ECM Daily Briefs | Page 68 of 118

In today’s briefing:

Xtep International Placement – Parent Trimming at ATHs, Last Deal Didn’t Do Well
WCP IPO: Additional Important Considerations
Signature Global (India) Pre-IPO Tearsheet
Pre-IPO Best Wellness Innovation Group – Here Are the Concerns

Xtep International Placement – Parent Trimming at ATHs, Last Deal Didn’t Do Well

Group Success Investments is looking to raise up to US$133m by trimming its holdings in Xtep International (1368 HK).
We can’t say that the deal is expected and short interest on the stock hasn’t been creeping up as well.
While the deal won’t be a large one, representing just 5.7 days of three month ADV, the firm’s last deal hasn’t done well.

WCP IPO: Additional Important Considerations

We remain Bearish on the WCP IPO. Our base case valuation of WCP is implied market cap of 3.0 trillion won and target price of 87,805 won per share.
In this insight, we highlight four additional important considerations to the WCP IPO including comparison to SK IE Technology, 1Q22 earnings comparison, higher IPO discount, and overly optimistic EBITDA estimates.
We would categorize WCP as an excellent company but not exceptional as HPSP. Therefore, the weak market conditions will likely have a negative impact on the WCP IPO pricing.

Signature Global (India) Pre-IPO Tearsheet

SignatureGlobal India Pvt Ltd (1468641D IN) is looking to raise around US$125m in its upcoming India IPO. The deal will be run by Axis, ICICI, and Kotak.
Signature Global is a real estate development company in India, with its primary operations being the development of residential real estate projects in the affordable and mid segment.
As of FY22, it had completed five projects with a land area of 34.9 acres and an aggregate saleable area of 2.86m sqft.

Pre-IPO Best Wellness Innovation Group – Here Are the Concerns

By Xinyao (Criss) Wang

The growth in revenue and profit was mainly driven by the face mask business, but this business has ceased, which raises the concerns on future growth momentum of Best Wellness.
Best Wellness’s weak performance of its own-brand business would prevent it from standing out in the fierce market competition in the long term.
Together with over-reliance on limited customers and the complex international relations, we are conservative about the Company’s outlook at the current stage.

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Jul 21

Daily Brief ECM: Tian Tu Capital Pre-IPO Tearsheet and more

In today’s briefing:

Tian Tu Capital Pre-IPO Tearsheet
Beneunder Pre-IPO – The Positives – Basking in the Sun
Bharat FIH IPO: Rife with Bottlenecks
Beneunder Pre-IPO – The Negatives – Doubts Remain, Including Related Party Dealings

Tian Tu Capital Pre-IPO Tearsheet

Tian Tu Capital (1390587D CH) is looking to raise about US$500m in its upcoming Hong Kong IPO. The deal will be run by JP Morgan and Huatai International.
Tian Tu Capital is a private equity investor that invests in Chinese consumer brands/companies, managing capital for institutional investors and high-net worth individuals.
Among the 205 portfolio companies it had invested in up to FY21 (Dec 31, 2021), 23 of them had reached a valuation of US$1bn at that date.

Beneunder Pre-IPO – The Positives – Basking in the Sun

Beneunder Limited (BL) aims to raise around US$500m in its Hong Kong IPO.
According to CIC, it was the largest sunprotection apparel brand in China in terms of both total retail sales value and online retail sales value with 5.0% and 12.9% marketshare.
In this note, we will talk about the positive aspects of the deal.

Bharat FIH IPO: Rife with Bottlenecks

Bharat FIH (BFIH IN) is India’s largest Electronic Manufacturing Services (EMS) provider and the largest mobile phone manufacturing and assembly services provider to Xiaomi Corp (1810 HK).
It has received Sebi approval for an IPO to raise Rs50,038 million (US$625 million), split equally between a primary and secondary raise. The offer will launch in August.
The fundamentals are challenged due to its reliance on Xiaomi, market share pressure, glacial revenue diversification, low margin and cash burn. We would pass on the IPO.

Beneunder Pre-IPO – The Negatives – Doubts Remain, Including Related Party Dealings

Beneunder Limited (BL) aims to raise around US$500m in its Hong Kong IPO.
According to CIC, it was the largest sunprotection apparel brand in China in terms of both total retail sales value and online retail sales value with 5.0% and 12.9% marketshare.
In this note, we will talk about the not-so-positive aspects of the deal.

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Jul 20

Daily Brief ECM: Sebit Chem IPO Preview – A Major Competitor to Sungeel Hitech in Rechargeable Batteries Recycling and more

In today’s briefing:

Sebit Chem IPO Preview – A Major Competitor to Sungeel Hitech in Rechargeable Batteries Recycling
Soosan Industries IPO Book Building Results
Healthvista India Pre-IPO Tearsheet
Beijing UBOX Online Technology Pre-IPO – Trimming Losses, but yet to Factor in 2022 Lockdowns
Sebit Chem Valuation Analysis

Sebit Chem IPO Preview – A Major Competitor to Sungeel Hitech in Rechargeable Batteries Recycling

Sebit Chem is getting ready to complete its IPO in early August. The IPO price range is from 25,000 won to 30,000 won.
The IPO base deal size is from US$21 million to US$25 million. The expected market cap after the IPO is from 126 billion won to 151 billion won.
Sebit Chem is one of the competitors to Sungeel Hitech which completed a very successful IPO book building. Sebit Chem is also likely to enjoy strong demand among many investors.

Soosan Industries IPO Book Building Results

Soosan Industries had disappointing IPO book building results. The demand ratio from the institutional investors was 130 to 1 which is lower than some of the recent IPOs.
The IPO price has been determined at 35,000 won. Soosan Industries is one of the leading companies in Korea for providing maintenance services for nuclear power plant equipment in Korea.
Our base case valuation of Soosan Industries is target price of 56,383 won per share, which is 61% higher than the IPO price of 35,000 won.

Healthvista India Pre-IPO Tearsheet

Healthvista India (1370230D IN) is looking to raise about US$126m in its upcoming India IPO. The deal will be run by SBI Cap, IIFL Securities and JM Financial.
Healthvista India is an out-of-hospital healthcare service provider. Under its brand Portea, it offers services such as primary care, geriatric and palliative care, amongst others.
It also distributes specialty pharmaceuticals and provides “point of care” medical equipment for sale and rental.

Beijing UBOX Online Technology Pre-IPO – Trimming Losses, but yet to Factor in 2022 Lockdowns

Beijing UBOX Online Technology (1741985D CH) is looking to raise up to US$500m in its upcoming Hong Kong IPO.
Beijing UBOX Online Technology (UBOX) is an unmanned retail operator (vending machine) in China.
As per F&S, it was the largest unmanned retail operator in China, with the largest retail machine network in the country.

Sebit Chem Valuation Analysis

Our base case valuation of Sebit Chem IPO is target price of 50,775 won which is 69% higher than the high end of the IPO price range.
Sebit Chem’s business is now mainly composed of recycling waste rechargeable batteries and waste acid (mostly from semiconductor and LCD related products).
Our base case valuation is based on 23.7x P/E (comps’ average) using our estimated net profit of 10.8 billion won in 2023.

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Jul 19

Daily Brief ECM: ANZ Bank (ANZ AU) Nixes MYOB and more

In today’s briefing:

ANZ Bank (ANZ AU) Nixes MYOB, Yeas SunCorp Bank, To Raise A$3.5bn of Equity
ANZ Renounceable Entitlement Offer – Dilute Now, Accrete Later. Still Appears Better than MYOB
SoCar IPO – Refiling Updates – Latest Earnings Do Not Change Investment Thesis
Air Closet Files for IPO
Super Hi Spin-Off: Unexciting Fundamentals

ANZ Bank (ANZ AU) Nixes MYOB, Yeas SunCorp Bank, To Raise A$3.5bn of Equity

By Travis Lundy

Australia and New Zealand Banking Group (ANZ) (ANZ AU) this morning made a flurry of announcements. First and foremost, ANZ withdrew from discussions on MYOB.
Q3 earnings ended 30 June saw revenue +5%, lending up 3%yoy, markets revenue +7%, NIM up 3bp (rising rates helps). Basel3 APRA Level2/Level1 CET1 Ratios were 11.1%/10.4%.
But the big news: ANZ is buying SunCorp Bank from SunCorp (SUN AU) for A$4.9bn (1.3x NTA), and will raise A$3.5bn through a 1 for 15 renounceable rights offering.

ANZ Renounceable Entitlement Offer – Dilute Now, Accrete Later. Still Appears Better than MYOB

ANZ aims to raise around US$2.4bn (A$3.5bn) via a renounceable entitlement offer to part fund the purchase of Suncorp Bank.
In our view, neither the fundraising nor the acquisition appear to be particularly well flagged. ANZ’s withdrawal from MYOB talks might be the most positive thing about the announcement.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

SoCar IPO – Refiling Updates – Latest Earnings Do Not Change Investment Thesis

SOCAR (403550 KS) is looking to raise up to US$157m in its upcoming Korea IPO.
SoCar is a Korean car sharing business which aims to become an all-in-one mobility solutions provider beyond car sharing, with approximately 80% domestic market share in the car sharing space.
The firm remains loss-making with no signs of being profitable in the near/medium term. In this note, we will take a look at its refiling updates.

Air Closet Files for IPO

By Michael Causton

Subscription rental services have become increasingly mainstream and the earlier start ups are now maturing into larger businesses. One of the first, Air Closet, plans an IPO later this month.
Air Closet specialises in renting out clothing from major labels but also in taking away the burden of choice by arranging for styles to be picked in-house.
As well as this growing service, Air Closet has also just launched a rental service for gadgets ranging from kitchen appliances to cameras.

Super Hi Spin-Off: Unexciting Fundamentals

By Ke Yan, CFA, FRM

Haidilao International announced the spin-off plan of its overseas arm, Super Hi.
We take a quick look at Super Hi’s fundamentals. We think it is unlikely for Super Hi to achieve the level of economy of scale as Haidilao in China.
We think the valuation of Super Hi should be compared to F&B peers in the ASEAN region given that its business is mainly focused on the ASEAN region.

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Jul 18

Daily Brief ECM: Pre-IPO Cryofocus Medtech (Shanghai) – The Industry and more

In today’s briefing:

Pre-IPO Cryofocus Medtech (Shanghai) – The Industry, the Business and the Concerns

Pre-IPO Cryofocus Medtech (Shanghai) – The Industry, the Business and the Concerns

By Xinyao (Criss) Wang

The cryoablation market accounts for about 1/3 of the total tumor ablation market overseas, while this percentage is less than 1/10 in China, indicating promising growth potential in the future.
Cryofocus Medtech (Shanghai) (CFM HK)’s products and candidates do have technical advantages, offering more choices for patients and doctors.
However, the commercialization outlook remains to be seen because of the potential large price reduction after entering national medical insurance coverage and the uncertainties over acceptance by patients and doctors.

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Jul 17

Daily Brief ECM: Socar IPO: Slightly Revises IPO Prospectus Details and more

In today’s briefing:

Socar IPO: Slightly Revises IPO Prospectus Details
ECM Weekly (17th Jul 2022) – Tianqi, Emperador, Soosan, SoCar, WCP, Deewin, Bharat FIH, BYD

Socar IPO: Slightly Revises IPO Prospectus Details

SOCAR revised its IPO prospectus. What has changed is the date when the book building for the institutional investors starts (4 August).
The IPO price range remains at 34,000 won to 45,000 won. The IPO base offering size is also between US$120 million to US$159 million.
We maintain our base case valuation of Socar (target price of 27,967 won), which is 18% lower than the low end of the IPO price range of 34,000 won.

ECM Weekly (17th Jul 2022) – Tianqi, Emperador, Soosan, SoCar, WCP, Deewin, Bharat FIH, BYD

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
Tianqi’s soggy debut in Hong Kong despite its wide discount will probably put Hong Kong ECM back in snooze mode for a while
There were no major placements this week and its likely to remain that was as we approach the half-yearly results season.

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Jul 16

Daily Brief ECM: SOCAR Revised Prospectus: Critical Issues Still Not Addressed and more

In today’s briefing:

SOCAR Revised Prospectus: Critical Issues Still Not Addressed
WCP IPO: Valuation Insights

SOCAR Revised Prospectus: Critical Issues Still Not Addressed

By Sanghyun Park

There must be a rationale for car sharing to receive a higher valuation than the traditional rental car business. For this, profit per vehicle must be provided, not sales.
Also, whether SOCAR can justify its valuation built on the relatively high valuation premiums granted to ccOS and FMS companies is still questionable.
Concerning fund flow, it is positive that SOCAR can aim for LG Energy’s six-month lockup release. But it is unclear how much flow will be left for SOCAR after WCP.

WCP IPO: Valuation Insights

WCP (WCP KS), a lithium-ion batteries separator company, is planning to launch a KRW900 billion (US$692 million) IPO in August.
In WCP IPO: Hooked on Lithium we noted that WCP has attractive fundamentals due to the favourable demand/supply balance, technology, strong revenue growth and improving margins.
In this note, we look at the syndicate’s valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive and we would pass on the IPO.

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Jul 15

Daily Brief ECM: Sungeel HiTech IPO – The Highest Ever Bookbuilding Demand Ratio for a Korean IPO and more

In today’s briefing:

Sungeel HiTech IPO – The Highest Ever Bookbuilding Demand Ratio for a Korean IPO
Deewin Tianxia IPO Trading – Weak Subscription Rates, Retail Portion Undersubscribed
Bharat FIH Pre-IPO – The Negatives – Not a Whole Lot to Show Yet
Innova Captab Pre-IPO Tearsheet
WCP IPO – The Negatives – Patent, Going Concern, Customer Concentration

Sungeel HiTech IPO – The Highest Ever Bookbuilding Demand Ratio for a Korean IPO

Sungeel Hitech announced its IPO book building results. The IPO price has been determined at 50,000 won, higher than the high end of IPO price of 47,500 won.
The demand ratio for Sungeel Hitech IPO was 2,269.7 to 1 which broke all time records in terms of highest ever demand ratio for a Korean IPO.
Our base case valuation is implied price per won of 70,992 won per share, which represents 42% higher than the IPO price of 50,000 won.

Deewin Tianxia IPO Trading – Weak Subscription Rates, Retail Portion Undersubscribed

Deewin Tianxia (2418 HK) raised around US$123m in its Hong Kong IPO.
DT’s subscription rates had been lackluster with weak coverage on the institutional tranche and the retail portion being undersubscribed.
Given its smaller size, in our view, the firm should come in at a discount to its peer average.

Bharat FIH Pre-IPO – The Negatives – Not a Whole Lot to Show Yet

Bharat FIH (BFIH) aims to raise around US$660m in its India IPO via selling a mix of both primary and secondary shares. BFIH is a subsidiary of Foxconn.
Its initial operations were focused on mobile phones, of late it has been expanding its portfolio to include mechanics, electric vehicles, televisions and hearables.
In this note, we will talk about the not so positive aspects of the deal.

Innova Captab Pre-IPO Tearsheet

Innova Captab (1605221D IN) is looking to raise about US$115m in its upcoming India IPO. The deal will be run by ICICI and JM Financial.
Innova Captab is an integrated pharmaceutical company in India with a presence across the pharmaceuticals value chain including research and development, manufacturing, drug distribution and marketing and exports.
Its business includes a contract development and manufacturing organization (CDMO) business providing manufacturing services to Indian pharmaceutical companies, a domestic branded generics business and an international branded generics business.

WCP IPO – The Negatives – Patent, Going Concern, Customer Concentration

WCP aims to raise around US$690m via selling a mix of primary and secondary shares in its Korean IPO.
WCP designs, manufactures, and sells separators, which are one of the four core materials for secondary Lithium-ion batteries
In this note, we will talk about the not-so-positive aspects of the deal.

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Jul 14

Daily Brief ECM: WCP IPO: Hooked on Lithium and more

In today’s briefing:

WCP IPO: Hooked on Lithium
Giant Biogene Holding (GBH HK) Pre IPO: A Fundamentally Strong Company to Grab Market Opportunity
SML Group Pre-IPO Tearsheet
Growatt Technology Pre-IPO Tearsheet
WCP IPO – The Positives – Past Sales Have Been Very Strong

WCP IPO: Hooked on Lithium

WCP (WCP KS), a lithium-ion batteries separator company, is planning to launch a KRW900 billion (US$692 million) IPO in August.
The price range of KRW80,000-100,000 implies a market cap of KRW2.7-3.4 trillion (US$2.1-2.6 billion).
WCP has attractive fundamentals due to the favourable demand/supply balance, technology, strong revenue growth and improving margins.

Giant Biogene Holding (GBH HK) Pre IPO: A Fundamentally Strong Company to Grab Market Opportunity

By Tina Banerjee

Giant Biogene Holding (GBH HK) has filed for a Hong Kong IPO for raising as much as $1 billion. The company is China’s largest supplier of collagen-based skincare products.
Through its dual-pronged “medical institution + mass consumer” sales strategy, the company has increased revenue to RMB1,553 million in 2021 from RMB956.7 million in 2019.
The collagen-based skincare market in China is expected to grow from RMB9.4 billion in 2022 to RMB77.5 billion in 2027, at a CAGR of 52.6%, thereby offering significant growth opportunity.

SML Group Pre-IPO Tearsheet

SML Group (SMLGZ HK) is looking to raise about US$200m in its upcoming Hong Kong IPO. The deal will be run by BNP Paribas.
SML Group (SMLG) is a vertically integrated digital identification solutions provider. It primarily engages in developing, manufacturing and selling label and tag products with RFID, a leading item-level identification technology.
SMLG operates globally across 24 countries and as of the latest practicable date (17 Jun 22), had 23 production facilities in 18 countries.

Growatt Technology Pre-IPO Tearsheet

Growatt Technology (1833969D CH) is looking to raise about US$500m in its upcoming Hong Kong IPO. The deal will be run by Credit Suisse and CICC.
Growatt Technology is a global distributed energy solution provider, specializing in sustainable energy generation, storage and consumption and energy digitalization.
As of the Latest Practicable Date (20 Jun 2022), they had shipped over 2.7m PV Inverters, 268,000 energy storage inverters.

WCP IPO – The Positives – Past Sales Have Been Very Strong

WCP aims to raise around US$690m via selling a mix of primary and secondary shares in its Korean IPO.
WCP designs, manufactures, and sells separators, which are one of the four core materials for secondary Lithium-ion batteries
In this note, we will talk about the positive aspects of the deal.

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Jul 13

Daily Brief ECM: Tianqi Lithium H Share Listing: Trading Debut and more

In today’s briefing:

Tianqi Lithium H Share Listing: Trading Debut
SoCar IPO – Highly Competitive Market Coupled with Steep Valuations
Pre-IPO Huayiwang Technology – The Business Model Is Reasonable, but There Are Also Challenges
Bharat FIH Pre-IPO – The Positives – A Whole Lot of Promise

Tianqi Lithium H Share Listing: Trading Debut

Tianqi Lithium (002466 CH) priced its H Share at HK$82.00 per share to raise net proceeds of HK$13,062 million (US$1.7 billion). The H Share will start trading tomorrow.
The H Share listing (HK$82.00) and grey market price (HK$76.50) imply an AH discount of 45% and 49%, respectively. This compares to Ganfeng Lithium (1772 HK)’s current 35.3% AH discount.
The relative valuation is attractive. At the H Share listing price, Tianqi Lithium (9696 HK)’s H Share trades at a -6% discount to the median peers’ CY2022 P/B multiple.

SoCar IPO – Highly Competitive Market Coupled with Steep Valuations

SOCAR (403550 KS) is looking to raise up to US$159m in its upcoming Korea IPO.
SoCar is a Korean car sharing business which aims to become an all-in-one mobility solutions provider beyond car sharing, with approximately 80% domestic market share in the car sharing space.
The firm remains loss-making with no signs of being profitable in the near/medium term. In this note, we will take a look at its valuations vs that of listed peers.

Pre-IPO Huayiwang Technology – The Business Model Is Reasonable, but There Are Also Challenges

By Xinyao (Criss) Wang

Huayiwang Technology (1985554D HK) is strong in its digital medical education solutions, which is the cornerstone business for the continuous expansion of other solution offerings and ecosystem.
HUAYIWANG charges service fees mainly from pharmaceutical companies, which could be a more sustainable profit model than charging from patients directly.
However, the increasing competition and potential risk of losing medical professionals could shake the foundations of HUAYIWANG’s business.

Bharat FIH Pre-IPO – The Positives – A Whole Lot of Promise