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

China Resources Beverage / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-resources-beverage" target="_blank" data-smartkarma-citation="entities:41984:1" rel="noopener">China Resources Beverage (2460 HK)</a> priced its IPO at HK$14.50 per share to raise the gross proceeds of US$649 million. The shares will start trading on 23 October.</li>
<li>The IPO was discussed in <strong><em><a href="https://www.smartkarma.com/insights/cr-beverage-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:157572" rel="noopener">CR Beverage IPO: The Bull Case</a>, <a href="https://www.smartkarma.com/insights/cr-beverage-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:158613" rel="noopener">CR Beverage IPO: The Bear Case</a>, <a href="https://www.smartkarma.com/insights/cr-beverage-ipo-the-investment-case" target="_blank" data-smartkarma-citation="insights:161273" rel="noopener">CR Beverage IPO: The Investment Case</a>, <a href="https://www.smartkarma.com/insights/cr-beverage-2460-hk-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:162418" rel="noopener">CR Beverage (2460 HK) IPO: Valuation Insights</a></em></strong>. </li>
<li>The market sentiment of the peers has remained unchanged since the IPO launch. CR Beverage is fairly valued at the IPO price.</li>
</ul>



China Resources Beverage (2460 HK) priced its IPO at HK$14.50 per share to raise the gross proceeds of US$649 million. The shares will start trading on 23 October.
The IPO was discussed in CR Beverage IPO: The Bull Case, CR Beverage IPO: The Bear Case, CR Beverage IPO: The Investment Case, CR Beverage (2460 HK) IPO: Valuation Insights. 
The market sentiment of the peers has remained unchanged since the IPO launch. CR Beverage is fairly valued at the IPO price.


Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/arcadium-lithium-plc" target="_blank" data-smartkarma-citation="entities:40438:1" rel="noopener">Arcadium Lithium (LTM AU)</a> has disclosed a binding offer from <a href="https://www.smartkarma.com/entities/rio-tinto-plc" target="_blank" data-smartkarma-citation="entities:22114:1" rel="noopener">Rio Tinto PLC (RIO LN)</a> at US$5.85 per share, a 90% premium to the undisturbed price of US$3.08 (4 October).</li>
<li>The offer is attractive compared to analyst price targets and peer multiples but unattractive compared to cyclical low timing and precedent transactions.</li>
<li>The shareholder structure requires an activist to disrupt the vote. The long-dated offer provides optionality on a bump if lithium prices materially re-rates. </li>
</ul>



Arcadium Lithium (LTM AU) has disclosed a binding offer from Rio Tinto PLC (RIO LN) at US$5.85 per share, a 90% premium to the undisturbed price of US$3.08 (4 October).
The offer is attractive compared to analyst price targets and peer multiples but unattractive compared to cyclical low timing and precedent transactions.
The shareholder structure requires an activist to disrupt the vote. The long-dated offer provides optionality on a bump if lithium prices materially re-rates. 


Arcadium Lithium (ALTM US/LTM AU): Rio’s Binding Proposal

<ul>
<li>In response to media reports, <a href="https://www.smartkarma.com/entities/arcadium-lithium-plc" target="_blank" data-smartkarma-citation="entities:40438:1" rel="noopener">Arcadium Lithium (LTM AU)</a> confirmed receiving a non-binding proposal from <a href="https://www.smartkarma.com/entities/rio-tinto-ltd" target="_blank" data-smartkarma-citation="entities:13:1" rel="noopener">Rio Tinto Ltd (RIO AU)</a>. No terms were disclosed.</li>
<li>According to press reports, Rio aims to acquire Arcadium at a valuation range of US$4-6 billion (A$5.9-8.8 billion). Blackwattle thinks a fair price is closer to US$8 billion. </li>
<li>The rumoured valuation range is unattractive and arguably a bear case valuation assuming no significant recovery in lithium prices.  </li>
</ul>


In response to media reports, Arcadium Lithium (LTM AU) confirmed receiving a non-binding proposal from Rio Tinto Ltd (RIO AU). No terms were disclosed.
According to press reports, Rio aims to acquire Arcadium at a valuation range of US$4-6 billion (A$5.9-8.8 billion). Blackwattle thinks a fair price is closer to US$8 billion. 
The rumoured valuation range is unattractive and arguably a bear case valuation assuming no significant recovery in lithium prices.  


Arcadium Lithium (ALTM US/LTM AU): Rio Tinto’s Rumoured Bid Is Light

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 148 stocks over the last week. The average A-H premium was 111.2% as of Sep 20th.</li>
<li>The average A-H premium changed by -0.3ppt week-on-week, led by consumer discretionary, communication services, materials and offset by consumer staples, health care.</li>
<li>We highlight weekly changes in A-H premium for RemeGen, JOINN, Shenzhen Expressway, Anhui Expressway, GAC Group, Ganfeng Lithium.</li>
</ul>


We analyse the changes of A-H premium on 148 stocks over the last week. The average A-H premium was 111.2% as of Sep 20th.
The average A-H premium changed by -0.3ppt week-on-week, led by consumer discretionary, communication services, materials and offset by consumer staples, health care.
We highlight weekly changes in A-H premium for RemeGen, JOINN, Shenzhen Expressway, Anhui Expressway, GAC Group, Ganfeng Lithium.


A-H Premium Weekly (Sep 20th):RemeGen, JOINN, Shenzhen Expressway, Anhui Expressway, GAC Group

Midea Group Co Ltd A / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/midea-group-co-ltd-a" target="_blank" data-smartkarma-citation="entities:16185:1" rel="noopener">Midea Group Co Ltd A (000333 CH)</a> priced its H Share at HK$54.80 to raise HK$31,014 million (US$4.0 billion) in gross proceeds. The H Share will be listed tomorrow.</li>
<li>The H Share listing price implies an AH discount of 21.4% at the A Share price of RMB63.51. This compares to <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home (6690 HK)</a>'s AH discount of 13.8%.</li>
<li>Futu grey market data shows that the H Shares closed 5.1% higher at HK$57.60. Our valuation analysis suggests that the H Share listing price is attractive.</li>
</ul>



Midea Group Co Ltd A (000333 CH) priced its H Share at HK$54.80 to raise HK$31,014 million (US$4.0 billion) in gross proceeds. The H Share will be listed tomorrow.
The H Share listing price implies an AH discount of 21.4% at the A Share price of RMB63.51. This compares to Haier Smart Home (6690 HK)'s AH discount of 13.8%.
Futu grey market data shows that the H Shares closed 5.1% higher at HK$57.60. Our valuation analysis suggests that the H Share listing price is attractive.


Midea Group H Share Listing (300 HK): Trading Debut

China

Tianqi Lithium Corporation develops, manufactures, and sells lithium products. The Company produces lithium carbonate, lithium chloride, lithium hydroxide, and other related products. Tianqi Lithium markets its products worldwide.

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Tianqi Lithium (9696 HK)

CR Beverage (2460 HK) IPO: Trading Debut

The market sentiment of the peers has remained unchanged since the IPO launch. CR Beverage is fairly valued at the IPO price.

Arun George

Arcadium Lithium (ALTM US/LTM AU): Rio’s Binding Proposal

The offer is not a knockout bid but the shareholder structure requires an activist to disrupt the vote. The long-dated offer provides optionality...

Arun George

Arcadium Lithium (ALTM US/LTM AU): Rio Tinto’s Rumoured Bid Is Light

The rumoured valuation range is unattractive and arguably a bear case valuation assuming no significant recovery in lithium prices.

Arun George

A-H Premium Weekly (Sep 20th):RemeGen, JOINN, Shenzhen Expressway, Anhui Expressway, GAC Group

We analyzed A-H premium changes in the past week and highlight A-H premium changes for RemeGen, JOINN, Shenzhen Expressway, Anhui Expressway, GAC...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

CR Beverage (2460 HK) IPO: Trading Debut

The market sentiment of the peers has remained unchanged since the IPO launch. CR Beverage is fairly valued at the IPO price.

Arun George

Arcadium Lithium (ALTM US/LTM AU): Rio’s Binding Proposal

The offer is not a knockout bid but the shareholder structure requires an activist to disrupt the vote. The long-dated offer provides optionality...

Arun George

Arcadium Lithium (ALTM US/LTM AU): Rio Tinto’s Rumoured Bid Is Light

The rumoured valuation range is unattractive and arguably a bear case valuation assuming no significant recovery in lithium prices.

Arun George

A-H Premium Weekly (Sep 20th):RemeGen, JOINN, Shenzhen Expressway, Anhui Expressway, GAC Group

We analyzed A-H premium changes in the past week and highlight A-H premium changes for RemeGen, JOINN, Shenzhen Expressway, Anhui Expressway, GAC...

Ke Yan, CFA, FRM

Midea Group H Share Listing (300 HK): Trading Debut

The H Share listing and Futu grey market price imply an AH discount of 21.4% and 17.4%, respectively, which is attractive compared to Haier, its...

Arun George