ECM Daily Briefs | Page 41 of 118

In today’s briefing:

TS Lines Pre-IPO | Like Wan Hai Lines, but Smaller | Intra-Asia Update | Approaches to Valuation

TS Lines Pre-IPO | Like Wan Hai Lines, but Smaller | Intra-Asia Update | Approaches to Valuation

By Daniel Hellberg

In terms of fleet characteristics, market exposure, and recent financial performance, we believe T.S. Lines (TSL HK) and Taiwan’s Wan Hai Lines (2615 TT) are directly comparable
WHL has more exposure to the Transpacific, but still boasts a much larger Intra-Asia operation owing to its scale advantage (fleet and revenue about four times the size of TSL)
Given the similarities we outline in this insight, we believe TSL’s shares should trade at EV/Fleet and EV/Revenue multiples in line with WHL’s; no premium is justified, in our view

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Jun 04

Daily Brief ECM: ECM Weekly (4th June 2023) – JD Ind and more

In today’s briefing:

ECM Weekly (4th June 2023) – JD Ind, Alibaba, Growatt, Olam Agri, Coal India, Adani, Patanjali

ECM Weekly (4th June 2023) – JD Ind, Alibaba, Growatt, Olam Agri, Coal India, Adani, Patanjali

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, Indonesia appears to be the only market where sizeable deals are being done as Growatt and Olam Agri laucnhes got pushed back.
On the placement front, there were only a few smaller deals that were lauched, apart from the selldown in Coal India Ltd (COAL IN).

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Jun 02

Daily Brief ECM: Coal India Follow-On – Recent Momentum Is Strong but past Deals Haven’t Done Much and more

In today’s briefing:

Coal India Follow-On – Recent Momentum Is Strong but past Deals Haven’t Done Much
Amman Mineral Internasional IPO: The Investment Case
Martin Marietta Materials Inc.: Major Drivers
Mettler-Toledo International Inc.: Launch Of Automated Label Inspection Solution & Other Developments
Quanta Services Inc.: Is The RP Construction Services Acquisition A Big Boost To Its Infra Solutions Platform? – Key Drivers
Alnylam Pharmaceuticals: Commercialization of RNAi Therapeutics & Other Developments
Vulcan Materials Company: Does It Have A Significant Competitive Advantage? – Key Drivers
BorgWarner Inc.: Partnerships In The EV Sector Giving It An Edge? – Key Drivers

Coal India Follow-On – Recent Momentum Is Strong but past Deals Haven’t Done Much

The Government of India is looking to raise up to US$540m via selling around 3% of Coal India.
This will be the third divestment by the Government since 2015 and the past two deals didn’t end up doing much.
In this note, we will talk about the placement and run the deal through our ECM framework.

Amman Mineral Internasional IPO: The Investment Case

Amman Mineral Internasional (1416286D IJ), an Indonesian copper-gold producer, has launched an IDX IPO to raise US$860 million. Bookbuilding runs from 31 May to 16 June.
Amman’s Batu Hijau mine when combined with the Elang project has the fifth largest copper equivalent reserves in the world, according to Wood Mackenzie.
The key elements of the investment case rest on world-class reserves, credible development plans, solid top-line growth, high profitability, leading cost competitiveness and cash generation.

Martin Marietta Materials Inc.: Major Drivers

Martin Marietta had a solid start to the year and managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
Financially, Martin Marietta reported increased revenues, gross profit, earnings per share, and adjusted EBITDA.
Solid aggregate demand was observed across their footprint, with attractive pricing fundamentals.

Mettler-Toledo International Inc.: Launch Of Automated Label Inspection Solution & Other Developments

It was a successful first quarter for Mettler-Toledo International, with solid sales and profit growth and an all-around beat.
Sales growth was broad-based across various markets, driven by effective market identification and attractive growth opportunities.
Strong execution on margin initiatives and cost control resulted in solid earnings growth despite significant currency headwinds.

Quanta Services Inc.: Is The RP Construction Services Acquisition A Big Boost To Its Infra Solutions Platform? – Key Drivers

Quanta Services had a successful first quarter with double-digit revenue growth and strong performance across segments.
Their management team sees opportunities for further backlog growth driven by base business and energy transition projects.
In the quarter, Quanta Services also completed the acquisition of RP Construction Services.

Alnylam Pharmaceuticals: Commercialization of RNAi Therapeutics & Other Developments

The last quarter was successful for Alnylam Pharmaceuticals, with solid growth in total product sales, mainly driven by the ongoing launch of AMVUTTRA, which delivered a 48% increase compared to the same quarter last year.
Their TTR franchise showed strong performance with solid net product revenues and patient growth, driven by the ongoing launch of AMVUTTRA.
We give Alnylam Pharmaceuticals a ‘Buy’ rating with a revised target price.

Vulcan Materials Company: Does It Have A Significant Competitive Advantage? – Key Drivers

It was a successful Q1 for Vulcan Materials as they delivered an all-around beat and projected attractive growth for 2023.
Despite lower volumes in significant product lines, gross profit improved by 12%, and gross margin expanded by 90 basis points.
We give Vulcan Materials Company a ‘Hold’ rating with a revised target price.

BorgWarner Inc.: Partnerships In The EV Sector Giving It An Edge? – Key Drivers

It was a mixed first quarter for BorgWarner as the company reported double-digit organic growth and surpassed the revenue expectations of Wall Street but missed out meeting earnings expectations.
The company’s free cash flow was impacted by planned capital spending to support the growth of its eProducts division, as well as working capital usage and annual incentive compensation payout.
However, BorgWarner made significant progress during the quarter, securing multiple new eProducts awards and announcing capacity investments in this segment.

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Jun 01

Daily Brief ECM: MoneyHero SPAC Listing: Thoughts on Valuation and more

By Shifara Samsudeen, ACMA, CGMA

In today’s briefing:

MoneyHero SPAC Listing: Thoughts on Valuation
Alibaba Potential IPOs – Part 5 – An Early Look at Local Operations
Pre IPO MicroPort Cardiac Rhythm Management – The Industry, the Business and the Challenges Ahead

MoneyHero SPAC Listing: Thoughts on Valuation

Asia-Based leading personal finance aggregation and comparison platform MoneyHero has filed to go public in the US by merging with Bridgetown Holdings and raise proceeds of up to US$154m.
This would give MoneyHero a pre-money enterprise value of US$200m and an equity value of US$198m with post-money EV of US$342m assuming no redemption by Bridgetown’s public shareholders.
MoneyHero Global (1534965D HK) plans to use proceeds from the deal to further accelerate growth and capture market opportunity in the region.

Alibaba Potential IPOs – Part 5 – An Early Look at Local Operations

On 28th Mar 2023, Alibaba (ADR) (BABA US) announced that it would adopt a new organizational and governance structure, splitting into six major business groups and other investments.
Alibaba also stated that each of the business groups would be set up as an independent entity with its own board and the groups will eventually seek to list.
In our previous notes, we highlighted which divisions could list and looked at some of the divisions in more detail. In this note, we will talk about the local operations.

Pre IPO MicroPort Cardiac Rhythm Management – The Industry, the Business and the Challenges Ahead

By Xinyao (Criss) Wang

MicroPort CRM got into CRM device field with global layout mainly through M&A. However, revenue growth in the past three years was unsatisfactory and losses were increasing year by year.
The situation where Boston Scientific/Medtronic/Abbott dominate CRM device overseas markets wouldn’t change. Although China market has big potential theoretically, the actual space remains to be seen due to various challenges.
This IPO application could be aimed at achieving the terms of redemption agreement. Even MicroPort CRM is not in good shape, it is still better than Microport’s other listed subsidiaries.

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May 31

Daily Brief ECM: Alibaba Potential IPOs – Part 4 – An Early Look at International Operations and more

In today’s briefing:

Alibaba Potential IPOs – Part 4 – An Early Look at International Operations

Alibaba Potential IPOs – Part 4 – An Early Look at International Operations

On 28th Mar 2023, Alibaba Group (9988 HK) announced that it would adopt a new organizational and governance structure, splitting into six major business groups and other investments.
Alibaba also stated that each of the business groups would be set up as an independent entity with its own board and the groups will eventually seek to list.
In our previous notes, we highlighted which divisions could list and looked at some of the divisions in more detail. In this note, we will talk about the international operations.

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May 30

Daily Brief ECM: JD Industrials IPO: The Bear Case and more

In today’s briefing:

JD Industrials IPO: The Bear Case
Changjiu Digital Technology Pre-IPO Tearsheet
Almac IPO Valuation Analysis
JD Industrials Pre-IPO – Initial Thoughts on Valuation
Growatt IPO: Peer Comparison and Thoughts on Valuation
Interactive Strength Inc. – Investment Thesis
Lear Corporation: The I.G. Bauerhin Acquisition Upside & Other Drivers

JD Industrials IPO: The Bear Case

JD Industrials (2231713D CH)/JDI, a leading industrial supply chain technology and service provider in China, has filed for a US$1bn IPO. JD.com Inc (ADR) (JD US) owns a 77.95% stake.
In JD Industrials 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 slowing SME growth, declining key accounts take rate and gross margin, unnecessary factoring and transfer of most cash for treasury management.

Changjiu Digital Technology Pre-IPO Tearsheet

By Ethan Aw

Changjiu Digital Technology (CDT CH) is looking to raise about US$150m in its upcoming HK IPO. The deal will be run by Citic Securities and ICBC.
Changjiu Digital Technology (CDT) provides comprehensive automobile digital risk management services and automobile dealership operation management services in China.
According to CIC, it was the largest digital risk management service provider in China’s automobile sales and distribution industry in terms of revenue as of FY21 (31st Dec 2021).

Almac IPO Valuation Analysis

By Douglas Kim

Our target price of Almac is 58,573 won per share, which is 30% higher than the high end of the IPO price range of 45,000 won.
Our target price is based on 14.8x P/E using our estimated net profit of 25.4 billion won in 2024.
Almac ranks first in domestic market share (Korea) in the aluminum extruded module cases that protect batteries from external shocks.

JD Industrials Pre-IPO – Initial Thoughts on Valuation

By Shifara Samsudeen, ACMA, CGMA

JD Industrials is looking to raise about US$1bn in its upcoming HK IPO.
JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
We have looked at the company background and undertaken a peer comparison in our previous notes. In this note, we will talk about valuations.

Growatt IPO: Peer Comparison and Thoughts on Valuation

Growatt Technology (1833969D CH) has downsized it HKEx IPO to about US$400m and in this insight, we have compared the company’s financials against other listed PV inverter players.
Our peer analysis reveals that Growatt’s top line has grown at much higher rates compared to No. 1 player Sungrow whose margins were well below the company.
By looking at valuation multiples of listed peers, it seems that the company could easily command a valuation of more than US$5bn if it is valued in line with peers.

Interactive Strength Inc. – Investment Thesis

This is our first report on Forme and we look to provide a detailed account of the various drivers that will be responsible for the company’s growth in the coming years.
Its top-line revenue has increased from a low starting point, while operating losses, operating cash flows, and EBITDA loss have all decreased.
This is unlike many large incumbents like Peloton who have struggled with a high cash burn for many years.

Lear Corporation: The I.G. Bauerhin Acquisition Upside & Other Drivers

Lear had a solid start to the year, with an all-around beat in the recent quarterly result.
The management intends to start making full seats with essential thermal components for these vehicles.
Besides, the company acquired IGB, which will be essential to growing its Thermal Comfort Systems business and boosting its market share and profits in the seating industry.

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May 29

Daily Brief ECM: Weekly Deals Digest (28 May) – Rakuten and more

In today’s briefing:

Weekly Deals Digest (28 May) – Rakuten, Growatt, JD Industrials, Toyo, Silk Laser, Penguin

Weekly Deals Digest (28 May) – Rakuten, Growatt, JD Industrials, Toyo, Silk Laser, Penguin

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 – Rakuten (4755 JP) prices its offer, Tata Technologies (TATATECH IN), Growatt Technology (1833969D CH), JD Industrials (2231713D CH) IPOs.
Event-Driven developments – Toyo Construction (1890 JP), Silk Laser Australia (SLA AU), Healius (HLS AU), Penguin International (PBS SP), Lian Beng (LBG SP).

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May 28

Daily Brief ECM: JD Industrials IPO: The Bull Case and more

In today’s briefing:

JD Industrials IPO: The Bull Case
ECM Weekly (28th May 2023) – HK Trip Notes, Rakuten, JD Ind, Horizon Const, Nippon Prologis, MINT
Fidelity National Information Services Inc.: Is The Recurring Revenue Growth in Banking and Capital Markets Here To Stay? – Key Drivers
Church & Dwight Co: Capacity Expansion Update & Other Drivers
Rockwell Automation: The Strategic Partnership with Autonox Robotics Could Be A Game Changer – Key Drivers
Sirius XM Holdings Inc.: Launch Of Sports-Focused Social Channels & Other Developments
Snap Inc.: Acquisition Of Th3rd For 3D Scanning Capabilities & Other Drivers

JD Industrials IPO: The Bull Case

JD Industrials (2231713D CH)/JDI, a leading industrial supply chain technology and service provider in China, has filed for a US$1bn IPO. JD.com Inc (ADR) (JD US) owns a 77.95% stake.
JDI is the largest industrial supply chain technology and service provider in China in terms of GMV, customer coverage and SKU offerings in 2022, according to CIC.
The key elements of the bull case rest on large addressable markets, market share gains, robust product revenue growth underpinned by key accounts, improving underlying margin and strong cash generation.

ECM Weekly (28th May 2023) – HK Trip Notes, Rakuten, JD Ind, Horizon Const, Nippon Prologis, MINT

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, HK market sentiment is likely to be put to test again with the upcoming listing for Growatt Technology.
The REIT were once again at the front lines this week for placements, while Rakuten (4755 JP) has so far been holding up.

Fidelity National Information Services Inc.: Is The Recurring Revenue Growth in Banking and Capital Markets Here To Stay? – Key Drivers

Fidelity National Info (FIS) had a successful start to 2023, surpassing Wall Street expectations in terms of revenues as well as earnings.
FIS experienced significant recurring revenue growth in their banking and capital markets businesses and impressive organic growth in their e-commerce segment.
We give Fidelity National Information Services a ‘Buy’ rating with a revised target price.

Church & Dwight Co: Capacity Expansion Update & Other Drivers

Church & Dwight had a particularly robust Q1 as the company reported solid revenue growth of 10.2% and an all-around beat.
The management exceeded its Q1 outlook with organic sales increasing by 5.7%, driven by more robust performance across multiple brands, including Hero, THERABREATH, ARM & HAMMER laundry, and ARM & HAMMER litter.
With encouraging signs such as flat volume growth after a series of declines, the company’s team anticipates volume growth throughout the year.

Rockwell Automation: The Strategic Partnership with Autonox Robotics Could Be A Game Changer – Key Drivers

It was a successful second quarter for Rockwell Automation, as the company outperformed market expectations in terms of both sales and earnings.
The company’s strong execution, focus on business resiliency, and improved electronic component availability contributed to double-digit sales and margin growth.
Despite the uncertain economic environment, Rockwell Automation’s differentiated offerings continued to experience robust demand, with organic sales surpassing expectations.

Sirius XM Holdings Inc.: Launch Of Sports-Focused Social Channels & Other Developments

Sirius XM had a bad quarter and they failed to meet the revenue expectations as well as the earnings expectations of Wall Street.
Their launch of @SIRIUSXMSPORTS also enhances their social media presence and helps them to remain connected with subscribers and reach new audiences on Instagram.
We give Sirius XM Holdings a ‘Hold’ rating with a revised target price.

Snap Inc.: Acquisition Of Th3rd For 3D Scanning Capabilities & Other Drivers

It was a challenging yet promising quarter for Snap as it failed to meet the revenue expectations of Wall Street but surprisingly managed to deliver a positive bottom-line.
Despite a 7% year-over-year decrease in revenue, the company reached 383 million daily active users in Q1 and showcased the community’s continued growth.
Snap introduced My AI, an AI-powered chatbot, and unveiled new features at the Snap Partner Summit, emphasizing their commitment to innovation.

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May 27

Daily Brief ECM: Sayona Mining Placement – Has Remained on Schedule with Increased Coverage and more

In today’s briefing:

Sayona Mining Placement – Has Remained on Schedule with Increased Coverage
Jiangxi Rimag IPO Preview: Empowering The Future of Medical Imaging Services in China
L3Harris Technologies Inc.: Launch of Next-Generation NTS-3 Satellite & Other Developments
ResMed Inc.: On Track to Meet Global Demand for Connected CPAP and APAP Devices – Key Drivers
Roper Technologies Inc.: A Disciplined Approach to Capital Deployment – Key Drivers
Etsy Inc.: Can It Really Outperform The Major Indices? – Key Drivers
IQVIA Holdings Inc.: Major Partnership With CENTOGENE & Other Drivers
American Airlines Group Inc.: Improving Premium Cabin Demand Is A Positive Sign – Key Drivers
Exxon Mobil Corporation: Acquisition Of Drilling Rights In Arkansas & Other Drivers

Sayona Mining Placement – Has Remained on Schedule with Increased Coverage

By Ethan Aw

Sayona Mining (SYA AU) is looking to raise around US$129m in its primary follow-on offering. Proceeds will be used for CAPEX needs and working capital, amongst others.
The deal is a slightly large one to digest at 17.9 days of ADV and 12.1% dilution.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Jiangxi Rimag IPO Preview: Empowering The Future of Medical Imaging Services in China

By Andrei Zakharov

Jiangxi Rimag Group (JIR HK), a China-based medical imaging center operator and provider of Rimag cloud services, filed for a Hong Kong IPO.
Jiangxi Rimag Group (JIR HK) was backed by Goldman Sachs, leading VC firms in Asia, Baidu Inc., JD Health, and American healthcare investment firm OrbiMed.
China’s medical imaging industry is experiencing a remarkable transformation, driven by rapid technological advancements, evolving healthcare needs, and supportive government policies.

L3Harris Technologies Inc.: Launch of Next-Generation NTS-3 Satellite & Other Developments

It was a successful first quarter for L3Harris as they delivered an all-around beat while building momentum in orders and backlog.
The company saw top-line growth of 9% across all segments, along with improved operating income in two out of three segments.
They also reaffirmed their 2023 guidance, with a potential bias towards the higher end of the revenue range due to strong revenue growth and significant orders.

ResMed Inc.: On Track to Meet Global Demand for Connected CPAP and APAP Devices – Key Drivers

ResMed delivered a strong set of financial results in the last quarter and managed an all-around beat.
While they are still addressing some supply chain challenges with the AirSense 11 platform, they are on track to meet the global demand for connected CPAP and APAP devices by the end of 2023.
In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Roper Technologies Inc.: A Disciplined Approach to Capital Deployment – Key Drivers

Roper had a strong quarter which happened to be an all-around beat.
With a solid start to the year, Roper increased its full-year organic growth outlook and EPS guidance, further reinforcing its strong position in the market.
Roper Technologies’ backlog at the end of the first quarter of 2023 was $4.4 billion, up 14% from the end of the fourth quarter of 2022.

Etsy Inc.: Can It Really Outperform The Major Indices? – Key Drivers

Etsy reported another strong performance and kickstarted the year with an all-around beat.
With a roughly 11% increase in revenue to $641 million, the company’s adjusted EBITDA margin was once again very high at 26.6%.
Etsy also witnessed strong trends in apparel, particularly in personalized and pop culture-related tops, tees, hoodies, sweatshirts, bags, purses, and gift goods.

IQVIA Holdings Inc.: Major Partnership With CENTOGENE & Other Drivers

The last quarter proved to be yet another successful period for IQVIA as they delivered an all-around beat.
With an 11% organic growth in revenue, IQVIA demonstrated the strength and diversification of their short- and long-cycle businesses, enabling them to navigate the macroeconomic dynamics effectively.
The demand environment for the industry remained robust, with global clinical trial activity showing resilience and positive prospects for their commercial business.

American Airlines Group Inc.: Improving Premium Cabin Demand Is A Positive Sign – Key Drivers

In 2023, American Airlines Group got off to a good start with revenues above expectations in the latest quarterly result as well as an earnings beat.
In addition to delivering a profit for the quarter, the American Airlines team outperformed its initial EPS projection of roughly breakeven.
American Airlines is also satisfied with its domestic and short-haul international unit revenue results.

Exxon Mobil Corporation: Acquisition Of Drilling Rights In Arkansas & Other Drivers

Despite lower energy prices and refining margins, ExxonMobil produced an all-around beat in the first quarter.
This 250,000 barrel per day development is the biggest refinery addition in the US, helping to meet society’s ongoing demand for transportation fuels.
In addition, ExxonMobil acquired drilling rights in Arkansas to enter the crucial mineral mining industry.

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May 26

Daily Brief ECM: Mapletree Industrial Trust Placement – Data Centre Exposure Still on the Rise and more

In today’s briefing:

Mapletree Industrial Trust Placement – Data Centre Exposure Still on the Rise
Growatt Technology IPO: Valuation Updated Look
Almac IPO Preview

Mapletree Industrial Trust Placement – Data Centre Exposure Still on the Rise

By Ethan Aw

Mapletree Industrial Trust (MINT SP) is looking to raise at least S$202m (US$150m) in its primary placement.
The proceeds will be used to partially fund its acquisition of a data centre asset in downtown Osaka, Japan, while the remainder will be funded by debt.
In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

Growatt Technology IPO: Valuation Updated Look