ECM Daily Briefs | Page 26 of 118

In today’s briefing:

ECM Weekly (5th Nov 2023)- Midea, WuxiXDC, Cello, Honasa, Qyuns, Ecopro, Lalatech, Mankind, TWE, VNT

ECM Weekly (5th Nov 2023)- Midea, WuxiXDC, Cello, Honasa, Qyuns, Ecopro, Lalatech, Mankind, TWE, VNT

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
In the IPO space, EcoPro Materials (ECO123 KS), Cello World Limited (CW IN) and Honasa Consumer were bookbuilding in the past week.
Given the earnings seasons, there was only an entitlement offer by Treasury Wine Estates (TWE AU), and a cleanup for Ventia (VNT AU).

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Nov 03

Daily Brief ECM: Midea Group H Share Listing: The Investment Case and more

In today’s briefing:

Midea Group H Share Listing: The Investment Case
Ventia Services Group Placement- Coming Ahead of Lockup but Is Well Flagged, past Deals Have Done Ok
Cloudchain Pre-IPO Tearsheet

Midea Group H Share Listing: The Investment Case

Midea Group Co Ltd A (000333 CH), the world’s biggest home appliances maker, has filed for a H Share listing to raise US$1 billion, according to press reports.
Midea is the world’s largest home appliance company in sales volume and revenue in 2022. Its subsidiary, KUKA Group, is one of the world’s “big four” industrial robotics companies.
The investment case rests on return to growth, margin on an upward trajectory, cash generation, strong balance sheet and undemanding valuation.

Ventia Services Group Placement- Coming Ahead of Lockup but Is Well Flagged, past Deals Have Done Ok

Ventia (VNT AU) (VSG)’s two largest shareholders, Apollo Global Management and CIMIC Group, aim to raise around US$174m via selling 11.7% of the company.
The two investors have pared their stake thrice this year and this will be the final cleanup sale. All the past deals have done ok.
In this note, we will talk about the deal dynamics.

Cloudchain Pre-IPO Tearsheet

By Ethan Aw

Cloudchain (CC CH) is looking to raise up to US$200m in its upcoming HK IPO. The deal will be run by China Securities International, ABC International, ICBC and Maxa Capital.
Cloudchain is an independent industry digital finance platform in China, serving anchor enterprises, chain-related enterprises, and financial institutions.
According to F&S, it is the largest independent digitalized corporate credit confirming platform in China. Its user base had grown at a CAGR of 75.1% from 2020 to 2022.

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Nov 02

Daily Brief ECM: WuXi XDC IPO: The Bear Case and more

In today’s briefing:

WuXi XDC IPO: The Bear Case
Honasa Consumer Ltd IPO- Forensic Analysis
ASK Automotive Pre-IPO – Business Has Been Resilient, Although Concentration Risk Remains Elevated
Past A/H Listings Performance – Have Been a Mixed Bag

WuXi XDC IPO: The Bear Case

WuXi XDC Cayman Inc (1877628D HK), a leading contract research, development and manufacturing organization (CRDMO), is pre-marketing an HKEx IPO to raise US$500 million, according to press reports.
In WuXi XDC 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 margins on a downward trend, large customer concentration, high related party transactions and volatile FCF generation.

Honasa Consumer Ltd IPO- Forensic Analysis

By Nitin Mangal

Honasa Consumer (1652951D IN) IPO is a book built issue worth INR 17 bn, comprising INR 3.65 bn worth fresh issue and INR 13.4 bn of OFS (41.2 mn shares).
The company is renowned for its flagship brand, Mama Earth while it has acquired other brands recently such as B-Blunt, Dr. Sheth and has also ventured in the salon business.
Our concerns remain on the A&P spends and related growth output, acquisition value and employee churning.

ASK Automotive Pre-IPO – Business Has Been Resilient, Although Concentration Risk Remains Elevated

By Clarence Chu

Ask Automotive (7175293Z IN) is looking to raise around US$145m in its upcoming India IPO.
ASK Automotive (ASKA) is the largest manufacturer of brake-shoe and advanced braking (AB) systems for 2Ws in India, in terms of FY23 production volume for OEMs and the branded IAM.
As per CRISIL, it had an approximate 50% market share in said market. The IPO is expected to consist of 100% secondary shares, with promoters trimming their stakes.

Past A/H Listings Performance – Have Been a Mixed Bag

Two of the biggest deals in the Hong Kong pipeline are A/H listings for S.F. Holding (002352 CH) and Midea Group (000333 CH), both looking to raise around US$3bn.
Prior to the deals going live, we had a quick look at the A/H premium, subscription and past performance of some of the earlier A/H listings.
Overall, most of the recent A/H listings haven’t done much in the near term.

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Nov 01

Daily Brief ECM: Treasury Wine Entitlement Offer – Not as Straightforward as It Sounds and more

In today’s briefing:

Treasury Wine Entitlement Offer – Not as Straightforward as It Sounds
WuXi XDC IPO: The Bull Case
WuXi XDC Cayman Pre-IPO – PHIP Updates – Margins Remain Depressed Although Growth Still Strong
Asicland IPO Book Building Results Analysis
Pre-IPO WuXi XDC (PHIP Updates) – Some Points Worth the Attention
Midea A/H Listing – Filing Updates – Growth and Margins Pick Up

Treasury Wine Entitlement Offer – Not as Straightforward as It Sounds

Treasury Wine Estates (TWE AU) aims to raise up to US$525m (A$825m) via a renounceable fully underwritten entitlement offer.
Proceeds from the placement will be used to part fund the acquisition of DAOU Vineyards, a luxury wine brand based in California.
In this note, we will talk about the deal dynamics.

WuXi XDC IPO: The Bull Case

WuXi XDC Cayman Inc (1877628D HK), a leading contract research, development and manufacturing organization (CRDMO), is pre-marketing an HKEx IPO to raise US$500 million, according to press reports.
WuXi XDC ranked No. 2 globally and No. 1 in China among CRDMO for antibody-drug conjugates and other bioconjugates in terms of revenue in 2022, according to Frost & Sullivan.
The bull case rests on large addressable markets, market share gains, fast-paced revenue growth, strong revenue visibility, a solid balance sheet and ambitious capacity expansion plans.

WuXi XDC Cayman Pre-IPO – PHIP Updates – Margins Remain Depressed Although Growth Still Strong

By Clarence Chu

WuXi XDC Cayman Inc (1877628D HK) is looking to raise around US$500m in its upcoming Hong Kong IPO.
WuXi XDC Cayman (WXDC) is a CRDMO focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
In our previous notes we looked at the company’s past performance, peer comparison, and shared our thoughts on valuations. In this note, we discuss WXDC’s PHIP updates.

Asicland IPO Book Building Results Analysis

By Douglas Kim

Asicland completed an excellent IPO book building results. IPO price has been determined at 25,000 won which is 17% higher than the high end of the IPO price range.
A total of 1,906 institutional investors participated in this IPO book building results. The IPO demand ratio was 490 to 1. Asicland IPO will start trading on 13 November.
Our base case valuation of Asicland is implied market cap of 434 billion won or target price of 40,571 won per share, which is 62% higher than the IPO price.

Pre-IPO WuXi XDC (PHIP Updates) – Some Points Worth the Attention

By Xinyao (Criss) Wang

We’ve seen increasing global cooperation for ADC pipelines. However, licensing deals alone cannot be used as the only basis for judgment. We still need to wait for solid clinical evidence.
ADCs are far less “general and popularized” than PD-1. If compare ADC with GLP-1s, the difference is more obvious.How big the real market is for ADC is a question mark.
WuXi XDC’s share price could perform well after IPO due to positive sentiments towards ADC, but whether its long-term valuation would be higher than peers remains to be seen.

Midea A/H Listing – Filing Updates – Growth and Margins Pick Up

Midea Group Co Ltd A (000333 CH), one of the world’s largest home appliance producers, aims to raise up to US$3bn in its H-share listing.
Midea Group is one of the world’s largest home appliance manufacturing companies with a presence in over 200 countries. Its A-shares have been listed since 2013.
We have covered the company and deal background in our previous note. In this note, we talk about the updates from the recent filing.

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Oct 31

Daily Brief ECM: Ecopro Materials IPO – Updated Thoughts on Valuation – Sentiment Has Gotten Worse and more

In today’s briefing:

Ecopro Materials IPO – Updated Thoughts on Valuation – Sentiment Has Gotten Worse
Honasa Consumer IPO – Thoughts on Valuations
LS Materials IPO Valuation Analysis
Qyuns Therapeutics (荃信生物) Pre-IPO: Mixed View on Two Core Products

Ecopro Materials IPO – Updated Thoughts on Valuation – Sentiment Has Gotten Worse

By Ethan Aw

EcoPro Materials (ECO123 KS) is looking to raise up to US$469m in its Korean IPO.
Ecopro Materials (EPM) manufactures and sells high-nickel precursors, one of the key materials for high-nickel cathode materials for secondary (rechargeable) batteries.
In our previous notes, we covered the company’s performance, undertook a peer comparison and shared our thoughts on valuation. In this note, we will share our updated thoughts on valuation.

Honasa Consumer IPO – Thoughts on Valuations

Honasa Consumer is looking to raise about US$200m in its upcoming India IPO.
HC’s product portfolio includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.
In our previous note, we looked at the company’s past performance. In this note, we talk about the RHP updates and valuations.

LS Materials IPO Valuation Analysis

By Douglas Kim

Our base case valuation of LS Materials IPO is target price of 6,628 won per share, which is 21% higher than the high end of the IPO price range.
We estimate LS Materials to generate sales of 155.5 billion won (down 4% YoY) and 197.2 billion won (up 26.8% YoY) in 2024.
LS Materials is one of the largest players globally in the large-size ultracapacitors, which stabilize power supply and are used to replace and supplement primary batteries and lithium-ion batteries.

Qyuns Therapeutics (荃信生物) Pre-IPO: Mixed View on Two Core Products

By Ke Yan, CFA, FRM

Qyuns Therapeutics, a China-based clinical-stage biotechnology company, plans to raise up to US$ 100m via a Hong Kong listing.
In this note, we examine the company’s core products, namely QX002N, an IL-17A antibody, and QX005N, an IL-4Rα antibody. We also look at the company’s management and pre-IPO investors.
We are of mixed views for its two core products. We also think the management and pre-IPO investors are of mediocre quality.

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Oct 30

Daily Brief ECM: Cainiao Smart Logistics IPO: The Bear Case and more

In today’s briefing:

Cainiao Smart Logistics IPO: The Bear Case
Lalatech (货拉拉) Pre-IPO: To Understand Revenue Growth from Drivers’ Complaints and Strike

Cainiao Smart Logistics IPO: The Bear Case

Cainiao Smart Logistics (1437124D HK), a global leader in e-commerce logistics, has filed for a HKEx IPO to raise at least US$1 billion at a US$15-20 billion valuation.
In Cainiao Smart Logistics 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 global cross-border market share, China logistics decelerating growth, high related-party transactions, and FCF burn.

Lalatech (货拉拉) Pre-IPO: To Understand Revenue Growth from Drivers’ Complaints and Strike

By Ming Lu

Lalatech charges drivers more commissions but less membership fees to raise the general fees.
Drivers went on strike to protest against the income squeeze, but they did not achieve their target.
We believe Lalatech is the dominator of the low-end truck-hiring market.

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Oct 29

Daily Brief ECM: ECM Weekly (29th Oct 2023) – Kokusai and more

In today’s briefing:

ECM Weekly (29th Oct 2023) – Kokusai, J&T, Midea, Wuxi XDC, Cirrus, Cello World, Honasa, SIA

ECM Weekly (29th Oct 2023) – Kokusai, J&T, Midea, Wuxi XDC, Cirrus, Cello World, Honasa, SIA

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
In the IPO space, Kokusai Electric (6525 JP) provided some relief in the ECM space, even as J&T Global Express (1519 HK) didn’t do much.
Given the earnings seasons, there weren’t any placement during the week. We did look at Singapore Airlines (SIA SP)‘s upcoming placement lockup expiry.

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Oct 28

Daily Brief ECM: CARGO Therapeutics IPO Preview: A Promising Pipeline of Next-Gen CAR T-Cell Therapies and more

In today’s briefing:

CARGO Therapeutics IPO Preview: A Promising Pipeline of Next-Gen CAR T-Cell Therapies

CARGO Therapeutics IPO Preview: A Promising Pipeline of Next-Gen CAR T-Cell Therapies

By Andrei Zakharov

CARGO Therapeutics, a clinical-stage biotech company developing treatments for various lymphomas, filed for an IPO to fund its Phase 2 clinical trials of CRG-022, a lead program in the pipeline.
The biotech firm was backed by founding investor Samsara BioCapital and top-tier healthcare VC firms, including Third Rock Ventures, Perceptive Advisors, and Nextech Invest.
The company’s lead program, CRG-022, is focused on patients with large B-cell lymphoma whose disease relapsed and targets CD-22 that has been expressed in 81% to 100% of DLBCL patients.

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Oct 27

Daily Brief ECM: J&T Global Express IPO: Trading Debut and more

In today’s briefing:

J&T Global Express IPO: Trading Debut
Vinfast: New Funding to Support Growth Plans Despite Struggling to Sell EVs
Cello World IPO – Thoughts on Valuation
Honasa Consumer IPO – RHP Updates – Sales Strong, Slight Margin Improvement
Cirrus Aircraft Pre-IPO – Has Grown Steadily but Faces Prominent Regulatory Risks

J&T Global Express IPO: Trading Debut

By Shifara Samsudeen, ACMA, CGMA

J&T priced its IPO at a fixed price of HK$12.00 per share to raise the gross proceeds of the offering of US$500 million. The shares will start trading tomorrow.
We previously discussed the IPO in J&T Global Express IPO: The Bull Case, J&T Global Express IPO: The Bear Case and J&T Global Express IPO: Valuation Insights.
The market sentiment on the sector continues to weaken. The de-rating of peers lowers our SoTP valuation to HK$10.01 per share, 16.5% below the IPO price.

Vinfast: New Funding to Support Growth Plans Despite Struggling to Sell EVs

Vinfast’s shares have fallen more than 80% since its IPO in August. Shares are currently trading at $4.93 per share compared to IPO open price of $22 per share.
On 20th October, Vinfast announced that the company has entered into a standby equity subscription agreement of up to $1.0bn with Yorkville Advisors which has a term of 36 months.
A majority of Vinfast’s EV sales in 9M2023 were to related parties or affiliates of its parent, raising serious concerns over the company’s ability to establish a market presence.

Cello World IPO – Thoughts on Valuation

Cello World is looking to raise around US$240m in its upcoming India IPO.
Cello World (CW) is an Indian consumer products company. The firm is a leading company in the consumerware market in India.
In our previous note, we looked at the company’s past performance. In this note, we talk about valuations.

Honasa Consumer IPO – RHP Updates – Sales Strong, Slight Margin Improvement

Honasa Consumer (HC) is looking to raise about US$200m in its upcoming India IPO.
HC’s product portfolio includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.
In our previous note, we looked at the company’s past performance. In this note, we talk about the RHP updates and valuations.

Cirrus Aircraft Pre-IPO – Has Grown Steadily but Faces Prominent Regulatory Risks

By Ethan Aw

Cirrus Aircraft (0153126D US) is looking to raise up to US$300m in its upcoming HK IPO.
Cirrus Aircraft designs, develops, manufactures, and sells premium aircrafts. Its two aircraft product lines, the SR2X Series and the Vision Jet, are currently certified and validated in over 60 countries.
CA has managed to grow its profitability steadily over the track record period. However, the firm is subjected to heightened regulatory risks as US and China tensions rise.

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Oct 26

Daily Brief ECM: LS Materials IPO Preview and more

In today’s briefing:

LS Materials IPO Preview
Cello World IPO – Strong past Growth but Has a Number of Related Party Issues
J&T Global Express IPO Trading – Tepid Demand Despite the Team Effort
WuXi XDC Pre-IPO – Thoughts on Valuation – While TAM Is Uncertain, Sales and PAT Are Set to Double

LS Materials IPO Preview

By Douglas Kim

LS Materials is getting ready to complete its IPO in Korea in late November. The IPO price range is from 4,400 won to 5,500 won per share.
According to the bankers’ valuation, the expected market cap after the IPO is from 298 billion won to 372 billion won.
LS Materials is one of the largest players globally in the large-size ultracapacitors, which stabilize power supply and are used to replace and supplement primary batteries and lithium-ion batteries.

Cello World IPO – Strong past Growth but Has a Number of Related Party Issues

Cello World is looking to raise around US$240m in its upcoming India IPO.
Cello World (CW) is an Indian consumer products company. The firm is a leading company in the consumerware market in India.
In this note, we look at the company’s past performance.

J&T Global Express IPO Trading – Tepid Demand Despite the Team Effort