ECM Daily Briefs | Page 13 of 124

In today’s briefing:

MMG (1208 HK): Rights Trade Playbook
Local Capital Market Movements Targeting July Implementation of Block Deal Pre-Disclosure Rule
Sanil Electric IPO Preview
ECM Weekly (24th June 2024)-Webtoon, Guzman, Black Ses, Johor Plant, Bajaj Housing, Infratil, Mizuho

MMG (1208 HK): Rights Trade Playbook

On 4 June, MMG (1208 HK) announced plans to raise HK$9.1bn (US$1.2bn) through 2 rights shares for every five existing shares rights offering, with a rights price of HK$2.62.
Since the rights issue announcement, MMG shares have declined by 16.2% to the undisturbed price and by 8.0% compared to the TERP of HK$3.48 per share.
MMG’s trading pattern has diverged from Link REIT/Yuexiu’s rights trading due to the statement on 18 May that the Peruvian mine is not liable for a 30% withholding tax.

Local Capital Market Movements Targeting July Implementation of Block Deal Pre-Disclosure Rule

By Sanghyun Park

The new pre-disclosure rule starting July 24th will reshape business practices. Local institutions are now preparing by launching dedicated block deal funds, targeting 40 to 80 deals annually.
No rule bars short-sellers from block deals post-pre-disclosure. Local institutions are planning to exploit this, anticipating sellers favoring club deals under new July rules, potentially stabilizing prices for hedge strategies.
Access to club deals will be crucial post-July in Korea’s block deal market. Effective short-selling instruments are also vital with the ban extended until March next year.

Sanil Electric IPO Preview

Sanil Electric is getting ready to complete its IPO in late July in KOSPI. The IPO price range is from 24,000 won to 30,000 won per share.
The company is planning is raise between 182.4 billion won and 228 billion won in this IPO. The book building for the institutional investors lasts from 9 to 15 July.
Sanil Electric is best known for making special transformers used for special purposes in environments with severe weather changes, such as offshore wind power, solar power, and offshore plants.

ECM Weekly (24th June 2024)-Webtoon, Guzman, Black Ses, Johor Plant, Bajaj Housing, Infratil, Mizuho

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, Guzman provided some hope to the Australian market, while Webtoon Entertainment (WBTN US) and Allied Blenders & Distillers will soon test their respective markets.
There was no dearth of placement this week, with large deals in Hong Kong, New Zealand and India.

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Jun 23

Daily Brief ECM: Webtoon Entertainment IPO: Favorable Risk/Reward IPO Valuation and Limited Downside Potential and more

In today’s briefing:

Webtoon Entertainment IPO: Favorable Risk/Reward IPO Valuation and Limited Downside Potential

Webtoon Entertainment IPO: Favorable Risk/Reward IPO Valuation and Limited Downside Potential

By Andrei Zakharov

Webtoon Entertainment, a South Korean global storytelling platform and the world’s largest digital comics platform, filed for an IPO in the United States.
The company offers 15M shares at a price range between $18.00 and $21.00, implying a market cap of roughly $2.5B at the midpoint based on 129.3M outstanding shares.
I have a positive view of the upcoming Webtoon Entertainment IPO and I think risk/reward is more favorable for IPO investors given the company’s improving profitability and strong cash position.

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Jun 22

Daily Brief ECM: Allied Blenders and Distillers – RHP Updates & Thoughts on Valuation and more

In today’s briefing:

Allied Blenders and Distillers – RHP Updates & Thoughts on Valuation
Tianju Dihe Technology IPO: Limited Room For Multiple Expansion Despite Healthy Growth

Allied Blenders and Distillers – RHP Updates & Thoughts on Valuation

Allied Blenders & Distillers (9844250Z IN) is looking to raise about US$180m in its upcoming India IPO.
ABD is the largest Indian-owned Indian-made foreign liquor (IMFL) company and the third largest IMFL company in India, in terms of annual sales volumes between FY14 and FY22.
In our previous notes, we talked about various aspects of the company. In this note, we talk about its RHP updates and our thoughts on valuation.

Tianju Dihe Technology IPO: Limited Room For Multiple Expansion Despite Healthy Growth

By Andrei Zakharov

Tianju Dihe Technology, a provider of integrated API-enabled data exchange services in China, set terms for an IPO and plans to raise ~HK$400M in June.
The initial public offering is expected to be priced at HK$83.33 per H share, valuing the technology company at ~HK$4.2B or $535M based on 50.1M outstanding shares.
Cornerstone investors have agreed to acquire ~3.8M H shares, representing 80% of the offer shares or ~8% of the total outstanding shares.

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Jun 21

Daily Brief ECM: Sensetime Placement – Seems Highly Opportunistic and more

In today’s briefing:

Sensetime Placement – Seems Highly Opportunistic
Muthoot Microfin Lockup Expiry – Pre-IPO Investors Well in the Money Despite the Stock’s Performance
Hyundai Motor India: Can It Thrive Amidst a Rapidly Evolving Mobility Landscape?
Tamboran Resources US Offering – Strong Recent Momentum but CDIs Have Been Volatile Since Listing

Sensetime Placement – Seems Highly Opportunistic

SenseTime Group (20 HK) aims to raise up to US$263m via selling around 4.5% stake.
Sensetime hasn’t had the best of times since listing, however, the shares have rebounded recently on generative AI buzz around the stock.
In this note, we will talk about the placement and run the deal through our ECM framework.

Muthoot Microfin Lockup Expiry – Pre-IPO Investors Well in the Money Despite the Stock’s Performance

Muthoot Microfin (MUTHOOTM IN) raised around US$115m in its Indian IPO, after pricing the deal at the top end of its IPO range at INR291/share.
Muthoot Microfin is a microfinance institution providing micro-loans to women customers with a focus on the rural regions of India.
In this note, we will talk about the lock-up dynamics and updates since our last note.

Hyundai Motor India: Can It Thrive Amidst a Rapidly Evolving Mobility Landscape?

By Devi Subhakesan

India’s passenger vehicle industry is shifting towards alternative fuels and facing intense competition, amidst changing customer preferences.
Despite a growing vehicle market, Hyundai Motor India (HMIL) faces a tough battle to defend its market share given changing industry dynamics.
With more competitors in the fray, including its parent group company Kia and EV leader BYD, Hyundai Motor India is in for a challenging ride.

Tamboran Resources US Offering – Strong Recent Momentum but CDIs Have Been Volatile Since Listing

By Clarence Chu

Tamboran Resources (TBN AU) is looking to raise US$175m from listing its shares in the US.
Tamboran Resources is an early stage, independent natural gas exploration and production company.
In this note, we talk about the deal dynamics and the listing impact.

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Jun 20

Daily Brief ECM: Webtoon Entertainment IPO – Further Thoughts on Valuation – Acquisitions and more

In today’s briefing:

Webtoon Entertainment IPO – Further Thoughts on Valuation – Acquisitions, Buyouts
Guzman Y Gomez IPO Trading – Strong Demand, Not All Shares in Escrow
Innospace IPO Bookbuilding Results Analysis
Black Sesame Pre-IPO – PHIP Updates – Unable to Shake off Its Loss-Making Tendencies
Bajaj Housing Finance Pre-IPO – The Negatives – Carrying More Risky Loans
Bloks Group IPO: Exceptional Revenue Hyper-Growth and Profitability Are Unique Among Toy Makers
Telix Pharmaceuticals (TLX AU): Nasdaq IPO Plan Dropped; Future Growth Prospect Remains Intact
Pre-IPO Soft International Group – Whether Performance Growth Can Be Sustained Is a Question Mark

Webtoon Entertainment IPO – Further Thoughts on Valuation – Acquisitions, Buyouts

Webtoon Entertainment (WBTN US) is looking to raise up to US$315m in its US IPO, down from an earlier reported float of US$500m.
Webtoon Entertainment is a global storytelling platform where a community of creators and users discover, create and share new content.
In our previous notes, we talked about the company’s historical performance, undertook a peer comparison and shared our thoughts on valuation. In this note, we share additional thoughts on valuation.

Guzman Y Gomez IPO Trading – Strong Demand, Not All Shares in Escrow

Guzman Y Gomez raised around US$221m in its upsized Australian IPO.
GYG is a quick service restaurant business with more than 200 restaurants globally. It mainly focuses on fresh, made-to-order, Mexican-inspired food.
We have looked at the company’s performance and valuation in our past notes. In this note, we talk about the trading dynamics.

Innospace IPO Bookbuilding Results Analysis

Innospace reported solid IPO bookbuilding results. Innospace’s IPO price has been determined at 43,300 won won, which is at the high end of the IPO price range.
Our base case valuation of Innospace is target price of 51,481 won per share (12 month view), which is 19% higher than the IPO price.
Innospace is involved in the satellite launch vehicle production and launch service business.

Black Sesame Pre-IPO – PHIP Updates – Unable to Shake off Its Loss-Making Tendencies

By Clarence Chu

Black Sesame Technologies (BLACKSES HK) is looking to raise around US$300m in its upcoming Hong Kong IPO.
Black Sesame International Holdings (BSIH) is an automotive-grade computing SoC and SoC-based intelligent vehicle solution provider.
In our previous note we looked at the company’s past performance. In this note, we discuss Black Sesame’s PHIP updates.

Bajaj Housing Finance Pre-IPO – The Negatives – Carrying More Risky Loans

Bajaj Housing Finance (BHF IN) is looking to raise around US$830m in its upcoming India IPO.
BHF is a non-deposit taking housing finance company engaged in mortgage lending since FY18. Its mortgage products include home loans, loans against property, lease rental discounting and developer financing.
In this note, we talk about the not-so-positive aspects of the deal.

Bloks Group IPO: Exceptional Revenue Hyper-Growth and Profitability Are Unique Among Toy Makers

By Andrei Zakharov

Bloks Group, a fast-growing toy company and leader of assembly character toys, filed for a Hong Kong IPO. The company is headquartered in Shanghai, PRC, and has 410 full-time employees.
Bloks Group has raised $200M+ to date from investors, including YF Capital, Legend Capital, Source Code Capital, Gaorong Capital and SinoMedia Asia Pacific.
The Chinese toy maker has delivered an exceptional revenue hyper-growth of 169% y/y in 2023. Elite operating metrics and impressive financial profile make IPO attractive for investors.

Telix Pharmaceuticals (TLX AU): Nasdaq IPO Plan Dropped; Future Growth Prospect Remains Intact

By Tina Banerjee

Telix Pharmaceuticals (TLX AU) has withdrawn its proposed IPO in the U.S. due to unfavorable market condition. The proposed Nasdaq listing was not predicated on the need to raise capital.
As a profitable, cash generative company, Telix is confident that its existing and upcoming cash resources will be sufficient to meet R&D and commercialization needs.
Following the successful commercial launch of Illuccix, Telix has demonstrated its ability to develop and commercialize innovative product portfolio, which should accelerate its growth trajectory.

Pre-IPO Soft International Group – Whether Performance Growth Can Be Sustained Is a Question Mark

By Xinyao (Criss) Wang

The top two biggest markets of Soft International (China and Russia) are encountering the challenge of slowing growth or even growth stagnation due to decreasing birth rate and increasing competition.
Single-Digit net profit margin is not satisfactory for a company with strong consumption attributes. This makes us wonder if the personal hygienic disposables is not a money-making business.
Overreliance on Russian Top-tier Retailer would bring risks to the business.Both revenue growth and profitability could decrease sharply if adverse situations occur. Soft International’s valuation could be lower than peers.

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Jun 19

Daily Brief ECM: Webtoon Entertainment (WBTN US) IPO: Valuation Insights and more

In today’s briefing:

Webtoon Entertainment (WBTN US) IPO: Valuation Insights
Webtoon Entertainment IPO – Thoughts on Valuation
Bajaj Housing Finance Pre-IPO – The Positives – Strong Brand, Fast Growth
Webtoon Entertainment IPO Valuation Analysis

Webtoon Entertainment (WBTN US) IPO: Valuation Insights

Webtoon Entertainment (WBTN US) is a global storytelling platform. Webtoon has launched a Nasdaq IPO to raise US$270-315 million at a US$18.00 to US$21.00 price range.
We previously discussed the IPO in Webtoon Entertainment IPO: The Bull Case and Webtoon Entertainment (WBTN US) IPO: The Bear Case.
In this note, we outline our forecasts and valuation. Our valuation analysis suggests that Webtoon is attractively valued at the IPO price range.

Webtoon Entertainment IPO – Thoughts on Valuation

Webtoon Entertainment (WBTN US) is looking to raise up to US$315m in its US IPO, down from an earlier reported float of US$500m.
Webtoon Entertainment is a global storytelling platform where a community of creators and users discover, create and share new content.
In our previous notes, we talked about the company’s historical performance and undertook a peer comparison. In this note, we share our thoughts on valuation.

Bajaj Housing Finance Pre-IPO – The Positives – Strong Brand, Fast Growth

Bajaj Housing Finance (BHF IN) is looking to raise around US$830m in its upcoming India IPO.
BHF is a non-deposit taking housing finance company engaged in mortgage lending since FY18. Its mortgage products include home loans, loans against property, lease rental discounting and developer financing.
In this note, we talk about the positive aspects of the deal.

Webtoon Entertainment IPO Valuation Analysis

Webtoon announced that it is targeting a valuation of up to US$2.7 billion in the upcoming IPO. The IPO price range is from US$18 to US$21 per share.
The company is aiming to raise as much as US$315 million in this IPO. Blackrock Asset Management has indicated interest of purchasing up to US$50 million in this IPO.
Our base case valuation of Webtoon is market cap of US$3.6 billion or target price of US$27.9 per share (33% higher than the high end of the IPO price range).

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Jun 18

Daily Brief ECM: Kagome (2811) – Well-Flagged Slightly Dilutive Equity Financing for High ROIC Purchase and more

In today’s briefing:

Kagome (2811) – Well-Flagged Slightly Dilutive Equity Financing for High ROIC Purchase
Hyundai Motor India IPO Preview
Infratil Placement – Riding the AI Wave, but Deal Timing Seems Opportunistic

Kagome (2811) – Well-Flagged Slightly Dilutive Equity Financing for High ROIC Purchase

By Travis Lundy

In January, Kagome Co Ltd (2811 JP) announced an acquisition of an additional 50% stake in a US equity affiliate. It is transformational. Incremental ROIC is truly excellent.
At the time, they said they’d finance the purchase with a bridge loan but would sell treasury shares for ¥25bn or less to cover it. They announced the shelf then.
Friday they announced the Offering. Today shares fell 8+%. This is now cheap.

Hyundai Motor India IPO Preview

Hyundai Motor India is getting ready to complete its IPO in 2H 2024. Hyundai Motor India plans to offer up to 142.2 million shares (17.5% stake) to investors.
Hyundai Motor (005380 KS) currently owns a 100% stake in Hyundai Motor India. The IPO of Hyundai Motor India could raise as much as US$3 billion.
If Hyundai Motor India (HMI) is valued at US$25 billion and HMC sells a 17.5% stake in the company, HMC’s remaining stake in HMI would be worth nearly US$21 billion.

Infratil Placement – Riding the AI Wave, but Deal Timing Seems Opportunistic

Infratil Ltd (IFT NZ) aims to raise around US$613m (NZ$1bn) via an institutional placement.
Proceeds from the placement will be used to fund IFT’s share of capex for its data center arm, CDC.
In this note, we will talk about the placement and run the deal through our ECM framework.

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Jun 17

Daily Brief ECM: Webtoon Entertainment (WBTN US) IPO: The Bear Case and more

In today’s briefing:

Webtoon Entertainment (WBTN US) IPO: The Bear Case
Growth of SHEIN, Temu Appears to Be Boosting Asia-US Air Cargo Volume & Pricing
Hyundai Motor India IPO: Key Facts and Financials at a Glance
Kagome Placement – Very Well Flagged Deal but Liquidity Might Be a Concern
ECM Weekly (17th June 2024)-Shift Up, Webtoon, Quantum, Guzman, MaoGeping, Johor Plant, Telix, Atour
Johor Plantations IPO – ASPs to Remain Resilient, Downside Appears Limited
Pre-IPO Fangzhou Inc. (PHIP Updates) – Some Points Worth the Attention

Webtoon Entertainment (WBTN US) IPO: The Bear Case

Webtoon Entertainment (WBTN US), a global storytelling platform, seeks to raise up to US$500 million through a Nasdaq IPO.
In Webtoon Entertainment IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on declining organic revenue, declining Korean paying ratio, a peaking Japan growth driver, optimistic market sizing, and unsustainable low marketing spending.

Growth of SHEIN, Temu Appears to Be Boosting Asia-US Air Cargo Volume & Pricing

By Daniel Hellberg

For first time since 2022, carriers’ cargo revenue, yield, load factor all rising
Asia outbound, US inbound air cargo tons both improving in early 2024
SHEIN, Temu could account for 40%+ of US inbound air tons from CH, HK, TW

Hyundai Motor India IPO: Key Facts and Financials at a Glance

By Devi Subhakesan

Hyundai Motor India’s proposed IPO is an offer for sale by its parent, Hyundai Motor Company, Korea, and reported to raise USD3 billion, potentially making it India’s largest IPO ever.
Hyundai Motor India’s sales growth has been driven by strong domestic and export sales, both in volume and unit realisation.
With SUVs now making up 62% of Hyundai Motor India’s domestic volumes, up from 45% in FY2021, the shift towards premium models has boosted profit margins.

Kagome Placement – Very Well Flagged Deal but Liquidity Might Be a Concern

Kagome Co Ltd (2811 JP) aims to raise around US$140m to repay debt used to fund the acquisition of Ingomar in Jan 2024.
At the time of the acquisition, the company has stated its intention to part finance the acquisition via issuance of treasury shares
In this note, we will talk about the placement and run the deal through our ECM framework.

ECM Weekly (17th June 2024)-Shift Up, Webtoon, Quantum, Guzman, MaoGeping, Johor Plant, Telix, Atour

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, we continued to look at Shift Up (462870 KS), Guzman Y Gomez and Webtoon Entertainment (WBTN US), along with Mao Geping Cosmetics.
On the placement front, there were quite a few deals in India, while Atour Lifestyle Holdings (ATAT US) was the major Asia linked offerings.

Johor Plantations IPO – ASPs to Remain Resilient, Downside Appears Limited

By Clarence Chu

Johor Plantations Group (2368120D MK) is looking to raise US$156m in its Malaysia IPO. The IPO will consist of both primary and secondary shares.
Johor Plantations Group (JPG) is an upstream oil palm plantation firm operating predominantly in Johor, Malaysia.
In this note, we look at the updates since, and share our thoughts on valuation.

Pre-IPO Fangzhou Inc. (PHIP Updates) – Some Points Worth the Attention

By Xinyao (Criss) Wang

Fangzhou cannot get around the decreasing unit-price of drugs and the increasing role of medical insurance in chronic-disease treatment.It’s challenging to find patients willing to pay out of own pockets.
The internal dispute between the Founder and shareholders hasn’t ended, and related litigation is still pending. This makes us concerned about the stability of future business development and corporate governance.
Fangzhou has significant cash flow pressure. In the case of increasingly fierce competition in the industry, without successful business diversification/transformation, growth prospects is gloomy, Valuation should be lower than peers.

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Jun 15

Daily Brief ECM: Shift Up IPO – Refiling and Other Updates and more

In today’s briefing:

Shift Up IPO – Refiling and Other Updates, Not Ranked at the Top Anymore
Clarifying BRV’s Post-Block Deal Lockup Conditions Involving Ecopro Materials
Webtoon Entertainment Pre-IPO – Peer Comparison – Relatively Small in Operating Scale as a Platform
Enchem Placement- Easily Digestible but a Punt at Best

Shift Up IPO – Refiling and Other Updates, Not Ranked at the Top Anymore

Shift Up (462870 KS) plans to raise up to US$320m in its South Korean IPO.
Shift Up is a South Korean games developer, which as released three games so far for the global markets.
We have looked at the company’s performance, undertaken a peer comparison and talked about valuations in our past notes. In this note, we talk about the refiling and other updates.

Clarifying BRV’s Post-Block Deal Lockup Conditions Involving Ecopro Materials

By Sanghyun Park

In Korea, the lockup period for block deals is set by the seller and underwriters, not by law, and can be adjusted if both parties agree.
BRV obtained consent from Goldman, UBS, and KB for a second block deal after assessing that many initial buyers had sold their shares.
Understanding this lockup structure provides key insights into predicting when the next block deal might occur.

Webtoon Entertainment Pre-IPO – Peer Comparison – Relatively Small in Operating Scale as a Platform

Webtoon Entertainment (WBTN US) is looking to raise up to US$500m in its US IPO.
Webtoon Entertainment is a global storytelling platform where a community of creators and users discover, create and share new content.
In our previous note, we talked about the company’s historical performance. In this note, we undertake a peer comparison.

Enchem Placement- Easily Digestible but a Punt at Best

Woori PE, NH PE and KDB Capital seek to raise around KRW195bn (US$141m) through a secondary block deal, selling 0.71m shares (3.64% of TSO) of Enchem (348370 KS).
The deal is a small one to digest at only 1.1 days of three-month ADV.
In this note, we will talk about the placement and run the deal through our ECM framework.

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Jun 14

Daily Brief ECM: Webtoon Entertainment IPO: The Bull Case and more

In today’s briefing:

Webtoon Entertainment IPO: The Bull Case

Webtoon Entertainment IPO: The Bull Case