ECM Daily Briefs | Page 58 of 118

In today’s briefing:

Australia REITs: Asset Deflation Bear Market
Skymark IPO – Ready For Takeoff
Weilong Delicious Global Pre-IPO – Latest PHIP Updates – No Growth
Growatt Technology Pre-IPO – PHIP Updates – Profitability Still Accelerating
Weilong Delicious IPO: Remains in a Pickle
Weilong Delicious IPO (PHIP): Covid Outbreak Is Not The Sole Reason for 1H2022 Decline
Navi Technologies- Forensic Analysis

Australia REITs: Asset Deflation Bear Market

By David Blennerhassett

The S&P/ASX A-REIT 200 Index has returned -22% in FY22, underperforming the ASX 200 Index by ~17% basis points.
REIT performance is typically negatively correlated with bond yield movements, however, long-dated government bond yields may be approaching their peak.
The asset deflation bear market in FY22 has improved the REIT valuation. A basket of REITs is currently at 0.8x, versus the five-year average of 1.05x, and 1.1x pre-Covid.

Skymark IPO – Ready For Takeoff

By Mio Kato

Skymark will be re-listing following a successful turnaround under the guidance of ANA and Integral.
Listing proceeds will mainly be directed towards improving the fuel efficiency of its fleet.
Skymark offers an attractive play on reopening in Japan as it is geared into the simpler domestic market where elevated cargo rates and revenue per passenger are not downside risks.

Weilong Delicious Global Pre-IPO – Latest PHIP Updates – No Growth

Weilong Delicious Global (WDG HK), a spicy snack food company in China, aims to raise around US$200m in its Hong Kong IPO.
According to F&S, WDG ranked first among spicy snack food enterprises in China, with a market share of 6.2%, and in the seasoned flour product and spicy vegetable snacks categories.
In this note, we will talk about the updates from the recently re-refiled PHIP.

Growatt Technology Pre-IPO – PHIP Updates – Profitability Still Accelerating

Growatt Technology (1833969D CH) is looking to raise about US$1bn in its upcoming Hong Kong IPO.
Growatt Technology is a global distributed energy solution provider, specializing in sustainable energy generation, storage and consumption, as well as energy digitalization.
In our previous notes, we looked at the company’s past performance, peer comparison and our thoughts on valuation. In this note, we will talk about the updates from its PHIP.

Weilong Delicious IPO: Remains in a Pickle

By Shifara Samsudeen, ACMA, CGMA

Weilong Delicious Global (WDG HK) has refiled (again) its PHIP with an aim to raise US$200 million, materially below its original ambition to raise US$1 billion.
We have previously discussed the IPO in Weilong Delicious IPO: In a Pickle, Weilong Delicious IPO: Mixed Update and Weilong Delicious IPO Initiation: Tasty Bite.
The latest PHIP highlights Weilong’s floundering attempt of putting in price increases to protect margins but without tanking demand. We would pass on the IPO.

Weilong Delicious IPO (PHIP): Covid Outbreak Is Not The Sole Reason for 1H2022 Decline

Weilong Delicious is a leading spicy snack food company in China with a market share of 6.2%. The company plans to raise proceeds of about US$500m through a HKEx IPO.
This insight focuses on the new data points from the company’s latest PHIP release (dated 23rd Nov) which includes the company’s 1H2022 results.
Weilong Delicious Global (WDG HK)’s top line growth has slowed down during 1H2022 and margins have come under pressure due to increased S&M spending and lower utilisation.

Navi Technologies- Forensic Analysis

By Nitin Mangal

Navi (NAVI IN) is a tech-driven financial products and services company in India, with an end-to-end digital system, focusing on three key offerings i.e. lending, insurance and asset management.
Company has taken a major write offs in 9MF22 which may have glorified the NPA ratios. Moreover, there is an element of opaqueness on the equity issuance transaction in F20.
Other key forensic takeaways include high cash balances in current account, quality of goodwill, etc.

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Nov 24

Daily Brief ECM: DPC Dash Pre-IPO – The Negatives – Lags the Leader and more

In today’s briefing:

DPC Dash Pre-IPO – The Negatives – Lags the Leader, Remains Loss Making
Sunshine Insurance Group Pre-IPO – PHIP Updates – Mixed Bag
Growatt Technology IPO: Growing Watts

DPC Dash Pre-IPO – The Negatives – Lags the Leader, Remains Loss Making

DPC Dash aims to raise around US$100m in its Hong Kong IPO.
The company is the exclusive master franchisee for Domino’s Pizza in China, HK and Macau. DPC operated 562 stores across 13 cities, as of Nov 2022.
In this note, we will talk about the not-so-positive aspects of the deal.

Sunshine Insurance Group Pre-IPO – PHIP Updates – Mixed Bag

Sunshine Insurance Group (SIG), a life, health and P&C insurance company, aims to raise up to US$1bn in its HK IPO.
SIG is an integrated insurance provider which offers both life and health (L&H) and property and casualty (P&C) insurance in China.
We have looked at the company’s past performance in our previous notes. In this note, we will talk about the updates from its latest filings.

Growatt Technology IPO: Growing Watts

Growatt Technology (1833969D CH), a leading PV invertors manufacturer, is pre-marketing a US$500 million HKEx IPO in October, according to press reports.
We previously discussed the IPO in Growatt Technology IPO: The Bull Case and Growatt Technology IPO: The Bear Case.
The PHIP which disclosed the 1H22 results and latest developments suggests that Growatt is delivering high growth, profitability and cash generation.

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Nov 23

Daily Brief ECM: Skymark Airlines Pre-IPO – Highly Leveraged with a History of Bankruptcy and more

In today’s briefing:

Skymark Airlines Pre-IPO – Highly Leveraged with a History of Bankruptcy
2023 High Conviction: Chindata’s Track Record & Rating Makes It a Takeover Target
DPC Dash Pre-IPO – The Positives – On a Rapid Expansion Spree

Skymark Airlines Pre-IPO – Highly Leveraged with a History of Bankruptcy

Skymark Airlines (9204 JP) is looking to raise approximately US$218m in its upcoming Japan IPO.
Skymark Airlines (SA) is a Japanese low-cost airline, being the third largest domestic airline according to the company. Unlike major airlines and other low-cost carriers, Skymark operates only domestic flights.
In this note, we talk about the company’s past performance.

2023 High Conviction: Chindata’s Track Record & Rating Makes It a Takeover Target

Chindata Group (CD US)’s 3Q22 results beat both revenue and adjusted EBITDA consensus estimates. Chindata raised its full-year guidance for the second time this year.
Chindata continues to attract rumours of takeover interest, most recently from China Merchants. Its track record of beating guidance, modest leverage and beaten-down rating make it a target.
A forward EV/EBITDA multiple of 10.8x, in line with 21Vianet Group (VNET US)’s multiple implied by its founder’s offer (at US$8.20), would imply Chindata’s price of US$8 per ADS.

DPC Dash Pre-IPO – The Positives – On a Rapid Expansion Spree

DPC Dash aims to raise around US$100m in its Hong Kong IPO.
The company is the exclusive master franchisee for Domino’s Pizza in China, HK and Macau. DPC operated 562 stores across 13 cities, as of Nov 2022.
In this note, we will talk about the positive aspects of the deal.

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Nov 22

Daily Brief ECM: Lygend Resources & Technology IPO – Margins Expected to Expand and more

In today’s briefing:

Lygend Resources & Technology IPO – Margins Expected to Expand, Enticing at the Bottom End
Ant Group: Consumer Finance Finds Investors But Beijing Could Throw New Obstacles At Ant’s Direction
Lygend Resources & Technology IPO: Valuation Insights
Daiei Kankyo Pre-IPO – Peer Comparison and Thoughts on Valuation

Lygend Resources & Technology IPO – Margins Expected to Expand, Enticing at the Bottom End

By Clarence Chu

Lygend Resources & Technology (LR HK) is looking to raise up to US$595m in its Hong Kong IPO.
Lygend Resources & Technology (Lygend) is a nickel trading and production firm with a portfolio covering multiple areas across the nickel industry value chain.
In this note, we will revisit our earnings assumptions and share our thoughts on valuation.

Ant Group: Consumer Finance Finds Investors But Beijing Could Throw New Obstacles At Ant’s Direction

By Oshadhi Kumarasiri

Earlier this year, an RMB 22.0bn fundraising was likely blocked by Beijing with the state-backed asset manager, China Cinda pulling out of the deal at the last moment.
Several media outlets reported last week that Ant Group is pushing ahead yet again with an RMB 10.5bn fundraising effort for its Consumer Finance business.
This fundraising could yet again face obstacles as Beijing might want Ant Financial Services Group (6688 HK) to surrender a controlling stake in the Consumer Finance business to state-backed firms.

Lygend Resources & Technology IPO: Valuation Insights

Lygend Resources & Technology (2245 HK), a nickel play, has launched its IPO to raise up to US$595 million.
We previously discussed the IPO in Lygend Resources & Technology IPO: Riding the Wave.
In this note, we present our forecasts and look at valuation. Lygend is attractively valued at the IPO price range. We would participate.

Daiei Kankyo Pre-IPO – Peer Comparison and Thoughts on Valuation

Daiei Kankyo (9336 JP) , a waste management company, aims to raise around US$280m in its Japan IPO.
Daiei Kankyo is involved in the waste management and related businesses in Japan. The core of its operations consists of its waste management and recycling business.
In our previous note, we looked at the company’s past performance. In this note, we undertake a peer comparison and talk about valuations.

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Nov 20

Daily Brief ECM: ECM Weekly (20th Nov 2022) – I-Tail and more

In today’s briefing:

ECM Weekly (20th Nov 2022) – I-Tail, Growatt, Lygend, SinoHytech, Meituan/Tencent, Olympus, Paytm
NVIDIA Corp: New Product Launches & Other Drivers

ECM Weekly (20th Nov 2022) – I-Tail, Growatt, Lygend, SinoHytech, Meituan/Tencent, Olympus, Paytm

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, Indian IPOs delivered some decent performance while HK IPOs are likely to pick up as well.
There were a number of placement and blocks this week, after the expiry of lockups in a few Indian names.

NVIDIA Corp: New Product Launches & Other Drivers

NVIDIA Corp delivered a mixed performance as the company’s revenues exceeded the analyst consensus estimate.
However, its earnings were below par given the persistent supply chain interruptions, increased export bans, and macroeconomic challenges.
Leading U.S. cloud providers and a growing number of consumer Internet companies were the main drivers of year-over-year increases for workloads like big language models, recommendation systems, and generative AI.

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Nov 19

Daily Brief ECM: Five-Star Business IPO Trading – One of the Best Anchor Books but Worst Overall Demand and more

In today’s briefing:

Five-Star Business IPO Trading – One of the Best Anchor Books but Worst Overall Demand
Archean Chemical Industries IPO Trading – One of the Highest Subscriptions for the Year
Initial Thoughts on the Vinfast IPO
Lygend Resources & Technology IPO: Riding the Wave
Taiwan Semiconductor: Initiation of Coverage – Geopolitical Challenges & Other Factors
Ralph Lauren: Collaboration With Fortnite & Other Developments
Bumble Inc.: Blind Dating Offering & Other Drivers

Five-Star Business IPO Trading – One of the Best Anchor Books but Worst Overall Demand

Five Star Business Finance (0958461D IN) raised around US$190m in its India IPO.
Five-Star Business is a non-banking financial company (NBFC-ND-SI) that provides secured business loans to micro-entrepreneurs and self-employed individuals.
We have looked at various aspects of the deal in our previous note, in this note, we talk about the demand and trading dynamics.

Archean Chemical Industries IPO Trading – One of the Highest Subscriptions for the Year

Archean Chemical Industries (0810406D IN) has raised about US$178m in its India IPO.
Archean Chemical Industries (ACI) is a specialty marine chemical manufacturer in India focused on producing and exporting bromine, industrial salt, and sulphate of potash to customers around the world.
We have looked at various aspects of the deal in our previous notes. In this note, we talk about the demand for the deal and the trading dynamics.

Initial Thoughts on the Vinfast IPO

By Douglas Kim

According to Bloomberg, VinFast is getting ready for an IPO in the US as soon as 1Q 2023.
Vinfast has secured approximately US$1.2 billion in incentives for its EV production facility in North Carolina which is expected to start production in 2024 (annual production of 150,000 vehicles).
Vinfast could raise more than US$1 billion in this IPO. If Vinfast is able to successfully complete this IPO, it would be one of the largest Asian IPOs in 2023.

Lygend Resources & Technology IPO: Riding the Wave

Lygend Resources & Technology (LR HK), a nickel play, is set to open its books for an HKEx IPO to raise US$700-800 million, according to press reports.
Lygend had the largest nickel ore trading volume in China in 2019, 2020 and 2021, with a market share of 26.8% in 2021.
The fundamentals are solid as the consolidation of HPL has delivered strong growth and an improved margin profile, at manageable leverage.

Taiwan Semiconductor: Initiation of Coverage – Geopolitical Challenges & Other Factors

This is our first report on Taiwan Semiconductor, the world’s largest dedicated contract chip manufacturer.
The company delivered a mixed set of results for the past quarter with revenues below expectations as it continues to see softness in the consumer end-market category.
TSMC’s other end market categories, like data centers and the automotive industry, are currently stable and it did manage to deliver an earnings beat.

Ralph Lauren: Collaboration With Fortnite & Other Developments

Ralph Lauren’s previous quarter results were strong and the company managed an all-around beat.
Their top-line continued to increase in the previous quarter, with revenues rising 13% in constant currency and 5% on a reported basis.
The success for this quarter was once again aided by good constant currency growth across all 3 regions.

Bumble Inc.: Blind Dating Offering & Other Drivers

Bumble delivered a mixed set of third-quarter results as it failed to meet market expectations on the revenue front but managed an earnings beat.
The company produced a decent top-line growth of 17% year over year in Q3, driven by 28% growth for the Bumble App.
The revenue growth would have been 10 points higher and Bumble App revenue growth would have been 5 points higher after adjusting for forex and the situation in Ukraine.

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Nov 18

Daily Brief ECM: Growatt Technology Pre-IPO – Thoughts on Valuation and more

In today’s briefing:

Growatt Technology Pre-IPO – Thoughts on Valuation
Lear Corporation: New Sustainability Solutions Addition & Other Developments
Bio-Techne Corp: Advanced Cell Diagnostics RNAscope System Developments & Other Drivers
Qorvo Inc: Major Drivers
Roku Inc: Expansion Of Free Streaming In Mexico & Other Drivers
Unity Software: Native Game Engine Support For Windows & Other Drivers
Match Group: Major Drivers

Growatt Technology Pre-IPO – Thoughts on Valuation

Growatt Technology (1833969D CH) is looking to raise about US$500m in its upcoming Hong Kong IPO.
Growatt Technology is a global distributed energy solution provider, specializing in sustainable energy generation, storage and consumption, as well as energy digitalization.
In our previous notes, we looked at the company’s past performance and peer comparison. In this note, we will look at assumptions and share our thoughts on valuation.

Lear Corporation: New Sustainability Solutions Addition & Other Developments

Lear Corporation saw a significantly improved set of results in the last quarter and it managed to surpass Wall Street expectations on all fronts.
The improved results reflect higher production volumes as well as its strong new business backlog.
Core operating earnings and sales increased and in both e-Systems and seating, operating margins improved as compared to the previous year.

Bio-Techne Corp: Advanced Cell Diagnostics RNAscope System Developments & Other Drivers

Bio-Techne has been going through a tough 2022 and witnessed a slow summer especially in the European markets as well as Covid-related shutdowns in China.
The company did manage to achieve some organic revenue growth but failed to meet Wall Street expectations in terms of revenues as well as earnings.
The company recently announced the release of the automated codetection assays for the company’s Advanced Cell Diagnostics RNAscope system for in-situ hybridization.

Qorvo Inc: Major Drivers

Qorvo delivered an excellent result with its quarterly revenue as well as EPS above the market expectations.
Revenue in high-performance analog was broad-based, with the strength primarily in high-power applications and defense.
In Advanced cellular, Qorvo enjoyed quite a big customer ramp in the quarter.

Roku Inc: Expansion Of Free Streaming In Mexico & Other Drivers

This is our first report on streaming major, Roku.
The company had a strong first quarter of 2022 with Platform revenue up 39% yearly, driven by increased content distribution and advertising revenue.
As one of the industry’s top platforms for streaming TV, the company anticipates long-term growth in active users and platform revenue.

Unity Software: Native Game Engine Support For Windows & Other Drivers

Unity Software delivered a mixed set of results as its revenues failed to meet market expectations but its net loss was narrower than expected.
The company continued with a robust customer pull in its newer Artistry and Digital Twins segments.
We provide the stock of Unity with a ‘Buy’ rating and a revision in the target price.

Match Group: Major Drivers

Match Group is currently operating in a challenging macro-economic environment and its stock price has been tumbling over the past few months.
Excluding the forex impact, Match Group delivered double-digit growth given the fact that Tinder has been performing quite well.
We provide the stock of Match Groups with a ‘Hold’ rating and a revision in the target price.

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Nov 17

Daily Brief ECM: Beijing SinoHytec A/H Listing – Initial Thoughts on Valuation and more

In today’s briefing:

Beijing SinoHytec A/H Listing – Initial Thoughts on Valuation

Beijing SinoHytec A/H Listing – Initial Thoughts on Valuation

Beijing Sinohytec Co Ltd (688339 CH) (BSH) is looking to raise up to US$400m via its H-shares listing.
BSH provides fuel cell systems in China, focusing on the design, development and manufacture of fuel cell systems and stacks mainly for commercial vehicles, such as buses and trucks.
We looked at the company’s past performance in our previous note. In this note, we’ll talk about valuations.

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Nov 16

Daily Brief ECM: Olympus Placement – Had Been Doing Well and more

In today’s briefing:

Olympus Placement – Had Been Doing Well, till Recently
I-Tail Corporation IPO – Blowout 3Q22, Revised Earnings, Updated Thoughts on Valuation
Yungkang Group Lock-Up – Shares Benefited from a Protracted Lockdown. Shareholders Could Monetise
Bikaji Foods International IPO Trading – One of the Strongest Demand This Year
I-Tail Corporation IPO: Valuation Insights
Escorts Kubota (ESCORTS IN) | Costly Market Share Gains & AR Concerns
Daiei Kankyo Pre-IPO – Steady, at Best
DuPont de Nemours: DuPont Liveo Healthcare Solutions In China & Other Drivers
Lyft Inc: Entry Into The Advertising Business & Other Drivers

Olympus Placement – Had Been Doing Well, till Recently

MUFG aims to raise around US$255m via selling around 1% of Olympus Corp (7733 JP).
The stock has been doing well recently and MUFG has sold before. Although, the recent earnings updates didn’t go down too well.
In this note, we will run the deal through our ECM framework and comment on other deal dynamics.

I-Tail Corporation IPO – Blowout 3Q22, Revised Earnings, Updated Thoughts on Valuation

I-Tail, an OEM in the wet pet food category, aims to raise around US$600m in its Thailand IPO. It is a subsidiary of Thai Union Group (TU TB) .
As per ITC, it was the number two pet food company in Asia and in the top ten pet food companies globally. ITC expertise lies in fish-based wet pet food.
In our previous notes, we have looked at various aspects of the deal. In this note, we talk about its 3Q22 updates and run the deal through our ECM framework.

Yungkang Group Lock-Up – Shares Benefited from a Protracted Lockdown. Shareholders Could Monetise

By Clarence Chu

Yunkang Group (2325 HK) was listed on 18th May 2022, with its six month lockup expiring on 17th November 2022.
Yunkang Group is a medical operation service provider in China and as per F&S, had a market share of 3.7% in China’s medical operation service market as per 2020 revenue.
Coming up for six-month lockup expiry are the controlling shareholders and cornerstones. With protracted lockdowns underway in China, this stock has continued to benefit, currently trading 86.3% above IPO price.

Bikaji Foods International IPO Trading – One of the Strongest Demand This Year

Bikaji Foods (BIKAJI IN) , an ethnic snacks company, raised approximately US$107m in its India IPO.
Its product range includes six principal categories: bhujia, namkeen, packaged sweets, papad, western snacks as well as other snacks which primarily include gift packs, frozen food, mathri range and cookies.
We have looked at various aspects of the deal in our previous notes. In this note, we talk about the demand for the deal and the trading dynamics.

I-Tail Corporation IPO: Valuation Insights

I-Tail (ITC TB), Thai Union Group (TU TB)’s pet care division, has launched its SET listing at THB30-32 per share to raise up to US$593 million.
We previously discussed the IPO in I–Tail Corporation IPO: The Bull Case, I-Tail Corporation IPO: The Bear Case and I-Tail Corporation IPO: A Strong 3Q Results Update.
I-Tail is attractively valued at the IPO price range. We would participate. Pricing will be announced on 28 November.

Escorts Kubota (ESCORTS IN) | Costly Market Share Gains & AR Concerns

By Pranav Bhavsar

Escorts Kubota Limited (ESCORTS IN) reported a 69 bps YoY gain in market share, but a -540 bps drop in EBITDA margins in spite of a 2% price hike.
We believe the product and management issues highlighted earlier, are likely to ensure both margins and market share do not cross 10% for FY23.
As per the FY22 Annual Report, auditors have received whistle-blower complaints, but no details are disclosed. Credit-impaired trade receivables are also increasing. Stock is not cheap and hence the caution.

Daiei Kankyo Pre-IPO – Steady, at Best

Daiei Kankyo (9336 JP) (DK), a waste management company, aims to raise around US$280m in its Japan IPO.
Daiei Kankyo is involved in the waste management and related businesses in Japan. The core of its operations consists of its waste management and recycling business.
In this note, we talk about the company’s past performance.

DuPont de Nemours: DuPont Liveo Healthcare Solutions In China & Other Drivers

DuPont’s stock price has surged past our target price and is witnessing a strong momentum after the company posted a solid set of results this quarter in an extremely challenging environment.
The revenue growth of the company included solid organic growth.
We provide the stock of DuPont with a ‘Buy’ rating and a revision in the target price.

Lyft Inc: Entry Into The Advertising Business & Other Drivers

Lyft had a mixed quarter and failed to meet the revenue expectations of Wall Street but managed an earnings beat.
Active drivers, active riders, and total rides everything was high.
In this quarter, the number of active users who are using Lyft displayed the strongest growth.

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Nov 15

Daily Brief ECM: Growatt Technology Pre-IPO Peer Comparison – Performed Well on Many Fronts and more

In today’s briefing:

Growatt Technology Pre-IPO Peer Comparison – Performed Well on Many Fronts
Bionote IPO – Delayed Timeline & Updated Valuation Analysis
Fusion Micro Finance IPO Trading – Weak Demand Seems Justified
Marriott International: Acquiring The City Express Brand Portfolio & Other Developments
Global Health IPO Trading – Relatively Cheap and Good

Growatt Technology Pre-IPO Peer Comparison – Performed Well on Many Fronts

Growatt Technology (1833969D CH) is looking to raise about US$500m in its upcoming Hong Kong IPO.
Growatt Technology is a global distributed energy solution provider, specializing in sustainable energy generation, storage and consumption, as well as energy digitalization.
In our previous notes, we looked at the company’s past performance. In this note, we undertake a peer comparison.

Bionote IPO – Delayed Timeline & Updated Valuation Analysis

By Douglas Kim

Bionote has delayed its IPO timeline. Now, the company expects to complete its IPO in late December. The book building for the institutional investors will now start on 8 December.
Our updated base case valuation is target price of 16,966 won per share, which is 6% lower than the low end of the IPO price range.
Given the downside risk relative to the IPO price range, we have a Negative View of the BioNote IPO.

Fusion Micro Finance IPO Trading – Weak Demand Seems Justified

Fusion Micro Finance Ltd (1053199D IN) raised approximately US$134m in its India IPO.
Fusion Micro Finance (FMF) is a non-banking financial company – microfinance institution (NBFC-MFI) that provides financial services to unserved and underserved women in rural and peri-rural areas across India.
We have looked at various aspects of the deal in our previous notes. In this note, we talk about the demand for the deal and the trading dynamics.

Marriott International: Acquiring The City Express Brand Portfolio & Other Developments

Marriott delivered a mixed set of results for the third quarter.
The leisure demand for the quarter remained strong and far above 2019 levels.
Travelers are apparently continuing to mix pleasure and work visits, according to third quarter day-of-the-week trends.

Global Health IPO Trading – Relatively Cheap and Good