ECM Daily Briefs | Page 50 of 118

In today’s briefing:

Pertamina Geothermal Energy IPO Trading – Should Be a Steady Listing
Pertamina Geothermal IPO: Trading Debut
Star Entertainment (SGR AU): A$800m Highly Dilutive Raise to Fix the Balance Sheet
Fangzhou Pre-IPO – The Negatives – Hard to Shake off Loss-Making Tendencies
Guangzhou Tinci Materials GDR Listing Early Look – US$1.5bn Raising Could Further Aid Growth Plans
Pre-IPO Fangzhou Group – The Business and the Concerns

Pertamina Geothermal Energy IPO Trading – Should Be a Steady Listing

Pertamina Geothermal Energy (PGE) raised around US$600m in its Indonesia IPO. PGE is an Indonesian state owned power producer which utilizes geothermal energy to produce electricity.
PGE currently manages 13 Geothermal Working Areas with a total capacity of 1,877 MW, of which 672 MW is owned by it, while 1,205 MW is via joint operations.
In our previous notes, we looked at the company’s past performance and valuations. In this note, we talk about the deal dynamics ahead of its listing.

Pertamina Geothermal IPO: Trading Debut

By Arun George

Pertamina Geothermal Energy (PGEO IJ) priced its IPO at IDR875 per share to raise gross proceeds of IDR9.1 trillion (US$600 million). The shares will start trading tomorrow.
We previously discussed the IPO in Pertamina Geothermal IPO: The Investment Case and Pertamina Geothermal IPO: Valuation Insights.
Peers have modestly re-rated and the IPO price continues to imply a discount to the median peer CY2023 EV/EBITDA multiple. Therefore, the IPO price remains attractive.

Star Entertainment (SGR AU): A$800m Highly Dilutive Raise to Fix the Balance Sheet

By Arun George

Star Entertainment Group (SGR AU) will raise A$800 million with a fully underwritten 3:5 pro rata accelerated non-renounceable entitlement offer and institutional placement at A$1.20, a 13.6% discount to TERP.
The equity raise of A$800 million will maintain leverage within the targeted 2.0x-2.5x net debt/EBITDA long-term range in our fines high-case scenario.
Adjusting for the raise, Star trades at a discount to peers. While the shares will be under short-term pressure due to the raise, there is long-term value for the brave.

Fangzhou Pre-IPO – The Negatives – Hard to Shake off Loss-Making Tendencies

Fangzhou Group (FANGZHOU HK) is looking to raise about US$300m in its upcoming Hong Kong IPO.
Fangzhou (FZ) is an online chronic disease management (CDM) service provider in China.
In this note, we will talk about the not-so-positive aspects of the deal.

Guangzhou Tinci Materials GDR Listing Early Look – US$1.5bn Raising Could Further Aid Growth Plans

Guangzhou Tinci Materials Technlgy (002709 CH) is looking to raise up to US$1.5bn in its upcoming Swiss GDR listing. Bookrunners on the deal are CICC, HSBC, and JPMorgan.
As per the firm’s filings, it is to issue no more than 289m A-shares, or not exceeding 15% of the firm’s total ordinary share capital.
In this note, we discuss the GDR’s timeline, and the firm’s recent financial performance.

Pre-IPO Fangzhou Group – The Business and the Concerns

By Xinyao (Criss) Wang

Fangzhou initially launched online retail pharmacy to address the needs of chronic disease patients, and then expand to online chronic disease management. However,the investment logic of this business is problematic.
Due to the low willingness to pay/high acquisition cost of C-end patients, it is difficult to achieve large-scale profits. Developing To B business would be important for Fangzhou’s future development.
Either To B business or To C business, the key point is to accumulate/retain large physician resources, but Fangzhou hasn’t had “a panacea” in this regard.

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Feb 23

Daily Brief ECM: Zeekr IPO Early Look – Possibly US$0 to US$7bn Revenue in Under Three Years and more

In today’s briefing:

Zeekr IPO Early Look – Possibly US$0 to US$7bn Revenue in Under Three Years
Honasa Consumer Pre-IPO – The Negatives – Ad Spending Keeping Profits Low
Fangzhou Pre-IPO – The Positives – Regulatory Changes and COVID Spurred Growth
Fiserv Inc.: Major Drivers
Amkor Technology Inc.: Expansion of European Supply Chain & Other Drivers
CVS Health Corporation: Acquisitions Of Oak Street Health & Signify Health
ZoomInfo Technologies Inc.: Major Drivers

Zeekr IPO Early Look – Possibly US$0 to US$7bn Revenue in Under Three Years

Zeekr, a premium EV brand by Geely, aims to raise around US$1bn (estimated) in its US listing in 1H2023. GS, BofA and MS are said to be running the deal.
Zeekr was formed in Mar 2021 as a JV between Geely and its founder. Its first model was launched in Apr 21 with deliveries starting in Oct 21.
In this note, we take an early look at the IPO based on publicly avaiable information.

Honasa Consumer Pre-IPO – The Negatives – Ad Spending Keeping Profits Low

Honasa Consumer (HC) is looking to raise about US$350m in its upcoming India IPO.
HC’s product portfolio includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.
In this note, we will talk about the not-so-positive aspects of the deal.

Fangzhou Pre-IPO – The Positives – Regulatory Changes and COVID Spurred Growth

Fangzhou Group (FANGZHOU HK) is looking to raise about US$300m in its upcoming Hong Kong IPO.
Fangzhou (FZ) is an online chronic disease management (CDM) service provider in China.
In this note, we will talk about the positive aspects of the deal.

Fiserv Inc.: Major Drivers

Fiserv had a decent 2022 and managed to surpass the revenue expectations of Wall Street in its last result.
The company’s better-than-expected growth against the challenging backdrop was a result of growth in organic revenue, improvement in operating margin, and adjusted earnings per share.
Fiserv also advanced its core banking cloud roadmap for its new and existing clients with the acquisition and integration of Finxact.

Amkor Technology Inc.: Expansion of European Supply Chain & Other Drivers

Amkor produced a mixed set of results for the fourth-quarter with revenues of $1.9 billion that were above analyst expectations.
Demand for premium-tier smartphones was stronger than anticipated, while the automotive and industrial markets outperformed other markets where demand was weaker.
The demand for innovative packaging and infotainment systems helped the company was strong in the automotive and industrial sectors.

CVS Health Corporation: Acquisitions Of Oak Street Health & Signify Health

CVS Health has been on an acquisition spree lately and has been in the news for the acquisitions of Oak Street Health and Signify Health.
The company delivered strong financial results that exceeded the revenue expectations as well as earnings expectations of Wall Street with high single-digit top-line growth.
CVS recently announced that it has entered into one definitive agreement to acquire the outstanding shares of Oak Street Health.

ZoomInfo Technologies Inc.: Major Drivers

Even in the face of a challenging economic environment, Zoominfo Technologies delivered an all-around beat with strong revenue growth in the last quarter.
Structurally, Zoominfo is a profitable company committed to driving top-line growth while efficiently growing free cash flow and expanding profitability.
Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

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Feb 22

Daily Brief ECM: Amvis Holdings Placement – Has Done Exceptionally Well and more

In today’s briefing:

Amvis Holdings Placement – Has Done Exceptionally Well, Now It’s Prime Time
TVS Supply Chain Solutions Pre-IPO – Profitability Might Have Been COVID-Driven
Luye Pharma Placement (2186.HK) – The Potential Downside to Valuations Is Large

Amvis Holdings Placement – Has Done Exceptionally Well, Now It’s Prime Time

Amvis Holdings Inc (7071 JP) (AH)’s founder aims to raise around US$250m via a secondary follow-on offering.
The deal will increase the free-float of the stock and will lead to the stock being transferred to the Prime segment.
In this note, we will talk about the placement and run the deal through our ECM framework.

TVS Supply Chain Solutions Pre-IPO – Profitability Might Have Been COVID-Driven

TVS Supply Chain Solutions (1915741D IN) is looking to raise about US$500m in its upcoming India IPO.
TVS SCS is an Indian supply chain logistics solution provider which also has global capabilities and network across the value chain with cross deployment abilities, according to RedSeer.
TVS SCS has seen its revenue grow as both its operating segments registered decent growth during the track record period. However, its profitability might have been a result of COVID-19.

Luye Pharma Placement (2186.HK) – The Potential Downside to Valuations Is Large

By Xinyao (Criss) Wang

The decline in revenue from multiple categories of drugs due to VBP indicates that Luye Pharma (2186 HK) urgently needs a group of new products to reverse the overall weak performance.
Without the advantages in R&D efficacy and product competitiveness, the current pipeline would generate little value. It’s hard to convince people that the fundamentals of Luye have truly changed.
We are not optimistic about Luye’s outlook, which lacks long investment logic. Meanwhile, we think that this Placement is not cost-effective due to more potential downside to valuation.

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Feb 21

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

In today’s briefing:

BorgWarner Inc.: Major Drivers
Honasa Consumer Pre-IPO – The Positives – New Age DTC Brand

BorgWarner Inc.: Major Drivers

Despite the severe production unpredictability and inflationary pressures, BorgWarner performed strongly and delivered an all-around beat in the last quarter.
BorgWarner declared its intention to cut its absolute Scope 3 emissions by at least 25% by 2031.
The Scope 3 target was formally submitted to SBTi for certification together with their goal of achieving 85% absolute Scope 1 and Scope 2 emissions reductions by 2030.

Honasa Consumer Pre-IPO – The Positives – New Age DTC Brand

Honasa Consumer (HC) is looking to raise about US$350m in its upcoming India IPO.
HC’s product portfolio includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.
In this note, we will talk about the positive aspects of the deal.

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Feb 19

Daily Brief ECM: ECM Weekly (19th Feb 2023) – Rakuten Bank and more

In today’s briefing:

ECM Weekly (19th Feb 2023) – Rakuten Bank, ZJLD, REPT, Link REIT, SoCar, Ryman, Indigo, ESR, Oasis

ECM Weekly (19th Feb 2023) – Rakuten Bank, ZJLD, REPT, Link REIT, SoCar, Ryman, Indigo, ESR, Oasis

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
On the IPO front, Pertamina Geothermal is set to make its debut in the coming week.
Placements picked up pace this week, with multiple deals across geographies.

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Feb 18

Daily Brief ECM: Sirius XM Holdings Inc.: Major Drivers and more

In today’s briefing:

Sirius XM Holdings Inc.: Major Drivers

Sirius XM Holdings Inc.: Major Drivers

Sirius XM had a mixed quarterly result.
This was a challenging environment for the company as the auto sales were the lowest in 11 years in 2022.
Sirius XM is trying to attract more consumers to its platform and continues holding the largest share of car music outside combined terrestrial radio.

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Feb 17

Daily Brief ECM: ESR-Logos REIT Placement – Implied Yield Attractive Enough to Take the Deal and more

In today’s briefing:

ESR-Logos REIT Placement – Implied Yield Attractive Enough to Take the Deal
Rakuten Bank IPO Early Look – The Negatives – Is Already Slowing Down
ZJLD Group Pre-IPO – The Positives – Larger Network Led to Sales Growth. Poised for Market Tailwind
ZJLD Group Pre-IPO – The Negatives – Small Fish in a Big Pond. Drunk on Inventory Buildup

ESR-Logos REIT Placement – Implied Yield Attractive Enough to Take the Deal

ESR-LOGOS REIT (EREIT SP) is looking to raise US$114m (S$150m) in a private placement. The proceeds will be used to fund potential acquisitions and finance the redevelopment of its properties.
Post offering, there will also be a US$114m (S$150m) non-renounceable preferential offering, which will bring the total gross proceeds of the equity fund raising to US$228m (S$300m).
The deal is a relatively large one to digest at 46 days of ADV and 6.4% of current mcap. We’ll talk about the deal dynamics.

Rakuten Bank IPO Early Look – The Negatives – Is Already Slowing Down

Rakuten Bank, the online banking arm of Rakuten Inc (4755 JP), aims to raise around US$500m (estimated) in its Japan listing in April 2023.
RB is the largest internet bank in Japan, by number of accounts. As of Mar 2023, it had 13.39m deposit accounts with a total deposit base of JPY8.6tn.
In this note we take an early look at the IPO and talk about the not-so-positive aspects of its past performance.

ZJLD Group Pre-IPO – The Positives – Larger Network Led to Sales Growth. Poised for Market Tailwind

ZJLD Group (ZJLD HK) is looking to raise up to US$400m in its upcoming Hong Kong IPO
ZJLD is a Chinese liquor company primarily producing baijiu. As per F&S, the firm was the fourth largest privately-owned baijiu company in terms of FY21 sales.
In this note, we will talk about the positive aspects of the deal.

ZJLD Group Pre-IPO – The Negatives – Small Fish in a Big Pond. Drunk on Inventory Buildup

ZJLD Group (ZJLD HK) is looking to raise up to US$400m in its upcoming Hong Kong IPO.
ZJLD is a Chinese liquor company primarily producing baijiu. As per F&S, the firm was the fourth largest privately-owned baijiu company in terms of FY21 sales.
In this note, we will talk about the not-so-positive aspects of the deal.

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Feb 16

Daily Brief ECM: Rakuten Bank IPO Early Look – The Positives – Has Grown Fast over the past Few Years and more

In today’s briefing:

Rakuten Bank IPO Early Look – The Positives – Has Grown Fast over the past Few Years
Ryman Healthcare Renounceable Entitlement Offer – Dilutive, but Would Take at the Low End
Interglobe Aviation (Indigo) Placement – Has Sold Before, Will Sell Again
SoCar Lock-Up – US$242m Pre-IPO Lock-Up Expiry, Expect Scattered Selling

Rakuten Bank IPO Early Look – The Positives – Has Grown Fast over the past Few Years

Rakuten Bank, the online banking arm of Rakuten Inc (4755 JP), aims to raise around US$500m (estimated) in its Japan listing in April 2023.
RB is the largest internet bank in Japan, by number of accounts. As of Mar 2023, it had 13.39m deposit accounts with a total deposit base of JPY8.6tn.
In this note we take an early look at the IPO and talk about the positive aspects of its past performance.

Ryman Healthcare Renounceable Entitlement Offer – Dilutive, but Would Take at the Low End

Ryman Healthcare (RYM NZ) aims to raise around US$569m (NZ$903m) via a renounceable entitlement offer.
The use of proceeds will be to reset the firm’s capital structure and reduce its gearing.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Interglobe Aviation (Indigo) Placement – Has Sold Before, Will Sell Again

Indigo’s co-founder Rakesh Gangwal aims to raise around US$375m via selling around 4.0% of the company.
He had earlier stated his intention to pare down his stake after a long drawn, and very public battle, with the other co-founder. He last sold in Sep 2022.
In this note, we will talk about the placement and run the deal through our ECM framework.

SoCar Lock-Up – US$242m Pre-IPO Lock-Up Expiry, Expect Scattered Selling

SOCAR (403550 KS) was listed on 22nd Aug 2022, where it raised US$78m in its Korea IPO. Its six-month lockup will expire on 21st Feb 2023.
SoCar is a Korean car sharing business which aims to become an all-in-one mobility solutions provider beyond car sharing, with approximately 78% domestic market share in the car sharing space.
Coming up for six-month lockup expiry are the firm’s pre-IPO investors, but the bulk of the shares unlocked will come from its strategic investors.

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Feb 15

Daily Brief ECM: Waste Management Company: Key Drivers and more

In today’s briefing:

Waste Management Company: Key Drivers
Bio-Techne Corporation: Expansion RNAscope & Other Drivers
DXC Technology: Key Drivers
Novartis AG: Major Drivers
Qorvo Inc: Key Drivers, Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (02/23)
REPT BATTERO Energy Pre-IPO – The Negatives – Is Only Now Aiming for Sustainable Profits

Waste Management Company: Key Drivers

Waste Management delivered a highly disappointing result in the last quarter and did not live up to analyst expectations with respect to revenues as well as earnings.
They observed a slowdown in the rate of labor increases and remained committed to managing operating costs and bending costs to match shifting volumes.
The company advanced its planned recycling investments and provided more details in the supplemental presentation on its website.

Bio-Techne Corporation: Expansion RNAscope & Other Drivers

Bio-Techne delivered a disappointing result in the last quarter while failing to meet Wall Street expectations in terms of revenues as well as earnings.
The company also noticed the strongest effects of decreasing biotech spending in Q2 in North America.
The multiyear growth rates in North America remain in double digits and are consistent with its long-term objectives.

DXC Technology: Key Drivers

DXC achieved a decent set of results with strong bookings resulting in $3.57 billion in revenues meeting Wall Street expectations.
Their organic revenue increased for the second consecutive quarter and the company delivered an earnings beat.
DXC continues to increase margins and stabilize revenue in GIS.

Novartis AG: Major Drivers

Novartis delivered a mixed set of results for the last quarter as it failed to meet the revenue expectations of Wall Street but managed an earnings beat.
The management continued to invest in the organic business, pursued value-creating bolt-ons, and looked at the full range of M&A opportunities.
To further extend their opportunities in gene therapy, they acquired PPY, their gene treatment for geographic atrophy in ophthalmology.

Qorvo Inc: Key Drivers, Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (02/23)

Qorvo delivered a strong set of results and managed an all-around beat.
Its power business in particular, reported a successful quarter with active design work for its silicon carbide power products.
For WiFi products in their Connectivity and Sensors Group, the third quarter showed decreased end-market demand and channel inventory consumption.

REPT BATTERO Energy Pre-IPO – The Negatives – Is Only Now Aiming for Sustainable Profits

REPT BATTERO Energy (REPT HK) is looking to raise US$1bn in its upcoming Hong Kong IPO.
REPT BATTERO Energy (REPT) is a lithium-ion battery manufacturer in China, focusing on R&D, production, and sales of EV/ESS lithium-ion battery products such as battery cells, modules and packs.
In this note, we will talk about the not-so-positive aspects of the deal.

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Feb 14

Daily Brief ECM: UBTech Robotics Hong Kong IPO: Capital Dried Up as Fundamentals Deteriorated and more