ECM Daily Briefs | Page 3 of 123

In today’s briefing:

Tokyo Metro IPO: Steady Tracks with Potential for OP Growth Through Fixed Cost Savings
Cerebras IPO Preview: Does The Size Matter? Top-Tier VC Investors and $1B+ Deal With UAE’s G42
ECM Weekly (7th Oct 2024) – Tokyo Metro, Rigaku, China Resources, K Bank, JD Ind, Swiggy, Lalatech
Rigaku IPO Thoughts on Valuation – Decent Upside from the Indicative Range

Tokyo Metro IPO: Steady Tracks with Potential for OP Growth Through Fixed Cost Savings

By Oshadhi Kumarasiri

Tokyo Metro (9023 JP) operates 9 out of the 14 subway lines that provides essential public transportation services within the Greater Tokyo area.
Many are unaware of Tokyo Metro’s cost savings, and we believe it could reach ¥110bn OP, exceeding the ¥100bn OP that most currently expect.
Even without factoring in the cost savings, the indicative IPO price appears reasonably cheap, as it’s priced near the lower end of peer multiples.

Cerebras IPO Preview: Does The Size Matter? Top-Tier VC Investors and $1B+ Deal With UAE’s G42

By Andrei Zakharov

Cerebras Systems, a high-growth Ai chip maker and hardware company that builds AI supercomputers with scalable architecture, has filed for an IPO on the Nasdaq.
The AI company plans to raise up to $1B in upcoming IPO. Citigroup and Barclays are the lead bankers on the offering.
Cerebras Systems may become the biggest disruptor since NVIDIA. The company’s growth is exceptionally high for any AI chip maker.

ECM Weekly (7th Oct 2024) – Tokyo Metro, Rigaku, China Resources, K Bank, JD Ind, Swiggy, Lalatech

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, the roaring China/HK market led to some refilings, in what is likely to be the start of a tsunami of refilings, if the market momentum sustains.
On the placements front, given the China/HK holidays there weren’t any deals. We instead looked at Bharti Hexacom upcoming lockup expiry.

Rigaku IPO Thoughts on Valuation – Decent Upside from the Indicative Range

By Clarence Chu

Rigaku Holdings (268A JP) is looking to raise US$762m in its Japan IPO.
Rigaku engages in developing, manufacturing, sales and servicing scientific instruments specializing in X-ray technologies.
In our earlier notes, we looked at the firm’s past performance and peers. In this note, we discuss our thoughts on valuation.

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Oct 06

Daily Brief ECM: Weekly Deals Digest (06 Oct) – Tokyo Metro and more

In today’s briefing:

Weekly Deals Digest (06 Oct) – Tokyo Metro, Rigaku, CR Beverage, K Bank, ASMPT, Samson, T-Gaia
Lalatech IPO | Review of H124 Financials & Operating Stats | Strike While the Iron Is Hot-Ish?

Weekly Deals Digest (06 Oct) – Tokyo Metro, Rigaku, CR Beverage, K Bank, ASMPT, Samson, T-Gaia

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: Tokyo Metro (9023 JP), Rigaku Holdings (268A JP), K Bank (279570 KS) and China Resources Beverage (CRB HK) IPOs.
Event-Driven developments: ASM Pacific Technology (522 HK), Greatview Aseptic Packaging (468 HK), Samson Holding (531 HK), Descente Ltd (8114 JP), T Gaia Corp (3738 JP).

Lalatech IPO | Review of H124 Financials & Operating Stats | Strike While the Iron Is Hot-Ish?

By Daniel Hellberg

In a new filing with HKEX, we can see Lalatech’s revenue growth slow
The company’s grip on CoR loosened, but OpEx growth in H1 was minimal
Given improving market conditions, we believe Lalatech may finally sell shares

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Oct 05

Daily Brief ECM: Schloss Bangalore Pre-IPO Tearsheet and more

In today’s briefing:

Schloss Bangalore Pre-IPO Tearsheet

Schloss Bangalore Pre-IPO Tearsheet

Schloss Bangalore Ltd (SCHBL IN) plans to raise about US$600m in its India IPO. The deal will be run by BofA, MS, JPM, Kotak, Axis, Citi, IIFL,ICICI, JMF,Motilal and SBICaps.
It is a luxury hospitality company which owns, operates, manages and develops luxury hotels and resorts under ‘The Leela’ brand, through direct ownership and hotel management agreements with third-party owners.
According to the HVS Report, SBL is the only institutionally owned and managed pure-play luxury hospitality company in India. Its portfolio comprises 3,382 keys across 12 operational hotels.

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Oct 04

Daily Brief ECM: Rigaku Holdings (268A JP) IPO: The Bear Case and more

In today’s briefing:

Rigaku Holdings (268A JP) IPO: The Bear Case
Nanshan Aluminium International Pre-IPO Tearsheet
Rigaku IPO – Peer Comparison – Compensating for Smaller Scale with Better Growth and Margins
CR Beverage IPO: The Investment Case
Chongqing Terminus Pre IPO Tearsheet
Pre-IPO Sichuan Biokin Pharmaceutical – Would Investors Be Willing to Take a Gamble?

Rigaku Holdings (268A JP) IPO: The Bear Case

Rigaku Holdings (268A JP) is Japan’s leading manufacturer of X-ray analysis, measurement and testing instruments. It is seeking to raise up to US$760 million.
In Rigaku Holdings (268A JP) 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 forward growth indicators, China revenue risk, rising cash conversion cycles, mid-tier FCF margin and large post-IPO share overhang.

Nanshan Aluminium International Pre-IPO Tearsheet

By Nicholas Tan

Nanshan Aluminium International Holdings (NAI HK) is looking to raise about US$500m in its upcoming Hong Kong IPO. The deal will be run by Huatai International.
Nanshan Aluminium International is a leading alumina manufacturer in Southeast Asia.
The firm’s primary focus has been tapping into Indonesia’s abundant bauxite and coal reserves, utilizing the low-temperature Bayer process to produce metallurgical-grade alumina in sand form.

Rigaku IPO – Peer Comparison – Compensating for Smaller Scale with Better Growth and Margins

By Clarence Chu

Rigaku Holdings (268A JP) is looking to raise US$762m in its Japan IPO.
Rigaku engages in developing, manufacturing, sales and servicing scientific instruments specializing in X-ray technologies.
In our earlier notes, we looked at the firm’s past performance. In this note, we undertake a peer comparison.

CR Beverage IPO: The Investment Case

China Resources Beverage (CRB HK), China’s largest purified drinking water company, is premarketing an HKEx to raise US$0.5-1 billion.
We previously discussed the IPO in CR Beverage IPO: The Bull Case and CR Beverage IPO: The Bear Case. In this note, we examine the latest updates in the PHIP.
The investment case rests on core business offsetting slowing growth with margin improvement, beverage’s fast-paced growth, narrowing the margin gap with Nongfu Spring (9633 HK), and return to FCF generation.

Chongqing Terminus Pre IPO Tearsheet

By Nicholas Tan

Chongqing Terminus (2471080D CH) is looking to raise about US$300m in its upcoming Hong Kong IPO. The deal will be run by CITIC Securities and Haitong.
Chongqing Terminus is a leader and pioneer in China’s public realm AIoT (Artificial Intelligence of Things) industry.
It leverages its innovative AIoT operating system, TacOS, to provide enterprises, public administrators and public realm participants with full stack AIoT products i.e. software, hardware and services. .

Pre-IPO Sichuan Biokin Pharmaceutical – Would Investors Be Willing to Take a Gamble?

By Xinyao (Criss) Wang

Biokin’s traditional chemical drug and TCM businesses would continue to shrink and their valuation contribution can be negligible. The collaboration agreement for BL-B01D1 with BMS changes the outlook of Biokin.
The clinical data of BL-B01D1 look good so far, but the R&D failure risk of BL-B01D1 is not low. It is uncertain if BL-B01D1 would finally be druggable.
Biokin is overvalued and there is big bubble in valuation. If BL-B01D1 fails in R&D or its clinical data fail to meet high expectation, Biokin’s market value will plummet.

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Oct 03

Daily Brief ECM: China Resources Beverage Pre-IPO – PHIP Updates – Revenue Slowing and more

In today’s briefing:

China Resources Beverage Pre-IPO – PHIP Updates – Revenue Slowing, Margins Growing
Intermestic IPO: Forecasts and Valuation
The Cerebras IPO Stucture Sucks
China Resources Beverage Pre-IPO – Updated Thoughts on Valuation
Pre-IPO China Resources Beverage (PHIP Updates) – Some Points Worth the Attention

China Resources Beverage Pre-IPO – PHIP Updates – Revenue Slowing, Margins Growing

By Shifara Samsudeen, ACMA, CGMA

China Resources Beverage (CRB HK) is looking to raise up to US$1bn in its upcoming Hong Kong IPO.
China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
In our earlier notes, we talked about the company’s past performance and provided our thoughts on valuations. In this note, we will look at updates from its most recent filings.

Intermestic IPO: Forecasts and Valuation

The Japanese eyewear company Intermestic (262A JP) has set the terms for its Tokyo IPO and plans to raise US$121m through the IPO.
Our analysis shows that the company’s IPO is valued attractively compared to JINS Inc (3046 JP) , who offers eyewear at a similar price range to Intermestic.
Japanese eyewear makers who have aggressively expanded into overseas markets seems to be suffering from falling sales and margins, particularly in China due to economic slowdown.

The Cerebras IPO Stucture Sucks

By Douglas O’Laughlin

I’m not going to write about the technical side at all, as I expect Dylan Patel’s team at SemiAnalysis to do a much better job than I can do alone.
However, I want to note some of the funniest aspects because landmines are everywhere for this IPO. Of course, it’s driven by G42, but it’s much worse than you think. Here’s the prelim S-1.
G42 is pretty much the only customer.

China Resources Beverage Pre-IPO – Updated Thoughts on Valuation

China Resources Beverage (CRB HK) is looking to raise up to US$1bn in its upcoming Hong Kong IPO.
China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
In our earlier notes, we talked about the company’s past performance and provided our initial thoughts on valuations. In this note, we will relook at valuations post its PHIP updates.

Pre-IPO China Resources Beverage (PHIP Updates) – Some Points Worth the Attention

By Xinyao (Criss) Wang

Nongfu Spring is able to take a price war to grab market share,but the strategy of CR Beverage forced to cut prices may not work,making its profit margin further decline.
CR Beverage’s business model is “single business + scale expansion”, worse than “multi-category structure + new product incubation”.Future performance growth may inevitably slow down if without the second growth curve.
Whether in terms of product/revenue structure, profitability, or sustainability of growth momentum, CR Beverage isn’t as good as Nongfu Spring. Valuation of CR Beverage should be lower than Nongfu Spring.

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Oct 02

Daily Brief ECM: Tokyo Metro (9023 JP) IPO: Valuation Insights and more

In today’s briefing:

Tokyo Metro (9023 JP) IPO: Valuation Insights
Aica Kogyo (4206) – Small Offering Chips Away At Cross-Holdings
Rigaku Holdings (268A JP) IPO: The Bull Case
K Bank IPO – Should Price Below Its Range
Casagrand Premier Builder Pre-IPO Tearsheet

Tokyo Metro (9023 JP) IPO: Valuation Insights

Tokyo Metro (9023 JP), a mass transit operator, is seeking to raise up to US$2.3 billion. Pricing is on 15 October, and the listing is on 23 October.
We previously discussed the IPO in Tokyo Metro (9023 JP) IPO: The Bull Case and Tokyo Metro (9023 JP) IPO: The Bear Case.
In this note, we discuss valuation. Our analysis suggests that Tokyo Metro is attractively valued at the IPO price compared to peer multiples.

Aica Kogyo (4206) – Small Offering Chips Away At Cross-Holdings

By Travis Lundy

On Monday, 30 September, shareholders of US$1.4bn market cap chemicals and housing materials supplier Aica Kogyo (4206 JP) announced a Secondary Share Sale. It’s small at 2% of market cap.
The Offering is 2.1mm shares including greenshoe. The company also raised its H1 dividend guidance slightly (¥53/share to ¥56/share) and announced a buyback which should cover 57% of the offering.
It’s a small deal. There are a lot more cross-holdings behind that but the company is cash-rich and the company is very cheap/underlevered on an LBO basis.

Rigaku Holdings (268A JP) IPO: The Bull Case

Rigaku Holdings (268A JP) is Japan’s leading manufacturer of X-ray analysis, measurement and testing instruments. It is seeking to raise up to US$760 million.
In Japan, Rigaku’s XRD (X-ray diffraction) has a high market share of 75%. Around 70% of its revenue is derived from customers outside Japan.
The bull case rests on high customer switching costs, peer-leading revenue growth, top-quartile profitability, FCF generation, and low leverage.

K Bank IPO – Should Price Below Its Range

K Bank (279570 KS) plans to raise up to US$740m in its upcoming South Korean IPO.
K Bank is one of three Internet-only banks in Korea. It provides a full range of commercial banking products and services.
In our previous note, we have looked at the company’s past performance and undertaken a peer comparison. In this note, we will talk about valuations.

Casagrand Premier Builder Pre-IPO Tearsheet

Casagrand Premier Builder Ltd (0949880D IN) is looking to raise about US$131m in its upcoming India IPO. The deal will be run by JM Fin and Motilal Oswal.
Casagrand Premier Builder is a residential developer in India. It constructs apartments and independent villas spanning luxury, mid-end and affordable categories in the states of Karnataka, Telangana and Tamil Nadu.
According to CBRE, it was the largest residential developer in Chennai with ~24% share in terms of launches and ~20% in terms of demand during 1st Jan’17 to 31st Mar’24.

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Oct 01

Daily Brief ECM: Swiggy Pre-IPO Tearsheet and more

In today’s briefing:

Swiggy Pre-IPO Tearsheet
Tokyo Metro IPO – Thoughts on Valuation
Tencent/Netease: One Approval for Tencent in September
Midea HK Listing: Take Profit
Hive Box Holdings Pre-IPO, Part 3: Hive Box Vs InPost Group: Similarities & (BIG) Differences
Intermestic IPO – Digestible Valuation

Swiggy Pre-IPO Tearsheet

Swiggy (1255298D IN) Swiggy is looking to raise about US$1.25bn in its upcoming India IPO. The deal will be run by Kotak, Citi, Jefferies, Avendus, JPM, BofA and ICICI.
Swiggy Limited (Swiggy) is a business to commerce (B2C) marketplace company offering users a platform for ordering grocery and household items (Instamart) and food delivery, through its on-demand delivery network.
The platform can also be used to make restaurant reservations (Dineout), event bookings (SteppinOut), product pick-up/drop-off services (Genie) and other hyperlocal commerce activities (Swiggy Minis).

Tokyo Metro IPO – Thoughts on Valuation

By Shifara Samsudeen, ACMA, CGMA

Tokyo Metro (9023 JP)‘s shareholders aim to raise up to US$2.3bn in its Japan IPO.
Tokyo Metro (TKM) is one of the two metro network operators in the Tokyo region. It operates nine subway lines with a total of 180 stations.
We have looked at the company’s past performance in our previous notes. In this note, we will talk about valuations.

Tencent/Netease: One Approval for Tencent in September

By Ke Yan, CFA, FRM

China announced game approval for the September batch. The number of games approved remained at a higher level than 2023.
The pace of China game approval appears to have accelerated to the same level as pre-tightening.
Of the companies that we are monitoring, Tencent and Kingsoft got one approval each.

Midea HK Listing: Take Profit

Midea debuted on HKEx on 17th September and shares last closed at HK$74.25 per share, up by about 35% compared to final HK offer price of HK$54.80 apiece.
We previously suggested that Midea’s HK offering was attractive as HK shares were priced at a 25% discount to its A-shares, and was at a discount to Haier Smart Homes.
The PBOC announced several measures to revive the housing market in the country which contributed to the recent rally in the China home appliance sector.

Hive Box Holdings Pre-IPO, Part 3: Hive Box Vs InPost Group: Similarities & (BIG) Differences

By Daniel Hellberg

In this insight we compare Hive Box to InPost, a smart locker specialist
The firms play in different geographies, making apples:apples comps tough
In the absence of better comps, comparing Hive Box to InPost still useful

Intermestic IPO – Digestible Valuation

By Clarence Chu

Intermestic (262A JP) is looking to raise US$120m in its Japan IPO.
Intermestic is an eyewear manufacturer of eyeglasses and eyeglass accessories in Japan.
In an earlier note, we looked at the firm’s past performance. In this note, we will undertake a peer comparison, and share our thoughts on valuation.

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Sep 30

Daily Brief ECM: Tokyo Metro IPO – Peer Comparison – Pre-COVID to 1Q25 and more

In today’s briefing:

Tokyo Metro IPO – Peer Comparison – Pre-COVID to 1Q25
CR Beverage IPO: Less Diversification, Falling Growth Rates and Inferior Margins Compared to Peers
ECM Weekly (30th Sep 2024) – Tokyo Metro, Rigaku, China Resources, K Bank, Mr DIY, Smartworks, IREDA

Tokyo Metro IPO – Peer Comparison – Pre-COVID to 1Q25

By Shifara Samsudeen, ACMA, CGMA

Tokyo Metro (9023 JP)‘s shareholders aim to raise up to US$2.3bn in its Japan IPO.
Tokyo Metro (TKM) is one of the two metro network operators in the Tokyo region. It operates nine subway lines with a total of 180 stations.
We have looked at the company’s past performance in our previous note. In this note, we will undertake a peer comparison.

CR Beverage IPO: Less Diversification, Falling Growth Rates and Inferior Margins Compared to Peers

The Chinese drinking water and beverage maker, China Resources Beverage (CRB HK) has filed for an IPO on the HKEx to raise around US$1.0bn.
The company’s operations are heavily concentrated towards drinking water products where the market competition is intensifying leading into a price war.
CR Beverage’s margins are inferior compared to peer Nongfu Spring (9633 HK) who has diversified into other beverage products from drinking water to grow its financials.

ECM Weekly (30th Sep 2024) – Tokyo Metro, Rigaku, China Resources, K Bank, Mr DIY, Smartworks, IREDA

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, it hasn’t been this busy for a while, with deals live in Japan and Korea, and possible launches in Hong Kong and India as well.
On the placements front, there were a few China ADR blocks and other placements across the region.

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Sep 29

Daily Brief ECM: Kumyang’s Capital Raise Drop: Breaking It Down from an Arb Trading Play and more

In today’s briefing:

Kumyang’s Capital Raise Drop: Breaking It Down from an Arb Trading Play
Upstream Bio Valuation Summary, DCF Analysis Suggests U.S. Business (Ex. COPD) Is Worth ~$1.8B
Weekly Deals Digest (29 Sep) – Tokyo Metro, CR Beverage, K Bank, Fuji Soft, Sun Art, Xingda, Capitol

Kumyang’s Capital Raise Drop: Breaking It Down from an Arb Trading Play

By Sanghyun Park

Kumyang’s major shareholders are backing the capital raise, committing ₩160B of the ₩450B total. We’re also likely to see some robust price support for the stock rights in early phases.
Institutional investors still make up about 10% of the SO, with around 8% being active players. These guys could easily start dumping stock rights in bulk.
Retail holds nearly 50% of the SO, increasing volatility and boosting chances for arb spreads. Kumyang’s stock futures have solid liquidity, making it a prime arb trading setup.

Upstream Bio Valuation Summary, DCF Analysis Suggests U.S. Business (Ex. COPD) Is Worth ~$1.8B

By Andrei Zakharov

Upstream Bio, a biotech company focused on developing therapeutics that address severe asthma, CRSwNP and COPD, will price its IPO in October.
Upstream Bio has raised ~$400M to date. Their last round was a $200M Series B led by private equity firm Enavate Sciences and Venrock Healthcare Capital Partners.
My DCF analysis suggests that Upstream Bio’s core U.S. business (ex. COPD) may be worth ~$1.8B. The severe asthma and CRSwNP markets represent a potential $10B+ opportunity.

Weekly Deals Digest (29 Sep) – Tokyo Metro, CR Beverage, K Bank, Fuji Soft, Sun Art, Xingda, Capitol

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: Tokyo Metro (9023 JP), K Bank (279570 KS) and China Resources Beverage (CRB HK) IPOs.
Event-Driven developments: Capitol Health (CAJ AU), Sun Art Retail (6808 HK), Xingda International (1899 HK), Fuji Soft Inc (9749 JP), Dyna Mac Holdings (DMHL SP).

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Sep 28

Daily Brief ECM: Swiggy IPO: Key Facts and Financials at First Glance and more

In today’s briefing:

Swiggy IPO: Key Facts and Financials at First Glance
NTPC Green Pre-IPO Tearsheet

Swiggy IPO: Key Facts and Financials at First Glance

By Devi Subhakesan

Swiggy (1255298D IN) , a popular food and grocery delivery platform in India, plans to launch its much-anticipated IPO in early November.
The company has seen rapid growth in Gross Order Value and revenues, driven by increased food delivery demand and a surge in quick commerce, an on demand grocery delivery service.
The Naspers and Softbank Group (9984 JP) backed company that started operations in 2014 is yet to turn profitable while its close competitor Zomato reported profits in FY2024.

NTPC Green Pre-IPO Tearsheet