ECM Daily Briefs | Page 70 of 118

In today’s briefing:

Tianqi Lithium A/H Listing – Large Deal but Its Been Priced to Go
Tianqi Lithium H Share Listing: Valuation Insights
SoCar Pre-IPO – Aiming to Become an All-In-One Mobility Solution Provider
Pre-IPO Dental Doctor Medical Holding Group – An Uncertain Outlook and Concerns About Profitability

Tianqi Lithium A/H Listing – Large Deal but Its Been Priced to Go

Tianqi Lithium (TL) is looking to raise up to US$1.7bn 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 take about the deal pricing and run the deal through our ECM framework.

Tianqi Lithium H Share Listing: Valuation Insights

Tianqi Lithium (9696 HK) has launched its H Share listing at an indicative price range of HK$69.00-82.00 per share. Pricing is on 6 July and listing on 13 July.
Tianqi Lithium (002466 CH)‘s AH discount range of 52.9%-44.0% is reasonable in the context of Ganfeng Lithium (1772 HK)’s average AH discount is 38.5% since its H Share listing.
Our relative valuation analysis suggests that Tianqi’s H Share valuation is attractive in comparison to median peers’ multiples.

SoCar Pre-IPO – Aiming to Become an All-In-One Mobility Solution Provider

By Ethan Aw

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.
As of May 2022, SoCar has over 8m subscribers and over 10m SoCar app downloads. However, the firm remains loss-making with no signs of being profitable in the near/medium term.

Pre-IPO Dental Doctor Medical Holding Group – An Uncertain Outlook and Concerns About Profitability

By Xinyao (Criss) Wang

Dental Doctor has not established core competitiveness and high moat, and has to invest more on marketing and promotion to attract customers and drive growth.
The lack of dentists, weak talent and training system as well as high dentist turnover rate would be big concerns for the Company’s long term development, especially for nationwide expansion.
This industry has not yet entered the profit mode. Most of chain dental services providers are still in the stage of cash-burning expansion. So, we are conservative about the Company’s outlook.

Before it’s here, it’s on Smartkarma

Jun 30

Equity Capital Markets: GOME Retail Holdings, Weilong Delicious Global, Soosan Industries, SOCAR, Rainmed Medical and more

In today’s briefing:

GOME Retail Placement: The Crisis Persists
Weilong Delicious IPO: In a Pickle
Soosan Industries Pre-IPO – Improving Margins and Other Segments Could Lift the Coal Overhang
SOCAR IPO Post-Listing Flow: VC-Triggered Overhang Vs. Lotte’s Counter Move
Pre-IPO Rainmed Medical – The Industry, the Business and the Concerns

GOME Retail Placement: The Crisis Persists

By Oshadhi Kumarasiri

As the mismatch between short-term assets and liabilities expands, GOME is raising HK$776.5m at HK$0.40 per-share, which is a 12.1% discount to the closing price on 27th June 2022.
This is clearly insufficient to pay down GOME Retail Holdings (493 HK)‘s RMB 40.0bn short term debt and accounts payable obligations falling due in the next 12 months.
With the omni-channel transformation taking longer than expected to turn around performance, the company might find it difficult to refinance the debt and maintain the supply chain as usual.

Weilong Delicious IPO: In a Pickle

Weilong Delicious Global (WDG HK) has refiled its PHIP with an aim to raise US$500 million, half of its previous ambition to raise US$1 billion.
We have previously discussed the IPO in Weilong Delicious IPO Initiation: Tasty Bite and Weilong Delicious IPO: Mixed Update.
The PHIP which discloses the 2021 results and recent developments point to reducing growth rates and cost pressures. We would pass on the IPO.

Soosan Industries Pre-IPO – Improving Margins and Other Segments Could Lift the Coal Overhang

By Clarence Chu

Soosan Industries (126720 KS) is looking to raise about US$189m in its upcoming Korean IPO.
Soosan Industries (SSI) is a private maintenance firm that provides general maintenance services for power plants in South Korea.
Given the downstream nature of where the firm sits, it is highly reliant on the underlying energy generation sector, which is subjected to government policies/regulations.

SOCAR IPO Post-Listing Flow: VC-Triggered Overhang Vs. Lotte’s Counter Move

By Sanghyun Park

In SOCAR’s IPO, the early investors’ post-listing flow direction draws the market’s attention as much as the valuation issue.
Even this pricing level is high enough to infer that these VCs will be tempted to consider exiting after listing. A significant level of short-term overhang risk is inevitable.
Then, we need to factor in the Lotte factor, which will likely expand its stake after listing to secure management rights for Socar.

Pre-IPO Rainmed Medical – The Industry, the Business and the Concerns

By Xinyao (Criss) Wang

The combination of FFR and IMR can provide a complete functional evaluation from epicardial arteries to myocardial microcirculation,pushing the precise diagnosis and treatment of coronary disease into a new era.
Rainmed’s caFFR System and caIMR System have obvious technical and first-mover advantages; The CE certificate also opens up the imagination space of product commercialization (such as developing markets).
However, the concerns on current sales model, market acceptance, medical insurance coverage, cash flow pressure and market sentiment when IPO should also not be neglected.

Before it’s here, it’s on Smartkarma

Jun 29

Equity Capital Markets: Sichuan Tianqi Lithium Industries, Inc, Li Auto, Miniso, Thai Life Insurance, SOCAR and more

In today’s briefing:

Tianqi Lithium H Share Listing: AH Discount Views
Li Auto’s US$2 Billion ATM Offering
Miniso Dual Primary Listing: Positive on Momentum, Valuation and Acceleration of Global Expansion
Thai Life Insurance IPO – Can’t Pinpoint the Upside
Socar IPO Valuation Analysis

Tianqi Lithium H Share Listing: AH Discount Views

Sichuan Tianqi Lithium Industries, Inc (002466 CH) has upped its targeted H Share raise from US$1.0-1.5 billion to US$1.5–2.0 billion. The listing will kick off on Thursday.
In Tianqi Lithium H Share Listing: Riding the Wave, we noted that Tianqi is well-placed to leverage the high lithium prices to deliver growth, margin and cash generation.
In this note, we examine the likely discount that Sichuan Tianqi Lithium Industries, Inc. (TIANQI HK) will offer its H Shares in comparison to the A Shares.

Li Auto’s US$2 Billion ATM Offering

Li Auto Inc. (LI US) has announced an ATM offering to sell US$2.0 billion of ADS. The offering appears to be timed to take advantage of the share price rally.
Li Auto (2015 HK)‘s strong balance sheet and cash generation do not necessitate the need for the offering. The impending launch of the Li L9 underpins its prospects.
However, with the recent rally, the shares are at best fully valued at the last close. We prefer remaining on the sidelines for now.

Miniso Dual Primary Listing: Positive on Momentum, Valuation and Acceleration of Global Expansion

By Oshadhi Kumarasiri

MINISO Group Holdings (MNSO US) rallied more than 70% this month before receiving approval for a $100m placement on the Hong Kong Stock Exchange yesterday (27th June 2022).
The company has no requirement for extra cash and this Hong Kong listing is mostly a precautionary measure against a potential delisting of Chinese companies from US markets.
Overall, we are positive about this placement on account of momentum, reasonableness of current valuation and positive reception of what we would regard as an intention to accelerate expansion.

Thai Life Insurance IPO – Can’t Pinpoint the Upside

Thai Life Insurance (TLI) is looking to raise up to US$975m in its upcoming Thailand IPO. Cornerstone investors including GIC have taken up around 54% of the deal.
Thai Life Insurance is one of the largest life insurance companies in Thailand, third by assets. As of Mar 2022, it had 64,000 insurance agents.
In this note we will talk about the deal dynamics and run the deal through our ECM framework.

Socar IPO Valuation Analysis

Our base case valuation of Socar is target price of 27,967 won, which is 18% lower than the low end of the IPO price range of 34,000 won.
Given the lack of upside, we would Pass on this IPO. Our valuation is also 23% lower than the valuation that Lotte Rental paid for its 13.9% stake in Socar.
We estimate Socar to generate sales of 396.4 billion won (up 37.2% YoY) and EBITDA margins of 12.6% in 2022.

Before it’s here, it’s on Smartkarma

Jun 28

Equity Capital Markets: Carsales.Com Ltd, Soosan Industries, Sungeel Hitech and more

In today’s briefing:

Carsales Entitlement Offer – Well Flagged Deal for a Well Know Asset, but Last Deal Didn’t Do Well
Soosan Industries IPO Valuation Analysis
Sungeel HiTech IPO Valuation Analysis

Carsales Entitlement Offer – Well Flagged Deal for a Well Know Asset, but Last Deal Didn’t Do Well

Carsales aims to raise around US$835m (A$1.2bn) via a non-renounceable entitlement offer to part fund the purchase of remaining 51% of trader Interactive.
While the acquisition is probably well flagged and will be earnings accretive, the last entitlement offering didn’t do well in the near term.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Soosan Industries IPO Valuation Analysis

Our base case valuation of Soosan Industries is target price of 56,383 won, which is 31% higher than the high end of the IPO price range of 43,100 won.
Our valuation is based on 14.1x P/E (20% premium to KEPCO KPS) using our estimated net profit of 57.1 billion won in 2023.
Soosan Industries provides comprehensive maintenance services for major nuclear, thermal, and renewable power plants in Korea. Soosan Industries is the only private maintenance company for main nuclear power plant equipment.

Sungeel HiTech IPO Valuation Analysis

Our base case valuation of Sungeel HiTech is target price of 70,992 won per share (49% higher than the high end of the IPO price).
Our valuation is based on 15.9x P/E (50% discount to comps’ average multiple) using our estimated net profit of 54.9 billion won in 2023.
Given the excellent upside, we have a Positive view of the Sungeel HiTech, which is a leading recycling specialist in Korea that extracts valuable metals from lithium-ion secondary batteries.

Before it’s here, it’s on Smartkarma

Jun 27

Equity Capital Markets: Thai Beverage, Thai Life Insurance and more

In today’s briefing:

Weekly Deals Digest (26 Jun) – ThaiBev’s BeerCo, Thai Life, Tianqi Lithium, Giordano, DTAC/True
Thai Life Insurance IPO: Valuation Insights

Weekly Deals Digest (26 Jun) – ThaiBev’s BeerCo, Thai Life, Tianqi Lithium, Giordano, DTAC/True

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
ECM – Thai Life Insurance (TLI TB) is set to launch a US$1bn IPO; BeerCo and Sichuan Tianqi Lithium Industries, Inc (002466 CH) are premarketing US$0.8-1.0bn and US$1.0-1.5bn IPOs, respectively.
Event-Driven developments at Giordano International (709 HK), Link Net (LINK IJ), Total Access Communication (DTAC TB)/True Corp Pcl (TRUE TB) merger, Infomedia Ltd (IFM AU), Resapp Health (RAP AU).

Thai Life Insurance IPO: Valuation Insights

Thai Life Insurance (TLI TB) will open its book for a US$1 billion raise from 29 June to 14 July. The IPO price has been set at THB16.00 per share.
We previously discussed the IPO in Thai Life Insurance IPO: The Bull Case and Thai Life Insurance IPO: The Bear Case.
Peer analysis suggests that Thai Life should trade at a modest premium to Bangkok Life but at a material discount to AIA. Consequently, the IPO valuation is full.

Before it’s here, it’s on Smartkarma

Jun 26

Equity Capital Markets: SOCAR Inc, Thai Beverage and more

In today’s briefing:

SOCAR IPO: Another Absurd Valuation
ECM Weekly (26th June 2022) – Tianqi, Thai Life, Thai Bev, ClouDr, ACommerce, SenseTime, SonaComstar

SOCAR IPO: Another Absurd Valuation

By Sanghyun Park

This IPO’s valuation is the trickiest among Korea’s recent IPOs. Whether all of these ten valuation peers have high enough business relevance to SOCAR is highly doubtful.
Whether SOCAR can evolve from a simple car sharing (or rental) operator to an in-vehicle software platform provider actually determines the success or failure of this IPO.
However, the IPO prospectus available to us lacks the evidence to favorably judge SOCAR’s growth potential. So, I will consider taking this IPO as conservatively as possible.

ECM Weekly (26th June 2022) – Tianqi, Thai Life, Thai Bev, ClouDr, ACommerce, SenseTime, SonaComstar

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
A few IPOs are lined up in Thailand and South Korea, in addition a number of deals are gearing up for launch.
There were no major placements last week. Although there are a few large lockup releases soon.

Before it’s here, it’s on Smartkarma

Jun 25

Equity Capital Markets: SOCAR Inc and more

In today’s briefing:

Socar IPO Preview

Socar IPO Preview

Socar, the largest car sharing platform in Korea, is getting ready to complete its IPO in KOSPI. The IPO base case offering size is from $120 million to $159 million.
The IPO price range is from 34,000 won to 45,000 won. The expected market cap of the company is from 1.2 trillion won to 1.6 trillion won.
Book building for the institutional investors starts on 1 August. Mirae Asset Securities and Samsung Securities are the lead underwriters in this IPO.

Before it’s here, it’s on Smartkarma

Jun 24

Equity Capital Markets: Sichuan Tianqi Lithium Industries, Inc, Soosan Industries and more

In today’s briefing:

Tianqi Lithium H Share Listing: Riding the Wave
Soosan Industries IPO Preview

Tianqi Lithium H Share Listing: Riding the Wave

Sichuan Tianqi Lithium Industries, Inc. (TIANQI HK) is pre-marketing an H Share listing to raise US$1.0-1.5 billion. It was listed on the Shenzhen Stock Exchange in 2010.
The H Share proceeds will be used to repay the outstanding Quimica Y Minera Chil-Sp Adr (SQM US) related debt, fund construction costs and working capital
The fundamentals are strong as Sichuan Tianqi Lithium Industries, Inc (002466 CH) is well-placed to leverage the high lithium prices to deliver growth, margin and cash generation.

Soosan Industries IPO Preview

Soosan Industries is getting ready for an IPO in Korea at end of July. The IPO offering range is from $155 million to $191 million.
Soosan Industries provides comprehensive maintenance services for major nuclear, thermal, and renewable power plants in Korea. It is the only private maintenance company for main nuclear power plant equipment.
In our view, this is the third most interesting IPO opportunity in Korea this year so far, after LG Energy Solution (373220 KS) and HPSP.

Before it’s here, it’s on Smartkarma

Jun 23

Equity Capital Markets: Thai Beverage, Thai Life Insurance, aCommerce Group, MicroPort NeuroTech and more

In today’s briefing:

ThaiBev’s BeerCo IPO: What’s It Worth?
Thai Life Insurance Pre-IPO – Thoughts on Valuation and International Peer Comparison
ACommerce Pre-IPO – Updates Since Our Last Note – Probably Has to Scale Further to Become Profitable
Pre-IPO MicroPort NeuroTech – The Industry, the Business and the Concern

ThaiBev’s BeerCo IPO: What’s It Worth?

Thai Beverage (THBEV SP)’s BeerCo is once again pre-marketing an SGX IPO to raise US$0.8-1.0 billion, according to press reports.
In ThaiBev’s BeerCo IPO: Third Time’s the Charm?, we look at the latest developments and results.
The target raise by offering 20% of BeerCo’s issued shares points to a valuation of US$4.0-5.0 billion. Our first-look valuation analysis suggests a valuation range of US$5.0-5.2 billion.

Thai Life Insurance Pre-IPO – Thoughts on Valuation and International Peer Comparison

Thai Life Insurance is looking to raise up to US$1bn in its upcoming Thailand IPO.
Thai Life Insurance is one of the largest life insurance companies in Thailand, third by assets. As of Mar 2022, it had 64,000 insurance agents.
In this note, we will talk about valuations and undertake a peer comparison versus its international peers.

ACommerce Pre-IPO – Updates Since Our Last Note – Probably Has to Scale Further to Become Profitable

By Clarence Chu

ACommerce Group (ACOM TB) is looking to raise about US$200m in its upcoming Thailand IPO.
ACommerce is an ecommerce enabler providing end-to-end and ala carte ecommerce solutions for brands in Southeast Asia (SEA).
In this note, we will discuss aCommerce’s updates since our last note.

Pre-IPO MicroPort NeuroTech – The Industry, the Business and the Concern

By Xinyao (Criss) Wang

The advantages of NeuroTech are mainly reflected in the comprehensive product portfolio and stable product performance, with higher gross margin, stronger cost control ability and first-mover advantage than its peers.
The major concerns here are the domestic shrinking market size due to the centralized procurement, the fierce market competition and the pain points on its sales model.
In terms of valuation, our view is that NeuroTech’s valuation could be higher than that of the peers such as Zylox-Tonbridge, HeartCare Medical, Peijia Medical and Sino Medical.

Before it’s here, it’s on Smartkarma

Jun 22

Equity Capital Markets: Thai Life Insurance, Keystone Realtors and more

In today’s briefing:

Thai Life Insurance Pre-IPO – Industry Dynamics and Domestic Peer Comparison Aren’t Very Encouraging
Keystone Realtors Pre-IPO Tearsheet

Thai Life Insurance Pre-IPO – Industry Dynamics and Domestic Peer Comparison Aren’t Very Encouraging

Thai Life Insurance is looking to raise up to US$1bn in its upcoming Thailand IPO.
Thai Life Insurance is one of the largest life insurance companies in Thailand, third by assets. As of Mar 2022, it had 64,000 insurance agents.
In this note, we will talk about the industry dynamics and undertake a peer comparison versus its domestic peers.

Keystone Realtors Pre-IPO Tearsheet

By Ethan Aw

Keystone Realtors (3324626Z IN) is looking to raise about US$109m in its upcoming India IPO. The deal will be run by Axis Capital and Credit Suisse.
Keystone Realtors is a real estate developer which develops projects under the Rustomjee brand, with operations based solely in India.
As of March 31, 2022, it has developed 20.05m sqft of residential buildings, premium gated estates, townships, corporate parks, retail spaces, schools, iconic landmarks and various other real estate projects.

Before it’s here, it’s on Smartkarma