ECM Daily Briefs | Page 17 of 117

In today’s briefing:

Toei Animation (4816 JP) – This Offering Could Be Heavy; the NEXT Offering Is More Interesting
Pre-IPO Xunfei Healthcare Technology – Continuous Losses Will Be the Norm

Toei Animation (4816 JP) – This Offering Could Be Heavy; the NEXT Offering Is More Interesting

On 14 February, Sony Corp (6758 JP) and Bandai Namco Holdings (7832 JP) announced an equity offering of nearly 4.5mm shares of Toei Animation (4816 JP).
Float on Toei Animation (4816 JP) has been low. This would raise it to meet the minimum standard to stay listed on the TSE Standard market section.
To get to TSE Prime, it needs another offering. And there are lots of cross-holders to go.

Pre-IPO Xunfei Healthcare Technology – Continuous Losses Will Be the Norm

By Xinyao (Criss) Wang

In healthcare AI industry, the commercialization process is complex and burdened with challenges. Related products mainly plays an auxiliary role in medical scenarios, rather than a core support or rigid-demand.
The idea of creating corresponding solutions for C-end and B-end customers by FUNFEI is not inappropriate. However, both B-end and C-end businesses of FUNFEI have encountered varying degrees of problems.
We’re not optimistic about XUNFEI’s profitability. The sluggish stock price performance after Airdoc’s listing indicates that the market/investors have not fully recognized healthcare AI enterprises, leading to low valuation.

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Feb 27

Daily Brief ECM: Toei Animation (4816 JP): The Current Playbook and more

In today’s briefing:

Toei Animation (4816 JP): The Current Playbook
Trading Strategy of APR on the First Day of IPO
Pre-IPO 160 Health – The Lack of Moat Has Led to Development Falling Far Short of Expectations
Astera Labs IPO Preview and Valuation Analysis: Will Pricey IPO Frighten The Investors Off?
MIXUE/ChaPanda/Good Me Pre-IPO – Peer Comparison
QuantumPharm (Xtalpi) Pre-IPO – The Negatives – Requires Deep Pockets to Fund Its Cash Burn

Toei Animation (4816 JP): The Current Playbook

By Arun George

Since the US$550 million secondary placement announcement, Toei Animation (4816 JP)’s shares are down 7.0% from the undisturbed price of JPY18,560 per share (14 February).
Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Toei Animation’s shares have followed the pattern of previous large placements.
The offering will likely be priced on 27 February. Investors participating in previous large Japanese placements tend to secure positive returns.

Trading Strategy of APR on the First Day of IPO

By Douglas Kim

In this insight, we discuss a trading strategy for APR (278470 KS) which starts trading on 27 February. APR is the most anticipated IPO in Korea so far in 2024.
Our base case (6 months – 1 year) target price of APR is 370,809 won, which is 48% higher than the IPO price.
We recommend investors to take some profits off the table (30%-50%) if the share price shoots higher by 100% to 200%+ from the IPO price on the first day.

Pre-IPO 160 Health – The Lack of Moat Has Led to Development Falling Far Short of Expectations

By Xinyao (Criss) Wang

160 Health collaborates with medical institutions and then get access to high-caliber medical professionals, which helps to attract patients/other business parties. So, its business model is B2B2C, similar to ClouDr.
However, ClouDr has much better performance than 160 Health, because ClouDr has established moat/barriers to more effectively monetize medical resources, while 160 Health is clearly lagging behind in this regard.
160 Health’s revenue mainly comes from sales of pharmaceutical and healthcare products, whose gross margin is very low. As the competition intensifies, the C-end customer acquisition cost would also increase.

Astera Labs IPO Preview and Valuation Analysis: Will Pricey IPO Frighten The Investors Off?

By Andrei Zakharov

Astera Labs, a cloud- and AI connectivity-focused semiconductor company, filed to go public. Top-tier underwriters Morgan Stanley and J.P. Morgan are leading the offering.
The fabless semiconductor unicorn plans to raise up to $500M. Selling stockholders intend to sell shares and the number of shares is yet to be announced.
I like the long-term, AI/cloud story. However, the IPO may look too pricey at more than $3B valuation despite the company’s revenue acceleration and improving profitability.

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

Mixue Group is looking to raise about US$1bn in its Hong Kong IPO, while Sichuan Baicha (ChaPanda) and Guming Holdings (Good me) are said to be looking to raise US$300m each.
All three 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.
In this note, we will undertake a peer comparison, including the Hong Kong listed peer, Nayuki Holdings (2150 HK).

QuantumPharm (Xtalpi) Pre-IPO – The Negatives – Requires Deep Pockets to Fund Its Cash Burn

By Clarence Chu

QuantumPharm (QUP HK) (Xtalpi) is looking to raise US$200m in its upcoming Hong Kong IPO.
QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
In this note, we will talk about the not so positive aspects of the deal.

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Feb 26

Daily Brief ECM: ECM Weekly (26th Feb 2024) – Trial Holdings and more

In today’s briefing:

ECM Weekly (26th Feb 2024) – Trial Holdings, Juniper, Xiaocaiyuan, Union Bank, Orica, Azure
Akums Drugs and Pharmaceuticals Pre-IPO Tearsheet
QuantumPharm (Xtalpi) Pre-IPO – The Positives – Grand Ambitions to Open New Monetisation Channels

ECM Weekly (26th Feb 2024) – Trial Holdings, Juniper, Xiaocaiyuan, Union Bank, Orica, Azure

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, we looked at Trial Holdings (5882 JP) refiling and Xiaocaiyuan International Holding .
For placements, it was an action packed week in India, again, with Australia joining in as well.

Akums Drugs and Pharmaceuticals Pre-IPO Tearsheet

Akums Drugs and Pharmaceuticals (0200361D IN) is looking to raise >US$100m in its upcoming India IPO. The deal will be run by ICICI Securities, Axis Capital, Citigroup and Ambit.
Akums Drugs and Pharmaceuticals (ADP) is a pharmaceutical contract development and manufacturing organization (CDMO) offering a comprehensive range of pharmaceutical products and services in India and overseas.
As a CDMO, it produces a range of dosage forms including tablets, capsules, liquid orals, vials, ampoules, blow-filled seals, topical preparations, eye drops, dry powder injections, and gummies, among others.

QuantumPharm (Xtalpi) Pre-IPO – The Positives – Grand Ambitions to Open New Monetisation Channels

By Clarence Chu

QuantumPharm (QUP HK) (Xtalpi) is looking to raise US$200m in its upcoming Hong Kong IPO.
QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
In this note, we will talk about the positive aspects of the deal.

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Feb 24

Daily Brief ECM: Reddit IPO Preview and more

In today’s briefing:

Reddit IPO Preview

Reddit IPO Preview

By Douglas Kim

Reddit is getting ready for an IPO in the United States in the next several weeks. It is expected that this IPO will be completed in March.
The company was previously valued at US$10 billion in a funding round in 2021. It is expected that the company could sell about 10% of its shares in this IPO.
Reddit may be seeking a valuation of at least US$5 billion in this IPO, which would be nearly half its valuation it received in 2021 in a private funding round.

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Feb 23

Daily Brief ECM: Trial Holdings IPO: The Investment Case and more

In today’s briefing:

Trial Holdings IPO: The Investment Case
Xiaocaiyuan International Holding Pre-IPO – Strong Network Expansion and Same Store Sales Growth

Trial Holdings IPO: The Investment Case

By Arun George

Trial Holdings (5882 JP), a discount store operator in Japan, is seeking to raise US$235 million at the IPO reference price of JPY1,550 per share. Pricing on 11 March.
Trial aims to act as a one-stop shopping store where consumers can buy whatever they want at a great price. Trial’s basic pricing strategy is Every Day Low Price.
The investment case rests on steady revenue growth, industry-leading same-store sales growth, solid margin profile and cash generation.

Xiaocaiyuan International Holding Pre-IPO – Strong Network Expansion and Same Store Sales Growth

Xiaocaiyuan International Holding (XCY HK) is looking to raise up to US$200m in its upcoming HK IPO.
Xiaocaiyuan is a Chinese home-style cuisine restaurant operator. It prices its menus’ items to achieve average spending per consumer between RMB50 and RMB70 for its dine-in customers at its restaurants.
In this note, we talk about the company’s historical performance.

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Feb 22

Daily Brief ECM: Gree (3632 JP) – Overnight Offering in Asset-Rich Value Trap as KDDI Sells Out and more

In today’s briefing:

Gree (3632 JP) – Overnight Offering in Asset-Rich Value Trap as KDDI Sells Out
Azure Minerals Block – Removal of Overhang but Still a Risky Bet
Union Bank of India QIP – Well-Flagged and Just in Time for Index Inclusion
Brainbees Solutions (FirstCry) IPO | Channel Feedback
Trial Holdings Pre-IPO – Updated Peer Comparison and Valuation
Pre-IPO Numans Health Food Holdings – Due to Flawed Business Model, Future Growth Is Uncertain

Gree (3632 JP) – Overnight Offering in Asset-Rich Value Trap as KDDI Sells Out

Today after the close, KDDI Corp (9433 JP) and Gree Inc (3632 JP) announced that KDDI would offer its 8,000,000 shares in Gree in an international offering through Mizuho Intl.
The deal comes at a decently large discount and the stock is quite downtrodden. Especially when compared to its venture assets and cash, assuming invested amount is remotely viable.
The problem is that too much of revenue isn’t earning much, so this sits in a Value Trap category. Shareholder structure makes it difficult to do buybacks.

Azure Minerals Block – Removal of Overhang but Still a Risky Bet

Mineral Resources (MIN AU) is looking to raise up to A$229m (US$150m) via a secondary block trade in Azure Minerals (AZS AU), which will be a clean-up.
The deal is a large one to digest, at approximately 51.6 days of three month ADV and 13.8% of current mcap.
In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

Union Bank of India QIP – Well-Flagged and Just in Time for Index Inclusion

Union Bank Of India (UNBK IN) is looking to raise up to US$370m (INR30bn) via its QIP.
The company last undertook a QIP in Aug 2023, which we covered in Union Bank of India QIP – Well-Flagged Deal, Recent Momentum Has Been Strong.
This deal too is a very well flagged one, with the firm having earlier reported that it would look to do a QIP to boost its free float and capital.

Brainbees Solutions (FirstCry) IPO | Channel Feedback

By Pranav Bhavsar

We visited FirstCry Franchisee stores in Ajmer (Rajasthan), and Hosur (Tamil Nadu).
FirstCry has a high brand recall, limited competition, and healthy franchisee relations.
The ability to leverage FirstCry and Baby Oye is a good margin lever.

Trial Holdings Pre-IPO – Updated Peer Comparison and Valuation

Trial Holdings (5882 JP) (TH) is now looking to raise around US$234m in its Japan IPO, after having canceled its prior listing attempt last year.
TH operates a network of retail stores that offer one-stop shopping under its everyday low price model, across a variety of daily necessities, food items and other products.
We have looked at the company’s past performance in our previous notes. In this note, we provide our updated thoughts on valuation.

Pre-IPO Numans Health Food Holdings – Due to Flawed Business Model, Future Growth Is Uncertain

By Xinyao (Criss) Wang

Numans values light asset model, which helps reduce cost/expenditures, and thereby increase profits. However, such business model has flaws – no R&D/production, only terminal sales/brand operation, no control over upstream.
Revenue growth of core business Algal oil DHA products declined.Numans attempts to change its monotonous product line and enter milk powder industry, but the results weren’t ideal. Numans suffered losses.
If Numans only plays the role of a “porter” of finished products from abroad and lacks core competitiveness/technological content, it will face multiple challenges to achieve sustained high performance growth.

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Feb 21

Daily Brief ECM: Juniper Hotels IPO – Looks Somewhat Fairly Valued and more

In today’s briefing:

Juniper Hotels IPO – Looks Somewhat Fairly Valued
Orica Placement – Keeping the Acquisition Momentum Going

Juniper Hotels IPO – Looks Somewhat Fairly Valued

Juniper Hotels is looking to raise up to US$217m in its upcoming India IPO.
Juniper Hotels is the largest owner by no. of keys of Hyatt affiliated hotels in India as of 2Q23 (30th Jun 23), according to Horwath.
We have looked at the company’s past performance in our previous note. In this note, we provide our thoughts on valuations.

Orica Placement – Keeping the Acquisition Momentum Going

Orica Ltd (ORI AU) is looking to raise up to A$400m (US$260m) in its primary placement. The proceeds will be used to partially fund the acquisition of Cyanco.
The deal is a large one to digest, representing 21.3 days of three month ADV and 5.2% dilution.
In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

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Feb 20

Daily Brief ECM: Senko Group (9069 JP) Offering – Banks and Insurers Unwinding Cross-Holdings in Offering and more

In today’s briefing:

Senko Group (9069 JP) Offering – Banks and Insurers Unwinding Cross-Holdings in Offering
Heiwado (8276 JP) – Banks and Insurers Unwinding Cross-Holdings In Offering
Amman Mineral International Lockup Expiry – Large Lockup Expiry, Sitting on Sizeable Profits
Initial Thoughts on the Webtoon Entertainment IPO
Waaree Energies IPO- Forensic Analysis
Auntea Jenny (Shanghai) Industrial Pre-IPO Tearsheet
Trial Holdings Pre-IPO – Refiling Updates – Margin Uptick, More Golf Courses

Senko Group (9069 JP) Offering – Banks and Insurers Unwinding Cross-Holdings in Offering

SENKO Group Holdings Co., Ltd. (9069 JP) today announced large financial institutional cross-holders would sell shares in a Secondary Offering. There’s a buyback on the back end.
Cross-Holding unwinding is the subject of the moment. It will continue to be so. It will involve selldowns, and buybacks. Study the model of what companies must do what.
In this case, Senko has a LOT of cross-holders and minimal excess cash. So investors buy more shares. But there is a buyback and index demand to come.

Heiwado (8276 JP) – Banks and Insurers Unwinding Cross-Holdings In Offering

Heiwado Co Ltd (8276 JP) today announced a Secondary Offering sell-down by cross-holders, combined with a buyback post-offering to mitigate some of the effects of overhang.
Banks and insurers are selling, and that will leave the stock with a lot of cross-holders left, but investors should look at the model given he zeitgeist.
Companies with lots of cross-holders have to be “fair” to them. Those without copious cash have to spread it around so this transaction model looks likely to be continued.

Amman Mineral International Lockup Expiry – Large Lockup Expiry, Sitting on Sizeable Profits

Amman Mineral Internasional (AMMN IJ) raised around US$714m in its Indonesia IPO, after pricing the deal at IDR1,695/share. Its eight-month lockup will expire on 21st Feb 2024.
Amman Mineral International (AMI) carries out exploration, development, mining, and processing. The company operates an open pit copper and gold mine known as the Batu Hijau mine in Indonesia.
In this note, we will talk about the lock-up dynamics and updates since our last note.

Initial Thoughts on the Webtoon Entertainment IPO

By Douglas Kim

Naver Corp (035420 KS) is trying to complete the IPO of its affiliate Webtoon Entertainment in the US stock market as early as June 2024.
The expected value of Webtoon Entertainment (post IPO) is about US$3 billion to US$4 billion. Webtoon Entertainment is seeking to raise about US$500 million in this IPO.
The IPO of Webtoon Entertainment in the US is likely to have a positive impact on Naver Corp (035420 KS).

Waaree Energies IPO- Forensic Analysis

By Nitin Mangal

Waaree Energies Limited (0656504D IN) (WEL) has filed its DRHP. The company is the largest player in the Solar PV Modules manufacturing space in the country.
The company has seen a sharp growth in sales in F23, backed by China plus one phenomemon.
However, the financials do have a few talking points, such as high RPT, large inventory in transit, faster depreciating newer assets, etc.

Auntea Jenny (Shanghai) Industrial Pre-IPO Tearsheet

By Clarence Chu

Auntea Jenny (Shanghai) Industrial (AJI HK) is looking to raise US$300m in its upcoming Hong Kong IPO. The bookrunners on the deal are CITIC Securities, Haitong, and DFZQ.
Auntea Jenny (Shanghai) Industrial (Auntea) is a freshly-made beverage producer.
As per CIC, the firm operates the fourth largest network of freshly-made tea shops in China as of Sept 23, with an extensive reach into the lower-tier markets

Trial Holdings Pre-IPO – Refiling Updates – Margin Uptick, More Golf Courses

Trial Holdings (5882 JP) (TH) is now looking to raise around US$234m in its Japan IPO, after having canceled its prior listing attempt last year.
TH operates a network of retail stores that offer one-stop shopping under its everyday low price model, across a variety of daily necessities, food items and other products.
We have looked at the past performance in our previous notes. In this note, we talk about the updates from its recent filings.

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Feb 19

Daily Brief ECM: ECM Weekly (19th Feb 2024) – Toei Ani and more

In today’s briefing:

ECM Weekly (19th Feb 2024) – Toei Ani, KB Fin, IIF, Trial, Juniper, Bharti Hexacom, Octillion Energy

ECM Weekly (19th Feb 2024) – Toei Ani, KB Fin, IIF, Trial, Juniper, Bharti Hexacom, Octillion Energy

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) was back in the market, a year after ditching its previous attempt, while Juniper Hotels is trying to ride the India wave.
For placements, more signs of REIT coming back to life, this time in Japan. A relatively large deal in Toei Animation (4816 JP) as well was launched.

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Feb 18

Daily Brief ECM: Weekly Deals Digest (18 Feb) – Toei and more