ECM Daily Briefs | Page 14 of 117

In today’s briefing:

HD Hyundai Marine Solutions IPO: The Investment Case

HD Hyundai Marine Solutions IPO: The Investment Case

HD Hyundai Marine Solution (443060 KS), the ship after-service subsidiary of HD Hyundai (267250 KS), aims to raise up to US$550 million.
The international book-building will run from 8 to 22 April, while the domestic book will open from 16 to 22 April. Pricing will be announced on 24 April.
The investment case rests on solid top-line growth, a healthy order book, rising margins, cash generation, and modest leverage.

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Mar 29

Daily Brief ECM: Local Color on HD Hyundai Marine Solution’s Excessive IPO Valuation and more

In today’s briefing:

Local Color on HD Hyundai Marine Solution’s Excessive IPO Valuation
HD Hyundai Marine Solution IPO – Strong Profitability Growth but Lacking in Disclosures
Bharti Hexacom IPO – Unexciting and at a Half-Decent Discount
Bharti Hexacom IPO: Valuation Insights
Ibotta IPO Preview: High-Growth Cashback Unicorn With Robust AI-Powered Capabilities

Local Color on HD Hyundai Marine Solution’s Excessive IPO Valuation

By Sanghyun Park

Valuation controversy arises from comparing HD Hyundai Marine Solution, a ship AS specialist, with diverse global companies, leading to a target market cap of ₩5T.
HD KSOE’s inclusion worsens the valuation controversy. Applying HD KSOE’s last year PER without adjusting for a significant one-off profit seems to inflate HD Hyundai Marine Solution’s PER.
Currently, major local IPO funds see HD Hyundai Marine’s valuation nearing ₩4T as excessive, despite the industry’s revival and potential growth in eco-friendly ship conversions, impacting the upcoming bookbuilding process.

HD Hyundai Marine Solution IPO – Strong Profitability Growth but Lacking in Disclosures

HD Hyundai Marine Solution (443060 KS) is looking to raise up to US$555m in its Korean IPO.
HD Hyundai Marine Solution (HMS from hereon) is a ship aftermarket service provider that provides necessary services throughout a ship’s life cycle after the delivery of a new ship.
In this note, we talk about the company’s historical performance.

Bharti Hexacom IPO – Unexciting and at a Half-Decent Discount

Bharti Hexacom is looking to raise up to US$513m in its upcoming India IPO.
Bharti Hexacom (BH) is a communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services to customers in the Rajasthan and the North East telecommunication circles in India.
We have looked at the company’s past performance in our earlier notes. In this note, we talk about valutions.

Bharti Hexacom IPO: Valuation Insights

Bharti Hexacom (6597372Z IN), a 70% owned subsidiary of Bharti Airtel (BHARTI IN), aims to raise up to US$513 million at an IPO price range of Rs542-570 per share.
We previously discussed the IPO in Bharti Hexacom IPO: The Bull Case and Bharti Hexacom IPO: The Bear Case.
Our valuation analysis suggests that the IPO price range is unattractive. Therefore, we would not participate in the IPO.

Ibotta IPO Preview: High-Growth Cashback Unicorn With Robust AI-Powered Capabilities

By Andrei Zakharov

Ibotta, a cashback rewards platform provider, files to list IPO on NYSE. The Denver-based technology company was backed by VC investors, GGV Capital, Walmart and Koch Disruptive Technologies.
Ibotta is a trusted and well-known brand in the cashback space in the United States, and means “I-bought-a”. The company is led by its Founder & CEO, Bryan Leach.
Considering Ibotta’s strong and profitable growth, low penetration of the addressable market opportunity, and potential international expansion, they should have a successful IPO.

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Mar 28

Daily Brief ECM: Pre-IPO LANTIAN Group Holdings – The Industry Is Saturated and more

In today’s briefing:

Pre-IPO LANTIAN Group Holdings – The Industry Is Saturated, with Weak Profitability
Sichuan Baicha Baidao Pre-IPO – Thoughts on Valuation

Pre-IPO LANTIAN Group Holdings – The Industry Is Saturated, with Weak Profitability

The industry in which LANTIAN operates has basically bid farewell to the era of high-speed growth. The baby diaper products market is nearing saturation, with limited future growth potential.
The economy baby diaper products market is the last segment to bring alpha. However, it’s not easy for LANTIAN to break through considering strong international big names and local brands.
Profit margin of LANTIAN is low. If this is the characteristic of this industry, then baby diaper products isn’t a profitable business.Investors could have other options to achieve higher returns.

Sichuan Baicha Baidao Pre-IPO – Thoughts on Valuation

Sichuan Baicha Baidao Industrial (SBBI) is looking to raise up to US$300m in its upcoming HK IPO.
SBBI sells new-style tea drinks through its ChaPanda stores. According to F&S, SBBI ranked third in China’s new-style tea shop market with a market share of 6.8% in FY23.
We have looked at the company’s past performance in our earlier notes. In this note, we provide our initial thoughts on valuations.

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Mar 27

Daily Brief ECM: Globalwafers GDR Offering – Coming to Market Earlier than Anticipated and more

In today’s briefing:

Globalwafers GDR Offering – Coming to Market Earlier than Anticipated
Shinhan Financial Group Placement – Another Selldown, Momentum Is Strong but Deal Is Large
Bharti Hexacom IPO: The Bear Case
Pre-IPO Zhejiang Taimei Medical Technology – Be Cautious About the “valuation Bubble”
MIXUE/ChaPanda/Good Me/Auntea Pre-IPO – Updated Peer Comparison

Globalwafers GDR Offering – Coming to Market Earlier than Anticipated

Globalwafers (6488 TT) is looking to raise up to US$681m in its GDR offering. The proceeds will be used to purchase raw materials overseas.
The deal is a somewhat large one to digest at 20.2 days of three month ADV and the proceeds will be used to purchase raw materials overseas.
In this note, we run the deal through our ECM framework and comment on deal dynamics.

Shinhan Financial Group Placement – Another Selldown, Momentum Is Strong but Deal Is Large

BNP Paribas (BNP FP) is looking to raise around US$680m via selling 3.5% of its stake in Shinhan Financial (055550 KS).
This will be the fourth selldown for the stock since the start of the year. It will also be the largest one of the lot, so far.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Bharti Hexacom IPO: The Bear Case

Bharti Hexacom (6597372Z IN), a 70% owned subsidiary of Bharti Airtel (BHARTI IN), aims to raise up to US$513 million at an IPO price range of Rs542-570 per share.
In Bharti Hexacom 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 low geographic diversification, slowing growth, share overhang from TCIL’s desire to exit fully, mid-tier revenue growth and EBITDA margin.

Pre-IPO Zhejiang Taimei Medical Technology – Be Cautious About the “valuation Bubble”

Taimei has transformed from a classic SaaS model to an industrial Internet platform, with value-added digital services as main source of revenue.However, this may not necessarily bring better financial performance.
Considering declining revenue growth/gross margin, as well as constantly increasing customer acquisition cost, it’s highly uncertain whether Taimei can successfully turn losses into profits in 2025 as expected by management.
The significant valuation changes in Series E/E+/F Financing attracted the attention of Shanghai Stock Exchange.Taimei is actually not confident in its future performance. Its valuation could be lower than Yidu.

MIXUE/ChaPanda/Good Me/Auntea Pre-IPO – Updated Peer Comparison

Mixue Group is looking to raise about US$1bn in its Hong Kong IPO, while Sichuan Baicha (ChaPanda), Guming (Good me) and Auntea are said to be looking to raise around US$300m.
All four are primarily focussed on providing freshly-made drinks, including freshly-made fruit drinks, and tea, with some selling ice cream, coffee, baked goods and ready to drink beverages as well.
We undertook a peer comparison in Feb 2024. In this note, we add Auntea to the mix and include the latest financials for ChaPanda.

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Mar 26

Daily Brief ECM: HD Hyundai Marine Solution IPO Preview and more

In today’s briefing:

HD Hyundai Marine Solution IPO Preview
Mankind Pharma Placement – Well Flagged, past Deals Have Done Well but Its Expensive
Bharti Hexacom IPO: The Bull Case
Pre-IPO Beijing Health Guard Biotechnology – The Story of the HPV Vaccine Is Not as Good as Imagined
GL-Carlink Technology Pre-IPO Tearsheet
Sichuan Baicha Baidao Pre-IPO – PHIP Updates – Store Additions Driving Growth as SSSG Lags

HD Hyundai Marine Solution IPO Preview

By Douglas Kim

HD Hyundai Marine Solution is getting ready to complete its IPO in KOSPI in May 2024. This will be one of the largest IPOs in Korea in 2024.
The IPO price range is from 73,300 won to 83,400 won. The IPO offering amount is from 652.4 billion won to 742.3 billion won.
A key beneficiary of HD Hyundai Marine Solution IPO is HD Hyundai (62% ownership). Our NAV analysis suggests implied price of 95,632 for HD Hyundai (40% higher than current price).

Mankind Pharma Placement – Well Flagged, past Deals Have Done Well but Its Expensive

ChrysCap is looking to raise around US$295m via selling a 2.8% stake in Mankind Pharma.
MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
We have looked at the IPO, lock-up release and prior placement in our earlier notes. In this note, we talk about the current deal dynamics.

Bharti Hexacom IPO: The Bull Case

Bharti Hexacom (6597372Z IN), a 70% owned subsidiary of Bharti Airtel (BHARTI IN), aims to raise around US$500 million at a valuation of US$3.3-4.2 billion.
The offer is a pure secondary offering. The Government of India aims to reduce its stake from 30% to 15% of outstanding shares.
The bull case rests on market share gains, ARPU growth, low churn rates, improving margins, cash generation and low leverage.

Pre-IPO Beijing Health Guard Biotechnology – The Story of the HPV Vaccine Is Not as Good as Imagined

The real market space of China’s HPV vaccines is much smaller-than-expected. Investment logic of vaccine companies is different from biotech – They either become large vaccine enterprises or are eliminated.
Low-Valent HPV vaccines would easily enter a price war or be included in National Immunization Program. 9-valent HPV vaccines would be the main battlefield, which is a highly competitive market.
Health Guard is facing increasing survival risks. Based on the concerns about the commercialization outlook of HPV vaccines, we’re not sure if the Company would bring expected returns to investors.

GL-Carlink Technology Pre-IPO Tearsheet

GL-Carlink Technology (1818017D CH) is looking to raise >US$100m in its upcoming HK IPO. The deal will be run by CCBI.
GL-Carlink (GLC) is a connected services provider for players within the automotive aftermarket industry in China, selling in-vehicle hardware products and the provision of SaaS marketing and management services.
As per CIC, connected services refer to connecting vehicles with the Internet and providing comprehensive hardware products, software services, and value-added services for customers such as 4S stores.

Sichuan Baicha Baidao Pre-IPO – PHIP Updates – Store Additions Driving Growth as SSSG Lags

Sichuan Baicha Baidao Industrial (SBBI) is looking to raise up to US$300m in its upcoming HK IPO.
SBBI sells new-style tea drinks through its ChaPanda stores. According to F&S, SBBI ranked third in China’s new-style tea shop market with a market share of 6.8% in FY23.
We have looked at the company’s past performance in our earlier notes. In this note, we talk about the updates from its recent filings.

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Mar 25

Daily Brief ECM: ECM Weekly (25th Mar 2024) – TCS and more

In today’s briefing:

ECM Weekly (25th Mar 2024) – TCS, Akeso, Coforge, ABSL, Tokio Marine, Trial, Migao, Mixue, Reddit

ECM Weekly (25th Mar 2024) – TCS, Akeso, Coforge, ABSL, Tokio Marine, Trial, Migao, Mixue, Reddit

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
On the IPO front, Trial Holdings (5882 JP) ended up doing better than we expected, while Hong Kong finally got its first US$100m+ listing for the year.
For placements, India was again at the forefront, this time with a not-so-pleasant results of Tata Consultancy Svcs (TCS IN).

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Mar 24

Daily Brief ECM: Avianca – Bridging 2024 Prospects with a Little Help from LATAM and more

In today’s briefing:

Avianca – Bridging 2024 Prospects with a Little Help from LATAM

Avianca – Bridging 2024 Prospects with a Little Help from LATAM

By Neil Glynn

Avianca reached $1,200m EBITDAR in 2023, ahead of our forecast of $1,162m, already exceeding its 2024 target.
The company does not provide guidance on 2024 profitability but we publish our quarterly bridge analysis and map prospects versus LATAM Group guidance.
We forecast 10% yoy EBITDAR growth in 2024 on 20% capacity growth, which compares to our forecast of 15% EBITDAR growth at LATAM, which is growing less aggressively.

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Mar 22

Daily Brief ECM: Baishan Cloud IPO Preview: Break-Even Is Likely To Be Achieved in 2024 and more

In today’s briefing:

Baishan Cloud IPO Preview: Break-Even Is Likely To Be Achieved in 2024

Baishan Cloud IPO Preview: Break-Even Is Likely To Be Achieved in 2024

By Andrei Zakharov

Baishan Cloud, China’s independent edge cloud service provider, filed to go public in Hong Kong. CICC and investment bank Haitong are the lead underwriters in this offering.
Founded in 2015, BaishanCloud (1568617D HK) is led by its CEO and Founder, Mr. HUO Tao, and a highly experienced founding team.
I believe the company will achieve a break-even this year, coupled with a strong international expansion, potential revenue acceleration and gross margin improvement as the business continues to scale up.

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Mar 21

Daily Brief ECM: Trial Holdings IPO: Trading Debut and more

In today’s briefing:

Trial Holdings IPO: Trading Debut
Akeso Biopharma Placement (9926.HK) – Would Investors Be Willing to Take a Gamble?
Tencent 4Q2023: Gaming Declines Yet Again, Margins Have Further Upside
Akeso Inc Placement – A Small One to Digest, Momentum Has Been Strong
Reddit IPO – Quick Thoughts on Valuation
Carote Ltd Pre-IPO Tearsheet
Jeil Machine & Solution IPO Valuation Analysis
MIXUE Pre-IPO – Initial Thoughts on Valuation
Aeromexico – Another Record Year in Prospect in 2024

Trial Holdings IPO: Trading Debut

Trial Holdings (5882 JP) priced its IPO at JPY1,700 per share to raise gross proceeds of US$256 million. The shares will start trading on 21 March.
We previously discussed the IPO in Trial Holdings IPO: The Investment Case and Trial Holdings IPO: Valuation Thoughts.
The peers have modestly re-rated since the prospectus was released on February 19. The IPO price remains attractive.

Akeso Biopharma Placement (9926.HK) – Would Investors Be Willing to Take a Gamble?

By Shifara Samsudeen, ACMA, CGMA

Akeso’s product sales grew rapidly in 2023, mainly driven by off-label use of AK104. Since AK104’s commercialization potential on other indications was “overdrawn” in advance, sales growth would slow afterwards.
The key investment logic of Akeso is whether/how much its BsAb pipelines would grab shares from PD-1. The high valuation has somewhat priced in AK112’s successful head-to-head trial with pembrolizumab.
If AK112 does beat Keytruda, valuation will reach a new level. If AK112 fails in critical clinical trials, it would cast a shadow on the entire BsAb pipeline of Akeso.

Tencent 4Q2023: Gaming Declines Yet Again, Margins Have Further Upside

Tencent (700 HK) reported 4Q results today. Both revenues and OP increased 7.1% and 42.0% YoY, however, both revenue and OP fell below consensus estimates.
The company also announced an increase to 2023 dividends and more than doublethe size of the company’s share buyback in 2024 compared to 2023.
We expect Internet VAS to grow at single-digits in 2024, however, high-margin new products to help boost margins in 2024.

Akeso Inc Placement – A Small One to Digest, Momentum Has Been Strong

By Clarence Chu

Akeso Biopharma Inc (9926 HK) is looking to raise US$155m from its primary placement.
Proceeds from the deal would be geared towards R&D expenditure for its preclinical programs, expediting clinical trials, and towards commercializing its existing approved products.
Accounting for 3% of shares outstanding, and representing 5.7 days of its three month ADV, the deal would be a relatively small one for the firm to digest.

Reddit IPO – Quick Thoughts on Valuation

Reddit (RDDT US) is looking to raise up to US$750m in its US IPO.
Reddit is an online social media platform where users are able to join communities, engage in conversations, research, exchange goods and services as well as create new communities.
In our previous note, we talked about the company’s historical performance. In this note, we share our quick thoughts on valuation.

Carote Ltd Pre-IPO Tearsheet

By Clarence Chu

Carote Ltd (CARO HK) is looking to raise around US$150m in its upcoming Hong Kong IPO. The bookrunners on the deal are BNP Paribas, and CMB International.
Carote is a distributor of kitchenware products. Expanding its lineup of products, the firm aims to meet its customers’ varied kitchen scenarios and enhance their culinary experience.
Initially engaged to provide original equipment manufacturing (OEM) overseas, the firm has since ventured into the online retail sector, introducing kitchenware products under its own brand name “CAROTE”.

Jeil Machine & Solution IPO Valuation Analysis

By Douglas Kim

Our base case valuation of Jeil M&S is target price of 24,354 won per share, which is 35% higher than the high end of the IPO price range.
We estimate the Jeil M&S to generate sales of 279 billion won (up 94.9% YoY) and operating profit of 18.1 billion won (up 928% YoY).
Jeil M&S’s main products include mixing equipment for the rechargeable battery sector. Its major customers include Samsung SDI, LG Energy Solution, and Northvolt.

MIXUE Pre-IPO – Initial Thoughts on Valuation

Mixue Group is looking to raise about US$1bn in its upcoming Hong Kong IPO.
MIXUE Group (MIXUE) is a freshly-made drinks company providing affordable products to consumers, including freshly-made fruit drinks, tea, ice cream and coffee, typically priced at around one USD per item.
In our earlier notes, we have looked at the past performance and undertaken a peer comparison. In this note, we provide our initial thoughts on valuation.

Aeromexico – Another Record Year in Prospect in 2024

By Neil Glynn

Aeromexico reported record profitability in 2023 and we expect another record in 2024.
Our deep dive on the competitive landscape suggests a benign outlook as Aeromexico does not face competitor capacity growth in 2024.
The US DOT’s tentative ruling that Delta and Aeromexico must terminate their JV is a meaningful negative from 4Q24 unless their appeal is successful.

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Mar 20

Daily Brief ECM: Aditya Birla Sun Life AMC OFS – Share Price Has Corrected in Anticipation of the Current Deal and more

In today’s briefing:

Aditya Birla Sun Life AMC OFS – Share Price Has Corrected in Anticipation of the Current Deal
Jeil Machine & Solution IPO Preview
Reddit IPO – Well-Known Brand but Sustainability of Growth Is Questionable
Trial Holdings IPO Trading – Demand and Valuation Are Towards the Higher Side
Baazar Style Retail Limited Pre-IPO Tear Sheet

Aditya Birla Sun Life AMC OFS – Share Price Has Corrected in Anticipation of the Current Deal

By Clarence Chu

Promoters in Aditya Birla Sun Life AMC (ABSLAMC IN) are looking to raise US$189m via an offer for sale (OFS). This assumes that the over-allotment option is exercised.
This appears to be done in a bid to meet SEBI’s 75% free-float requirement for listed firms in India. .
News of the selldown had surfaced a week earlier leading to a correction in share price. As such, we would argue that the deal here is well flagged

Jeil Machine & Solution IPO Preview

By Douglas Kim

Jeil Machine & Solution is getting ready for an IPO in April in the Korean stock market. The IPO price range is 15,000 won to 18,000 won.
The total offering amount ranges from 36 billion won to 43.2 billion won. The book building for the institutional investors will last from 5 to 12 April.
According to the bankers’ assessment, the implied market cap of the company ranges from 309 billion won to 371 billion won.

Reddit IPO – Well-Known Brand but Sustainability of Growth Is Questionable

Reddit (RDDT US) is looking to raise up to US$750m in its US IPO.
Reddit is an online social media platform where users are able to join communities, engage in conversations, research, exchange goods and services as well as create new communities.
In this note, we talk about the company’s historical performance.

Trial Holdings IPO Trading – Demand and Valuation Are Towards the Higher Side