ECM Daily Briefs | Page 65 of 118

In today’s briefing:

Biocytogen (百奥赛图) IPO Trading: Week Demand
Deere & Co: Major Drivers
Dollar Tree: Major Drivers

Biocytogen (百奥赛图) IPO Trading: Week Demand

By Ke Yan, CFA, FRM

Biocytogen raised HKD 471m (USD 60.77m) from its global offering and will list on the Hong Kong Stock Exchange on Thursday, September 1st.
In the previous note, we looked at the company’s business lines including biotech and animal model businesses.
In this note, we provide an update for the IPO before trading debut.

Deere & Co: Major Drivers

By Baptista Research

Despite ongoing supply issues, Deere increased production rates in the past quarter, which led to a 25% increase in net sales.
The demand-driven growth in the construction and forestry industries also contributed to the division’s impressive success in the third quarter.
Furthermore, because of ongoing supply issues that result in manufacturing inefficiencies, overhead expenses also increase over time.

Dollar Tree: Major Drivers

By Baptista Research

Given the ongoing cost difficulties that the retail industry is witnessing, Dollar Tree’s business was bound to be negatively impacted.
Its second quarter performance was below par with revenues below Wall Street expectations and earnings just about meeting the analyst consensus estimate.
For Family Dollar, the management relocated 24 stores, remodelled 257 stores, and established 95 new stores throughout the quarter.

💡 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

Aug 31

Daily Brief ECM: Doosan Enerbility Placement – Selldown by Parent Doesn’t Send the Best Signal and more

In today’s briefing:

Doosan Enerbility Placement – Selldown by Parent Doesn’t Send the Best Signal
Leapmotor IPO: Look Before You Leap
Leapmotor Pre-IPO – Peer Comparison – One of the Leaders in 2Q Volumes but Lags on Margins

Doosan Enerbility Placement – Selldown by Parent Doesn’t Send the Best Signal

Doosan Corp (000150 KS) is looking to raise up to US$435m from trimming a portion of its stake in Doosan Enerbility (034020 KS).
The deal isn’t exactly a large one to process at just 5.2 days of three month ADV. Shares are offered at a discount range between 5.1-7.8%.
As there wasn’t a specific mention of the former’s intention to sell, we would argue that the deal isn’t particularly well flagged.

Leapmotor IPO: Look Before You Leap

By Arun George

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 and Leapmotor IPO: The Bear Case. This note updates our view for the PHIP and recent developments.
While the 1Q and truncated 1H numbers outline rapid growth and declining loss margin, key metrics continue to lag peers over comparable periods. We would pass on the IPO.

Leapmotor Pre-IPO – Peer Comparison – One of the Leaders in 2Q Volumes but Lags on Margins

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 notes, we spoke about the company’s past performance and its PHIP updates. In this note, we will undertake a peer comparison.

💡 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

Aug 30

Daily Brief ECM: Leapmotor IPO Preview and more

In today’s briefing:

Leapmotor IPO Preview
YH Entertainment IPO – While Smaller than Peers, It Is a Lot Cheaper as Well
Leapmotor Pre-IPO – PHIP Updates – 6M22 Sales Doing Well, Catching up with the Rest

Leapmotor IPO Preview

By Douglas Kim

Leapmotor is getting ready to complete its IPO in Hong Kong in the next few weeks, aiming to raise US$1 billion to US$1.5 billion.
Leapmotor is one of the fastest growing pure play EV companies in China in terms of delivery volume. Leapmotor shipped more than 43,000 EVs in 2021, up 443.5% YoY.
Leapmotor’s revenue surged from 117 million RMB in 2019 to 3,132 million RMB in 2021. Operating margin improved from -625% in 2019 to -137.7% in 2020, and -91.6% in 2021.

YH Entertainment IPO – While Smaller than Peers, It Is a Lot Cheaper as Well

YH Entertainment Group (2306 HK) is looking to raise up to US$144m in its Hong Kong IPO.
YH Entertainment (YHE) is an artist management company in China. Its business covers the entire artist management industry value chain, from auditioning, training, artist operation to artist promotion.
As per Frost & Sullivan (F&S), YHE was ranked first amongst artist management companies in China with a market share of 1.9%, based on artist management revenue generated in 2021.

Leapmotor Pre-IPO – PHIP Updates – 6M22 Sales Doing Well, Catching up with the Rest

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 notes, we spoke about the company’s past performance. In this note, we will have a look at its PHIP updates.

💡 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

Aug 26

Daily Brief ECM: WM Motor Holding IPO – The Negatives – Has Ample Issues to Contend With and more

In today’s briefing:

WM Motor Holding IPO – The Negatives – Has Ample Issues to Contend With
Balaji Speciality Chemicals Pre-IPO Tearsheet

WM Motor Holding IPO – The Negatives – Has Ample Issues to Contend With

WM Motor Technology Co Ltd (WMT CH) (WMM) is looking to raise about US$1bn in its upcoming Hong Kong IPO.
WM Motor is a smart EV player in China. As of the latest practicable date, it had a total of four main EV models.
In this note, we talk about the not-so-positive aspects of the deal.

Balaji Speciality Chemicals Pre-IPO Tearsheet

Balaji Speciality Chemicals (1742663D IN) is looking to raise about US$126m in its upcoming India IPO. The deal will be run by JM Financial and HDFC Bank.
Balaji Speciality Chemicals (BSC) is the sole manufacturer in India of niche chemicals such as Ethylenediamine, Piperazine (Anhydrous), Diethylenetriamine, Amino Ethyl Ethanol Amines and Amino Ethyl Piperazine, according to CRISIL.
The chemicals it manufactures are import substitutes and are used in end-use industries such as speciality chemicals. Its customer base grew from 45 in FY20 to 182 in FY22.

💡 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

Aug 25

Daily Brief ECM: CTG Duty-Free H-Share Listing: Thoughts on First Day Trading and more

By Shifara Samsudeen, ACMA, CGMA

In today’s briefing:

CTG Duty-Free H-Share Listing: Thoughts on First Day Trading
CTG Duty Free H Share Listing: Trading Debut
Leapmotor IPO: The Bear Case
Go Digit General Insurance Pre-IPO Tearsheet
Concord Biotech Pre-IPO Tearsheet

CTG Duty-Free H-Share Listing: Thoughts on First Day Trading

CTG Duty-Free Group has priced its IPO at HK$158 per share, at a slight premium to the midpoint of the indicative IPO price range of HK$143.5-165.5 per share.
At HK$158 per share, the company raised net proceeds of HK$15,892.3 (approx. US$2.0bn) and the IPO is priced at an almost 30% discount to CTG’s A-share last close price.
Cornerstone investors subscribed for approx. 38.4% of the H-share offering (or 1.9% of the total issued share capital of the company post-offering) with some existing shareholders subscribing under placing guidelines.

CTG Duty Free H Share Listing: Trading Debut

By Arun George

China Tourism Group Duty Free Corp Ltd (1880 HK)/CTGDF priced its H Share at HK$158.00 per share to raise net proceeds of US$2.0 billion. The H Share starts trading tomorrow.
The H Share listing price implies an AH discount of 27.2% at A Share price of RMB189.80. This compares to an average AH discount of 46.6% of listed AH shares.
The China Tourism Group Duty Free Corp Ltd (601888 CH) A Shares are trading close to fair value. The H Shares valuation is unattractive compared to peers.

Leapmotor IPO: The Bear Case

By Arun George

Leapmotor (2007699D HK), a Chinese EV manufacturer, will start its listing hearing for a US$1.5 billion HKEx IPO this week, according to press reports.
In Leapmotor 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 a slow ramp-up, lower revenue, high EBIT and FCF loss margin compared to peers at a similar stage of development.

Go Digit General Insurance Pre-IPO Tearsheet

Go Digit General Insurance (1643133D IN) is looking to raise about US$503m in its upcoming India IPO. The deal will be run by ICICI, MS, Axis, Edelweiss, HDFC and IIFL.
Go Digit General Insurance (GDGI) is a digital full stack insurance company, offering motor, health, travel, property, marine, liability and other insurance products, which are customizable, as per the company.
GDGI accounted for approximately 82.9% (INR 52.68bn in Fiscal 2022) of the gross written premiums written, making it the largest digital full stack insurance player in India, according to RedSeer.

Concord Biotech Pre-IPO Tearsheet

Concord Biotech Ltd (658823Z IN) is looking to raise about US$250m in its upcoming India IPO. The deal will be run by Kotak, Citi, and Jefferies.
Concord Biotech is an India-based biopharma firm, which develops and manufactures fermentation-based APIs.
As per F&S, it was one of the leading global developers and manufacturers of select fermentation-based APIs across immunosuppressants and oncology in terms of market share, based on FY21 volume.

💡 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

Aug 23

Daily Brief ECM: Daiwa House REIT Placement – Well-Flagged but Low on DPU Accretion and more

In today’s briefing:

Daiwa House REIT Placement – Well-Flagged but Low on DPU Accretion
Biocytogen (百奥赛图) IPO: Short Term and Long Term Challenges
BAREIT IPO – Maiden Airport-REIT Listing Should Garner Interest. Yield Is Better as Well.
WM Motor Holding IPO – The Positives – Fast Growth Driven by Its SUV and Mainstream Focus

Daiwa House REIT Placement – Well-Flagged but Low on DPU Accretion

Daiwa House Reit Investment (8984 JP) is looking to raise around US$98m to acquire four new properties.
Overall, the deal is well flagged with Daiwa House REIT (DHR) making capital raises almost an annual routine. The acquisition would be accretive to DPU as well.
In this note, we will look at the assets to be acquired, impact on forecast and portfolio, and run the deal through our framework.

Biocytogen (百奥赛图) IPO: Short Term and Long Term Challenges

By Ke Yan, CFA, FRM

Biocytogen is a leading animal model player in China expanding into biotech. The company launched a downsized deal to raise up to USD 70m via a Hong Kong listing.
In our previous note, we looked at the company business lines and compared the company’s operation with leading animal model players.
In this note, we provide an update for the book building. We provide our quick thoughts on the valuation and deal dynamics.

BAREIT IPO – Maiden Airport-REIT Listing Should Garner Interest. Yield Is Better as Well.

BA Airport Leasehold REIT (BAREIT TB) is looking to raise up to US$173m in its Thailand IPO.
BA Airport Leasehold REIT (BAREIT), sponsored by Bangkok Airways, is Thailand’s first airport REIT.
We selected an amalgamation of Thai-listed REITs to get a sense of where they trade, in their respective yield offered.

WM Motor Holding IPO – The Positives – Fast Growth Driven by Its SUV and Mainstream Focus

WM Motor Technology Co Ltd (WMT CH) (WMM) is looking to raise about US$1bn in its upcoming Hong Kong IPO.
WM Motor is a smart EV player in China. As of the latest practicable date, it had a total of four main EV models.
In this note, we talk about the positive aspects of the deal.

💡 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

Aug 21

Daily Brief ECM: ECM Weekly (21st Aug 2022) – China Tourism and more

In today’s briefing:

ECM Weekly (21st Aug 2022) – China Tourism, SoCar, Beauty Farm, ANZ, Max, Judo, Steadfast, Cleanaway

ECM Weekly (21st Aug 2022) – China Tourism, SoCar, Beauty Farm, ANZ, Max, Judo, Steadfast, Cleanaway

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, China Tourism managed to price its IPO above the mid-point.
There were a host of placements and blocks this week across the region.

💡 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

Aug 20

Daily Brief ECM: Cleanaway Waste Management Placement – Accretive Acquisition Could Outweigh Weak Momentum and more

In today’s briefing:

Cleanaway Waste Management Placement – Accretive Acquisition Could Outweigh Weak Momentum
BA Airport Leasehold REIT Pre-IPO – First Airport-REIT, Expect Stable Income
SoCar IPO Trading – Weak Subscription Rates and Remains Overvalued

Cleanaway Waste Management Placement – Accretive Acquisition Could Outweigh Weak Momentum

Cleanaway Waste Management (CWY AU) is looking to raise US$242m (A$350m) to fund its acquisition of Global Renewables Holdings (GRL) and for funding its Blueprint 2030 initiatives.
Cleanaway Waste Management (CWY) had recently released its update for the Blueprint 2030 initiative. Short interest on the stock has been on the rise as well.
The deal is relatively large at 21.3 days of three month ADV, representing 6.3% of current mcap.

BA Airport Leasehold REIT Pre-IPO – First Airport-REIT, Expect Stable Income

BA Airport Leasehold REIT (BAREIT TB) (BAREIT) is looking to raise about US$290m in its Thailand IPO.
BA Airport Leasehold REIT (BAREIT), sponsored by Bangkok Airways, is Thailand’s first airport REIT.
It aims to utilise the IPO proceeds, combined with a debt issuance to lease a number of properties located in Samui Airport.

SoCar IPO Trading – Weak Subscription Rates and Remains Overvalued

SOCAR (403550 KS) raised around US$78m in its South Korea IPO, after the deal was priced at 28,000 KRW/share, below the bottom end of its initial IPO price range.
Subscription rates for SoCar have been tepid, and previous deals with similar subscription rates as that of SoCar have had poor debuts, closing -8.2% on average.
The lack of instis opting for lockup will likely result in a selldown given its weak fundamentals and lofty valuations.

💡 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

Aug 18

Daily Brief ECM: Steadfast Group Placement – Another Accretive Acquisition and more

In today’s briefing:

Steadfast Group Placement – Another Accretive Acquisition, past Deals Have Done Well
Pre-IPO Weimeizi (Guangdong) – The Market Position Is Not Solid

Steadfast Group Placement – Another Accretive Acquisition, past Deals Have Done Well

Steadfast (SDF AU) is looking to raise around A$225m from its placement to fund the acquisition of Insurance Brands Australia, an insurance distribution firm.
The company had undertaken a similar sized deal last year for another acquisition, that deal did well.
In this note, we will talk about the acquisition and run the deal through our ECM framework.

Pre-IPO Weimeizi (Guangdong) – The Market Position Is Not Solid

By Xinyao (Criss) Wang

WEIMEIZI develops the oral care market by means of large promotion and marketing so as to attract consumers, which helps Saky become one of the top brands in China.
However, with the layout of other long-lasting reputable brands and the entry of new brands, how to maintain the market share in fierce competition has become an important issue.
WEIMEIZI’s leading market position is not solid, unless it could create differentiated products and keep up with industry trends closely.

💡 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

Aug 16

Daily Brief ECM: Ascott Residence Trust Placement – Accretive Acquisition to Bolster Stable Income and more

In today’s briefing:

Ascott Residence Trust Placement – Accretive Acquisition to Bolster Stable Income
Max Healthcare Placement – Well Flagged but a Large One to Process

Ascott Residence Trust Placement – Accretive Acquisition to Bolster Stable Income

Ascott Residence Trust (ART SP) is looking to raise US$110m (S$150m) in its primary offering to partially fund the acquisition of nine properties in France, Vietnam, Australia, US and Japan.
The deal is a relatively large one to digest at 23.6 days of three month ADV, although it would represent just 3.9% of current mcap.
The proposed acquisitions are expected to be accretive, increasing DPU by 2.8% and would increase the REIT’s proportion of stable income to 71%, up from 69% in end proforma-FY21.

Max Healthcare Placement – Well Flagged but a Large One to Process