings plans to raise US$1.9-2.0bn through an issuance of primary shares, of which nearly 50% has already been placed with cornerstone...

Sumeet Singh

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