Category

ECM

Jul 12
0

Daily Brief ECM: SOCAR IPO Likely to Be Delayed and more

By | Daily Briefs, ECM

In today’s briefing:

  • SOCAR IPO Likely to Be Delayed
  • Tianqi Lithium A/H Trading – A-Shares Have Done Relatively Well, H-Shares Should Follow

SOCAR IPO Likely to Be Delayed

By Douglas Kim

  • After the market close today, Seoul Economic Daily reported that Socar is likely to delay its IPO to later on. 
  • Although Socar has not formally announced that it will delay the IPO, we believe that there is a high probability that the IPO will be postponed. 
  • The overall sentiment on the Socar IPO appears to be negative by many institutional investors, unless the company reduces the IPO price range substantially. 

Tianqi Lithium A/H Trading – A-Shares Have Done Relatively Well, H-Shares Should Follow

By Sumeet Singh

  • Tianqi Lithium (TL) raised around US$2bn via its H-shares listing. It undertakes mining of lithium ore and manufacturing of lithium concentrate, lithium compounds and derivatives.
  • TL was the largest producer of mined lithium globally in terms of output in 2020 and ranked third in terms of revenue generated from lithium in 2020.
  • In this note, we talk about the updates since our last note, along with the trading dynamics.

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Jul 11
0

Equity Capital Markets: Tianqi Lithium, WCP, Akeso Biopharma Inc and more

By | Daily Briefs, ECM

In today’s briefing:

  • Weekly Deals Digest (10 Jul) – Tianqi Lithium, Noah Holdings, Emperador, Link Admin, Hwa Hong
  • Northbound Flows: Tianqi Lithium Inflow Before H-Share Listing
  • WCP IPO Terms & Valuation Controversies
  • Akeso Biopharma Placement (9926.HK) – The Concerns Behind and the Outlook

Weekly Deals Digest (10 Jul) – Tianqi Lithium, Noah Holdings, Emperador, Link Admin, Hwa Hong

By Arun George

Northbound Flows: Tianqi Lithium Inflow Before H-Share Listing

By Ke Yan, CFA, FRM

  • We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine.
  • Inflows into the consumer staple and health care were offset by the outflows from industrials and material sector.
  • We highlight inflows into the Tianqi Lithium-A prior to its H-share debut next week.

WCP IPO Terms & Valuation Controversies

By Sanghyun Park

  • It is hard to understand why WCP uses future EBITDA in the peer valuation while all the peers are based on the 1Q22 LTM figures.
  • Not only that, of the eight valuation peers, only SKIET and Shenzhen Senior Tech are the only ones with sufficient business relevance to WCP.
  • WCP’s intrinsic market cap is ₩2.35T with a price per share of ₩69,141, implying that the bankers’ indicative price band is rather at a 15.7-44.6% premium.

Akeso Biopharma Placement (9926.HK) – The Concerns Behind and the Outlook

By Xinyao (Criss) Wang

  • The current stock price is not high. Akeso is reluctant to diluting its shareholders too much. So, it plans to raise just HK$576.65 million, which won’t bring any fundamental change.
  • Akeso (9926 HK)’s conservative management style, development mode, low cash balance and FDA’s “Guidance” on bispecific antibodies would limit the Company’s future development pace, commercialization, internationalization and valuation expansion prospects. 
  • We do not think Akeso is attractive at present, unless the Company could hit some big license-out deals, or IPO on SSE STAR Market to secure enough funds in advance. 

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Jul 10
0

Equity Capital Markets: WCP, Soosan Industries, Tianqi Lithium and more

By | Daily Briefs, ECM

In today’s briefing:

  • WCP IPO Valuation Analysis
  • Soosan Industries Pre-IPO – Pro-Nuclear Growth Angle and Better Track Record Vs Peers
  • ECM Weekly (10th Jul 2022) -Tianqi, Thai Life, TPG, SK IE, Weilong, Emperador, Soosan, SoCar, Deewin

WCP IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of WCP is EV of 2.4 trillion won, implied market cap of 3.0 trillion won and target price of 87,805 won per share. 
  • Given the lack of upside relative to the IPO price range (80,000 won to 100,000 won), we would PASS on this IPO deal.
  • We forecast the company to generate revenue of 229.1 billion won (up 23.5% YoY) in 2022. We estimate operating margin of 14.8% in 2022, lower than 21.8% in 2021.

Soosan Industries Pre-IPO – Pro-Nuclear Growth Angle and Better Track Record Vs Peers

By Clarence Chu

  • Soosan Industries (126720 KS) is looking to raise up to US$189m in its Korean IPO. 
  • Soosan Industries (SSI) is a private maintenance firm that provides general maintenance services for power plants in South Korea.
  • In our view, despite being a much smaller player, it has recorded better margins and profitability growth, warranting it to trade at least inline with its direct peer, KKPS.

ECM Weekly (10th Jul 2022) -Tianqi, Thai Life, TPG, SK IE, Weilong, Emperador, Soosan, SoCar, Deewin

By Sumeet Singh

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • Tianqi managed to pull off the largest HK IPO so far this year, a good listing could see a pickup in other large deals.
  • For placements, SK IE couldn’t hold on to its deal price, while Ming Yang kicked off what might be a busy GDR season.

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Jul 09
0

Equity Capital Markets: Noah Holdings and more

By | Daily Briefs, ECM

In today’s briefing:

  • Noah Holdings: Rich Pickings but Patience Required

Noah Holdings: Rich Pickings but Patience Required

By Arun George

  • Noah Holdings (NOAH US) priced its H Share at HK$292.00 per share (US$18.60 per ADS) to raise gross proceeds of US$41 million. The H Share will trade on 13 July. 
  • The H Share listing is primarily to address the risk of a potential US delisting. With cash accounting for around 50% of the market cap, Noah is well capitalised. 
  • The valuation is attractive for a company well-positioned to take advantage of any improving market sentiment and an easing of the risk-off sentiment.

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Jul 08
0

Equity Capital Markets: Deewin Tianxia, SOCAR, Weilong Delicious Global, WCP and more

By | Daily Briefs, ECM

In today’s briefing:

  • Deewin Tianxia IPO – Losing Market Share in a Fragmented Market, Coupled with Pricey Valuation
  • SoCar Pre-IPO – Peer Comparison – Highly Competitive Market with Thin Margins
  • Weilong Delicious IPO: Not Very Delicious
  • WCP IPO Preview

Deewin Tianxia IPO – Losing Market Share in a Fragmented Market, Coupled with Pricey Valuation

By Clarence Chu

  • Deewin Tianxia (2418 HK) is looking to raise up to US$147m in its Hong Kong IPO.
  • Deewin Tianxia (DT) is a service provider in the commercial automobile service industry in China. 
  • Listing sentiment hasn’t been the greatest as of late and the tepid cornerstone list doesn’t help. 

SoCar Pre-IPO – Peer Comparison – Highly Competitive Market with Thin Margins

By Ethan Aw

  • SOCAR (403550 KS) is looking to raise up to US$159m in its upcoming Korea IPO. 
  • While SoCar seeks to be an all-in-one mobility solution provider, the bulk of its revenues still come from its car sharing segment. 
  • The car sharing market remains highly competitive with existing players that are already profitable. In this note, we will undertake a peer comparison of SoCar vs its listed peers

Weilong Delicious IPO: Not Very Delicious

By Shifara Samsudeen, ACMA, CGMA

  • Weilong Delicious is a is a leading spicy snack food company in China with a market share of 6.2% and ranked first among all spicy snack food enterprises in China.
  • The company’s application for a HKEx IPO has been approved and plans to raise proceeds of about US$500m.
  • Our analysis on the company’s financials reveal that its top line growth is slowing down while margins have come under pressure. We discuss the details below.

WCP IPO Preview

By Douglas Kim

  • WCP is getting ready for an IPO in Korea in August. This is expected to be one of the largest IPOs in Korea post LG Energy Solution (373220 KS).
  • The IPO price range is from 80,000 won to 100,000 won. The IPO base deal size is from $560 million to $700 million.
  • WCP is a leading maker of separators which are key materials used in EV batteries.

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Jul 07
0

Equity Capital Markets: Emperador Inc, HPSP, Deewin Tianxia, Allied Blenders & Distillers and more

By | Daily Briefs, ECM

In today’s briefing:

  • Emperador SGX Secondary Listing: Scotch, Not so Neat
  • HPSP IPO Book Building Results Analysis
  • Deewin Tianxia IPO – Largest Segment Has Slowed and Generates Bulk of Sales from Related Parties
  • Allied Blenders and Distillers Pre-IPO Tear Sheet

Emperador SGX Secondary Listing: Scotch, Not so Neat

By Arun George

  • Emperador Inc (EMP PM) is pre-marketing a secondary listing on the SGX IPO by raising US$300-500 million, according to press reports. 
  • Emperador has established a track record of decent revenue growth, profitability and cash generation over the years. 
  • While the fundamentals are solid the valuation looks full in comparison to peers and historical trading ranges. 

HPSP IPO Book Building Results Analysis

By Douglas Kim

  • HPSP (403870 KS) announced its IPO book building results. The IPO price has been determined at 25,000 won, which is at the high end of the IPO price range.
  • There were 1,577 institutions that were involved in the IPO survey and the demand ratio was 1,511 to 1. The IPO offering amount is 75 billion won.
  • Our base case valuation of HPSP is target price of 38,228 won per share, which represents 53% higher than the high end of the IPO price range of 25,000 won.

Deewin Tianxia IPO – Largest Segment Has Slowed and Generates Bulk of Sales from Related Parties

By Clarence Chu

  • Deewin Tianxia (2418 HK) is looking to raise up to US$147m in its Hong Kong IPO.
  • Deewin Tianxia (DT) is a service provider in the commercial automobile service industry in China. 
  • The firm continues to generate the bulk of its revenue from its controlling shareholder and the latter’s associates. 

Allied Blenders and Distillers Pre-IPO Tear Sheet

By Sumeet Singh

  • Allied Blenders and Distillers (ABD) is looking to raise about US$250m in its upcoming India IPO. The deal will be run by ISec, Axis, JM Fin, Kotak and Equirus.
  • ABD is the largest Indian-owned Indian-made foreign liquor (IMFL) company and the third largest IMFL company in India, in terms of annual sales volumes between FY14 and FY21.
  • It had a market share of 8.2% in the IMFL market by sales volumes in FY21. Its products are retailed at over 64,000 outlets in India.

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Jul 06
0

Equity Capital Markets: SK IE Technology, Emperador Inc, Gaush Meditech, Weilong Delicious Global and more

By | Daily Briefs, ECM

In today’s briefing:

  • SK IE Technology Placement – Last Deal Didn’t Do Well, More Discount and Cleanup Should Help
  • Emperador Secondary Listing – Driven by Whisky, Supported by Brandy
  • Pre-IPO Gaush Meditech – The “Middlemen” Have Many Challenges
  • Weilong Delicious Global Pre-IPO – Growth Is Slowing but Pre-IPO Valuation Has Been Halved

SK IE Technology Placement – Last Deal Didn’t Do Well, More Discount and Cleanup Should Help

By Sumeet Singh

  • SK IE Technology’s (SKIE) shareholder aims to raise around US$228m via selling their remaining shareholding.
  • The same shareholder had sold some of their stake earlier in Nov 21. That deal didn’t end up doing well.
  • In this note, we will talk about the deal dynamics and  run the deal through our ECM framework.

Emperador Secondary Listing – Driven by Whisky, Supported by Brandy

By Sumeet Singh

  • Emperador (Emp) is looking to raise up to US$750m via a secondary listing in Singapore.
  • Emp is the Philippines’ largest liquor company and the world’s largest brandy producer. Its products are sold in over 100 countries.
  • In this note, we look at the company’s past performance.

Pre-IPO Gaush Meditech – The “Middlemen” Have Many Challenges

By Xinyao (Criss) Wang

  • Gaush Meditech (GMT HK) is a leading total solution provider of ophthalmic medical devices industry.
  • The irreplaceability of Gaush in the whole industrial chain is actually not high based on its current business model.The proprietary product business may also need to face different policy risks.
  • Together with other uncertainties such as increasing market competition and medical reform policy in China, we are conservative about Gaush’s outlook at the current stage.  

Weilong Delicious Global Pre-IPO – Growth Is Slowing but Pre-IPO Valuation Has Been Halved

By Sumeet Singh

  • Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$500m 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 talk about the updates from its refiled PHIP.

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Jul 05
0

Equity Capital Markets: Miniso, Kids Clinic India, Readboy Education and more

By | Daily Briefs, ECM

In today’s briefing:

  • Miniso Hong Kong Listing: Still Too Cheap
  • Kids Clinic India Pre-IPO – Losses Narrowing with Cluster Model Growth Strategy
  • Readboy Education IPO: Struggling Amidst COVID and Supply Shortages

Miniso Hong Kong Listing: Still Too Cheap

By Oshadhi Kumarasiri

  • The offer period for Miniso (MNSO US)’s HK listing began on 30th June at a maximum offer-price of HK$22.10 per-share, which translates to a 42% premium to its ADSs .
  • With store-level performance expected to reach the pre-COVID level , alongside an aggressive plan to increase the store count by 60%, we predict more than 100% upside to FY24 consensus.
  • Our estimates put Miniso on 4.3x FY24 OP, which seems genuinely cheap compared to most of the GMS stocks in New York and Hong Kong.

Kids Clinic India Pre-IPO – Losses Narrowing with Cluster Model Growth Strategy

By Ethan Aw

  • Kids Clinic India (9890311Z IN) is looking to raise approximately US$160m in its upcoming India IPO.
  • Kids Clinic India (KCI) is a super-specialty mother and baby-care provider, offering end-to-end coverage of all stages of the parenthood journey, beginning with fertility treatments, through maternity, neonatology and paediatrics.
  • KCI’s growth has been impressive, becoming operating EBITDA and CFO positive in recent years. However, it remains unclear as to which business segment or regions are KCI’s largest growth drivers.

Readboy Education IPO: Struggling Amidst COVID and Supply Shortages

By Shifara Samsudeen, ACMA, CGMA

  • Readboy Education has the second largest market share in China’s smart learning device market. The company has filed for an IPO on the HKEx to raise around HK$ 520m.
  • The company grew its revenues strongly over the past three years but shipments have been declining in 2021 amidst the COVID-19 resurgence and subsequent lockdowns.
  • Margins have been declining due to raw material shortages and even though Readboy claims to have taken measures to deal with the shortages, we are yet to see its effectiveness.

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Jul 04
0

Equity Capital Markets: Tianqi Lithium, China Tourism Group Duty Free Corp Ltd and more

By | Daily Briefs, ECM

In today’s briefing:

  • Weekly Deals Digest (03 Jul) – Tianqi Lithium, Thai Life, Li Auto, Link Admin, Tassal, DTAC/True
  • CTG Duty Free (601888 CH) Pre-IPO: Revival of H-Share IPO

Weekly Deals Digest (03 Jul) – Tianqi Lithium, Thai Life, Li Auto, Link Admin, Tassal, DTAC/True

By Arun George

CTG Duty Free (601888 CH) Pre-IPO: Revival of H-Share IPO

By Osbert Tang, CFA

  • China Tourism Group Duty Free Corp Ltd (601888 CH) has revived its H-share IPO plan by re-submitting the Application Proof to the Hong Kong Stock Exchange on 1 Jul. 
  • While there is no material changes in the Proof, weaker 1Q22 result, negative impact of pandemic and new agreements signed with Guangzhou Airport are recent developments that should be noted.
  • We think CDFC’s H-shares, based on similar valuation before cancellation of the previous IPO plan, look less attractive given the sharp pull back of its peers in Hong Kong. 

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Jul 03
0

Equity Capital Markets: Hyundai Oilbank Co Ltd, Tencent and more

By | Daily Briefs, ECM

In today’s briefing:

  • Korea IPOs for 2022: 1H Review & 2H Schedules for Flow Clash Risk
  • ECM Weekly (3rd Jul 2022) – Tianqi, Thai Life, Prosus/Naspers, Tencent, SEA, Soosan, SoCar, Carsales

Korea IPOs for 2022: 1H Review & 2H Schedules for Flow Clash Risk

By Sanghyun Park

  • Except for SOCAR, most major ones will be in the fourth quarter, so local IPO funds’ lock-up/pricing strategy should inevitably be intense to adjust the fund flow schedule.
  • Probably, local institutional investors’ SOCAR lock-up will be mostly one month. Or even we should expect some of them to skip SOCAR altogether to focus on Hyundai Oilbank.
  • Among those not yet applied for a preliminary review, the local street still expects Oasis Market, CJ Olive Young, and Kakao Mobility to complete their listing this year.

ECM Weekly (3rd Jul 2022) – Tianqi, Thai Life, Prosus/Naspers, Tencent, SEA, Soosan, SoCar, Carsales

By Sumeet Singh

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • There was a marked pickup in IPO activity with a number of smaller deals, along with two large deals being launched.
  • There were no major placements last week. In addition, Prosus single handedly took out two prospective large placements.

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