ECM Daily Briefs | Page 64 of 118

In today’s briefing:

China’s Real Estate Crisis: Threatening Headwinds on Onewo IPO
WCP IPO: Valuation Uncompelling

China’s Real Estate Crisis: Threatening Headwinds on Onewo IPO

Onewo Space-Tech (ONEWO HK) is getting ready to complete an IPO in Hong Kong in the coming weeks. The company is seeking to raise nearly US$2 billion in this IPO.
Onewo is one of the leading property management service providers in China with a market share of 4.3% in the US$16 billion industry in China.
The major real estate downturn in China is one of the biggest headwinds on the Onewo IPO.

WCP IPO: Valuation Uncompelling

WCP (WCP KS), a lithium-ion batteries separator company, is set to launch its IPO of KRW900 billion (US$692 million).
We last discussed the IPO in WCP IPO: Updated Prospectus, Solid 1H22, Unchanged and Unattractive Price Range.
Although the de-rating of peer multiples resulted in a decline in the syndicate’s intrinsic value, the IPO price range of KRW80,000-100,000 remains unchanged. The IPO price range is unattractive.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Sep 12

Daily Brief ECM: ECM Weekly (12th Sep 2022) – Onewo and more

In today’s briefing:

ECM Weekly (12th Sep 2022) – Onewo, CALB, YSB, Medanta, Beneunder, JMDC, SH Holdings, Indigo
Pre-IPO Innovex Medical – A Comprehensive Product Portfolio Underpins Future Growth Prospects

ECM Weekly (12th Sep 2022) – Onewo, CALB, YSB, Medanta, Beneunder, JMDC, SH Holdings, Indigo

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, a few large Hong Kong IPOs are lining up to launch soon.
Placements picked up this week in Japan and India with most being secondary deals.

Pre-IPO Innovex Medical – A Comprehensive Product Portfolio Underpins Future Growth Prospects

By Xinyao (Criss) Wang

As one of the few companies in the world that could provide one-stop solutions including all major medical devices used in non-vascular interventional surgery, Innovex’s outlook is promising.
About 30% overseas revenue indicates that the Company’s internationalization is on track, which could help to “hedge” negative domestic policy risks.
In terms of the valuation, Innovex’s valuation should be higher than Scivita but lower than Aohua. However, Innovex has the potential to surpass Aohua in the future.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Sep 11

Daily Brief ECM: CALB IPO Preview and more

In today’s briefing:

CALB IPO Preview
Onewo IPO: Trade-Offs Vs Peers

CALB IPO Preview

China Aviation Lithium Battery (CALB) is getting ready for an IPO in Hong Kong.
In the past several days, CALB received the approval from the Hong Kong stock exchange for an IPO.
In the next two years, CALB expects its production capacity for lithium batteries to increase to about 55 GWh which is more than 6x the capacity at end of 2021.

Onewo IPO: Trade-Offs Vs Peers

Onewo Space-Tech (ONEWO HK), China Vanke (000002 CH)’s property management unit, has begun pre-marketing a US$2.0 billion HKEx IPO.
We previously discussed the IPO in Onewo IPO: The Bull Case and Onewo IPO: The Bear Case.
A comparison with large-cap peers suggests that Onewo offers large-scale with parentco stability at the cost of low growth runaway from undelivered GFA and gross margin.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Sep 10

Daily Brief ECM: Intuit Inc: Value Proposition and more

In today’s briefing:

Intuit Inc: Value Proposition
SunPower Corporation: The IKEA Collaboration & Other Major Drivers
Palo Alto Networks: The NGFW Palo Alto Networks Cloud & Other Drivers
CrowdStrike Holdings: Increasing Cybercrime & Ransomware Upside & Other Drivers
Tyler Technologies: Recent Acquisitions
Enphase Energy: The GreenCom Networks Acquisition & Other Drivers
Ralph Lauren: Increased Digital Marketing Efforts
Sunrun Inc: New Level 2 EV Charger & Other Drivers

Intuit Inc: Value Proposition

Intuit had a strong quarter and delivered an all-around beat while continuing its focus on small businesses and customers.
It delivered strong margins and strong growth in the quarter.
There was a rise in the volatility in personal loans and various personal loan partners tightened the undertaking, but with volume from the other partners, Intuit was able to offset this negative impact.

SunPower Corporation: The IKEA Collaboration & Other Major Drivers

SunPower delivered a strong set of in Q2 surpassing Wall Street expectations on all counts.
These elements increase customer motivation to add rooftop solar while also giving the residential solar sector greater price power than in recent memory.
Furthermore, SunPower renewed its agreement with Dream Finders Homes in Colorado in the new home market and extended its arrangement with KB Homes internationally.

Palo Alto Networks: The NGFW Palo Alto Networks Cloud & Other Drivers

Palo Alto Networks’ management has continued to make significant investments to transform the company and take advantage of the rapidly growing and large market opportunity in cybersecurity.
Palo Alto Networks is looking to grab a large chunk of market share and become a leader in the firewall market.
We provide the stock of Palo Alto Networks with a ‘Hold’ rating with a revision in the target price.

CrowdStrike Holdings: Increasing Cybercrime & Ransomware Upside & Other Drivers

CrowdStrike saw its quarterly revenue exceed the $500 million threshold for the first time in the last quarter and delivered an all-around beat.
For the second consecutive quarter, gross retention increased to a new high, and dollar-based net retention soared to its highest point in seven quarters.
In the quarter, the public sector also became stronger, fueled by record-breaking success in U.S. federal and international government agencies.

Tyler Technologies: Recent Acquisitions

Tyler Technologies is benefitting from positive trends in the environment of the public sector market as its demo activities, and RPF continue to trend positively.
The company leveraged successful cross-selling efforts and multi-suite wins to deliver a solid quarter with revenues and earnings surpassing Wall Street expectations.
Overall, we provide the stock of Tyler Technologies with a ‘Hold’ rating with a revision in the target price.

Enphase Energy: The GreenCom Networks Acquisition & Other Drivers

Enphase had a good quarter and managed to exceed Wall Street expectations on all counts.
Its total revenue for the second quarter was $530.2 million, an increase of 20% from the previous quarter.
In the third quarter, they supplied microinverters rated at about 1,213 megawatts DC and actuators rated at 132.4-megawatt hours.

Ralph Lauren: Increased Digital Marketing Efforts

Ralph Lauren delivered strong results this quarter surpassing revenue expectations of Wall Street as a result of solid growth across all key regions.
Ralph delivered solid consumer metrics, which include increased net promoter scores, purchase intent, and global brand consideration through an engaging mix of performance marketing and purpose-led investments.
We provide the stock of Ralph Lauren with a ‘Hold’ rating and a revision in the target price.

Sunrun Inc: New Level 2 EV Charger & Other Drivers

Sunrun delivered a solid result, surpassing Wall Street expectations on all counts.
The company exceeded its volume projection and had almost 34,400 additional customers in the second quarter, including over 25,000 new subscribers.
Sunrun’s subscriber additions increased from almost 72% in Q1 to nearly 74% of its overall customer additions for the time period.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Sep 09

Daily Brief ECM: Onewo Space-Tech Pre-IPO – Thoughts on Valuation and more

In today’s briefing:

Onewo Space-Tech Pre-IPO – Thoughts on Valuation
WCP: First Day IPO Trading Strategy
Onewo Space-Tech IPO: A Deep Dive into the Largest Business Segment
YSB Inc Pre-IPO – The Negatives – However, It Comes at a Cost to Profitability
NVIDIA Corporation: Supporting The Metaverse
Model Solution IPO Valuation Analysis
Lululemon Athletica: Expansion In Spain & Other Drivers
Cummins Inc: The Meritor Acquisition & Other Drivers
Marathon Oil: Enhancement of Retail Operations & Other Drivers
Ross Stores: New Store Additions & Other Drivers

Onewo Space-Tech Pre-IPO – Thoughts on Valuation

Onewo Space-Tech (ONEWO HK) aims to raise upto US$2bn in its Hong Kong IPO. OST is a property management service provider primarily owned by China Vanke (2202 HK).
As per Frost & Sullivan, amongst the residential community service providers in China, OST ranked first. It also ranked first in the commercial space integrated services market in China.
In this note, we provide our earnings estimates and thoughts on valuation.

WCP: First Day IPO Trading Strategy

By Shifara Samsudeen, ACMA, CGMA

The IPO book building for WCP starts on 14 September. We have updated our earnings estimates following the company’s 2Q 2022 results.
Our base case target price of WCP is 78,317 won per share, which is 2% lower than the low end of the IPO price range of 80,000 won.
To derive our target price, we used 22.4x EV/EBITDA in 2023, which is the average multiple of its peers in 2023.

Onewo Space-Tech IPO: A Deep Dive into the Largest Business Segment

Onewo Space-Tech (ONEWO HK) is a leading property management service provider in China focused on offering basic property management services.
Backed by China Vanke Co Ltd (H) (2202 HK) , the company has filed for an IPO on the HKEx and plans to raise proceeds of around US$2bn.
In this insight, we discuss the company’s business model and deep dive into the largest business segment Community Space Living Consumption Services.

YSB Inc Pre-IPO – The Negatives – However, It Comes at a Cost to Profitability

By Clarence Chu

YSB Inc (YSB HK) is looking to raise about US$500m in its upcoming Hong Kong IPO.
YSB Inc. (YSB) operates a pharmaceutical platform, digitizing the pharmaceutical transaction and service segment.
However, gross margins have fluctuated owing to a changing sales mix. Growth has also come at the cost of profitability and YSB has consistently burned cash over its track period.

NVIDIA Corporation: Supporting The Metaverse

Nvidia has been among the priciest semiconductor stocks for a while now.
The company matched market expectations and delivered an earnings beat though the stock is still very expensive.
We provide the stock of Nvidia with a ‘Hold’ rating with a revision in the target price.

Model Solution IPO Valuation Analysis

Our base case valuation of Model Solution is implied market cap of 156 billion won and target price of 24,417 won.
The IPO valuation range is from 24,000 won to 27,000 won and our target price would be close to the low end of the IPO price range.
Given the low upside relative to the IPO price range, we have a Negative view of this IPO.

Lululemon Athletica: Expansion In Spain & Other Drivers

Throughout the second quarter, Lululemon’s momentum remained strong.
The company’s total revenue accelerated by 29% compared to last year and 28% on a 3-year CAGR basis, helping the company surpass Wall Street expectations.
It has been benefitting heavily from this launch as hiking has become increasingly popular among visitors since the pandemic.

Cummins Inc: The Meritor Acquisition & Other Drivers

Cummins delivered a third consecutive all-around beat in a quarter that was marked by a number of significant developments including many ke partnerships.
The company announced partnerships with Daimler Truck, Scania, and North America for delivering fuel cell electric powertrains for heavy-duty truck applications, with Komatsu on developing haulage equipment zero-emission which includes hydrogen fuel cell solutions for the large mining haul truck applications.
It also achieved a significant milestone in the quarter related to two acquisitions, namely Meritor and Jacobs Vehicle Systems.

Marathon Oil: Enhancement of Retail Operations & Other Drivers

Marathon’s previous quarter was one of its best financial performances since transitioning to an independent E&P company.
Despite these factors, the company delivered an all-around beat and continues to reward its shareholders with capital returns.
In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Ross Stores: New Store Additions & Other Drivers

Ross Stores had quite a disappointing quarter where its revenues were well below Wall Street expectations.
Comparable store sales were low in comparison to a strong increase in the second quarter of the last year.
We provide the stock of Ross Stores with a ‘Hold’ rating with a revision in the market price.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Sep 08

Daily Brief ECM: SG Holdings Placement – Had Suffered from Weak Price Momentum and more

In today’s briefing:

SG Holdings Placement – Had Suffered from Weak Price Momentum, Buyback Should Support Share Price
JMDC Offering – Smaller Than It Looks
CALB IPO: The Bear Case
Global Health Pre-IPO – Stiff Competition Makes Growth Look Mediocre
Top Material IPO Preview
Interglobe Aviation (Indigo) Placement – The Beginning of the End of the Overhang
Workday Inc: Growing Customer Base
Ulta Beauty: The Beauty& Campaign

SG Holdings Placement – Had Suffered from Weak Price Momentum, Buyback Should Support Share Price

By Clarence Chu

MUFG Bank and Sumitomo Mitsui Banking Corp are looking to raise a combined US$210m from trimming their respective stakes in SG Holdings (9143 JP).
While representing 16 days of three month ADV, comprising only 10.1m shares, 1.57% of the firm’s current market cap, the deal is a small one on an absolute basis.
In this note, we will talk about the placement and run the deal through our ECM framework.

JMDC Offering – Smaller Than It Looks

By Travis Lundy

In February 2022, Noritsu Koki (7744 JP) – longtime holder of JMDC Inc (4483 JP) – sold 2/3 of its holdings to Omron (6645). Omron made a US$1bn new bet.
Shares fell after Q1 results, and then fell another 7% in 2 days after the company announced a primary offering for ¥22bn to international investors, ¥11bn to Omron.
High PER but Fundamental Forecasts are up-and-to-the-right, and there is a surprising amount of flow mitigation from passive investor activity the next 3 months.

CALB IPO: The Bear Case

CALB (CALBLZ CH), a leading EV battery manufacturer, is seeking to raise US$2.0 billion through an HKEx IPO, according to press reports.
In CALB 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 its small scale, low profitability and high FCF burn compared to listed peers.

Global Health Pre-IPO – Stiff Competition Makes Growth Look Mediocre

By Ethan Aw

Global Health (Medanta) (GH IN) is looking to raise approximately US$270m in its upcoming India IPO.
Global Health (GH) is a hospital network that operates under the Medanta brand. The firm currently has five hospitals in operation and one more planned for development.
The company has managed to remain profitable throughout COVID-19 and even experienced margin expansion in FY22. However, its post-COVID growth might be short-lived given stiff competition amongst peers.

Top Material IPO Preview

Top Material is getting ready for an IPO in October in Korea. The IPO price range is from 27,000 won to 30,000 won.
Established in 2012, Top Material’s main business is in system engineering. It also provides high performance electrode and cathode materials for the lithium ion based rechargeable batteries.
Top Material had sales of 31.9 billion won (up 375% YoY) and operating profit of 4.8 billion won (up 930% YoY) in 2021.

Interglobe Aviation (Indigo) Placement – The Beginning of the End of the Overhang

InterGlobe Aviation Ltd (INDIGO IN)’s co-founder Rakesh Gangwal aims to raise around US$250m via selling 2.8% 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 Rahul Bhatia.
In this note, we will talk about the placement and run the deal through our ECM framework.

Workday Inc: Growing Customer Base

Workday delivered another all-around beat, outperforming market expectations with respect to its operating indicators, highlighting the ongoing significance of digital transformation for finance and HR.
Along with the significant expansion of their core HCM and financial apps, Q2 saw remarkable momentum throughout their broader spectrum of solutions.
Customers create apps with Extend customized for their specific use cases, potentially eliminating the need for additional specialized development tools.

Ulta Beauty: The Beauty& Campaign

Ulta Beauty performed well in this quarter and delivered an all-around beat.
Based on point-of-sale statistics from the NPD Group, all key categories for the quarter exceeded its expectations, and they grew their market share in prestige beauty compared to the previous year.
Haircare, their second-largest category, experienced double-digit growth for another quarter due to newness and excellent participation in their semi-annual Gorgeous Hair Event.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Sep 07

Daily Brief ECM: JMDC Placement – Lots to like but past Deals Have Been Mixed and It Is Expensive and more

In today’s briefing:

JMDC Placement – Lots to like but past Deals Have Been Mixed and It Is Expensive
Initial Thoughts on the Porsche IPO
CALB IPO: The Bull Case
Open Edges Technology IPO Valuation Analysis
YSB Inc Pre-IPO – The Positives – Evolving Business Model Coupled with Growth.
Onewo Space-Tech Pre-IPO – Peer Comparison – Large Scale, Small Margins

JMDC Placement – Lots to like but past Deals Have Been Mixed and It Is Expensive

JMDC Inc (4483 JP) aims to raise around US$235m, US$150m coming via an international offering and the rest via issuing shares to its largest shareholder, Omron Corp (6645 JP) .
The company plans to use the proceeds to repay some of its debt that was taken on earlier to acquire other companies.
In this note, we will talk about the placement and run the deal through our ECM framework.

Initial Thoughts on the Porsche IPO

Porsche is getting ready for an IPO to be completed by the end of this year. However, the final decision on the IPO is still subject to market conditions.
The expected valuation of the Porsche IPO is 60 billion to 85 billion euros ($60 billion to $85 billion).
Qatar Investment Authority has already committed to a 4.99% stake in the Porsche IPO.

CALB IPO: The Bull Case

CALB (CALBLZ CH), a leading EV battery manufacturer, is seeking to raise US$2.0 billion through an HKEx IPO, according to press reports.
According to Frost & Sullivan, in terms of installed capacity in 2021, CALB ranked seventh globally among EV battery companies with a 3.2% market share.
The key elements of the bull case rest on a large and growing market, rising market share, explosive top-line growth and ambitious capacity expansion plans.

Open Edges Technology IPO Valuation Analysis

Our valuation analysis suggests an implied target price of 24,813 won per share, representing 38% higher than the high end of the IPO price range of 18,000 won.
Given the solid upside, we have a Positive view of the Open Edges Technology, despite the weak IPO market conditions.
Open Edges Technology is one of the leading companies in Korea that specializes in the semiconductor design asset platforms.

YSB Inc Pre-IPO – The Positives – Evolving Business Model Coupled with Growth.

By Clarence Chu

YSB Inc (YSB HK) is looking to raise about US$500m in its upcoming Hong Kong IPO.
YSB Inc. (YSB) operates a pharmaceutical platform, digitizing the pharmaceutical transaction and service segment.
Throughout its history, YSB has been evolving its business model and has been growing its user base rapidly as well, thereby leading to GMV growth and in turn, sales growth.

Onewo Space-Tech Pre-IPO – Peer Comparison – Large Scale, Small Margins

Onewo Space-Tech (ONEWO HK) aims to raise upto US$2bn in its Hong Kong IPO. OST is a property management service provider primarily owned by China Vanke (2202 HK).
As per Frost & Sullivan, amongst the residential community service providers in China, OST ranked first. It also ranked first in the commercial space integrated services market in China.
In this note, we undertake a peer comparison with some of its larger listed peers.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Sep 06

Daily Brief ECM: Onewo Space-Tech Pre-IPO – PHIP Updates – Topline Still Strong YoY and more

In today’s briefing:

Onewo Space-Tech Pre-IPO – PHIP Updates – Topline Still Strong YoY, Sequentially Cracks Emerging
Kintor Pharmaceutical (9939.HK) Placement – The Hidden Risks and the True Colors

Onewo Space-Tech Pre-IPO – PHIP Updates – Topline Still Strong YoY, Sequentially Cracks Emerging

Onewo Space-Tech (OST) aims to raise upto US$2bn in its Hong Kong IPO. OST is a property management service provider primarily owned by China Vanke Co Ltd (H) (2202 HK).
As per Frost & Sullivan, amongst the residential community service providers in China, OST ranked first. It also ranked first in the commercial space integrated services market in China.
In this note, we talk about the updates from its recently filed PHIP.

Kintor Pharmaceutical (9939.HK) Placement – The Hidden Risks and the True Colors

By Xinyao (Criss) Wang

Over the past year, we’ve seen the stock price of Kintor fluctuate largely, which was mainly driven by its COVID-19 drug proxalutamide. However, we are not optimistic about its outlook.
There are big concerns about the credibility of management. The suspicion caused by mistrust leads us to suggest that investors directly enter the “show me the result” mode.
Shares plunged after the announcement of the Placing. Obviously, Kintor Pharmaceutical (9939 HK) is short of money. Considering the potential risks behind, we are bearish on Kintor.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Sep 03

Daily Brief ECM: Leapmotor IPO: Valuation First-Look and more

In today’s briefing:

Leapmotor IPO: Valuation First-Look
Chongqing Hongjiu Fruit IPO Trading – Scraped Through with Tepid Subscription Rates

Leapmotor IPO: Valuation First-Look

Leapmotor (2007699D HK), a Chinese EV manufacturer, is pre-marketing a US$1.5 billion HKEx IPO, according to press reports.
We previously discussed the IPO in Leapmotor IPO: The Bull Case, Leapmotor IPO: The Bear Case and Leapmotor IPO: Look Before You Leap.
In this note, we present our forecasts and take the first look at Leapmotor’s potential valuation range.

Chongqing Hongjiu Fruit IPO Trading – Scraped Through with Tepid Subscription Rates

By Ethan Aw

Chongqing Hongjiu Fruit (6689 HK) raised around US$71m in its Hong Kong IPO.
CHJF’s subscription rates were lackluster with weak coverage on the institutional tranche and the retail portion being undersubscribed.
However, after applying a discount to the local peer average, we think there still remains some upside for investors given its higher revenue and profitability growth.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Sep 02

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

In today’s briefing:

Leapmotor Pre-IPO – Thoughts on Valuation
Onewo IPO: The Bull Case
TBO Tek Pre-IPO – Recovery Underway Post-COVID
Pre-IPO Beijing Continent Pharmaceuticals – The Orphan Drug Pioneer Needs to Expand Overseas

Leapmotor Pre-IPO – Thoughts on Valuation

Leapmotor (LM) aims to raise around US$1.5bn in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.
As of end Jun 22, it had delivered a total of 104,829 cars with most of its sales coming from its mini units, T03.
In our previous note, we spoke about the company’s past performance, PHIP updates and undertook a peer comparison. In this note, we will talk about valuations.

Onewo IPO: The Bull Case