ECM Daily Briefs | Page 44 of 118

In today’s briefing:

Pre-IPO Lu DaoPei Medical Group – Profitability Is Disappointing Despite Big Potential Theoretically
AT&T Inc.: Low Churn & Rising ARPU Saving The Day? – Key Drivers
F5 Inc.: A Resilient Performer Amidst Macro Uncertainty – Key Drivers
Nucor Corporation: Upside From Steel Recycling & Other Drivers

Pre-IPO Lu DaoPei Medical Group – Profitability Is Disappointing Despite Big Potential Theoretically

By Xinyao (Criss) Wang

The government has started to encourage social capital to run hospitals. By entering the market that haven’t been fully covered by public hospitals, LDP has large development space theoretically.
The current gross profit margin of LDP isn’t satisfactory. Together with continuous expansion of new hospitals with large investment, LDP could face either continuous loss or very low profit margin.
China’s high degree of regulation depresses medical service price.The benefit chain of hospitals is complicated.In essence, an industry with low level of terminal payment is hard to generate high profits.

AT&T Inc.: Low Churn & Rising ARPU Saving The Day? – Key Drivers

AT&T delivered mixed results in the quarter with below-par revenues but profitability above expectations.
As a result, wireless service revenues and EBITDA may increase, and margins may improve.
Despite a slowdown in industry growth, their Business Solutions wireless service revenues increased by almost 7%.

F5 Inc.: A Resilient Performer Amidst Macro Uncertainty – Key Drivers

F5 managed an all-around beat in its second quarter results despite ongoing macro-uncertainty.
Global Services revenue increased by 8% to $363 million, owing to high maintenance renewals and the effects of the price increase implemented in Q4 of last year.
Product sales increased 14% year on year, reflecting strong system shipments compared to a more difficult comparison in the previous quarter.

Nucor Corporation: Upside From Steel Recycling & Other Drivers

Nucor Corporation delivered a mixed set of results in the quarter, failing to meet revenue expectations of Wall Street but managing an earnings beat.
Its result was largely attributed to Nucor’s steel products segments’ continued profitability as well as higher volumes and margins at its steel mills segment.
Shipments from Nucor’s steel mills increased by 18%, increasing their utilization to almost 80% in Q1 from 70% in Q1 of last year.

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May 02

Daily Brief ECM: Nexus Select Trust IPO: The Investment Case and more

In today’s briefing:

Nexus Select Trust IPO: The Investment Case

Nexus Select Trust IPO: The Investment Case

Nexus Select Trust (NST IN), a consumption centre REIT, is seeking to raise up to Rs32 billion (US$391 million). The offer opens from 9-11 May.
NST, sponsored by Blackstone Group (BX US), owns India’s most extensive portfolio of consumption centres and will be the first publicly listed consumption centre REIT in India.
The key elements of the investment case rest on strong portfolio performance, high occupancy rates, favourable lease contracts, rental reversion potential and low tenant concentration risk.

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Apr 27

Daily Brief ECM: ZJLD Group IPO Trading – Subscription Rates Better than Recent Large HK Deals and more

In today’s briefing:

ZJLD Group IPO Trading – Subscription Rates Better than Recent Large HK Deals
ZJLD Group IPO: Trading Debut
JD Industrials Pre-IPO – The Negatives – Hasn’t Provided a Whole Lot of Details
Kenvue (KVUE US) Pre-IPO: Marquee Brands to Drive Profitable Growth
Horizon Construction Development IPO: The Bear Case
AppLovin Corporation: Is AXON 2 The New Secret Weapon For Growth? – Key Drivers
M&T Bank Corporation: Initiation of Coverage – Playing The Rate Hike Well And Creating An Investor Safe Haven – Key Drivers
Nutanix Inc: The Next Amazon Of Hybrid Multi-Cloud Computing? – Key Drivers
Teleflex Incorporated: Revolutionizing Gastric Sleeve Surgery with the Titan Stapler – Key Drivers
FLEETCOR Technologies Inc.: A Hidden Gem In Payment Solutions? – Key Drivers

ZJLD Group IPO Trading – Subscription Rates Better than Recent Large HK Deals

ZJLD Group (ZJLD HK) raised around US$676m in its Hong Kong IPO.
ZJLD Group (ZJLD) is a Chinese liquor company primarily producing baijiu.
In this note, we will talk about the trading dynamics and valuation.

ZJLD Group IPO: Trading Debut

ZJLD Group (ZJLD HK) priced its IPO at HK$10.82 per share to raise net proceeds of HK$5.0 billion (US$636 million). The shares will start trading tomorrow.
We previously discussed the IPO in ZJLD Group IPO: The Bull Case, ZJLD Group IPO: The Bear Case and ZJLD Group IPO: Valuation Insights.
We expect a muted debut as A Share baijiu peers have derated since the release of the prospectus. The shares remain attractive at the IPO price.

JD Industrials Pre-IPO – The Negatives – Hasn’t Provided a Whole Lot of Details

By Sumeet Singh

JD Industrials is looking to raise about US$1bn in its upcoming HK IPO.
JD Industrials (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.
In this note, we talk about the not-so-positive aspects of the deal.

Kenvue (KVUE US) Pre-IPO: Marquee Brands to Drive Profitable Growth

By Tina Banerjee

Kenvue (KVUE US), a wholly owned subsidiary of Johnson & Johnson (JNJ US), is preparing for an IPO of 151M shares. The IPO price is expected to be $20–23/share.
Goldman Sachs, J.P. Morgan, and BofA Securities are acting as joint lead bookrunning managers for the IPO. J&J will still own more than 90% of Kenvue’s shares after the IPO.
In 1Q23, Kenvue’s revenue increased 7% YoY to $3.9B, driven by a 12% YoY revenue growth in self-care OTC products. Adjusted net income increased 3% YoY to $630M.

Horizon Construction Development IPO: The Bear Case

Horizon Construction Development (1887128D HK)/HCD, a subsidiary of Far East Horizon (3360 HK), is pre-marketing an HKEx IPO to raise US$200-250 million, according to press reports.
In Horizon Construction Development 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 core business margin decline, unexplained headcount reduction, cash burn, long receivable days and stretched balance sheet.

AppLovin Corporation: Is AXON 2 The New Secret Weapon For Growth? – Key Drivers

AppLovin Corporation had a disappointing quarter as it delivered significantly wider-than-expected losses and a negative bottom-line even though its revenues were above Wall Street expectations.
Its results in the quarter included the performance of the software platform, which increased 24% year over year.
For the first quarter of the upcoming year, they anticipate total revenue and EBITDA to be roughly flat compared to the fourth quarter which implies another possible loss-making quarter.

M&T Bank Corporation: Initiation of Coverage – Playing The Rate Hike Well And Creating An Investor Safe Haven – Key Drivers

This is our first report on a regional lender that played the rate hike well with its high-quality deposit base – M&T Bank Corporation.
Their interest-bearing bank deposits decreased from $41.9 billion to under $25 billion due to their repositioning the balance sheet to use surplus cash.
We initiate coverage on the stock of M&T Bank Corporation with a ‘Buy’ rating.

Nutanix Inc: The Next Amazon Of Hybrid Multi-Cloud Computing? – Key Drivers

Nutanix delivered a strong first quarter with an all-around beat.
The company’s renewals continue to be strong, exceeding its projected metrics.
Nutanix managed to deliver a successful quarter with efficient growth in the number of customers as well as in revenue and ACV billings.

Teleflex Incorporated: Revolutionizing Gastric Sleeve Surgery with the Titan Stapler – Key Drivers

Teleflex had a mixed quarter with revenues of $758 million that was below Wall Street expectations given a year-over-year fall of 0.5%.
Despite an unanticipated subcomponent supply chain issue in their Surgical business, their fourth quarter constant currency revenue growth remained steady.
Teleflex’s Interventional, Surgical, and OEM product categories produced double-digit constant currency year-over-year revenue increase.

FLEETCOR Technologies Inc.: A Hidden Gem In Payment Solutions? – Key Drivers

Fleetcor Technologies’ Q4 results were stronger than anticipated, surpassing Wall Street expectations in terms of revenues as well as earnings and also surpassing the upper limit of the management’s guidance in terms of revenues.
The company’s organic revenue increase was 7%.
Its total sales increased by 19%, retention remained constant at 92%, and same-store results were up 2% for the quarter.

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Apr 26

Daily Brief ECM: CPF Global Food Solution Pre-IPO – The Positives – One of the Largest Players in the Industry and more

In today’s briefing:

CPF Global Food Solution Pre-IPO – The Positives – One of the Largest Players in the Industry
Lalatech IPO: Huge Drop in Operating Costs Prior to IPO Is Concerning
Horizon Construction Development IPO: The Bull Case
Pre-IPO YSB Inc (YSB.HK) – The Business Model Is Facing Challenges
Esco Lifesciences (1891571D SP) Pre-IPO: A Profitable Revenue Growth Saga
CPF Global Food Solution Pre-IPO – The Negatives – Muted Growth Prospects
Ross Stores Inc.: Collaboration With Adidas & Other Drivers
Omnicom Group Inc.: Success in Precision Marketing and Public Relations – Key Drivers
Analog Devices Inc.: The Next Big Thing in Mission-Critical Equipment – Key Drivers

CPF Global Food Solution Pre-IPO – The Positives – One of the Largest Players in the Industry

By Shifara Samsudeen, ACMA, CGMA

CPF Global Food Solution (2247162D TB) is looking to raise around US$1bn in its upcoming Thailand IPO.
CPF Global Food Solution (CPFGS) is a subsidiary of CP Foods Group, offering food products and services to food operators and consumers locally and internationally.
In this note, we talk about the positive aspects of the deal.

Lalatech IPO: Huge Drop in Operating Costs Prior to IPO Is Concerning

Lalatech Holdings Co Ltd (LALA HK) is a technology driven logistics transportation platform with a global footprint. The company has filed for an IPO and plans to raise about US$1bn.
The company’s financials have shown significant improvement over the last 2 years with the company turning profitable at the operating profit line in 2022.
Huge drop in selling and marketing costs have helped cut down losses which seems too realistic and the company hasn’t provided sufficient explanation on these cost cuts.

Horizon Construction Development IPO: The Bull Case

Horizon Construction Development (1887128D HK)/HCD, a subsidiary of Far East Horizon (3360 HK), is pre-marketing an HKEx IPO to raise US$200-250 million, according to press reports.
HCD is the largest equipment operation service provider in China in terms of revenue in 2021, according to Frost & Sullivan.
The key elements of the bull case rest on market share gains, an anticipated post-COVID recovery boost, high revenue visibility, stable operating margin and young equipment life.

Pre-IPO YSB Inc (YSB.HK) – The Business Model Is Facing Challenges

By Xinyao (Criss) Wang

The margins of pharmaceutical circulation B2B business is low. If there’s not enough incremental space of terminal customers, the simple B2B trading model is difficult to form a leapfrog growth.
Based on YSB’s business model, if terminal customers choose to use other platforms like JD Health/Alibaba Health, etc., YSB would face the risk of losing upstream and downstream users.
So far, we haven’t seen that YSB has established core competitiveness or moat to secure the terminal customers pool, casting doubts on its business model, investment logic and outlook.

Esco Lifesciences (1891571D SP) Pre-IPO: A Profitable Revenue Growth Saga

By Tina Banerjee

Esco Lifesciences Group (1891571D SP), a profitable lifesciences tool provider with a global presence, is looking to raise $300M in its upcoming HK IPO.
The company clocked revenue of S$117M in 2019, which steadily rose to S$155M in 2020 and S$172M in 2021, representing CAGR of 21%, outpacing lifesciences equipment market growth of 10%.
In May 2021, Esco raised $200M through series-A fund raising with investors holding nearly 24% of the shares. This puts its valuation at around $840M.

CPF Global Food Solution Pre-IPO – The Negatives – Muted Growth Prospects

CPF Global Food Solution (2247162D TB) is looking to raise around US$1bn in its upcoming Thailand IPO.
CPF Global Food Solution (CPFGS) is a subsidiary of CP Foods Group, offering food products and services to food operators and consumers locally and internationally.
In this note, we talk about the not-so-positive aspects of the deal.

Ross Stores Inc.: Collaboration With Adidas & Other Drivers

Ross Stores delivered strong fourth-quarter sales and profitability results despite a very competitive holiday season, owing to customers’ positive response to the company’s expanded selection and value offerings.
The company delivered an all-around beat with earnings per share for Q4 reported at $1.31 on a net income of $447 million.
These figures compare to earnings per share of $1.04 on net earnings of $367 million for the 13 weeks ended January 29, 2022.

Omnicom Group Inc.: Success in Precision Marketing and Public Relations – Key Drivers

Omnicom Group delivered an all-around beat as its revenues increased by 1%, while non-GAAP adjusted operating income remained unchanged.
Net interest expense decreased as interest income exceeded the company’s expectations.
We give Omnicom Group a ‘Hold’ rating with a revised target price.

Analog Devices Inc.: The Next Big Thing in Mission-Critical Equipment – Key Drivers

Despite significant macroeconomic uncertainty in the first quarter of fiscal 2023, Analog Devices managed to deliver an all-around beat.
These successes were driven by the company’s unwavering commitment to customer collaboration, the rising demand for cutting-edge technologies, and effective operational management.
We give Analog Devices a ‘Hold’ rating with a revised target price.

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Apr 25

Daily Brief ECM: Rakuten Bank (5838 JP): Premium Growth Neobank Still Trading at Attractive Valuations and more

In today’s briefing:

Rakuten Bank (5838 JP): Premium Growth Neobank Still Trading at Attractive Valuations
KCC: Plans to IPO Its Subsidiary Momentive Performance Materials in the US as Early as 2023
JD.com Inc: Proposed Acquisition of Deppon Logistics Co & Other Drivers
JD Property Pre-IPO – The Negatives – Unprofitable Without FV Gain. Gearing Could Limit Growth Plans
Morgan Stanley: Initiation Of Coverage – A Series Of Synergistic Acquisitions & Other Drivers
Box Inc: Benefitting From The Hybrid Work Era With Phenomenal Retention – Key Drivers
Sabre Corp: Leveraging The Global Travel Recovery? – Key Drivers
Cooper Companies Inc: Reaping The Fruits Of Myopia Management – Key Drivers
Henry Schein Inc.: Initiation Of Coverage – Dental Sales Decline: A Temporary Setback or a Long-Term Problem? – Key Drivers
Mettler-Toledo International Inc.: Continued Lab Growth

Rakuten Bank (5838 JP): Premium Growth Neobank Still Trading at Attractive Valuations

By Victor Galliano

The sharp run-up in the share price since its IPO does not, in our view, mean that Rakuten Bank’s rally is done; there is further fundamental justification for a re-rating
Rakuten Bank trades on a LTM PE multiple of 14.4x, LTM PBV ratio of 1.6x and an ROE of 13.2%, which is the best return of our neobank peers
Relative to its peer group, Rakuten Bank has premium long-run growth prospects; conservatively estimating Rakuten Bank’s growth (8% pa), implies a PEG ratio in the range of 1.2x to 1.3x

KCC: Plans to IPO Its Subsidiary Momentive Performance Materials in the US as Early as 2023

By Douglas Kim

On 24 April, KCC Corp announced that it plans to IPO its subsidiary Momentive Performance Materials Inc. in the US stock market as early as 2023.
In 2021, KCC raised its stake in MOM Holding from 50% + 1 share to 60%. Momentive EBITDA increased from $300 million in 2018 to $450 million in 2022.
Our valuation of KCC Corp suggests an NAV of 3.1 trillion won (post 50% discount) or NAV per share of 347,633 won per share, representing 49% higher than current price.

JD.com Inc: Proposed Acquisition of Deppon Logistics Co & Other Drivers

JD.com had a successful year in 2022, achieving high-quality growth and surpassing 1 trillion RMB in full-year revenues for the first time.
Despite external challenges, the company was able to maintain high-quality operations and record the highest-ever profitability for the year.
In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

JD Property Pre-IPO – The Negatives – Unprofitable Without FV Gain. Gearing Could Limit Growth Plans

Jingdong Property (JDP HK) is looking to raise about US$1bn in its upcoming Hong Kong IPO.
JD Property (JDP) develops and manages modern infrastructure, consisting primarily of logistics parks, as well as business parks and other assets in China and in Asia.
In this note, we will talk about the not so positive aspects of the deal.

Morgan Stanley: Initiation Of Coverage – A Series Of Synergistic Acquisitions & Other Drivers

Despite a more difficult environment, Morgan Stanley had a strong quarter and managed an all-around beat.
The merging of Eaton Vance and E-Trade increased the company’s potential to gain new clients, increase assets, and support its stability.
We initiate coverage on Morgan Stanley with a ‘Hold’ rating with a revised target price.

Box Inc: Benefitting From The Hybrid Work Era With Phenomenal Retention – Key Drivers

Box had a successful third quarter and delivered an all-around beat with accelerating revenue growth, an operating margin of 21%, and RPO growth of 25%.
Box’s net retention rate was 109%, with 97 deals over $100,000 and a 63% attach rate of Suites over $100,000 in the quarter.
Box is seeing early success in customer adoption and use of Box Sign, with leading organizations replacing their incumbent signature solutions with Box Sign.

Sabre Corp: Leveraging The Global Travel Recovery? – Key Drivers

Sabre had a challenging Q3 and failed to meet the revenue expectations of Wall Street while delivering wider-than-expected losses.
Sabre generated total revenue of $441 million in the quarter, a substantial improvement compared to $278 million in Q3 2020.
The distribution revenue of Sabre increased by $140 million year-on-year, and the IT Solutions revenue increased to $145 million in Q3.

Cooper Companies Inc: Reaping The Fruits Of Myopia Management – Key Drivers

Cooper Companies had impressive Q3 results for both its CooperVision and CooperSurgical divisions and managed an all-around beat.
CooperVision experienced strong and diversified growth in all product categories, with its Daily Silicone hydrogel portfolio and myopia management products leading the way.
The company’s growth in the myopia management market has been strong, with revenues up 42%, and it remains a market leader with its FDA-approved MiSight product.

Henry Schein Inc.: Initiation Of Coverage – Dental Sales Decline: A Temporary Setback or a Long-Term Problem? – Key Drivers

Henry Schein had a successful quarter, generating $3.4 billion in net sales and managing to surpass the revenue expectations of Wall Street.
The company achieved an operating margin of 7.27%, which is an 18 basis point increase from the prior year’s GAAP operating margin, despite experiencing a decline in sales of PPE and COVID-19-related products due to pricing volatility.
Although global dental sales declined by 3.1%, with LCI sales down 0.3%, LCI sales growth, except for COVID-19-related products and PPE, was 3.5%.

Mettler-Toledo International Inc.: Continued Lab Growth

Mettler-Toledo experienced robust growth in most product lines and regions during Q3, particularly in the Lab business, resulting in a successful quarter which happened to be an all-around beat.
While Product Inspection witnessed a 13% increase in sales during the quarter, Food Retail sales decreased by 19%.
To capture growth and market share in its Lab business, Mettler has accelerated their digital transformation in sales and marketing and sharpened their focus on the most attractive market segments.

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Apr 24

Daily Brief ECM: ZJLD Group: Limited Near-Term Post-IPO Upside and more

In today’s briefing:

ZJLD Group: Limited Near-Term Post-IPO Upside, but Long-Term Prospects Indicate a Promising Future
JD Property Pre-IPO – The Positives – Active on the Acquisition Front Leading to Growth

ZJLD Group: Limited Near-Term Post-IPO Upside, but Long-Term Prospects Indicate a Promising Future

By Andrei Zakharov

ZJLD Group, a founder-led baijiu company, backed by PE firm KKR priced its Hong Kong IPO at HK$10.82/share. ZJLD Group shares are expected to start trading on Thursday, Apr.27.
The company’s IPO price implies a market cap of ~$4.6B, making it the Hong Kong’s largest IPO this year. Goldman Sachs and China Securities International acted as joint sponsors.
Baijiu is the world’s most consumed liquor and accounted for ~70% of the alcoholic beverage market in China in 2021. Baijiu has a history of more than 5,000 years.

JD Property Pre-IPO – The Positives – Active on the Acquisition Front Leading to Growth

Jingdong Property (JDP HK) is looking to raise about US$1bn in its upcoming Hong Kong IPO.
JD Property (JDP) develops and manages modern infrastructure, consisting primarily of logistics parks, as well as business parks and other assets in China and in Asia.
In this note, we will talk about the positive aspects of the deal.

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Apr 23

Daily Brief ECM: ECM Weekly (23rd Apr 2023) – Rakuten Bank and more

In today’s briefing:

ECM Weekly (23rd Apr 2023) – Rakuten Bank, Merdeka, ZJLD, Mankind, Lalatech, IMotion, Anta, KIT
International Flavors & Fragrances Inc.: Continued Growth In Nourish
Royal Bank of Canada: Initiation of Coverage – Canadian Banking Market Dynamics
Petróleo Brasileiro S.A. – Petrobras: Chartering of FPSO Vessels & Other Developments
Toronto Dominion Bank: Initiation of Coverage – The Cowen Acquisition & Other Drivers
Wells Fargo & Co: Initiation of Coverage – Banking Crisis Impact & Recent Developments
Woodside Energy Group Ltd: Upside From BHP Assets & Pluto KGP Interconnector

ECM Weekly (23rd Apr 2023) – Rakuten Bank, Merdeka, ZJLD, Mankind, Lalatech, IMotion, Anta, KIT

By Sumeet Singh

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
All eyes were on Rakuten Bank (5838 JP) listing this week. It didn’t disappoint, neither did Merdeka Battery Materials.
Anta Sports Products (2020 HK) pulled off one of the largest placements so far in 2023, despite being net cash.

International Flavors & Fragrances Inc.: Continued Growth In Nourish

International Flavors & Fragrances delivered a mixed set of results in the quarter.
Sales were up 4% on a comparable, currency-neutral basis for the quarter, with increases seen in almost all divisions.
Besides that, their scent division performed well, achieving a 6% year-over-year sales increase, driven by double-digit growth in fine fragrance and mid-single-digit growth in consumer fragrance.

Royal Bank of Canada: Initiation of Coverage – Canadian Banking Market Dynamics

This is our first report on the Royal Bank of Canada, one of the top 2 banks in the country.
This quarter’s performance included significant capital markets revenue, led by excellent Global Markets results, as well as market share improvements in Investment Banking and origination operations across the sector.
We initiate coverage on the stock of the Royal Bank of Canada with a ‘Buy’ rating.

Petróleo Brasileiro S.A. – Petrobras: Chartering of FPSO Vessels & Other Developments

Petróleo Brasileiro achieved strong in the quarter last quarter and managed an all-around beat.
By increasing the utilization rate of its refineries and introducing new products with renewable content, Petrobras continues to be competitive.
We give Petróleo Brasileiro S.A. – Petrobras a ‘Hold’ rating with a revised target price.

Toronto Dominion Bank: Initiation of Coverage – The Cowen Acquisition & Other Drivers

This is our first report on a major Canadian banker, Toronto Dominion Bank.
In Q1, the bank had a good quarter and delivered an all-around beat.
We initiate coverage on the stock of the Toronto Dominion Bank with a ‘Buy’ rating.

Wells Fargo & Co: Initiation of Coverage – Banking Crisis Impact & Recent Developments

This is our first report on one of the American banking major, Wells Fargo.
The company performed well in the quarter despite operating losses and managed an all-around beat.
Increasing interest rates fueled a rapid rise in net interest income.

Woodside Energy Group Ltd: Upside From BHP Assets & Pluto KGP Interconnector

Woodside Energy Group delivered a decent financial performance in 2022, driven by higher prices and adding former BHP assets to the portfolio and the Pluto KGP interconnector.
Besides that, Woodside Energy completed subsea tieback and enhancement initiatives across its Gulf of Mexico and West Australian LNG assets, keeping the plants occupied.
We give Woodside Energy Group Ltd. a ‘Buy’ rating with a revised target price.

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Apr 22

Daily Brief ECM: Etsy Inc.: Major Drivers and more

In today’s briefing:

Etsy Inc.: Major Drivers
Lyft Inc.: A New Bid To Attract Eco-Conscious Customers – Major Drivers
Trimble Inc.: Major Drivers
Uber Technologies Inc.: Major Drivers

Etsy Inc.: Major Drivers

Etsy Inc delivered a mixed set of results during the quarter and managed to surpass the revenue expectations of analysts but its profitability was below par.
The company’s management claims that its overall reach and consumer demand have increased and the services offered by the company are differentiated.
The company’s marketing programs, including the Star Seller program, continued to benefit the company.

Lyft Inc.: A New Bid To Attract Eco-Conscious Customers – Major Drivers

Lyft’s Q4 financial performance was mixed as it reported wider-than-expected losses despite surpassing the revenue expectations of Wall Street.
The company saw a mix of high demand for ride-sharing services, an improving supply, and promising early results from its cost-cutting initiatives.
Its overall revenue for 2022 increased by 28% compared to 2021 and the company added $375 million to its insurance reserves.

Trimble Inc.: Major Drivers

Trimble Inc had a disappointing result and failed to meet Wall Street expectations in terms of revenues as well as earnings.
The challenges in terms of the supply chain remained the same in the business environment, which has also affected the operations of the company.
Trimble delivered over 20% organic growth in ARR in addition to high levels of ACV software bookings and cross-sell bookings.

Uber Technologies Inc.: Major Drivers

Uber Technologies Inc. has delivered good results during this quarter and managed an all-around beat with a positive bottom-line.
The overall situation is in favor of the company as the competitive environment is getting better.
We give Uber Technologies Inc. a ‘Hold’ rating with a revised target price.

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Apr 21

Daily Brief ECM: Rakuten Bank (5838) IPO – Post-IPO Trading Volume Decay and RB’s Place Among Banks (Part 3) and more

In today’s briefing:

Rakuten Bank (5838) IPO – Post-IPO Trading Volume Decay and RB’s Place Among Banks (Part 3)
Yuexiu Property (123 HK): US$1.1bn Dilutive and Unnecessary Rights Issue
Mankind Pharma IPO: Valuation Insights
IMotion Automotive Technology Pre-IPO – The Negatives – But Profitability Still a Black Box

Rakuten Bank (5838) IPO – Post-IPO Trading Volume Decay and RB’s Place Among Banks (Part 3)

By Travis Lundy

To look at the Rakuten Bank (5838 JP) IPO and how trading and pricing may occur, some are looking at SBI Sumishin Net Bank (7163 JP).
To understand the movements of SBI Sumishin Net Bank, it may help to look at other IPOs in Japan and how they trade post-IPO.
I looked at the last 200+ IPOs in Japan to understand volume decay and price evolution. It leads to suggestions for investors regarding Rakuten Bank.

Yuexiu Property (123 HK): US$1.1bn Dilutive and Unnecessary Rights Issue

Yuexiu Property (123 HK) will raise US$1.1bn through a rights offering – 30 rights shares for every 100 existing shares. The subscription price is HK$9.00, a 23.3% discount to TERP.
As Yuexiu is in no danger of breaching the three red lines, the rights issue is an opportunistic play on capitalising on the strong share price run.
Rights shares will be entitled to the final and special dividend announced on 15 March. Shares go ex-rights on 2 May and the rights start trading on 15 May.

Mankind Pharma IPO: Valuation Insights

Mankind Pharma (6596876Z IN), a pharmaceutical company, is seeking to raise up to Rs43.3 billion (US$527 million) at Rs1,026-1,080 per share. The public offer runs from 25-27 April.
We previously discussed the IPO in Mankind Pharma IPO: The Bull Case, Mankind Pharma IPO: The Bear Case and Mankind Pharma IPO: Updates Warrant Caution.
Our valuation analysis suggests that Mankind Pharma is fully valued at the IPO price range. Therefore, we are inclined to pass on this IPO.

IMotion Automotive Technology Pre-IPO – The Negatives – But Profitability Still a Black Box

IMotion Automotive Technology (1812706D CH) is looking to raise about US$300m in its upcoming HK IPO.
The company possesses advanced full-stack R&D capabilities including self-developed algorithms and hardware-software co-design capabilities. It provides two AD domain controller product lines, and the self-designed iDC series.
In this note, we talk about the not-so-positive aspects of the deal.

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Apr 20

Daily Brief ECM: Rakuten Bank IPO: Trading Debut and more

In today’s briefing:

Rakuten Bank IPO: Trading Debut
Mankind Pharma IPO – Quality Name but Might Not Have a Whole Lot of Upside
Mankind Pharma IPO: Updates Warrant Caution
Indegene Pre-IPO – Growing Client Base and Cross/Up-Selling Led to Growth
Mankind Pharma (6596876Z IN) IPO: Pricey Valuation Limits Upside Potential
Pre IPO MedSci Healthcare Holdings – Some Points Worth the Attention
Roku Inc.: The SVB Nightmare & Other Developments
IMotion Automotive Technology Pre-IPO – The Positives – Strong Growth Ahead with Some Big Names
Lear Corporation: Benefits From Kongsberg Acquisition – Key Drivers
Bumble Inc.: Continued App Improvement Driving Users – Key Drivers

Rakuten Bank IPO: Trading Debut

Rakuten Bank (5838 JP) priced its IPO at JPY1,400 per share to raise gross proceeds of US$620 million. The shares will start trading on 21 April.
We previously discussed the IPO in Rakuten Bank IPO: The Investment Case, Rakuten Bank Vs SBI Sumishin Net Bank and Rakuten Bank IPO: New Price Range Is a Steal.
Peers have re-rated and our valuation analysis points to a fair value of around JPY1,900 per share, 36% above the IPO price. Therefore, the IPO price remains attractive.

Mankind Pharma IPO – Quality Name but Might Not Have a Whole Lot of Upside

By Sumeet Singh

Mankind Pharma (MP) is looking to raise up to US$527m in its upcoming India IPO.
MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products
We have looked at various aspects of the deal in our earlier notes. In this note, we talk about the implied valuations.

Mankind Pharma IPO: Updates Warrant Caution

Mankind Pharma (6596876Z IN), a pharmaceutical company, is seeking to raise up to Rs43.3 billion (US$527 million) at Rs1,026-1,080 per share. The public offer runs from 25-27 April.
We previously discussed the IPO in Mankind Pharma IPO: The Bull Case and Mankind Pharma IPO: The Bear Case.
The 9MFY23 (nine months to December) disclosure showcases a slowdown in growth, market share losses, margin pressure and declining RoCE. We are cautious about the IPO.

Indegene Pre-IPO – Growing Client Base and Cross/Up-Selling Led to Growth

Indegene Limited (1864095D IN) is looking to raise about US$400m in its upcoming India IPO.
Indegene is a “digital-first” commercialisation firm with an exclusive focus on the global life sciences industry.
Its solutions aim to enable biopharmaceutical, emerging biotech and medical devices companies to develop, launch and drive sales for their products in a more efficient manner.

Mankind Pharma (6596876Z IN) IPO: Pricey Valuation Limits Upside Potential

By Tina Banerjee

Mankind Pharma (6596876Z IN) IPO will open for public subscription on April 24 and close on April 27. The shares are expected to be listed on May 9.
The company has set IPO price band of INR1,026 –1,080 per share, valuing the company at INR433 billion at the top of the price band.
The IPO price band implies P/E of 30.9x at the lower band and 32.6x at the upper band. This is pricier than other India focused pharmaceutical companies.

Pre IPO MedSci Healthcare Holdings – Some Points Worth the Attention

By Xinyao (Criss) Wang

MedSci’s profit quality/business structure is “healthier” than Medlive. MedSci is better able to cope with the negative impact of external changes, and its performance growth is more resilient than Medlive.
MedSci’s physician platform solutions business is stronger than Medlive’s medical knowledge solutions business. Considering the logic and significance of this business, MedSci is expected to have bigger growth potential.
If considering the cash balance, MedSci’s IPO valuation seems not that cheap. However, we think MedSci’s valuation would narrow the gap with Medlive or even surpass it in the future.

Roku Inc.: The SVB Nightmare & Other Developments

Roku struggled amidst the controversy associated with its huge exposure to SVB (nearly 26% of its total cash reserves).
The collapse of the bank resulted in a significant level of panic among the company’s investors.
While Q4 platform revenue exceeded its estimates and platform revenue was up 5% year over year to $731 million, inflation and macroeconomic uncertainties continue to put pressure on consumers and advertisers.

IMotion Automotive Technology Pre-IPO – The Positives – Strong Growth Ahead with Some Big Names

IMotion Automotive Technology (1812706D CH) is looking to raise about US$300m in its upcoming HK IPO.
The company possesses advanced full-stack R&D capabilities including self-developed algorithms and hardware-software co-design capabilities. It provides two AD domain controller product lines, and the self-designed iDC series.
In this note, we talk about the positive aspects of the deal.

Lear Corporation: Benefits From Kongsberg Acquisition – Key Drivers

Lear had a strong quarterly performance and managed an all-around beat.
Its sales increased by 10% to $5.4 billion, and core operating profitability rose by 67% to $265 million.
The Lear Forward initiative also improved the company’s cash flow performance.

Bumble Inc.: Continued App Improvement Driving Users – Key Drivers