ECM Daily Briefs | Page 27 of 118

In today’s briefing:

Seoul Guarantee Insurance Corp IPO – Cancelled
Kokusai Electric IPO Trading – Decent Demand, Now for the Real Test
Waystar IPO Preview: Debt-Fueled Expansion Through M&A Deals In A High-Interest Rate Environment
Which Hong Kong E-Comm Logistics IPO Is Right for You? We Compare SF Holding, J&T, and CaiNiao

Seoul Guarantee Insurance Corp IPO – Cancelled

By Douglas Kim

Seoul Guarantee Insurance (031210 KS) stated today that it will cancel its IPO mainly due to low demand.
Despite the company’s emphasis on high dividends and high ROA of 5.8% in 2022 (5x average ROA of the domestic non-life insurance companies), many institutional investors emphasized on the negatives.
The major negatives include high interest rates, lack of growth potential, concerns about additional shares sale overhang, and unattractive valuations.

Kokusai Electric IPO Trading – Decent Demand, Now for the Real Test

KKR raised around US$730m via selling a stake in Kokusai Electric’s (6525 JP) (KE) Japan IPO.
KE main business activities consist of the manufacturing, sales and maintenance service of semiconductor manufacturing equipment.
In our previous notes we have looked at the company’s past performance, undertaken a peer comparison and looked at valuations. In this note, we talk about the trading dynamics.

Waystar IPO Preview: Debt-Fueled Expansion Through M&A Deals In A High-Interest Rate Environment

By Andrei Zakharov

Waystar Holding, a cloud-based technology company and healthcare RCM solution provider, filed for a $100M placeholder IPO.
Founded in 2017 through the merger of two healthcare firms, ZirMed and Navicure, Waystar Holding provides mission-critical cloud software to healthcare organizations in the United States.
The company has ~$2.3B of outstanding borrowings and plans to use net proceeds from an upcoming IPO to repay outstanding indebtedness under credit facilities.

Which Hong Kong E-Comm Logistics IPO Is Right for You? We Compare SF Holding, J&T, and CaiNiao

Three potentially large e-comm logistics IPOs are now in-process in Hong Kong
We compare the three ‘by the numbers’, then examine their strengths and weaknesses
We conclude by providing a matrix that may help investors decide where to allocate time

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Oct 23

Daily Brief ECM: CaiNiao Smart Logistics Pre-IPO Part 3 | Key Comps and more

In today’s briefing:

CaiNiao Smart Logistics Pre-IPO Part 3 | Key Comps, Valuation Multiples | 310 Bn CNY Justifiable

CaiNiao Smart Logistics Pre-IPO Part 3 | Key Comps, Valuation Multiples | 310 Bn CNY Justifiable

In this insight we first consider which comparables are the most appropriate for CaiNiao
We then discuss which valuation multiples make sense, plus some potential pitfalls
We believe CaiNiao and their bankers could justify a valuation up to 310 bn CNY

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Oct 22

Daily Brief ECM: ECM Weekly (22nd Oct 2023) – J&T and more

In today’s briefing:

ECM Weekly (22nd Oct 2023) – J&T, Cuscal, Liontown, Cainiao, ZJLD, Taiwan Cement, Zomato, Hana Micro

ECM Weekly (22nd Oct 2023) – J&T, Cuscal, Liontown, Cainiao, ZJLD, Taiwan Cement, Zomato, Hana Micro

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
J&T Global Express (1519 HK) launched its US$500m HK IPO earlier in the week, with more than half of the Offer Shares going to its pre-IPO shareholders.
It was a busy week for placements as well, with Liontown Resources (LTR AU)‘s stealing the spotlight with its equity/debt raising, after Albemarle withdrew its acquisition bid.

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Oct 21

Daily Brief ECM: Blue Jet Healthcare IPO: Niche Offering and Long-Standing Customer Relationship Are Key Positives and more

In today’s briefing:

Blue Jet Healthcare IPO: Niche Offering and Long-Standing Customer Relationship Are Key Positives

Blue Jet Healthcare IPO: Niche Offering and Long-Standing Customer Relationship Are Key Positives

By Tina Banerjee

Blue Jet Healthcare Ltd (BJHC IN) is a CDMO focusing on specialty pharmaceutical and healthcare ingredients and intermediates. The company targets to raise $100M from its upcoming India IPO.
The IPO, which will open for subscription on October 25, consists of OFS of 24.3M shares by two of the promoters. The price range has been fixed at INR329–346/share.
Blue Jet enjoys a competitive advantage in the global contrast media market through established customer relationships with the top contrast media manufacturers. The company is on a capacity expansion spree.

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Oct 19

Daily Brief ECM: Hudco Oct 23 OFS – Momentum Has Been Strong and more

In today’s briefing:

Hudco Oct 23 OFS – Momentum Has Been Strong, and Appears to Be Well Flagged
Pre-IPO VISEN Pharmaceuticals – The Product Pipeline and the Key Risks
Cuscal IPO – Peer Comparison & Thoughts on Valuation

Hudco Oct 23 OFS – Momentum Has Been Strong, and Appears to Be Well Flagged

The Government of India (GoI) is looking to raise up to US$130m from trimming its stake in Housing and Urban Development Corporation Limited (HUDCO IN).
The base deal includes a 3.5% stake sale, with an option to double it up to 7%. The selldown is targeted at meeting SEBI’s minimum public float requirements of 25%.
At 7.5 days of three month ADV, the deal isn’t a very large one for the firm to digest.

Pre-IPO VISEN Pharmaceuticals – The Product Pipeline and the Key Risks

By Xinyao (Criss) Wang

VISEN’s candidates are potential Best-In-Class or represent novel technologies, but they need to obtain doctors/authorities’ recognition.The competition pattern in growth hormone market would continue to deteriorate with increasing new entrants.
Once the growth hormone market is taken seriously by the regulatory authorities, the industry’s growth momentum would be challenged. The actual market space could be greatly reduced as a result.
In front of competitors with strong sales system, commercialization is a big challenge for VISEN. The Company has yet to prove this.VBP news on rhGH would weigh on market sentiment.

Cuscal IPO – Peer Comparison & Thoughts on Valuation

Cuscal Limited (1229Z AU) is looking to raise US$234m in its upcoming Australia IPO.
Cuscal is an authorized deposit-taking institution (ADI) in Australia that primarily provides financial infrastructure and payment services in Australia.
In our previous note we looked at the company’s past performance, in this note we will undertake a peer comparison and share our thoughts on valuation.

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Oct 18

Daily Brief ECM: Taiwan Cement GDS – Momentum Hasn’t Been the Greatest and more

In today’s briefing:

Taiwan Cement GDS – Momentum Hasn’t Been the Greatest, Although It Is Very Well Flagged
J&T Global Express IPO: Peer Comparison and Valuation
Cainiao Smart Logistics IPO: The Bull Case
Asirvad Micro Finance Limited Pre-IPO Tearsheet
Agilus Diagnostics Pre-IPO: Large Scale of Operation and Favorable Sector Demand To Drive Growth
Cainiao Pre-IPO – Initial Thoughts on Valuation

Taiwan Cement GDS – Momentum Hasn’t Been the Greatest, Although It Is Very Well Flagged

By Shifara Samsudeen, ACMA, CGMA

Taiwan Cement (1101 TT) is looking to raise US$395m in its global depository share (GDSs) issuance. Included in the offering is a concurrent US$420m convertible bond issuance.
The deal is a relatively large one to process at 19.5 days of three months ADV. Recent momentum on the stock hasn’t been the greatest as well.
That being said, the deal is very well flagged, and short interest remains elevated as well.

J&T Global Express IPO: Peer Comparison and Valuation

J&T Global Express (1519 HK) has announced the terms for its IPO. The company plans to issue 327m shares at HK$12 per share, which should raise proceeds of around US$501m.
Though profitability of the company’s China business has improved, SEA margins continue to decline, hence our analysis suggests that J&T may not be able to generate profits in the near-term.
Our SOTP valuation offers per share value of HK$9.48 per share which is at a 21% discount to the indicative IPO price suggesting J&T’s IPO is overvalued.

Cainiao Smart Logistics IPO: The Bull 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.
According to CIC, Cainiao is the world’s leading cross-border e-commerce logistics company regarding parcel volume in 2022, with one of the world’s largest logistics networks in terms of geographic reach.
The bull case rests on market share gains in China, improving performance of the largest business (international logistics), and rising gross and operating margins.

Asirvad Micro Finance Limited Pre-IPO Tearsheet

Asirvad Micro Finance Limited (1053198D IN) is looking to raise around US$183m in its upcoming India IPO. The deal will be run by JM Financial, Kotak, Nomura, SBI Caps.
Asirvad Micro Finance Limited (Asirvad) is a non-banking finance company (NBFC), and a microfinance institution (MFI) offering small loans to low-income women in India.
As per the CRISIL report, Asirvad was the largest MFI in India in terms of geographical coverage and third largest MFI in India in terms of AUM, in FY23.

Agilus Diagnostics Pre-IPO: Large Scale of Operation and Favorable Sector Demand To Drive Growth

By Tina Banerjee

Agilus Diagnostics Limited (SRLL IN) is the largest diagnostics service provider in terms of number of laboratories and the second largest in terms of revenue from operations in India.
Agilus has built an extensive network spread across 25 states and five union territories in India. An asset light model enables growth of the service network in a cost-effective manner.
Indian diagnostics industry is expected to have a CAGR of 8–10% during FY23–28 to reach INR1,150B–1,250B in FY28, providing immense growth opportunities for large players like Agilus.

Cainiao Pre-IPO – Initial Thoughts on Valuation

Cainiao Smart Logistics, Alibaba Group Holding’s logistics linked arm, is planning to raise at least US$1bn in its Hong Kong IPO.
Cainiao is the largest provider of cross-border e-commerce logistics services globally and a leader in China logistics services, according to CIC.
In our previous note we looked at the company’s past performance and undertook a peer comparison. In this note, we will talk about valuations.

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Oct 17

Daily Brief ECM: Hana Microelectronics Placement – Stock Has Been Doing Well and more

In today’s briefing:

Hana Microelectronics Placement – Stock Has Been Doing Well, Unclear if Deal Is Well Flagged
J&T Global Express IPO – Team Effort for Some Heavy Lifting
Cuscal Pre-IPO – The Positives – Monetising Its Connections and Benefiting from Tailwinds
J&T Global Express IPO: Valuation Insights
Agilus Diagnostics Limited Pre-IPO Tearsheet
Bluemtec IPO Preview
Cainiao Pre-IPO – Peer Comparison
Cuscal Pre-IPO – The Negatives – Margins Have Declined and Growth May Be Capped
Lawson: Seijo Ishii Producing at Home to Beat Inflation and Weak Yen

Hana Microelectronics Placement – Stock Has Been Doing Well, Unclear if Deal Is Well Flagged

Hana Microelectronics (HANA TB) aims to raise up to US$105m to finance expansion of Hana’s silicon carbide strategy including PMS (Power Master Semiconductor).
The deal scores well on our framework given the company’s strong recent performance and decent long term track record
In this note, we will talk about the deal dynamics.

J&T Global Express IPO – Team Effort for Some Heavy Lifting

J&T Global Express, a global logistics service provider, is looking to raise about US$500m in its Hong Kong IPO.
As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
We have looked at the company’s past performance and undertaken a peer comparison in our earlier notes. In this note, we talk about valuations.

Cuscal Pre-IPO – The Positives – Monetising Its Connections and Benefiting from Tailwinds

Cuscal Limited (1229Z AU) is looking to raise US$234m in its upcoming Australia IPO.
Cuscal is an authorized deposit-taking institution (ADI) in Australia that primarily provides financial infrastructure and payment services in Australia.
In this note, we will talk about the positive aspects of the deal.

J&T Global Express IPO: Valuation Insights

J&T Global Express (1519 HK), a leading express delivery business in Southeast Asia and China, has launched a HKEx IPO to raise US$500 million at a fixed price of HK$12.00.
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: Updates Tilts the Balance Positively.
The IPO price range is unattractive, with our SoTP valuation of HK$10.75 per share, 10% below the IPO price. Therefore, we would pass on the IPO.

Agilus Diagnostics Limited Pre-IPO Tearsheet

Agilus Diagnostics Limited (SRLL IN) is looking to raise around US$200m in its upcoming India IPO. The deal will be run by Citi, Axis Capital, and ICICI Securities.
Agilus Diagnostics Limited (Agilus) is a diagnostic testing service provider.
As per the CRISIL report, the firm was the largest diagnostics service provider in terms of number of laboratories and the second largest in terms of FY23 sales.

Bluemtec IPO Preview

By Douglas Kim

Bluemtec is getting ready to complete its IPO in KOSDAQ in the next several weeks. Bluemtec operates the number one pharmaceutical e-commerce platform in Korea.
The company is offering 1.4 million shares in this IPO. The IPO price range is from 15,000 won to 19,000 won.
The company sales and gross profit growth increased impressively in the past several years. The company’s sales increased at a CAGR of 60.5% from 2020 to 2022.

Cainiao Pre-IPO – Peer Comparison

Cainiao Smart Logistics, Alibaba (9988 HK)’s logistics linked arm, is planning to raise at least US$1bn in its Hong Kong IPO.
Cainiao is the largest provider of cross-border e-commerce logistics services globally and a leader in China logistics services, according to CIC.
In our previous note we looked at the company’s past performance, in this note we will undertake a peer comparison.

Cuscal Pre-IPO – The Negatives – Margins Have Declined and Growth May Be Capped

Cuscal Limited (1229Z AU) is looking to raise US$234m in its upcoming Australia IPO.
Cuscal is an authorized deposit-taking institution (ADI) in Australia that primarily provides financial infrastructure and payment services in Australia.
In this note, we will talk about the not so positive aspects of the deal.

Lawson: Seijo Ishii Producing at Home to Beat Inflation and Weak Yen

By Michael Causton

Seijo Ishii is Japan’s leading premium supermarket chain with some 200 stores and is being prepped for an IPO by its owner, Lawson.
After strong growth during Covid, sales have now flattened and the company’s large import business has suffered from higher costs due to the weak Yen and global crises.
To maintain its market position, it is reducing imports of packaged goods and increasing volumes of imported, high-end raw materials – and then manufacturing products itself.

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Oct 16

Daily Brief ECM: EcoPro Materials IPO: Valuation Insights and more

In today’s briefing:

EcoPro Materials IPO: Valuation Insights
J&T Global Express Pre-IPO, Part 6 | How We Could Potentially Get Closer To US$13 Bn Valuation

EcoPro Materials IPO: Valuation Insights

EcoPro Materials (ECO123 KS) is a leading player in the electrode material industry. It is seeking to raise up to US$470 million in a KRX IPO.
We previously discussed the IPO in EcoPro Materials IPO: The Bull Case and EcoPro Materials IPO: The Bear Case.
In this note, we look at the syndicate’s valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive, and we would pass on the IPO.

J&T Global Express Pre-IPO, Part 6 | How We Could Potentially Get Closer To US$13 Bn Valuation

In this insight we consider what it would take to pull our valuation up closer to US$13 bn
Such a valuation would require solid revenue growth (+17-18% Y/Y or better), plus sustained progress on raising China and ‘Other’ EBITDA margins, which are currently negative
Even with these optimistic assumptions, J&T would trade at 20x EV/2025 Adj EBITDA & at historical EV/Revenue multiples far above more profitable Chinese express names

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Oct 15

Daily Brief ECM: CaiNiao Smart Logistics Pre-IPO Part 2 | Analyzing Financial Statements & Operating Statistics and more

In today’s briefing:

CaiNiao Smart Logistics Pre-IPO Part 2 | Analyzing Financial Statements & Operating Statistics
ECM Weekly (15th Oct 2023) – Kokusai, J&T, Ecopro, Thai Credit, Lalatech, Barito, Rakuten, Zomato
Weekly Deals Digest (15 Oct) – Kokusai, EcoPro, Seoul Guarantee, J&T, Eoflow, NWS, Origin, Liontown

CaiNiao Smart Logistics Pre-IPO Part 2 | Analyzing Financial Statements & Operating Statistics

How did CaiNiao turn profitable? We answer with an analysis of the company’s P&L
We also analyze CaiNiao’s Balance Sheet, Cash Flow statement, and Operating Stats
We conclude with a list of ten questions we would put to CaiNiao management

ECM Weekly (15th Oct 2023) – Kokusai, J&T, Ecopro, Thai Credit, Lalatech, Barito, Rakuten, Zomato

Aequitas Reserach 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) managed to get strong support, even though we remain somewhat unconvinved.
In the placement space, we looked at the upcoming lockups for Rakuten Bank (5838 JP) and Zomato (ZOMATO IN), along with the Ingenia Communities (INA AU) placement.

Weekly Deals Digest (15 Oct) – Kokusai, EcoPro, Seoul Guarantee, J&T, Eoflow, NWS, Origin, Liontown

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments – Kokusai Electric (6525 JP), EcoPro Materials (ECO123 KS), Seoul Guarantee Insurance (031210 KS), Cainiao Smart Logistics (1437124D HK), J&T Global Express (1936374D CH) IPOs.
Event-Driven developments – Eoflow (294090 KS), Nws Holdings (659 HK), Origin Energy (ORG AU), Liontown Resources (LTR AU), Estia Health (EHE AU), Pact Group Holdings (PGH AU).

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Oct 13

Daily Brief ECM: Ecopro Materials: Reduces IPO Price Range and more

In today’s briefing:

Ecopro Materials: Reduces IPO Price Range
EcoPro Materials IPO: The Bear Case
Ingenia Communities Placement – Largest Shareholder Selling Isn’t Particularly Well Flagged

Ecopro Materials: Reduces IPO Price Range

By Douglas Kim

Ecopro Materials reduced the upper end of the IPO price range from 46,000 won to 44,000 won.
The bankers reduced the IPO discount, EV/EBITDA valuation multiple, and outstanding shares.
We maintain our Bearish view of the Ecopro Materials IPO. Our base case valuation of 37,436 won per share is towards to lower end of the IPO price range.

EcoPro Materials IPO: The Bear Case

EcoPro Materials (ECO123 KS) is a leading player in the electrode material industry. It is seeking to raise up to US$477 million in a KRX IPO.
In EcoPro Materials 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 weakening sector market sentiment, margin pressure likely to persist, cash burn, elevated leverage and high related-party transactions.

Ingenia Communities Placement – Largest Shareholder Selling Isn’t Particularly Well Flagged