ECM Daily Briefs | Page 53 of 118

In today’s briefing:

Mankind Pharma (6596876Z IN) Pre-IPO: Solid India-Centric Growth Story Fueled by Marquee Brands
Nextracker IPO Valuation Analysis
Sonos Inc: New Launches & Other Drivers
Sunrun Inc: Collaboration With The Enel Group & Other Drivers
Qualys Inc.: The Blue Hexagon Acquisition & Other Drivers
Marathon Oil: Acquisition Of Eagle Ford Assets Of Ensign Resources & Other Drivers
Enphase Energy Inc: Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (01/23)
Lululemon Athletica: Major Drivers
Appian Corp: Major Drivers, Financial Forecasts, DCF & Comparables Valuation, Key Risks (01/23)

Mankind Pharma (6596876Z IN) Pre-IPO: Solid India-Centric Growth Story Fueled by Marquee Brands

By Tina Banerjee

Mankind Pharma (6596876Z IN), India’s fourth largest pharmaceutical company, has filed DRHP for INR55B IPO, which is comprised of an OFS of 40M shares by promoters and existing investors.
Mankind has 36 pharma brands that have each achieved annual revenue of more than INR500M. 18 of its brands are among 300 top selling brands of the Indian pharma market.
During FY20–22, domestic sales of Mankind had a CAGR of ~16%, which is ~1.5 times that of the Indian pharma market, which grew at a CAGR of ~11%.

Nextracker IPO Valuation Analysis

By Andrei Zakharov

NEXTracker (NXT US) , a leading solar tracker and software solutions provider for utility-scale and distributed generation projects, filed for an IPO.
According to Crunchbase, NEXTracker (NXT US) has raised ~$548M in funding over four rounds, and investors include Sigma Partners, DBL Partners, SJF Ventures, and American private equity firm TPG.
We have a favorable view of the upcoming Nextracker IPO and see upside potential to the last round valuation of ~$3B, when the company announced a strategic investment from TPG.

Sonos Inc: New Launches & Other Drivers

Sonos delivered a decent performance in the last quarter with revenue growth beyond market expectations and narrower-than-expected losses despite the challenging macroeconomic backdrop.
In the last quarter, installer solutions revenue grew, driven by robust demand for the company’s Port and Amp products in spite of persistent supply challenges.
Sonos continues to see strong performance in its installer solutions channel in spite of slowing house activity in the United States.

Sunrun Inc: Collaboration With The Enel Group & Other Drivers

Sunrun delivered strong results in the last quarter as it continued expanding net subscriber value and delivering cost efficiency.
During the quarter, Lunar Energy unveiled the clean energy company where Sunrun invested for accelerating whole-home electrification.
Ford’s partnership with Sunrun continues to deliver strong results.

Qualys Inc.: The Blue Hexagon Acquisition & Other Drivers

Qualys delivered a strong set of results for the previous quarter, surpassing Wall Street expectations in terms of revenues as well as earnings.
It was another quarter of steady VMDR (Vulnerability, Management, Detection, Response) adoption that has developed 45% of the company’s customers worldwide.
VMDR applications of the company saw an increasing number of vendors and Qualys managed to build a high positioning in the recent market.

Marathon Oil: Acquisition Of Eagle Ford Assets Of Ensign Resources & Other Drivers

Marathon Oil delivered a mixed result for the quarter as it surpassed the revenue expectations of Wall Street.
It brought 13 wells to sales, among which 8 were 2-mile laterals and the productivity for these extended laterals is very strong.
We provide the stock of Marathon Oil Corporation with a ‘Hold’ rating with a revision in the target price.

Enphase Energy Inc: Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (01/23)

Enphase delivered solid results for the past quarter driven largely by solid revenues through microinverters which helped them produce an all-around beat.
Enphase Energy has recently announced the launch of IQ8 Microinverters in the Netherlands and France, thereby making the foremost expansion into the international markets for this product.
In the U.S., the microinverter channel inventory has been very healthy, and its storage channel inventory was slightly elevated because of longer installation times.

Lululemon Athletica: Major Drivers

Lululemon’s results for the last quarter continued to be strong and the company produced an all-around beat despite the fact that the external environment remains challenging.
In terms of traffic driven and revenue, Black Friday was among the biggest days for the company.
The revenue growth of Lululemon remained balanced and strong across various drivers, and the company’s market share gains continued.

Appian Corp: Major Drivers, Financial Forecasts, DCF & Comparables Valuation, Key Risks (01/23)

Appian Corp delivered a mixed result in the last quarter with revenues exceeding Wall Street expectations largely driven by the growth in cloud subscription revenue.
In every category, the revenue growth is healthy and setting records in the quarter.
While a large part of the tech industry has been retrenching, Appian went ahead and hired 221 employees in the last quarter.

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Jan 22

Daily Brief ECM: Cummins Inc: Acquisition Of Siemens’ Commercial Vehicles Business & Other Drivers and more

In today’s briefing:

Cummins Inc: Acquisition Of Siemens’ Commercial Vehicles Business & Other Drivers

Cummins Inc: Acquisition Of Siemens’ Commercial Vehicles Business & Other Drivers

Cummins delivered a mixed set of results for the quarter, surpassing the revenue expectations of Wall Street but missing out on earnings.
Also, through its subsidiary Meritor, Cummins announced the completion of its acquisition of the commercial vehicles business of Siemens.
Demand for the products of the company remained quite strong across its key regions and markets, which resulted in strong revenue in this quarter.

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Jan 21

Daily Brief ECM: ECM Weekly (20th Jan 23) – HK Brokers and more

In today’s briefing:

ECM Weekly (20th Jan 23) – HK Brokers, Wuxi, IQIYI, Anycol, Adani, WM Mot, LG Ene, AIn, Oasis, Perta
Heico Corporation: Major Drivers
TransDigm Group: Key Drivers

ECM Weekly (20th Jan 23) – HK Brokers, Wuxi, IQIYI, Anycol, Adani, WM Mot, LG Ene, AIn, Oasis, Perta

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.
Things are starting to pickup on the IPO front with the first somewhat sizeable US ADR filing done this week.
Placements deal flow continued to stay strong this week, even as the performance didn’t.

Heico Corporation: Major Drivers

Heico had another successful quarter and managed an all-around beat driven by record performance within the Flight Support Group.
The Flight Support Group’s operating income and net sales have increased sequentially.
Heico’s ETG Group finalized the acquisition of TRAD Tests & Radiations, a pioneer in the extremely specialized field of radiation engineering.

TransDigm Group: Key Drivers

TransDigm managed to deliver yet another all-around beat in the recent result.
Their value generation process heavily relies on their capital structure and allocations and has worked well in the post Covid environment.
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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Jan 20

Daily Brief ECM: Anycolor (5032 JP) Shareholder Structure Now And Future and more

In today’s briefing:

Anycolor (5032 JP) Shareholder Structure Now And Future
Avalon Technologies Pre-IPO – Sales Concentrated on a Handful. Market Tailwind Could Be Overstated
Oasis Corporation IPO – Peer Comparison – Smallest in Scale but Largest in Profitability

Anycolor (5032 JP) Shareholder Structure Now And Future

By Travis Lundy

Anycolor (5032 JP) is conducting a Secondary Offering so that three major pre-IPO shareholders can sell their shares. Legend Capital, Skyland Ventures, and Highsino Group are selling.
That should bring minimum publicly-traded longs to 6.3685mm shares, but it could easily be higher.
Based on the most conservative read of all the data, Real World Float is a net 21.2% after this offering. In reality, probably higher. But there’s still overhang.

Avalon Technologies Pre-IPO – Sales Concentrated on a Handful. Market Tailwind Could Be Overstated

Avalon Technologies (6594468Z IN) is looking to raise about US$130m in its upcoming India IPO. The IPO is expected to consist of both a fresh issue and a secondary portion.
Avalon Tech (Avalon) is a vertically integrated electronic manufacturing services (EMS) firm delivering box build solutions in India.
As per F&S, the firm is one of the leading domestic EMS companies with end-to-end capabilities offering a full stack product and solution suite.

Oasis Corporation IPO – Peer Comparison – Smallest in Scale but Largest in Profitability

OASIS Corp (370190 KS) is looking to raise up to US$166m in its upcoming Korea IPO.
Oasis Corporation is an early morning delivery service business that delivers fresh food to consumers. It runs an e-commerce platform named ‘Oasis Market’ as well as offline stores.
In our previous notes, we looked at the company’s past performance. In this note, we talk about peer comparison.

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Jan 19

Daily Brief ECM: Anycolor (5032) Overseas Offering – Pre-IPO VCs Selling This High Growth Name and more

In today’s briefing:

Anycolor (5032) Overseas Offering – Pre-IPO VCs Selling This High Growth Name
Aequitas HK IPOs Sponsor + GC Performance (2019-2022)
Anycolor Placement – First Placement Since Listing but Should Do Fine
IQiyi Follow-On Offer: Shifting Focus to Profits No Longer Sustainable
Nickel Industries Placement – Deepening Ties, Rising Short Interest Likely to Support Deal Price
IQIYI (IQ US) Placement: Fair Price for a Potential but Risky Recovery Play

Anycolor (5032) Overseas Offering – Pre-IPO VCs Selling This High Growth Name

By Travis Lundy

In late December, I wrote 2023 High Conviction – Anycolor (5032) Aiming at TSE Prime and TOPIX – And How!. Shares closed at ¥6,470 that day. Then went to ¥5,500.
They have since rebounded some, and now 3 pre-IPO VC investors have announced an overseas offering. This was NOT unexpected. They need more shares to get their TSE Prime listing.
The Offering is 3.27mm shares which is 5-6 days of volume. This lifts the TSE Prime inclusion amount, eventually, but the story is still about growth and model.

Aequitas HK IPOs Sponsor + GC Performance (2019-2022)

In this note, we will take a look at broker performance for HK IPOs from 2019-2022.
The following dataset includes all HK IPOs above US$100m for the period of Calendar Years 2019-2022, which amounted to a total of 173 deals.
The deals you see in this note are based on our historical IPO tracker. Feel free to drop us a message for additional information on any of these IPOs.

Anycolor Placement – First Placement Since Listing but Should Do Fine

By Shifara Samsudeen, ACMA, CGMA

Some shareholders of Anycolor (5032 JP) are looking to raise US$151.5m via an International Only Follow-on offering.
The deal is a relatively small one to digest in terms of ADV, representing only 4 days of three-month ADV. Although, it is still 10% of current mcap.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

IQiyi Follow-On Offer: Shifting Focus to Profits No Longer Sustainable

IQiyi announced a follow-on equity offering of 76.5m ADS priced at $5.90 per ADS (at a 11% discount to previous close) and will raise approx. $442.3m through the issuance.
Each ADS represents seven Class A ordinary shares and the new equity offering of 76.5m ADS will account for approx. 8.5% of iQiyi’s extended share capital post offering.
Following the announcement, the company’s shares fell 16.4% and we think the upside is limited here.

Nickel Industries Placement – Deepening Ties, Rising Short Interest Likely to Support Deal Price

Nickel Industries Ltd (NIC AU) is looking to raise US$185m with the majority of proceeds used to acquire 10% interests in nickel producing assets within the Indonesia Morowali Industrial Park.
The Indonesia Morowali Industrial Park is part of its ongoing collaboration with Tsinghan Group, a private Chinese nickel and stainless steel producer.
In this note, we will talk about the firm’s track record and run the deal through our ECM framework.

IQIYI (IQ US) Placement: Fair Price for a Potential but Risky Recovery Play

By Arun George

IQIYI Inc (IQ US) aims to raise net proceeds of US$442.3 million through the placement of 76.5 million ADS at US$5.90 per ADS.
The net proceeds will be used for working capital purposes, including serving its existing debt obligations. The placement closes on 19 January.
The placement price is fair vs peers and is an opportunity to play iQiyi’s expected topline recovery which is supported by ongoing margin improvement and declining cash burn.

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Jan 18

Daily Brief ECM: OASIS IPO Pricing Is Not Even Worth Reviewing: Strongly Recommend Avoiding It and more

In today’s briefing:

OASIS IPO Pricing Is Not Even Worth Reviewing: Strongly Recommend Avoiding It
IQIYI Follow-On Offering – Might Be Expected but Its Track Record Is…
Wuxi Biologics Placement (2269 HK) – Things Are No Longer Easy When the Magic of CXO Wears Off
Oasis Corporation IPO – Sole Profitable Player but Maybe Not for Long

OASIS IPO Pricing Is Not Even Worth Reviewing: Strongly Recommend Avoiding It

By Sanghyun Park

Of the four peers, only Coupang adopts the gross method. Since the others adopt the net method, it is impossible to compare PSR with OASIS, which uses the gross method.
If they really want to use PSR, it should only be compared with Coupang. Even if we apply CPNG’s current EV/Sales multiple (1.36x), it would only slightly exceed ₩0.5T.
A more logical way would be to use EV/GMV. Even in this case, it wouldn’t be easy to expect a valuation higher than ₩0.5T.

IQIYI Follow-On Offering – Might Be Expected but Its Track Record Is…

By Sumeet Singh

IQIYI aims to raise around US$500m via a follow-on ADS offering.
While the company hasn’t stated its use of proceeds, it will probably use most of it to redeem convertible notes
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Wuxi Biologics Placement (2269 HK) – Things Are No Longer Easy When the Magic of CXO Wears Off

By Xinyao (Criss) Wang

WuXi Bio announced the placing of existing shares by substantial shareholder. Obviously, the share price was in “comfortable position” for the management, so they think it’s time to take action.
WuXi Bio faces the uncertainty of future high growth.GSK deal/AD drug orders cannot offset the loss of COVID-19 orders.We advised to invest when it’s in “sector resonance” with “difference in expectations”.
What we’re most worried about this year isn’t recession/depression but Taiwan, which is the last card the US hasn’t yet played. If situation’s really bad,something may happen in Taiwan Strait.

Oasis Corporation IPO – Sole Profitable Player but Maybe Not for Long

OASIS Corp (1799513D KS) is looking to raise up to US$166m in its upcoming Korea IPO.
Oasis Corporation is an early morning delivery service business that delivers fresh food to consumers. It runs an e-commerce platform named ‘Oasis Market’ as well as offline stores.
Oasis Corporation aims to boost its sales and presence by further improving on its omnichannel strategy. However, its explosive growth appears likely to have been driven by COVID-induced lockdown measures.

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Jan 17

Daily Brief ECM: Wuxi Biologics Placement – Lesser Discount than Recent Deals but Still Looks Good and more

In today’s briefing:

Wuxi Biologics Placement – Lesser Discount than Recent Deals but Still Looks Good
AInnovation Technology Lock-Up – US$670m Worth of Pre-IPO Investment Is Still Well in the Money

Wuxi Biologics Placement – Lesser Discount than Recent Deals but Still Looks Good

Wuxi Biologics Holdings is looking to raise up to US$513m by selling about 1.3% of Wuxi Biologics (2269 HK).
This is the company’s 16th placement since it listed in June 2017.
In this note, we will discuss deal dynamics, past deal performance, and share the scores on our ECM framework.

AInnovation Technology Lock-Up – US$670m Worth of Pre-IPO Investment Is Still Well in the Money

Qingdao Ainnovation Technology Group (2121 HK) was listed on 27th Jan 2022, with its one-year lockup expiring on 27th January 2023.
Qingdao AInnovation Technology Group is an AI solutions provider offering full-stack AI-based products and solutions.
Coming up for one-year lockup expiry are the pre-IPO shareholders. Bulk of them are in the money as some have invested as early as 2018.

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Jan 15

Daily Brief ECM: ECM Weekly (15th Jan 2023) – 2022 Performance and more

In today’s briefing:

ECM Weekly (15th Jan 2023) – 2022 Performance, 2023 Pipeline, Bilibili, HTHT, China Edu, CDP, Allied

ECM Weekly (15th Jan 2023) – 2022 Performance, 2023 Pipeline, Bilibili, HTHT, China Edu, CDP, Allied

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
Things remain quiet on the IPO front and are likely to remain that way till CNY. Korea was once again the one that set the IPO ball rolling.
Placements were a different matter with deal flow pickup up where it left off last week.

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Jan 14

Daily Brief ECM: Allied Blenders and Distillers Pre-IPO – Yet to Recover from COVID-19 and more

In today’s briefing:

Allied Blenders and Distillers Pre-IPO – Yet to Recover from COVID-19
Oasis Corp IPO Valuation Analysis

Allied Blenders and Distillers Pre-IPO – Yet to Recover from COVID-19

Allied Blenders & Distillers (ABD IN) is looking to raise about US$250m in its upcoming India IPO. I-Sec, Axis Capital, JM Financial, Kotak and Equirus Capital will be the bookrunners.
ABD is the largest Indian-owned Indian-made foreign liquor (IMFL) company and the third largest IMFL company in India, in terms of annual sales volumes between FY14 and FY21.
ABD has grown its brand over time and managed to stay profitable, despite COVID-19. However, sales volume has yet to return to pre-COVID levels, along with its profitability.

Oasis Corp IPO Valuation Analysis

By Douglas Kim

Our base case valuation of Oasis Corp is EV of 605 billion won, implied market cap of 788 billion won, and target price of 24,847 won per share.
This is 18.5% lower than the low end of the IPO price range. Given the lack of upside, we have a Negative View of the Oasis Corp IPO.
The end of COVID pandemic and relaxed regulations for hypermarkets in early morning delivery services are likely to have greater negative impact on Oasis Corp.

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Jan 13

Daily Brief ECM: Oasis Corp IPO Preview and more

In today’s briefing:

Oasis Corp IPO Preview
Lu DaoPei Medical Group Pre-IPO Tearsheet
Survival Technology Pre-IPO Tearsheet

Oasis Corp IPO Preview

By Douglas Kim

Oasis Corp is getting ready to complete its IPO on KOSDAQ in February 2023. Oasis Corp is a leading online/offline provider of organic foods and other groceries in Korea.
IPO price range is from 30,500 won to 39,500 won, with a total offering amount of 160 billion won to 207 billion won.
Other than Coupang, the other three companies (bankers’ valuation) may not be appropriate comps, mainly because they operate in different markets around the world and are much bigger in size.

Lu DaoPei Medical Group Pre-IPO Tearsheet

Lu Daopei Medical Group (1816743D CH) Lu DaoPei Medical Group is looking to raise around US$400m in its upcoming Hong Kong IPO. The bookrunners are CITIC Securities, CMB International, and Macquarie.
Lu DaoPei Medical Group (LDPM) is a hospital operator focusing on hematology healthcare services.
As per F&S, the firm was the largest hematology healthcare services provider in China in terms of 2021 revenue.

Survival Technology Pre-IPO Tearsheet