ECM Daily Briefs | Smartkarma

In today’s briefing:

LG CNS IPO: The Bull Case
Shenzhen Dobot IPO (2432.HK): Global Offering, The Rising Star of Collaborative Robotics
Inventurus Knowledge Solutions IPO: Superior Margins and Growth Warrants a Premium
ECM Weekly (16th Dec 2024) – LG CNS, Mao Geping, Digico, Kioxia, Vishal Mega, IGI, Sai Life, Quantum

LG CNS IPO: The Bull Case

By Arun George

LG CNS (LGCNSZ KS), the IT service unit of LG Corp (003550 KS), seeks to raise up to US$837 million through a primary/secondary offering.
In 2020, Macquarie Asset Management bought a 35% stake from LG Corp for KRW950 billion, beating KKR & Co (KKR US), the other shortlisted bidder.
The bull case rests on an attractive market, improving visibility, strong AI-led growth, below-peer average dependence on related parties, and top-tier profitability.

Shenzhen Dobot IPO (2432.HK): Global Offering, The Rising Star of Collaborative Robotics

Shenzhen Dobot, a CICC-backed robotics unicorn, aims to raise up to HK$830M (~$107M) in the initial public offering in Hong Kong.
The offering is expected to be between HK$18.80 and HK$20.80, implying a market cap of ~HK$8B or ~$1B at the midpoint of the price range.
Given Shenzhen Dobot’s long-term growth opportunities and high TAM, they are likely to get a premium valuation, and the company could trade like UBTech Robotics and Doosan Robotics.

Inventurus Knowledge Solutions IPO: Superior Margins and Growth Warrants a Premium

By Nicholas Tan

Inventurus Knowledge Solutions (IKSINCD IN) is looking to raise up to US$295m in its upcoming India IPO.
It is a technology-enabled healthcare solutions provider, assisting physician enterprises in US, Canada and Australia, with a core focus in the US.
We have looked at the company’s past performance in our earlier notes. In this note, we discuss the industry growth, conduct a quick peer comparison and discuss the company’s valuation.

ECM Weekly (16th Dec 2024) – LG CNS, Mao Geping, Digico, Kioxia, Vishal Mega, IGI, Sai Life, Quantum

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, a number of offerings were live in India, in a bid to beat the year-end lull.
On the placements front, there was a large placement for SenseTime Group (20 HK) and a number of smaller deals in India.

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Dec 14

Daily Brief ECM: ServiceTitan IPO: Pricing and First Trading-Day and more

In today’s briefing:

ServiceTitan IPO: Pricing and First Trading-Day, The Stock Jumped ~42% As A Public Company

ServiceTitan IPO: Pricing and First Trading-Day, The Stock Jumped ~42% As A Public Company

ServiceTitan, a provider of field service management software for home service businesses, priced its IPO at $71.00/share and raised ~$625M.
ServiceTitan IPO has seen robust demand among institutional investors. The company boosted its initial price range to $65.00 to $67.00 per share.
The offering was priced above the price range, valuing ServiceTitan at ~$6.5B. The stock jumped ~42% on first day as a public company and closed at $101.00 on Thursday.

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Dec 13

Daily Brief ECM: IGI (India) IPO – Unique Exposure but Questionable Acquisition and more

In today’s briefing:

IGI (India) IPO – Unique Exposure but Questionable Acquisition, and 4x Returns for PE in 18 Months
Sai Life Sciences IPO – Quick Thoughts on Peer Comp and Valuation
LG CNS Pre-IPO – Post-COVID Beneficiary
Star Agriwarehousing and Collateral Management Ltd Pre-IPO Tearsheet
Pre-IPO Xiaocaiyuan International Holding (PHIP Updates) – Some Points Worth the Attention

IGI (India) IPO – Unique Exposure but Questionable Acquisition, and 4x Returns for PE in 18 Months

International Gemmological Institute (India) Limited (IGII) is looking to raise about US$500m in its upcoming India IPO.
IGI India is part of the International Gemmological Institute (IGI) group. As of 22nd August 2024, IGI India handled operations of the IGI business in India and Türkiye.
In this note, we will look at the company’s past performance and talk about the IPO valuations.

Sai Life Sciences IPO – Quick Thoughts on Peer Comp and Valuation

By Akshat Shah

SAI Life Sciences (SAILS12 IN) is looking to raise up to US$360m in its upcoming India IPO.
Sai Life Sciences is a contract research, development and manufacturing organisation providing end-to-end services across drug discovery, development and manufacturing value-chain, for small to global pharmaceutical innovators and biotechnology firms.
We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

LG CNS Pre-IPO – Post-COVID Beneficiary

By Clarence Chu

LG CNS (LGCNSZ KS) is looking to raise around US$850m in its upcoming Korea IPO.
LG CNS is a South Korean information technology company. The firm primarily provides comprehensive digital transformation services and solutions backed AI, big data, and cloud.
In this note, we look at the firm’s past performance.

Star Agriwarehousing and Collateral Management Ltd Pre-IPO Tearsheet

By Rosita Fernandes

Star Agriwarehousing and Collateral Management Ltd (0207140D IN) (SACM) is planning to raise about US$100m through its upcoming India IPO. The lead bookrunners for the deal are JMFin, Ambit, Equirius.
SACM is a technology-led integrated agricultural value-chain services platform that provides services such as procurement, trade facilitation, warehousing, collateral management, financing solutions, a digital marketplace, and data services.
According to the F&S report, the company was the largest by revenue and the most profitable technology-led integrated value chain services platform during the FY22 to FY24.

Pre-IPO Xiaocaiyuan International Holding (PHIP Updates) – Some Points Worth the Attention

By Xinyao (Criss) Wang

The financial data for 2024 has already shown investors weak growth signal.After IPO, Xiaocaiyuan may face stricter scrutiny from investors and the market in terms of its sustainable performance growth.
It’s not easy for Xiaocaiyuan to find new growth points. Catering companies commonly face problems such as performance fluctuations and uncertain profitability, which has left their share price underperforming.
Post investment valuation has already reached RMB10 billion, which far exceeds the market value of A-share peers. Due to concerns on the outlook, valuation performance after IPO could be lower-than-expected.

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Dec 12

Daily Brief ECM: 2025 (“Year of the Snake”) Major IPOs Pipeline in Korea and more

In today’s briefing:

2025 (“Year of the Snake”) Major IPOs Pipeline in Korea
Sai Life Sciences Pre-IPO – Portfolio Expansion and Increased Production Capacity to Drive Growth
A Review of Rights Offerings/Capital Raise Announcements in Korea in 2024
ISU Petasys Ignores FSS: A Likely Short-Term Dip Sets up an Opportunity to Target 15% Discount
DigiCo Infrastructure REIT IPO Trading – Now for the Real Test, Ex-Adjustments
Inventurus Pre-IPO – Accelerating Growth with Major Aquity Acquisition

2025 (“Year of the Snake”) Major IPOs Pipeline in Korea

This is our 10th “Annual Edition of the Major Korean IPOs Pipeline Preview” at Smartkarma.
This insight will feature 50 of the biggest potential IPOs in Korea in 2025.
These 50 IPOs in Korea are likely to represent more than 80% of all capital raised through IPOs in Korea next year.

Sai Life Sciences Pre-IPO – Portfolio Expansion and Increased Production Capacity to Drive Growth

By Akshat Shah

SAI Life Sciences (SAILS12 IN) is looking to raise up to US$360m in its upcoming India IPO.
Sai Life Sciences is a contract research, development and manufacturing organisation providing end-to-end services across drug discovery, development and manufacturing value-chain, for small to global pharmaceutical innovators and biotechnology firms.
In this note, we talk about the company’s historical performance.

A Review of Rights Offerings/Capital Raise Announcements in Korea in 2024

In this insight, we review the major rights offerings/capital raises that were announced in Korea in 2024.
In general, the major rights offerings/capital raises tend to result in lower share prices one month, three months, and over a longer time frame.
There are some exceptions. Peptron and ABL Bio experienced higher share prices even after their capital raise announcements, especially after a longer time frame (3 months or more).

ISU Petasys Ignores FSS: A Likely Short-Term Dip Sets up an Opportunity to Target 15% Discount

By Sanghyun Park

ISU Petasys is betting the FSS chief, tied to the current administration, won’t have much market power due to the impeachment drama—and that gamble looks likely to pay off.
ISU Petasys’ rights offering still offers solid trade potential, with 97% stockholder allocation and only 21% from the major shareholder, increasing the chance of significant unclaimed shares hitting the market.
Our plan is to grab stock rights cheap, ride the 15% discount, and capitalize on stock pullbacks, though lack of futures limits short hedging. Still, an unhedged setup looks promising.

DigiCo Infrastructure REIT IPO Trading – Now for the Real Test, Ex-Adjustments

DigiCo REIT (DIGICO AU) raised around US$1.3bn in its Australian IPO.
DigiCo REIT (DREIT) aims to be a diversified owner, operator and developer of data centres, with a global portfolio and broad investment mandate across stabilised, value-add and development opportunities
We have looked at the company’s past performance in our previous notes. In this note, we will talk about the trading dynamics.

Inventurus Pre-IPO – Accelerating Growth with Major Aquity Acquisition

By Nicholas Tan

Inventurus Knowledge Solutions (IKSINCD IN) is looking to raise up to US$295m in its upcoming India IPO.
IKS is a technology-enabled healthcare solutions provider, assisting physician enterprises in US, Canada and Australia. It is a one-stop shop designed to handle physicians administrative tasks.
In this note, we look at the firm’s past performance.

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Dec 11

Daily Brief ECM: LG CNS IPO Valuation Analysis and more

In today’s briefing:

LG CNS IPO Valuation Analysis
EAAA India Alternatives Limited Pre-IPO Tearsheet
SAI Life Sciences IPO- Growing and Profitable Business; Aggressive Pricing Limits Upside Potential

LG CNS IPO Valuation Analysis

According to our valuation analysis, it suggests a base case implied market cap of 7.9 trillion won for LG CNS, representing target price of 81,095 won per share.
Therefore, our base case valuation target price of 81,095 won is 31% higher than the high end of the IPO price range.
We estimate LG CNS to generate sales of 5.99 trillion won (up 6.8% YoY) and net profit of 356.1 billion won (up 7.1% YoY) in 2024.

EAAA India Alternatives Limited Pre-IPO Tearsheet

By Rosita Fernandes

EAAA India Alternatives Ltd (1619210D IN) (EAAA) is planning to raise about US$177m through its upcoming India IPO. The lead bookrunners for the deal are Axis Capital, Jefferies, Motilal Oswal, Nuvama.
EAAA is a fund management house with a diversified, multi-strategy platform in large, under-tapped, and fast-growing alternative asset classes, focusing on providing income and yield solutions to its clients.
As per CARE report, EAAA is one of the leading alternatives platforms in India, in terms of assets under management (AUM) of INR572.62bn (US$6.7bn) as of Sept 24.

SAI Life Sciences IPO- Growing and Profitable Business; Aggressive Pricing Limits Upside Potential

By Tina Banerjee

The IPO of SAI Life Sciences, a contract research, development, and manufacturing organization, is scheduled to open on December 11. The IPO consists of fresh issue as well as OFS.
Out of the fresh issue of proceeds, the company intends to use INR7.2B for repayment/prepayment of outstanding borrowings. As of September 30, 2024, total outstanding borrowing stands at INR7.6B.
We have high conviction on the growth prospect of SAI Life Sciences. Considering FY25 annualized post-IPO EPS of INR2.69, the company seeks a P/E valuation of 186.9–203.8x.

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Dec 10

Daily Brief ECM: Mao Geping Cosmetics IPO Trading – Highest Demand for This Year and more

In today’s briefing:

Mao Geping Cosmetics IPO Trading – Highest Demand for This Year
Vishal Mega Mart IPO – Showcasing the Wrong Peers, Somewhat Limited Upside
LG Electronics India IPO Preview
LG Electronics India Pre-IPO Tearsheet
ServiceTitan Valuation Analysis: Attractive First-Day Return, Initial Price Range: $52.00-$57.00

Mao Geping Cosmetics IPO Trading – Highest Demand for This Year

Mao Geping Cosmetics raised around US$345m in its Hong Kong IPO.
Mao Geping Cosmetics (MGC) operates in the premium beauty segment. Operating via its two brands, MAOGEPING and Love Keeps, MGC offers a wide range of color cosmetics and skincare products.
We have looked at the company’s past performance in our previous notes. In this note, we will talk about the trading dynamics.

Vishal Mega Mart IPO – Showcasing the Wrong Peers, Somewhat Limited Upside

Vishal Mega Mart is planning to raise around US$950m through its upcoming IPO in India.
Vishal Mega Mart Limited (VMM), is a one-stop retail destination. As per the company it targets middle and lower-middle income consumers across India
We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

LG Electronics India IPO Preview

LG Electronics India is getting ready to complete an IPO in India in the next several months. The IPO offering size is expected to be about US$1.8 billion.
LG Electronics (066570 KS) plans to sell 101.8 million shares, accounting for about 15% of the post-offer paid up equity capital shares of LG Electronics India.
If LGEI is valued at US$13 billion, then an 85% of this stake would be worth US$11.1 billion, which would be worth more than LG Electronics’s own market cap.

LG Electronics India Pre-IPO Tearsheet

LG Electronics (066570 KS) is looking to raise US$1.5bn+ via part-selling its stake in LG Electronics India IPO. The deal will be run by MS, JPM, Axis, BofA and Citi.
LG Electronics India (LGEI) was the market leader in India in major home appliances and consumer electronics (excluding mobile phones) in terms of volume in 1Q25, as per Redseer Report.
LGEI has been the number one player in this industry for 13 consecutive years (CY11-CY23) as per the value market share in the offline channel in India, as per Redseer.

ServiceTitan Valuation Analysis: Attractive First-Day Return, Initial Price Range: $52.00-$57.00

ServiceTitan, a founder-led market leader for trades businesses in the United States and Canada, is expected to IPO this week.
The company’s amended S-1 puts the initial price range per share at $52.00 to $57.00, implying a market cap of roughly $5B at the midpoint.
I have a positive view of upcoming ServiceTitan IPO and expect an attractive first trading-day return. The stock will begin trading on the Nasdaq on Thursday.

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Dec 09

Daily Brief ECM: Sanrio (8136 JP): The Current Playbook and more

In today’s briefing:

Sanrio (8136 JP): The Current Playbook
Paradigm Biopharmaceuticals (PAR AU): Fund Raising Amidst Pipeline Progress Raises Conviction
ECM Weekly (9th Dec 2024) – Goodman, Auckland Airport, Kioxia, MNC, DIY, Vishal Mega, Mao Geping

Sanrio (8136 JP): The Current Playbook

By Arun George

Since the announcement of the US$840 million secondary offering, Sanrio (8136 JP)’s shares have been down 3.9% from the undisturbed price of JPY5,160 per share (26 November).
It is instructive to look at recent large Japanese placements to understand the potential trading pattern. So far, Sanrio’s shares have followed the pattern of previous large placements.
The offering will likely be priced on 10 December. The average large Japanese placement tends to generate positive returns.

Paradigm Biopharmaceuticals (PAR AU): Fund Raising Amidst Pipeline Progress Raises Conviction

By Tina Banerjee

Paradigm Biopharmaceuticals (PAR AU) has requested a trading halt to the ASX pending an announcement in relation to a capital raising. Normal trading will resume on Monday, December 9, 2024.
Assuming quarterly cash burn rate of A$7M, Paradigm’s cash balance should provide a runway through mid-Q3FY25. The company is in a dire need to raise fund.
With lead drug being in late-stage trial and having huge market potential, Paradigm seems to be an attractive biotech investment opportunity. Recently, optimism is growing surrounding Paradigm’s lead drug candidate.

ECM Weekly (9th Dec 2024) – Goodman, Auckland Airport, Kioxia, MNC, DIY, Vishal Mega, Mao Geping

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, the deal flow doesn’t seem to be slowing down much into the year end. The coming two weeks will see some of the past IPOs listing.
On the placements front, Goodman Group (GMG AU)‘s block trade was hogging all of the limelight this week.

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Dec 07

Daily Brief ECM: A Review of Our IPO Research in 2024 and more

In today’s briefing:

A Review of Our IPO Research in 2024

A Review of Our IPO Research in 2024

This has been a difficult year for the global IPO market including in Korea. In this insight, we review our IPO research in 2024.
Using the criteria that the Aequitas Research uses (see below), the accuracy rate of our calls on the IPOs this year was 86%.
There some sizeable IPOs that are expected to be completed in Korea in 2025 including LG CNS, Sono International, K Bank, and Bithumb.

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Dec 06

Daily Brief ECM: LG CNS IPO Details Out: My Read on This IPO and more

In today’s briefing:

LG CNS IPO Details Out: My Read on This IPO
LG CNS IPO Preview
MNC Solution IPO Book Building Results Analysis
Vishal Mega Mart Pre-IPO – The Positives – One-Stop Shop
Aditya Infotech Pre-IPO – Expanding Channel Network and Increased Production Capacity to Drive Sales
Vishal Mega Mart Pre-IPO – The Negatives – No Online Presence, PE Overhang

LG CNS IPO Details Out: My Read on This IPO

By Sanghyun Park

The KRW 5T-6T valuation and 13x-16x PER look solid compared to local peers like SDS and Hyundai AutoEver, with CNS possibly getting a premium due to its smaller captive stake.
Instos probably won’t push hard for lock-ups but will aggressively target pricing to secure larger allotments, knowing the company is likely to stick with a market-friendly price.
On a separate note, I wouldn’t expect much of a NAV discount reduction for LG Corp, as LG CNS’s stake isn’t significant enough to move the needle.

LG CNS IPO Preview

The long awaited IPO of LG CNS is finally getting ready to be completed in February 2025. The IPO price range is 53,700 won to 61,900 won.
Expected market cap is between 5.2 trillion won to 6.0 trillion won. At the high end of the IPO price range, the total IPO offering would involve 1.2 trillion won.
The bankers used three companies including Samsung Sds, Hyundai Autoever, and NTT Data Corp as comps. This is expected to be one of the largest IPOs in Korea in 2025

MNC Solution IPO Book Building Results Analysis

MNC Solution reported its IPO book building results. The IPO price has been determined at 65,000 won, which is 18.8% lower than the low end of the IPO price range.
A total of 198 institutional investors participated in the IPO demand forecast. The competition rate was low at 8.2 to 1.
Our base case valuation of MNC Solution is target price of 92,842 won per share, which is 43% higher than the IPO price of 65,000 won.

Vishal Mega Mart Pre-IPO – The Positives – One-Stop Shop

Vishal Mega Mart is planning to raise around US$950m through its upcoming IPO in India.
Vishal Mega Mart Limited (VMM), is a one-stop retail destination. As per the company it targets middle and lower-middle income consumers across India
In this note, we talk about the positive aspects of the deal.

Aditya Infotech Pre-IPO – Expanding Channel Network and Increased Production Capacity to Drive Sales

By Akshat Shah

Aditya Infotech Ltd (6596564Z IN) is looking to raise about US$155m in its upcoming India IPO.
Aditya Infotech is a CCTV/video surveillance provider offering a range of advanced video security and surveillance products, technologies and solutions for enterprise and consumer segments under its CP PLUS brand.
In this note, we talk about the company’s historical performance.

Vishal Mega Mart Pre-IPO – The Negatives – No Online Presence, PE Overhang

Vishal Mega Mart is planning to raise around US$950m through its upcoming IPO in India.
Vishal Mega Mart Limited (VMM), is a one-stop retail destination. As per the company it targets middle and lower-middle income consumers across India
In this note, we talk about the not-so-good aspects of the deal.

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Dec 05

Daily Brief ECM: Auckland Airport Placement – NZ$1.3bn (US$770m) Cleanup Sale Will Remove the Overhang and more

By Shifara Samsudeen, ACMA, CGMA

In today’s briefing:

Auckland Airport Placement – NZ$1.3bn (US$770m) Cleanup Sale Will Remove the Overhang
Kioxia IPO: Peer Comparison and Valuation
Freetech Intelligent Technology Ltd Pre-IPO Tearsheet
Shenzhen Yuejiang Technology IPO: PHIP and Valuation Updates, High Valuations and A Higher TAM
Pre-IPO Mao Geping Cosmetics (PHIP Updates) – Some Points Worth the Attention

Auckland Airport Placement – NZ$1.3bn (US$770m) Cleanup Sale Will Remove the Overhang

By Clarence Chu

Auckland Council is looking to raise NZ$1.3bn (US$772m) from selling its entire stake in Auckland Intl Airport (AIA NZ).
Overall, the selldown will be a large one for the stock to digest at 10% of shares outstanding and 62 days of three month ADV.
In this note, we run the deal through our ECM framework and comment on deal dynamics.

Kioxia IPO: Peer Comparison and Valuation

Kioxia has announced the terms for its IPO, and plans to raise $730m through issuing new shares as well as offer by existing shareholders, at a market capitalisation of $819bn.
Kioxia Holdings (285A JP) ‘s earnings have been volatile and margins have trailed compared to peers Micron and SK Hynix. Earnings are approaching a new peak.
Kioxia’s implied valuation multiples are at a deep discount to peer multiples, suggesting there is significant upside to the indicative IPO price range.

Freetech Intelligent Technology Ltd Pre-IPO Tearsheet

By Rosita Fernandes

Freetech Intelligent Systems (1901036D CH) is planning to raise about US$200m through its upcoming Hong Kong IPO. The lead bookrunners for the deal are CITIC Securities, CICC, Huatai International, HSBC.
Freetech Intelligent Technology Ltd (FITL) is a provider of intelligent driving solutions, focusing on advanced driver assistance systems (ADAS) and autonomous driving systems (ADS) technologies.
It ranks third among domestic suppliers of Level 2 and Level 2+/2++ intelligent driving solutions in China, with a 2023 market share of 14.6%, according to CIC.

Shenzhen Yuejiang Technology IPO: PHIP and Valuation Updates, High Valuations and A Higher TAM