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

<div><p><a href="https://www.smartkarma.com/entities/cheerwin" target="_blank" data-smartkarma-citation="entities:31314:1" rel="noopener">Cheerwin (6601 HK)</a> is a leading consumer household care company in China that develops and manufactures a variety of household care, personal care and pet care products. At the proposed IPO price range of HK$7.80-9.20 per share, Cheerwin will have a market cap of HK$10,400.0-12,266.7 million ($1.3-1.6 billion). At the mid-point of the IPO price range, the net proceeds are HK$2,663.9 million ($343 million). </p></div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/cheerwin-group-ipo-initiation-the-itch-of-fate" target="_blank" data-smartkarma-citation="insights:48373" rel="noopener">Cheerwin Group IPO Initiation: The Itch of Fate</a>, we opined that Cheerwin has the right ingredients to offer investors a play on another subsegment of China’s household care industry. We concluded that Cheerwin’s fundamentals are attractive. Despite the lack of cornerstone support, we would participate in the IPO due to a reasonable IPO price range. Our base-case DCF valuation is HK$10.04 per share. </p></div></div>

Cheerwin (6601 HK) is a leading consumer household care company in China that develops and manufactures a variety of household care, personal care and pet care products. At the proposed IPO price range of HK$7.80-9.20 per share, Cheerwin will have a market cap of HK$10,400.0-12,266.7 million ($1.3-1.6 billion). At the mid-point of the IPO price range, the net proceeds are HK$2,663.9 million ($343 million). In Cheerwin Group IPO Initiation: The Itch of Fate, we opined that Cheerwin has the right ingredients to offer investors a play on another subsegment of China’s household care industry. We concluded that Cheerwin’s fundamentals are attractive. Despite the lack of cornerstone support, we would participate in the IPO due to a reasonable IPO price range. Our base-case DCF valuation is HK$10.04 per share. 

<div><p><a href="https://www.smartkarma.com/entities/cheerwin" target="_blank" data-smartkarma-citation="entities:31314:1" rel="noopener">Cheerwin (CHEER HK)</a> is a leading consumer household care company in China that develops and manufactures a variety of household care, personal care and pet care products. It is pre-marketing for a Hong Kong IPO to raise up to $400 million, according to press reports.</p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/cheerwin-group-ipo-initiation-the-itch-of-fate" target="_blank" data-smartkarma-citation="insights:48373" rel="noopener">Cheerwin Group IPO Initiation: The Itch of Fate</a>, we opined that Cheerwin has the right ingredients to offer investors a play on another subsegment of China’s household care industry. We concluded that Cheerwin’s fundamentals are attractive. In this note, we present our forecasts and take the first look at Cheerwin's valuation. </p></div></div></div>

Cheerwin (CHEER HK) is a leading consumer household care company in China that develops and manufactures a variety of household care, personal care and pet care products. It is pre-marketing for a Hong Kong IPO to raise up to $400 million, according to press reports.In Cheerwin Group IPO Initiation: The Itch of Fate, we opined that Cheerwin has the right ingredients to offer investors a play on another subsegment of China’s household care industry. We concluded that Cheerwin’s fundamentals are attractive. In this note, we present our forecasts and take the first look at Cheerwin's valuation. 

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<p>We believe <a href="https://www.smartkarma.com/entities/cpmc-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10427:1" rel="noopener">CPMC Holdings (906 HK)</a> is an attractive alternative consumption play given its exposure to the rise in demand for food, beverages and household chemical product packaging in China. It is among the top player in China's packaging manufacturing (1-piece cans, 2-piece cans, tinplate packaging and plastic containers) with prominent customer profile including Coca-Cola, Tsingtao, Carlsberg, Blue Moon, Feihe, Yili and Jiaduobao etc. </p><p>The combination of margin expansion, capacity growth and surging consumption demand, we expect CPMC to post a steady rising ROE. We expect special DPS payout on the receipt of Rmb1.5bn repurchase consideration from JDB settlement, and this will place its dividend yield at least at 7.8%. Its 8.9x PER and 0.69x P/B represent deep discounts to its customers (40x PER) and packaging peers (23.4x) which are unjustified in our view.</p>

We believe CPMC Holdings (906 HK) is an attractive alternative consumption play given its exposure to the rise in demand for food, beverages and household chemical product packaging in China. It is among the top player in China's packaging manufacturing (1-piece cans, 2-piece cans, tinplate packaging and plastic containers) with prominent customer profile including Coca-Cola, Tsingtao, Carlsberg, Blue Moon, Feihe, Yili and Jiaduobao etc. The combination of margin expansion, capacity growth and surging consumption demand, we expect CPMC to post a steady rising ROE. We expect special DPS payout on the receipt of Rmb1.5bn repurchase consideration from JDB settlement, and this will place its dividend yield at least at 7.8%. Its 8.9x PER and 0.69x P/B represent deep discounts to its customers (40x PER) and packaging peers (23.4x) which are unjustified in our view.

CPMC Holdings (906 HK): An Attractive Inexpensive Alternative Consumption Play

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Private Capital Markets

<p><a href="https://www.smartkarma.com/entities/tokopedia-pt" target="_blank" data-smartkarma-citation="entities:24239:1" rel="noopener">Tokopedia PT (1087142D IJ)</a> has confirmed that it has hired Morgan Stanley and Citigroup as advisers to help accelerate its plan to go public. The company has not yet decided which route to take to come to market, whether through a straightforward IPO or a SPAC listing, potentially through Richard Li and Peter Thiel's Bridgetown Holdings Ltd.</p>
<p>The company had previously stated that it would definitely seek a listing in its home market of Indonesia, with a potential dual listing in the US, although these statements were made pre-pandemic. </p>
<p>Valuations for <a href="https://www.smartkarma.com/entities/tokopedia-pt" target="_blank" data-smartkarma-citation="entities:24239:1" rel="noopener">Tokopedia PT (1087142D IJ)</a> range from US$8-10bn, although after the last round of funding it was valued at US$7.5bn, making it Indonesia's second most valuation start-up after <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a>, which was last valued at US$10bn.</p>
<p>An IPO would help the company realize a higher valuation, providing a currency to drive future growth, given it would be an alternative to <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US), </a>as the number 2 e-commerce player in Indonesia. <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> trades at 13x FY21E EV/Sales currently and just raised more than US$2bn through a placement of new ADS's. We look at <a href="https://www.smartkarma.com/entities/tokopedia-pt" target="_blank" data-smartkarma-citation="entities:24239:1" rel="noopener">Tokopedia PT (1087142D IJ)</a> and its positioning in more detail below the fold. </p>

Tokopedia PT (1087142D IJ) has confirmed that it has hired Morgan Stanley and Citigroup as advisers to help accelerate its plan to go public. The company has not yet decided which route to take to come to market, whether through a straightforward IPO or a SPAC listing, potentially through Richard Li and Peter Thiel's Bridgetown Holdings Ltd.
The company had previously stated that it would definitely seek a listing in its home market of Indonesia, with a potential dual listing in the US, although these statements were made pre-pandemic. 
Valuations for Tokopedia PT (1087142D IJ) range from US$8-10bn, although after the last round of funding it was valued at US$7.5bn, making it Indonesia's second most valuation start-up after Gojek (1379371D IJ), which was last valued at US$10bn.
An IPO would help the company realize a higher valuation, providing a currency to drive future growth, given it would be an alternative to Sea Ltd (SE US), as the number 2 e-commerce player in Indonesia. Sea Ltd (SE US) trades at 13x FY21E EV/Sales currently and just raised more than US$2bn through a placement of new ADS's. We look at Tokopedia PT (1087142D IJ) and its positioning in more detail below the fold. 

Tokopedia PT (1087142D IJ) - From Private to Public by Hook or by Crook

Blue Moon Group Holdings / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/blue-moon-group-holdings" target="_blank" data-smartkarma-citation="entities:29179:1" rel="noopener">Blue Moon Group Holdings (6993 HK)</a> is a leading consumer household care company in China.  Blue Moon will commence trading on Wednesday, 16 December. Blue Moon priced its IPO at HK$13.16 and <a href="http://www.aastocks.com/en/stocks/news/aafn-con/NOW.1063245/ipo-news" target="_blank" rel="noopener">opened 14% higher</a> at HK$15.00 in the grey market and last stood at HK$14.90.</p></div><div><p>In <a href="https://www.smartkarma.com/insights/blue-moon-ipo-initiation-laundry-list" target="_blank" data-smartkarma-citation="insights:41086" rel="noopener">Blue Moon IPO Initiation: Laundry List</a>, we stated that on balance we think the positives (market-leading brand, strong margin progression, solid cash generation) outweigh the negatives (declining revenue growth and short-term COVID-19 impact). In <a href="https://www.smartkarma.com/insights/blue-moon-ipo-doing-the-wash" target="_blank" data-smartkarma-citation="insights:45481" rel="noopener">Blue Moon IPO: Doing the Wash</a> we noted that the 1H20 results disclosed in the PHIP show that the Blue Moon has creditably navigated the adverse revenue decline on its core business due to the COVID-19 outbreak by improving margin and cash generation. In <a href="https://www.smartkarma.com/insights/blue-moon-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:46033" rel="noopener">Blue Moon IPO: Valuation Insights</a>, we noted that the IPO price range is attractive.</p></div><div><div><div class="content-highlight"><p>Our base-case DCF derived price target of HK$15.21 per share. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis shows that the IPO price continues to provide good upside potential. </p></div></div></div>

Blue Moon Group Holdings (6993 HK) is a leading consumer household care company in China.  Blue Moon will commence trading on Wednesday, 16 December. Blue Moon priced its IPO at HK$13.16 and opened 14% higher at HK$15.00 in the grey market and last stood at HK$14.90.In Blue Moon IPO Initiation: Laundry List, we stated that on balance we think the positives (market-leading brand, strong margin progression, solid cash generation) outweigh the negatives (declining revenue growth and short-term COVID-19 impact). In Blue Moon IPO: Doing the Wash we noted that the 1H20 results disclosed in the PHIP show that the Blue Moon has creditably navigated the adverse revenue decline on its core business due to the COVID-19 outbreak by improving margin and cash generation. In Blue Moon IPO: Valuation Insights, we noted that the IPO price range is attractive.Our base-case DCF derived price target of HK$15.21 per share. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis shows that the IPO price continues to provide good upside potential. 

United States

The Procter & Gamble Company manufactures and markets consumer products in countries throughout the world. The Company provides products in the laundry and cleaning, paper, beauty care, food and beverage, and health care segments. Procter & Gamble products are sold primarily through mass merchandisers, grocery stores, membership club stores, drug stores, and neighborhood stores.

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Procter & Gamble Co (PG US)

Cheerwin Group IPO: Valuation Insights

Cheerwin has launched its HK IPO to raise net proceeds of $343m at the mid-point of the HK$7.80-9.20 price range. The price range is attractive...

Arun George

Cheerwin Group IPO: Valuation First Look

Cheerwin is pre-marketing for an HK IPO to raise up to $400 million, according to press reports. In this note, we present our forecasts and take...

Arun George

CPMC Holdings (906 HK): An Attractive Inexpensive Alternative Consumption Play

CPMC is well positioned to capture the strong packaging demand from food, beverage and chemical products driven by China's consumption growth. Yet,...

Osbert Tang, CFA

Tokopedia PT (1087142D IJ) - From Private to Public by Hook or by Crook

Tokopedia has confirmed that it is looking to go public and has enlisted Investment Banks to speed the process. This will give investors an...

Angus Mackintosh

Blue Moon IPO: Trading Debut

Blue Moon priced its IPO at HK$13.16 and opened 14% higher at HK$15.00 in the grey market. Our DCF sensitivity analysis shows that the IPO price...

Arun George

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