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.

Event-Driven

<p><a href="https://www.smartkarma.com/entities/bairong" target="_blank" data-smartkarma-citation="entities:31486:1" rel="noopener">Bairong (6608 HK)</a> is a leading independent AI-powered technology platform in China serving the financial services industry. It is the largest independent financial big data analytics solutions provider in China with a 9.0% revenue market share in 2020, according to Frost &amp; Sullivan.</p><p>Bairong was listed on the HKEx on 31 March 2021 and raised net proceeds of HK$3,759.0 million at HK$31.80 per share. The shares currently trade 62% below their IPO price. Bairong priced its IPO at the market peak and the shares have collapsed in part due to China’s regulatory reset. </p><p><a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> fell 15% on 5 August after a lockup expiry, as early backers headed for the exit amid fears of China’s widening online crackdown. The ongoing regulatory crackdown has alerted investors to the risk of upcoming expiring lockups.  </p><div class="content-highlight"><p>Bairong’s pre-IPO investors’ lock-up period expires on 20 September. The cornerstones investors lock-up period expires on 30 September. In this note, we look at the returns of the pre-IPO investors and potential share sales post-lockup expiry.</p></div>

Bairong (6608 HK) is a leading independent AI-powered technology platform in China serving the financial services industry. It is the largest independent financial big data analytics solutions provider in China with a 9.0% revenue market share in 2020, according to Frost &amp; Sullivan.Bairong was listed on the HKEx on 31 March 2021 and raised net proceeds of HK$3,759.0 million at HK$31.80 per share. The shares currently trade 62% below their IPO price. Bairong priced its IPO at the market peak and the shares have collapsed in part due to China’s regulatory reset. Kuaishou Technology (1024 HK) fell 15% on 5 August after a lockup expiry, as early backers headed for the exit amid fears of China’s widening online crackdown. The ongoing regulatory crackdown has alerted investors to the risk of upcoming expiring lockups.  Bairong’s pre-IPO investors’ lock-up period expires on 20 September. The cornerstones investors lock-up period expires on 30 September. In this note, we look at the returns of the pre-IPO investors and potential share sales post-lockup expiry.

APAC IPOs & Placements

Zhen Zhou, Toh

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

<div>
<p><a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener"></a><a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> raised US$3.1bn at HK$40.36 per share, close to the bottom-end of its price range in its Hong Kong IPO. </p>
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<p>JD Logistics (JDL) was the leading supply chain solutions and logistics services provider in China in terms of revenue in 2018 and 2019. The company offers a full spectrum of supply chain solutions and logistics services ranging from warehousing to distribution, spanning across manufacturing to end-customers, covering regular and specialized items. </p>
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<p>In this note, we will discuss deal dynamics and update valuation.</p>
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<p>We had previously covered the IPO in:</p>
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<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/jd-logistics-ipo-updated-index-implications-and-impact-on-jd-com-holdco-valuation" target="_blank" data-smartkarma-citation="insights:51591" rel="noopener">JD Logistics (京东物流) IPO - Updated Index Implications and Impact on JD.com (京东) HoldCo Valuation</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/jd-logistics-ipo-widening-its-lead" target="_blank" data-smartkarma-citation="insights:51583" rel="noopener">JD Logistics (京东物流) IPO - Widening Its Lead</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/jd-logistics-pre-ipo-index-implications-it-will-cut-close" target="_blank" data-smartkarma-citation="insights:51054" rel="noopener">JD Logistics (京东物流) Pre-IPO - Index Implications - It Will Cut Close</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/jd-logistics-pre-ipo-quick-note-new-phip-with-1q21-results-changes-narrative" target="_blank" data-smartkarma-citation="insights:51453" rel="noopener">JD Logistics (京东物流) Pre-IPO - Quick Note - New PHIP with 1Q21 Results Changes Narrative</a> </li>
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<a href="https://www.smartkarma.com/insights/jd-logistics-pre-ipo-phip-updates-and-fine-tuning-valuation" target="_blank" data-smartkarma-citation="insights:51008" rel="noopener">JD Logistics (京东物流) Pre-IPO - PHIP Updates and Fine-Tuning Valuation</a> </li>
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<a href="https://www.smartkarma.com/insights/jd-logistics-pre-ipo-thoughts-on-valuation" target="_blank" data-smartkarma-citation="insights:50953" rel="noopener">JD Logistics (京东物流) Pre-IPO - Thoughts on Valuation</a> </li>
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<a href="https://www.smartkarma.com/insights/jd-logistics-pre-ipo-peer-comparison-shielded-from-price-war" target="_blank" data-smartkarma-citation="insights:50575" rel="noopener">JD Logistics (京东物流) Pre-IPO - Peer Comparison - Shielded from Price War</a> </li>
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<a href="https://www.smartkarma.com/insights/jd-logistics-pre-ipo-tethered-to-jd-group-and-looking-beyond" target="_blank" data-smartkarma-citation="insights:48396" rel="noopener">JD Logistics (京东物流) Pre-IPO - Tethered to JD Group and Looking Beyond</a> </li>
</ul>
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JD Logistics (2618 HK) raised US$3.1bn at HK$40.36 per share, close to the bottom-end of its price range in its Hong Kong IPO. 


JD Logistics (JDL) was the leading supply chain solutions and logistics services provider in China in terms of revenue in 2018 and 2019. The company offers a full spectrum of supply chain solutions and logistics services ranging from warehousing to distribution, spanning across manufacturing to end-customers, covering regular and specialized items. 


In this note, we will discuss deal dynamics and update valuation.


We had previously covered the IPO in:




JD Logistics (京东物流) IPO - Updated Index Implications and Impact on JD.com (京东) HoldCo Valuation 

JD Logistics (京东物流) IPO - Widening Its Lead 

JD Logistics (京东物流) Pre-IPO - Index Implications - It Will Cut Close 

JD Logistics (京东物流) Pre-IPO - Quick Note - New PHIP with 1Q21 Results Changes Narrative 

JD Logistics (京东物流) Pre-IPO - PHIP Updates and Fine-Tuning Valuation 

JD Logistics (京东物流) Pre-IPO - Thoughts on Valuation 

JD Logistics (京东物流) Pre-IPO - Peer Comparison - Shielded from Price War 

JD Logistics (京东物流) Pre-IPO - Tethered to JD Group and Looking Beyond 



JD Logistics (京东物流) IPO Trading - Decent Demand + Updates to JD.com Valuation

<div><p><a href="https://www.smartkarma.com/entities/waterdrop-inc" target="_blank" data-smartkarma-citation="entities:33018:1" rel="noopener">Waterdrop Inc (WDH US)</a> is the largest independent third-party insurance platform in China as measured by life and health insurance first-year premiums (FYP) distributed in 2020, according to iResearch. Waterdrop is backed by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/swiss-re-ag-1f83dcbc-730e-46fa-82f2-bfe7e8e361a1" target="_blank" data-smartkarma-citation="entities:27914:1" rel="noopener">Swiss Re AG (SREN SW)</a> and <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>.</p></div><div><p>At the mid-point of the proposed IPO price range of $10.00-12.00 per ADS, Waterdrop will have a market cap of $4.3 billion. At the mid-point of the IPO price range, the net proceeds are $301.6 million. New and existing shareholders have indicated on $210 million of the IPO, including Boyu Capital ($100 million), HOPU Investments (at least $80 million), and Kevin Sunny Holding ($30 million). The indications of interest represent 63.6% of the ADSs on offer at the mid-point of the IPO price range.</p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/waterdrop-ipo-initiation-going-for-brokers" target="_blank" data-smartkarma-citation="insights:50610" rel="noopener">Waterdrop IPO Initiation: Going for Brokers</a>, we opined that as a leading online third-party insurance broker, Waterdrop is well-positioned to benefit from favourable industry trends. The key unknown is whether the changing regulations will throw a spanner in the works. Notwithstanding the regulatory overhang, we concluded that Waterdrop is worth a look. Our analysis suggests that the IPO price range is full at the high-end but has some upside at the low-end. </p></div></div></div>

Waterdrop Inc (WDH US) is the largest independent third-party insurance platform in China as measured by life and health insurance first-year premiums (FYP) distributed in 2020, according to iResearch. Waterdrop is backed by Tencent Holdings (700 HK), Swiss Re AG (SREN SW) and Meituan (3690 HK).At the mid-point of the proposed IPO price range of $10.00-12.00 per ADS, Waterdrop will have a market cap of $4.3 billion. At the mid-point of the IPO price range, the net proceeds are $301.6 million. New and existing shareholders have indicated on $210 million of the IPO, including Boyu Capital ($100 million), HOPU Investments (at least $80 million), and Kevin Sunny Holding ($30 million). The indications of interest represent 63.6% of the ADSs on offer at the mid-point of the IPO price range.In Waterdrop IPO Initiation: Going for Brokers, we opined that as a leading online third-party insurance broker, Waterdrop is well-positioned to benefit from favourable industry trends. The key unknown is whether the changing regulations will throw a spanner in the works. Notwithstanding the regulatory overhang, we concluded that Waterdrop is worth a look. Our analysis suggests that the IPO price range is full at the high-end but has some upside at the low-end. 

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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.

<p><a href="https://www.smartkarma.com/entities/linklogis" target="_blank" data-smartkarma-citation="entities:31126:1" rel="noopener">Linklogis (9959 HK)</a> had a rather subdued debut compared to other recent SaaS IPOs. The company’s share price appreciated by 9.9% on 9<sup>th</sup> April 2021, compared to an average first day gain of 133% for recent SaaS IPOs <a href="https://www.smartkarma.com/entities/ming-yuan-cloud-group" target="_blank" data-smartkarma-citation="entities:29268:1" rel="noopener">Ming Yuan Cloud Group (909 HK)</a>, <a href="https://www.smartkarma.com/entities/snowflake-inc" target="_blank" data-smartkarma-citation="entities:29254:1" rel="noopener">Snowflake Inc (SNOW US)</a>, and <a href="https://www.smartkarma.com/entities/cloopen-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:31315:1" rel="noopener">Cloopen Group Holding Ltd (RAAS US)</a>.</p>
<p>Over the last couple of weeks, the share price moved up by another HK$ 3.70 to HK$ 23.00 per share, up 31% from the IPO price.</p>
<p>In <a href="https://www.smartkarma.com/insights/linklogis-ipo-first-day-trading" target="_blank" rel="noopener">Linklogis IPO: First Day Trading</a>, we predicted that shares could open trading near HK$ 26.0 per share. We also said that we would be looking to sell at or near the open if shares open trading near HK$ 25.0-26.0 range.</p>
<p>After a two-week delay, it appears that Linklogis is slowly reaching our target exit range.</p>
<p>We like the company’s long-term prospects, but at 20.2x FY+2 EV/Sales with 35% revenue CAGR, the company is fundamentally overvalued.</p>

Linklogis (9959 HK) had a rather subdued debut compared to other recent SaaS IPOs. The company’s share price appreciated by 9.9% on 9th April 2021, compared to an average first day gain of 133% for recent SaaS IPOs Ming Yuan Cloud Group (909 HK), Snowflake Inc (SNOW US), and Cloopen Group Holding Ltd (RAAS US).
Over the last couple of weeks, the share price moved up by another HK$ 3.70 to HK$ 23.00 per share, up 31% from the IPO price.
In Linklogis IPO: First Day Trading, we predicted that shares could open trading near HK$ 26.0 per share. We also said that we would be looking to sell at or near the open if shares open trading near HK$ 25.0-26.0 range.
After a two-week delay, it appears that Linklogis is slowly reaching our target exit range.
We like the company’s long-term prospects, but at 20.2x FY+2 EV/Sales with 35% revenue CAGR, the company is fundamentally overvalued.

Linklogis Post-IPO Trading & Valuation: Time to Get Out

<p><a href="https://www.smartkarma.com/entities/linklogis" target="_blank" data-smartkarma-citation="entities:31126:1" rel="noopener">Linklogis (9959 HK)</a> priced its IPO at HK$17.58 per share, 2% above the midpoint of the offer price range despite generating significant interest from both retail and institutional investors. The Hong Kong offer was oversubscribed 98.46x while the international offer was oversubscribed by 14.83x.</p><p>At 14.1x FY+2 EV/Sales with 35% revenue CAGR, Linklogis does not appear overly cheap compared peer multiples. However, the first day performance of recent SaaS IPOs like <a href="https://www.smartkarma.com/entities/ming-yuan-cloud-group" target="_blank" data-smartkarma-citation="entities:29268:1" rel="noopener">Ming Yuan Cloud Group (909 HK)</a>, <a href="https://www.smartkarma.com/entities/snowflake-inc" target="_blank" data-smartkarma-citation="entities:29254:1" rel="noopener">Snowflake Inc (SNOW US)</a> and <a href="https://www.smartkarma.com/entities/cloopen-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:31315:1" rel="noopener">Cloopen Group Holding Ltd (RAAS US)</a> suggests that Linklogis could open reasonably strong on trading debut.</p>

Linklogis (9959 HK) priced its IPO at HK$17.58 per share, 2% above the midpoint of the offer price range despite generating significant interest from both retail and institutional investors. The Hong Kong offer was oversubscribed 98.46x while the international offer was oversubscribed by 14.83x.At 14.1x FY+2 EV/Sales with 35% revenue CAGR, Linklogis does not appear overly cheap compared peer multiples. However, the first day performance of recent SaaS IPOs like Ming Yuan Cloud Group (909 HK), Snowflake Inc (SNOW US) and Cloopen Group Holding Ltd (RAAS US) suggests that Linklogis could open reasonably strong on trading debut.

China

MYCG is a software solution provider in China with a focus on real estate. The company provides enterprise resource planning (ERP) solutions and SaaS products to property developers and other industry participants in the real estate value chain in China.

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Ming Yuan Cloud Group (909 HK)

Bairong: Upcoming Lock-Up Expiry

Bairong’s pre-IPO investors’ lock-up period expires on 20 September. In this note, we look at the returns of the pre-IPO investors and potential...

Arun George

JD Logistics (京东物流) IPO Trading - Decent Demand + Updates to JD.com Valuation

JD Logistics (2618 HK) is raised US$3.1bn at HK$40.36 per share, close to the bottom-end of its price range in its Hong Kong IPO.

Zhen Zhou, Toh

Waterdrop IPO: Valuation Insights

Waterdrop has launched its IPO to raise net proceeds of $301.6 million at the mid-point of the price range of $10-12. The price range is full at...

Arun George

Linklogis Post-IPO Trading & Valuation: Time to Get Out

After a two-week delay, it appears that Linklogis is slowly reaching our target exit range. We like the company’s long-term prospects, but at 20.2x...

Oshadhi Kumarasiri

Linklogis IPO: First Day Trading

At 14.1x FY+2 EV/Sales with 35% revenue CAGR, Linklogis does not appear overly cheap compared peer multiples. However, the first day performance of...

Oshadhi Kumarasiri

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