ECM Daily Briefs | Page 36 of 118

In today’s briefing:

Genda IPO Trading – Stronger Subscription Rates than the Recent Large JP IPO
National Securities Depository Limited (NSDL) Pre-IPO Tearsheet
LianLian DigiTech IPO: The Bear Case

Genda IPO Trading – Stronger Subscription Rates than the Recent Large JP IPO

Genda Inc (9166 JP) raised around US$100m in its Japan IPO.
Genda develops and operates amusement facilities in Japan, primarily operating under its Genda GiGO Entertainment subsidiary.
In this note we will talk about the trading dynamics.

National Securities Depository Limited (NSDL) Pre-IPO Tearsheet

National Securities Depository Limited (NSDL) is looking to raise around US$400m in its India IPO.
The deal will be run by ISec, Axis Capital, HSBC, IDBI, Motilal and SBI Caps.
It IS the largest depository in India in terms of number of issuers, number of active instruments, market share in demat value of settlement volume and value of assets.

LianLian DigiTech IPO: The Bear Case

Lianlian DigiTech (2104619D CH), a digital payment services provider in China, has filed for an HKEx IPO to raise US$500 million, according to press reports.
In LianLian DigiTech IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The key elements of the bear case rest on margin pressure on the fastest-growing business, operating losses, an unconvincing path to profitability, FCF burn with a weak balance sheet.

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Jul 27

Daily Brief ECM: Fadu IPO Book Building Results Analysis and more

In today’s briefing:

Fadu IPO Book Building Results Analysis
Lalatech IPO Valuation Analysis: Discount To Last Round Valuation Is Justified

Fadu IPO Book Building Results Analysis

By Douglas Kim

Fadu’s IPO price has been confirmed at 31,000 won (top end of the IPO valuation range). A total of 1,082 institutions participated, with a demand ratio of 362.9 to 1.
Fadu is one of the biggest IPOs in Korea so far in 2023.
Our base case valuation analysis suggests implied market cap of 2.2 trillion won or 43,676 won per share, which represents 41% higher than the IPO price.

Lalatech IPO Valuation Analysis: Discount To Last Round Valuation Is Justified

By Andrei Zakharov

Lalatech Holdings filed for an IPO in March. I have tried to come at an IPO valuation for the company using a mix of methodologies: EV/Revenue, EV/GTV and EV/Gross Profit.
Taking a weighted average of peer group multiples-based valuation methodologies, I arrived at a ~$7B IPO valuation for Lalatech Holdings, including ~$1.65B of cash and cash equivalents.
From a peer group perspective, I arrived at a fair IPO valuation close to ~$7B, using a ~5x EV/CY22 Revenue, ~0.7x EV/CY22 GTV, and a 10x EV/CY22 Gross Profit multiple.

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Jul 26

Daily Brief ECM: Seeking Clues for a Preemptive Position in the Korean Local Block Deal Market in H2 and more

In today’s briefing:

Seeking Clues for a Preemptive Position in the Korean Local Block Deal Market in H2
LianLian DigiTech IPO: The Bull Case
Black Sesame Pre-IPO – The Negatives – Losses Remain Wide and Suffers from a Concentration Risk
Robosense Technology Pre-IPO – The Negatives – Not a Whole Lot of Earnings
Muthoot Microfin Pre-IPO Tearsheet

Seeking Clues for a Preemptive Position in the Korean Local Block Deal Market in H2

By Sanghyun Park

As the possibility of implementing the pre-disclosure rule in the second half of this year arises, the local block deal market is expected to become more active.
Specifically, there are observable movements among Kosdaq mid-sized companies that are particularly sensitive to deal execution risk. This suggests that LHJ’s KIS may further solidify its dominance.
Significant increases in trading volume through KB Securities could serve as potential clues indicating the imminence of block deals in companies where the likelihood of such deals is high.

LianLian DigiTech IPO: The Bull Case

Lianlian DigiTech (2104619D CH), a digital payment services provider in China, has filed for an HKEx IPO to raise US$500 million, according to press reports.
Lianlian ranked first among the independent digital payment solution providers in China in terms of TPV in 2022, with a market share of 9.1%, according to Frost & Sullivan.
The key elements of the bull case rest on rising market share, doubling of active customers, resilient core business growth and rapidly growing additional revenue streams.

Black Sesame Pre-IPO – The Negatives – Losses Remain Wide and Suffers from a Concentration Risk

Black Sesame Technologies (BLACKSES HK) is looking to raise around US$300m in its upcoming Hong Kong IPO.
Black Sesame International Holdings (BSIH) is an automotive-grade computing SoC and SoC-based intelligent vehicle solution provider.
In this note, we will talk about the not so positive aspects of the deal.

Robosense Technology Pre-IPO – The Negatives – Not a Whole Lot of Earnings

Robosense Technology (ROBO HK) (RT) is looking to raise around US$400m (estimated) in its upcoming Hong Kong IPO.
As of Mar 23, it had earned design wins for mass production of LiDAR for 52 vehicles with 21OEMs and Tier 1 suppliers, ranking No. 1 globally, according to CIC.
In this note, we talk about the not-so-positive aspects of the deal.

Muthoot Microfin Pre-IPO Tearsheet

Muthoot Microfin (1363943D IN) is looking to raise up to US$163m in its upcoming India IPO. The deal will be run by ICICI-Sec, Axis Capital, JM Financial and SBI Capital.
Muthoot Microfin is a microfinance institution providing micro-loans to women customers with a focus on the rural regions of India.
It is the fourth largest NBFC-MFI in India in terms of gross loan portfolio as of 9M23 (ending 31st Dec 2022). It is part of the Muthoot Group.

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Jul 25

Daily Brief ECM: Rakuten Securities IPO: The Bear Case and more

In today’s briefing:

Rakuten Securities IPO: The Bear Case
LianLian DigiTech Pre-IPO Tearsheet
Qiniu Pre-IPO – Widening Losses and Dwindling Market Share
Robosense Technology Pre-IPO – The Positives – A Whole Lot of Potential

Rakuten Securities IPO: The Bear Case

Rakuten Securities (RAKUSEC JP), a leading Japanese online brokerage, seeks to raise US$500 million. Rakuten Group (4755 JP) (80.01%) and Mizuho Financial Group (8411 JP) (19.99%) are its shareholders.
In Rakuten Securities IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The key elements of the bear case rest on rapidly slowing operating revenue and commissions growth, lowest per-account monetisation rates vs peers and mid-tier profitability.

LianLian DigiTech Pre-IPO Tearsheet

Lianlian DigiTech is looking to raise at least US$500m in its upcoming HK IPO. The deal will be run by CICC and JP Morgan.
LianLian DigiTech is a digital technology company that provides a range of digital payment services and value-added services to customers in China and around the world.
The firm ranked first among all independent digital payment solution providers in China in terms of TPV in 2022, with a market share of 9.1%, according to Frost & Sullivan.

Qiniu Pre-IPO – Widening Losses and Dwindling Market Share

Qiniu Limited (1045102D CH) is looking to raise about US$200m in its upcoming Hong Kong IPO.
Qiniu is an intelligent audiovisual service provider. According to iResearch, the firm is the third largest audiovisual platform as a service (PaaS) provider in China in terms of FY22 revenue.
Qiniu’s revenue has primarily been driven by its MPaaS segment over the track record period. However, the firm’s losses are still widening while its balance sheet health deteriorates.

Robosense Technology Pre-IPO – The Positives – A Whole Lot of Potential

Robosense Technology (ROBO HK) (RT) is looking to raise around US$400m (estimated) in its upcoming Hong Kong IPO.
As of Mar 23, it had earned design wins for mass production of LiDAR for 52 vehicles with 21OEMs and Tier 1 suppliers, ranking No. 1 globally, according to CIC.
In this note, we talk about the positive aspects of the deal.

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Jul 24

Daily Brief ECM: Weekly Deals Digest (23 Jul) – Rakuten Securities and more

In today’s briefing:

Weekly Deals Digest (23 Jul) – Rakuten Securities, Tryt, EbixCash, Lalatech, 111, Newcrest, Origin
Pre-IPO Edding Group – CSO Model Is Hard to Sustain, but Business Transformation Faces Challenges
SATP Holding IPO Preview: Bringing SaaS And Automation To 50M+ SMBs In China
Black Sesame Pre-IPO – The Positives – Catering to a Growing Demand for Automotive Automation

Weekly Deals Digest (23 Jul) – Rakuten Securities, Tryt, EbixCash, Lalatech, 111, Newcrest, Origin

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 – Tryt Inc (9164 JP), Rakuten Securities (RAKUSEC JP), EbixCash (EBIXC IN), Lalatech Holdings Co Ltd (LALA HK), Alibaba (ADR) (BABA US)‘s Cainiao & Cloud Intelligence Group IPOs.
Event-Driven developments – 111 Inc (YI US), Healius (HLS AU), Invocare Ltd (IVC AU), Newcrest Mining (NCM AU), Origin Energy (ORG AU).

Pre-IPO Edding Group – CSO Model Is Hard to Sustain, but Business Transformation Faces Challenges

By Xinyao (Criss) Wang

Vancocin/Ceclor/FPN are currently the “cash cow” for Edding, but they’re facing the challenges of generics, VBP and increasing competition. Their current market leading position may be lost in the future.
Edding seeks business transformation as its CSO model doesn’t work under domestic negative policies. But peak sales of three innovative drugs Vascepa/Mulpleta/EDP 125 may not reach the level of Vancocin/Ceclor.
Edding’s core advantage still lies in sales capabilities. Its R&D capabilities have always been questioned. It’s unsure whether the market would give high valuation to a company without core competitiveness.

SATP Holding IPO Preview: Bringing SaaS And Automation To 50M+ SMBs In China

By Andrei Zakharov

SATP Holding, a leading China-based SMB finance and taxation solution provider, filed to go public in Hong Kong. The company is led by visionary Founder and CEO Shugang Zhang.
SATP Holding offers scalable SaaS-based bookkeeping and taxation solutions to SMBs in China. The proprietary SaaS system (SATP) automates tax filings and financial statement submissions.
According to Pitchbook and the company’s IPO prospectus, the founder-led software provider has raised ~$226M in funding across nine funding rounds.

Black Sesame Pre-IPO – The Positives – Catering to a Growing Demand for Automotive Automation

Black Sesame Technologies (BLACKSES HK) is looking to raise around US$300m in its upcoming Hong Kong IPO.
Black Sesame International Holdings (BSIH) is an automotive-grade computing SoC and SoC-based intelligent vehicle solution provider.
In this note, we will talk about the positive aspects of the deal.

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Jul 23

Daily Brief ECM: TRYT IPO: Trading Debut and more

In today’s briefing:

TRYT IPO: Trading Debut
ECM Weekly (23rd July 2023) – Tryt, Genda, Rakuten, Mobovi, Samhi, Indigo, Federal Bank, Invincible

TRYT IPO: Trading Debut

Tryt Inc (9164 JP) priced its IPO at JPY1,200 per share to raise gross proceeds of US$339 million. The shares will start trading on 24 July.
We previously discussed the IPO in TRYT IPO: The Bull Case, TRYT IPO: The Bear Case, TRYT IPO: Valuation Insights and TRYT IPO: Revised IPO Price Range Remains Unattractive.
The market sentiment on the sector has broadly remained unchanged since the release of the prospectus. Our analysis suggests that Tryt is, at best, fully priced at the IPO price.

ECM Weekly (23rd July 2023) – Tryt, Genda, Rakuten, Mobovi, Samhi, Indigo, Federal Bank, Invincible

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, the coming week will see Tryt Inc (9164 JP) and Genda Inc (9166 JP) listing, along with Fadu (440110 KS) bookbuild.
For placements, Japan and India placements continue to flow, while there are no signs of any major Hong Kong activity.

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Jul 21

Daily Brief ECM: Rakuten Securities IPO: The Bull Case and more

In today’s briefing:

Rakuten Securities IPO: The Bull Case
Federal Bank QIP – Well Flagged Deal but the Last One Didn’t Do Well
Tryt IPO Trading – Subscription Rates Mostly Outdid Recent Large Japan Deals
Leader Energy Holdings Pre-IPO Tearsheet

Rakuten Securities IPO: The Bull Case

Rakuten Securities (RAKUSEC JP), a leading Japanese online brokerage, seeks to raise US$500 million. Rakuten Bank (5838 JP) (80.01%) and Mizuho Financial Group (8411 JP) (19.99%) are its shareholders.
Rakuten Securities has grown its business by pursuing a low-cost, high-volume strategy. It has the largest number of non-consolidated securities accounts among Japanese securities companies.
The key elements of the bull case rest on rapid customer growth, low-cost fees, market share gains, synergies with the Rakuten ecosystem and improving profitability trends.

Federal Bank QIP – Well Flagged Deal but the Last One Didn’t Do Well

Federal Bank (FB IN) aims to raise around US$370m via a QIP to increase its Tier-1 capital.
The deal is well flagged as the company had earlier obtained board approval for a fundraising and had guided towards a funding raising in FY24.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.

Tryt IPO Trading – Subscription Rates Mostly Outdid Recent Large Japan Deals

Tryt Inc (9164 JP) raised around US$344m in its Japan IPO. The IPO consisted of 100% secondary shares.
Tryt Inc (Tryt) offers employee placement services and temporary staffing services for the elderly care, nursing care and childcare workers segments.
In this note we will talk about the trading dynamics.

Leader Energy Holdings Pre-IPO Tearsheet

Leader Energy Holdings (1814173D MK) is looking to raise up to US$300m in its upcoming Malaysia IPO. The deal will be run by Affin Hwang, RHB, CIMB, Maybank and CLSA.
Leader Energy Holdings (LE) is an independent power producer (IPP) primarily engaged in the development, ownership, O&M of power assets and projects.
As of the Latest Practicable Date (LPD, 30th Apr 23), its power assets and projects (including those owned by jointly controlled entities), are located in six Southeast Asian countries.

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Jul 20

Daily Brief ECM: Invincible Investment Corp Placement – Decent Accretion Despite the Large Dilution and more

In today’s briefing:

Invincible Investment Corp Placement – Decent Accretion Despite the Large Dilution
L&F Considering On Switching Listing from KOSDAQ to KOSPI
Lalatech IPO: The Bear Case
Yibin City Commercial Bank Pre-IPO Tearsheet
Rookie International Pre-IPO Tearsheet
Rakuten Securities IPO Early Look – The Negatives – Growth Has Slowed Down

Invincible Investment Corp Placement – Decent Accretion Despite the Large Dilution

Invincible Investment (8963 JP) plans to raise around US$230m to fund the acquisition of six hotel assets in Japan.
The stock has done well over the past year and so have most of its deals which we have covered in the past.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.

L&F Considering On Switching Listing from KOSDAQ to KOSPI

By Douglas Kim

On 19 July, there were local media accounts that L&F Co Ltd (066970 KS) is considering on switching its listing from KOSDAQ to KOSPI.
L&F’s main business involves making cathode active materials for rechargeable batteries.
Despite this positive move, we believe the valuations of L&F have become too high. Its operating margins also worsened from 9.6% in 1Q 2022 to 3.0% in 1Q 2023.

Lalatech IPO: The Bear Case

Lalatech Holdings Co Ltd (LALA HK), a leading logistics transaction platform, has filed for an HKEx IPO to raise US$1 billion, according to press reports.
In Lalatech IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The key elements of the bear case rest on market share pressure, KPIs declining growth, declining revenue visibility, maiden profitability built on a shaky foundation and barely positive underlying FCF.

Yibin City Commercial Bank Pre-IPO Tearsheet

Yibin City Commercial Bank Co Ltd (1315463D CH) is looking to raise around US$300m in its upcoming Hong Kong IPO. The bookrunners on the deal are CCBI and ICBC.
Yibin City Commercial Bank (YCCB) is a city commercial bank in Yibin, Sichuan Province of China.
As per CBIRC Yibin Office, it was the largest bank in Yibin in terms of total assets as of Dec 22.

Rookie International Pre-IPO Tearsheet

Rookie International (1962144D CH) is looking to raise at least US$100m in its upcoming HK IPO. The deal will be run by Citic Securities and CMBI.
Rookie International is a fully-integrated operator of childrenswear brands in Greater China. It operates a portfolio of childrenswear brands, by designing, manufacturing and distributing branded products in Greater China.
It generates revenue primarily by selling licensed products which it has self-designed or curated under the brands (for which it has access to licenses) in Greater China.

Rakuten Securities IPO Early Look – The Negatives – Growth Has Slowed Down

Rakuten Securities, the online securities arm of Rakuten, aims to raise around US$500m (estimated) in its Japan listing.
It is the largest online securities firm in Japan with a 33.7% market share. In FY22, it had over 8.64m accounts, with around JPY18.2tn (US$131bn) of assets under custody.
In this note, we talk about the not-so-positive aspects of the deal.

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Jul 19

Daily Brief ECM: Lalatech IPO: The Bull Case and more

In today’s briefing:

Lalatech IPO: The Bull Case
Samhi Hotels Pre-IPO – Refiling Updates – Bigger Portfolio, Smaller Deal
EbixCash IPO: The Bear Case
Rakuten Securities IPO Early Look – The Positives – Has Been Gaining Market Share
Mobvoi Pre-IPO – Has Turned Profitable but Bulk of Growth Came from a Single Customer

Lalatech IPO: The Bull Case

Lalatech Holdings Co Ltd (LALA HK), a leading logistics transaction platform, has filed for an HKEx IPO to raise US$1 billion, according to press reports.
Lalatech is the largest logistics transaction platform in the world by closed-loop freight gross transaction value in the first half of 2022, according to Frost & Sullivan.
The key elements of the bull case rest on solid growth, rising monetization rates, achieving maiden profitability, a shift to cash generation and a debt-free balance sheet.

Samhi Hotels Pre-IPO – Refiling Updates – Bigger Portfolio, Smaller Deal

SAMHI Hotels (SAMHI IN) plans to raise around US$200m (estimated) in its Indian IPO.
Samhi is India’s third-largest hotel asset owner, by number of keys, with a portfolio of 25 operating hotel assets comprising 3,839 keys, as of Feb 2023.
In this note, we look at its updated filings and discuss the changes since its last filing in 2019.

EbixCash IPO: The Bear Case

EbixCash (EBIXC IN), a subsidiary of Ebix Inc (EBIX US) and India’s largest end-to-end financial exchange, is seeking to launch an Rs60 billion (US$730 million) in July.
In EbixCash IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The key elements of the bear case rest on margin pressure due to rising operating costs, a related party being the largest customer, declining revenue visibility and deteriorating cash generation.

Rakuten Securities IPO Early Look – The Positives – Has Been Gaining Market Share

Rakuten Securities (RAKUSEC JP), the online securities arm of Rakuten, aims to raise around US$500m (estimated) in its Japan listing.
It is the largest online securities firm in Japan with a 33.7% market share. In FY22, it had over 8.64m accounts, with around JPY18.2tn (US$131bn) of assets under custody.
In this note, we talk about the positive aspects of the deal.

Mobvoi Pre-IPO – Has Turned Profitable but Bulk of Growth Came from a Single Customer

Mobvoi (2185047D CH) is looking to raise about US$200m in its upcoming Hong Kong IPO.
Mobvoi is an AI company focusing on generative AI and voice interaction technologies. As per CIC, the firm is the largest revenue-generating AI company focusing on AI-generated content in 2022.
Mobvoi’s revenue growth was primarily driven by its AI enterprise solutions segment, which led to gross margin expansion and profitability turning positive on all fronts in FY22.

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Jul 18

Daily Brief ECM: Interglobe Aviation (Indigo) Lockup – Time for Another Selldown and more

In today’s briefing:

Interglobe Aviation (Indigo) Lockup – Time for Another Selldown, This Time Could Touch US$900m
EbixCash IPO: The Bull Case
Nexteel IPO Valuation Analysis
WuXi XDC Cayman Pre-IPO Tearsheet

Interglobe Aviation (Indigo) Lockup – Time for Another Selldown, This Time Could Touch US$900m

InterGlobe Aviation Ltd (INDIGO IN)’s co-founder Rakesh Gangwal’s 29%+ stake was released from lock-up today.
He had earlier stated his intention to pare down his stake after a long drawn, and very public battle, with his co-founder Rahul Bhatia.
In this note, we will talk about the lockup dynamics and possible placement.

EbixCash IPO: The Bull Case

EbixCash (EBIXC IN), a subsidiary of Ebix Inc (EBIX US) and India’s largest end-to-end financial exchange, is seeking to launch an Rs60 billion (US$730 million) in July.
EbixCash’s Forex operations have emerged as a leader in India’s airport Forex business. Also, EbixCash’s inward remittance business in India is the clear market leader.
The key elements of the bull case rest on fast-paced growth, growth runaway from the post-COVID recovery, declining contract assets, improving balance sheet, and declining leverage.

Nexteel IPO Valuation Analysis

By Douglas Kim

Our base case valuation of Nexteel is target price of 18,671 won per share, which represents 49% higher than the high end of the IPO price range of 12,500 won.
We estimate Nexteel to generate sales of 883.6 billion won (up 32.2% YoY) and operating profit of 257.4 billion won (up 42% YoY) in 2023.
Nexteel’s main products include pipes used to extract oil and gas from oil wells. It also makes steel pipes for transporting oil & steam, construction, shipbuilding, and machinery industries.

WuXi XDC Cayman Pre-IPO Tearsheet