ECM Daily Briefs | Page 16 of 124

In today’s briefing:

MODEC (6296 JP): The Current Playbook
Raspberry Pi IPO Preview
AUB Group Placement – Good Track Record, Accretive Acquisition

MODEC (6296 JP): The Current Playbook

By Arun George

Since the US$535 million secondary placement announcement, Modec Inc (6269 JP)’s shares are down 15% from the undisturbed price of JPY3,320 per share (14 May).
Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Modec’s shares have followed the pattern of previous large placements.
The offering will likely be priced on 22 May. Investors who have participated in previous large Japanese placements tend to secure positive returns.

Raspberry Pi IPO Preview

By Douglas Kim

Established in 2012, Raspberry Pi is getting ready to complete its IPO in London soon. Raspberry Pi provides small, single-board computers.
Raspberry Pi is backed by Sony and ARM Holdings. Nearly 72% of the company’s sales come from commercial customers embedding its products into various consumer devices and other systems.
The company generated sales of US$265.8 million (up 41.5% YoY) and operating profit of US$37.5 million (up 87% YoY) in 2023.

AUB Group Placement – Good Track Record, Accretive Acquisition

AUB Group Limited (AUB AU) is looking to raise up to AUD200m (US$133m) to fund the acquisition of Pacific Indemnity.
The company has a good track record and the deal will be accretive to EPS.
In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

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May 21

Daily Brief ECM: Renesas (6723) – Denso Selldown Starts; Fourth Large Renesas Block in 6mos (Two More To Come) and more

In today’s briefing:

Renesas (6723) – Denso Selldown Starts; Fourth Large Renesas Block in 6mos (Two More To Come)
Renesas Block – While Not Particularly Well Flagged, Recent Selldowns in the Stock Have Done Well
Shift Up IPO Preview
Novelis Pre-IPO – Leader in Most Categories, Although End Markets’ Aren’t Really Growing Much
Pre-IPO China Resources Beverage – Here Are the Concerns and the Risks Behind
Shulan Health Management Pre-IPO – Still Ramping up but Only a Small Player
Citicore Renewable Energy IPO – Needs a Wider Discount to Be Attractive

Renesas (6723) – Denso Selldown Starts; Fourth Large Renesas Block in 6mos (Two More To Come)

By Travis Lundy

Today post-close, Denso Corp (6902 JP) (via BofA) announced a selldown of 78,127,800 shares of Renesas Electronics (6723 JP). This is the latest in a line of block exits.
There was the 130mm offering in November last year by INCJ. There was 123mm shares in Jan 2024 by NEC and Hitachi. A month later, 50mm shares from Mitsubishi Electric.
In general, they have been absorbed, but one hasn’t needed to buy in the market. Some have broken price. Here, the pricing range is aggressive.

Renesas Block – While Not Particularly Well Flagged, Recent Selldowns in the Stock Have Done Well

Denso Corp (6902 JP) is looking to raise US$1.39bn from selling a portion of its stake in Renesas Electronics (6723 JP).
DENSO’s selldown is a small one at just 4.3 days of ADV. While there is an overhang of around 4% of TSO, DENSO will be locked up for 270 days.
In this note, we will talk about the placement and run the deal through our ECM framework.

Shift Up IPO Preview

By Douglas Kim

Shift Up (462870 KS) is getting ready to complete its IPO in KOSPI in June 2024. Established in 2013, Shift Up is one of the leading game developers in Korea.
The IPO price range is 47,000 won to 60,000 won. The IPO offering amount is 340.8 billion won to 435 billion won.
According to the bankers’ valuation, the market capitalization range of the company ranges from 2.73 trillion won to 3.4 trillion won. This is the second largest IPO in Korea YTD.

Novelis Pre-IPO – Leader in Most Categories, Although End Markets’ Aren’t Really Growing Much

Novelis Corporation (0620365D US) Novelis is looking to raise US$1.2bn in its upcoming US IPO. The firm is owned by Indian-listed Hindalco. The deal will consist of 100% secondary shares.
Novelis is a global provider of aluminum solutions for the beverage packaging, automotive markets, specialties markets and aerospace.
In this note, we look at the firm’s past performance.

Pre-IPO China Resources Beverage – Here Are the Concerns and the Risks Behind

By Xinyao (Criss) Wang

Over 92% of CR Beverage’s revenue is from packaged drinking water products, but YoY growth this business is already below industry CAGR, raising concerns about whether future growth will stall.
The revenue scale/profitability of CR Beverage are far inferior to Nongfu Spring. In terms of cost control, operational efficiency and the strength of supply chain, CR Beverage is lagging behind.
For low-priced packaging water, the nationwide expansion is not a simple task, which will lead to significant cash outflow. Valuation of CR Beverage should be lower than that of peers.

Shulan Health Management Pre-IPO – Still Ramping up but Only a Small Player

Shulan Health Management (1807987D CH) is looking to raise around US$150m in its Hong Kong IPO.
Shulan Health Management (SHM) is a technology-driven healthcare group in China that integrates healthcare services and medical research and education.
In this note, we talk about the firm’s historical performance.

Citicore Renewable Energy IPO – Needs a Wider Discount to Be Attractive

Citicore Renewable Energy (CREC PM) is looking to raise around US$120m in its Philippines IPO.
Citicore Renewable Energy (CREC) is a pure-play renewable energy platform focused on developing and operating renewable energy projects in the Philippines.
We looked at the firm’s past performance in an earlier note. In this note, we will share our thoughts on valuation.

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May 20

Daily Brief ECM: Lalatech Holdings: FCF Growth Accelerated and more

In today’s briefing:

Lalatech Holdings: FCF Growth Accelerated, Margins Improved, Fair Value May Be North of $10B
Giant Biogene (2367.HK) Placement – A Turning Point in Performance Growth Has Emerged
ECM Weekly (20th May 2024) -Lalatech, Go Digit, Aadhar, TBO Tek, Ecopro, Nexus, Modec, Hyundai Heavy

Lalatech Holdings: FCF Growth Accelerated, Margins Improved, Fair Value May Be North of $10B

By Andrei Zakharov

Lalatech Holdings, a technology based global logistics company, has updated its application for Hong Kong IPO and disclosed financial results for 2023.
Lalatech Holdings is aiming to raise up to $1B and the company’s IPO looks imminent in the coming months as cash flow growth accelerated, while margins and profitability improved.
My fair valuation of Lalatech Holdings is close to $10B and investors should buy into upcoming IPO given the company’s substantial scale, massive network effects and operating efficiency.

Giant Biogene (2367.HK) Placement – A Turning Point in Performance Growth Has Emerged

By Xinyao (Criss) Wang

Despite high growth in 2023, the accelerated growth of Giant Biogene has entered a turning point, and its performance has begun to slow down. Long-term growth momentum is highly uncertain.
Giant Biogene plans to prioritize the market entry of Class III medical device products.Due to increasing competition/challenges in marketing/promotion, it takes time to verify if the second growth curve works.
Reasonable valuation for Giant Biogene is P/E of 20-30x.If based on RMB1.8 billion 2024, market value is RMB36-54 billion. Short-term catalyst is the Online 618 Shopping Festival and 24H1 report.

ECM Weekly (20th May 2024) -Lalatech, Go Digit, Aadhar, TBO Tek, Ecopro, Nexus, Modec, Hyundai Heavy

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, Indian IPOs continued to do well, we also looked at two upcoming deals in Hong Kong.
On the placement front, last week ended up being one of the busiest ones so far this year with five deals live just on Thursday night alone.

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May 17

Daily Brief ECM: Hyundai Heavy Industries Block – Not Well Flagged and Recent Korean Deals Haven’t Done Well and more

In today’s briefing:

Hyundai Heavy Industries Block – Not Well Flagged and Recent Korean Deals Haven’t Done Well
Giant Biogene Placement – Has Been Doing Well but Doesn’t Need the Cash

Hyundai Heavy Industries Block – Not Well Flagged and Recent Korean Deals Haven’t Done Well

HD Korea Shipbuilding & Offshore Engineering (009540 KS) is looking to raise approximately US$258m, via selling 2.6m shares (2.9% of TSO) of HD Hyundai Heavy Industries (329180 KS) stock.
The deal is a large one to digest at 14.6 days of three month ADV.
In this note, we will talk about the placement and run the deal through our ECM framework.

Giant Biogene Placement – Has Been Doing Well but Doesn’t Need the Cash

Giant Biogene (2367 HK) aims to raise up to US$205m via a top-up placement.
We have followed the company since listing and its recent performance has been great. Although it doesn’t seem to need the cash.
In this note, we will run the deal through our ECM framework and talk about the recent updates.

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May 16

Daily Brief ECM: Nihon Kohden (6849 JP): ¥10B Buyback Plan And Stock Split; Japan and US to Drive Business Growth and more

In today’s briefing:

Nihon Kohden (6849 JP): ¥10B Buyback Plan And Stock Split; Japan and US to Drive Business Growth
Nexus Select Trust IPO Lockup Expiry – US$1.5bn Stake Comes Free. Will Likely Be a Coordinated Exit
Lalatech Holdings Limited Pre-IPO – Refiling Updates – Continues to Improve, Valuation Gap Narrowing

Nihon Kohden (6849 JP): ¥10B Buyback Plan And Stock Split; Japan and US to Drive Business Growth

By Tina Banerjee

In FY25, Nihon Kohden (6849 JP) guided for domestic revenue of ¥147B, up 3% YoY. The demand for patient monitors and treatment equipment is expected to remain steady.
Nihon Kohden expects North America business to report a revenue CAGR of 11% (fastest among all the other regions) during FY24–27, outpacing mid-single-digit growth of the market.
The company announced ¥10B buyback plan to repurchase up to 6M shares, representing 3.57% of total number of issued shares from August 5, 2024, to March 31, 2025.

Nexus Select Trust IPO Lockup Expiry – US$1.5bn Stake Comes Free. Will Likely Be a Coordinated Exit

Nexus Select Trust (NST IN) raised around US$391m in its India IPO in May 2023.
NST is a REIT with a portfolio of 17 Grade A urban consumption centers. Its portfolio covers retail malls, office assets, hospitality assets and a renewable power plant.
In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.

Lalatech Holdings Limited Pre-IPO – Refiling Updates – Continues to Improve, Valuation Gap Narrowing

Lalatech Holdings is looking to raise about US$1bn in its upcoming HK IPO.
Lalatech operates via a marketplace model serving merchants and carriers. Its platform facilitates closed-loop transactions from online shipping order booking to intelligent order matching, and automated dispatching to after-sale services.
We have looked at the company’s past performance in our earlier notes. In this note we will talk about the updates from its refiling.

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May 15

Daily Brief ECM: YUUUGE Modec (6269) Offering To Stay Listed in TSE Prime – Effectively a Re-IPO and more

In today’s briefing:

YUUUGE Modec (6269) Offering To Stay Listed in TSE Prime – Effectively a Re-IPO
MODEC (6296 JP): A US$535 Million Secondary Offering
Modec Placement – Deal Seems a Little Opportunistic but Not Particularly Expensive
Aadhar Housing Finance IPO Trading – More Loved by Institutional Investors than Retail
Belstar Microfinance Limited Pre-IPO Tearsheet

YUUUGE Modec (6269) Offering To Stay Listed in TSE Prime – Effectively a Re-IPO

By Travis Lundy

In March, Modec Inc (6269 JP) announced the TSE had said Modec at 29.3% (end-Dec-23) was below the required 35% tradable shares level required for continued listing on TSE Prime.
It announced a “Basic Plan” to comply with the criteria which involved convincing one of the three major corporate holders to sell some. They needed to sell about 6%.
Mitsui E&S has announced it will sell 32%, and 37% including greenshoe. This is overdoing it in a huge way. Mitsui E&S is getting out. This is a re-IPO.

MODEC (6296 JP): A US$535 Million Secondary Offering

By Arun George

Modec Inc (6269 JP) has announced a secondary offering of up to 25.2 million shares (including overallotment). The largest shareholder, Mitsui E&S Holdings (7003 JP), is the seller.
MODEC’s goal with the secondary offering is to reconfigure its shareholder mix to have a diverse base of shareholders who support its long-term strategies and a better tradable share ratio.
Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will likely fall between 22 and 28 May (likely 22 May).

Modec Placement – Deal Seems a Little Opportunistic but Not Particularly Expensive

Mitsui E&S Holdings (7003 JP) is looking to raise approximately US$451m through a secondary follow-on offering, via selling approximately 21.9m shares (32% of TSO) of Modec Inc (6269 JP)’s stock.
The deal is a large one to digest at 81 days of three month ADV.
In this note, we will talk about the placement and run the deal through our ECM framework.

Aadhar Housing Finance IPO Trading – More Loved by Institutional Investors than Retail

Aadhar Housing Finance(AHF) raised around US$360m in its India IPO, via selling a mix of primary and secondary shares.
AHF is focused on the low income housing segments (ticket size less than INR1.5m) in India. It offers a range of mortgage-related loan products.
We have looked at the company’s performance and valuation in our past notes. In this note, we talk about the trading dynamics.

Belstar Microfinance Limited Pre-IPO Tearsheet

Belstar Microfinance Ltd (3624918Z IN) is looking to raise US$156m in its upcoming India IPO. The bookrunners on the deal are ICICI Securities, Axis Capital, HDFC Bank, SBI Capital Markets.
Belstar Microfinance (Belstar) is a non-banking finance company (NBFC) in India with a focus on furnishing micro-enterprise loans.
As per the CRISIL report, the firm was the ninth largest NBFC – Micro Finance Institution (NBFC-MFI) in terms of assets under management (AUM) as of Dec 2023.

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May 14

Daily Brief ECM: Innospace IPO Valuation Analysis and more

In today’s briefing:

Innospace IPO Valuation Analysis
Olympus Corp (7733 JP): ¥100B Buyback Plan Offers an Attractive Exit Opportunity Amid Bleak Outlook
Breton Technology Pre-IPO Tearsheet
Go Digit General Insurance IPO – Growth Remains Strong, Valuation Isn’t Cheap
TBO Tek IPO Trading – Has One of the Highest Subscription Rates so Far This Year
Chongho Bridge Pre-IPO – Broad Offering Catered to Rural Consumers, However, Market Is Fragmented

Innospace IPO Valuation Analysis

By Douglas Kim

Our base case valuation of Innospace is target price of 51,481 won per share (12 month view), which is 28% higher than the midpoint of the IPO valuation range.
We estimate Innospace to generate sales of 1.8 billion won in 2024, 28.7 billion won in 2025, and 58.3 billion won in 2026.
Innospace is involved in the satellite launch vehicle production and launch service business.

Olympus Corp (7733 JP): ¥100B Buyback Plan Offers an Attractive Exit Opportunity Amid Bleak Outlook

By Tina Banerjee

Olympus Corp (7733 JP) has announced a buyback plan for up to 60M shares, representing 5.15% of outstanding shares, by spending ¥100B from May 13 to December 31, 2024.
The company has posted mixed FY24 results, with revenue beating and operating and net profits missing guidance. Olympus has guided for just 9% revenue growth for FY25.
Overall business outlook of the company seems to be bleak. With limited upside potential expected, it will be wise to tender shares through the company’s buyback offer.

Breton Technology Pre-IPO Tearsheet

Breton Technology (1884270D CH) is looking to raise up to US$200m in its upcoming HK IPO. The deal will be run by CICC and CMB International.
Breton Technology is a clean energy solution provider in China, focusing on the design, development and commercialization of engineering machinery powered by new energy sources.
Such engineering machinery includes battery-electric loaders and wide-body dump trucks, each offering a variety of payload and battery capacities.

Go Digit General Insurance IPO – Growth Remains Strong, Valuation Isn’t Cheap

Go Digit General Insurance is looking to raise around US$315m in its India IPO.
Go Digit General Insurance is a digital full stack insurance company, offering motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products.
We have looked at the company’s performance in our past note. In this note, we talk about the refiling updates and valuations.

TBO Tek IPO Trading – Has One of the Highest Subscription Rates so Far This Year

TBO Tek (0395045D IN) raised around US$186m in its India IPO, after pricing the deal at the top end of the range at INR920/share.
TBO Tek is a global travel distribution platform. Its two-sided technology platform serves companies involved in the travel industry such as hotels, airlines, travel agencies and travel management companies.
We have looked at various aspects of the deal in our previous notes. In this note, we talk about demand and trading dynamics.

Chongho Bridge Pre-IPO – Broad Offering Catered to Rural Consumers, However, Market Is Fragmented

Chongho Bridge (2314866D CH) is looking to raise about US$500m in its upcoming Hong Kong IPO.
Chongho Bridge (CB) is an integrated services provider to China’s rural population. It offers rural inclusive credit services, agricultural production services, rural consumer goods and rural clean energy services.
In this note, we look at the firm’s past performance.

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May 13

Daily Brief ECM: ZEEKR IPO: Strong First-Day Return and Upsized Offering and more

In today’s briefing:

ZEEKR IPO: Strong First-Day Return and Upsized Offering
ECM Weekly (13th May 2024) – Hyundai Marine, Zeekr, Swiggy, Indegene, Aadhar, TBO, Wuxi XDC, ASMedia

ZEEKR IPO: Strong First-Day Return and Upsized Offering

By Andrei Zakharov

ZEEKR, a rapidly growing premium EV maker, has successfully completed its IPO and raised ~$441M. The offering was priced at the top of the range at $21 per share.
The company sold a total of 21M ADSs, up from the initial target of 17.5M shares. ZEEKR’s stock soared more than 30% following its strong debut on NYSE on Friday.
Geely Auto, Mobileye and CATL have acquired ~14.3M ADSs and overall investor sentiment was positive. I believe ZEEKR may succeed as a high-volume EV maker worldwide.

ECM Weekly (13th May 2024) – Hyundai Marine, Zeekr, Swiggy, Indegene, Aadhar, TBO, Wuxi XDC, ASMedia

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, after a stellar showing by HD Hyundai Marine Solution (443060 KS), the coming week will be a busy one for India listings.
On the placement front, there were no major deals during the week. We did look at Asmedia Technology (5269 TT) planned GDR, and Wuxi XDC’s upcoming lockup expiry.

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May 11

Daily Brief ECM: Zeekr IPO Trading – Not as Cheap as It Looks but Float Is Tiny and more

In today’s briefing:

Zeekr IPO Trading – Not as Cheap as It Looks but Float Is Tiny
Aadhar Housing Finance IPO | Takeaways from Branch Visits
Indegene IPO Trading – High Anchor Quality + Strong Demand, Expect a Pop on Debut

Zeekr IPO Trading – Not as Cheap as It Looks but Float Is Tiny

ZEEKR (ZK US), a premium EV brand by Geely, raised around US$440m in its US listing, after the deal was upsized and priced at the top.
Zeekr was formed in Mar 2021 as a JV between Geely and its founder. Its first model was launched in Apr 21 with deliveries starting in Oct 21.
We have looked at the company’s past performance and provided our thoughts on valuations in our earlier notes. In this note, we talk about the trading dynamics.

Aadhar Housing Finance IPO | Takeaways from Branch Visits

By Pranav Bhavsar

Branches visited – Ajmer, Bengaluru, Mandya, Mysuru, Jaipur, Solapur, Pimpri and Pune.
Business growth is driven by taking calls that peers are reluctant to take with regards to property and incomes.
Lack of team and increasing competition are primary concerns that also warrant attention.

Indegene IPO Trading – High Anchor Quality + Strong Demand, Expect a Pop on Debut

Indegene Limited (1864095D IN) raised around US$220m in its India IPO, via selling a mix of primary and secondary shares.
Indegene is a “digital-first” commercialisation firm with an exclusive focus on the global life sciences industry.
We had looked at the firm’s past performance and shared our thoughts on Indegene’s valuation in earlier notes. In this note, we will look at the trading dynamics.

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May 10

Daily Brief ECM: Shouhui Tech Pre-IPO – Profitability Recovered but Hardly Stands Out as a Middleman and more

In today’s briefing:

Shouhui Tech Pre-IPO – Profitability Recovered but Hardly Stands Out as a Middleman

Shouhui Tech Pre-IPO – Profitability Recovered but Hardly Stands Out as a Middleman