ECM Daily Briefs | Page 76 of 118

In today’s briefing:

Shin Kong Financial Holdings Placement – Deal Appears to Be Very Well Flagged
WT Microelectronics Placement – Short Interest on the Rise, Could Lift the Debt Overhang

Shin Kong Financial Holdings Placement – Deal Appears to Be Very Well Flagged

Shin Kong Financial Holding (2888 TT) (SKFH) aims to raise around US$400m via an accelerated primary GDS offering.
This will be the third fundraising by the company in as many years. Both the prior deals did well and this one too appears to be well flagged.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

WT Microelectronics Placement – Short Interest on the Rise, Could Lift the Debt Overhang

WT Microelectronics (3036 TT) is looking to raise approximately US$190m in its Primary GDS offering to repay foreign currency denominated debt and for procuring raw materials in foreign currencies.
While we can’t explicitly state that the deal is well-flagged, the firm has seen its gearing ratio increase and CFO was negative in its latest financial year.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

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Apr 19

Equity Capital Markets: ONE Store and more

In today’s briefing:

One Store IPO: Changes Comps But Maintains Same IPO Price Range
One Store IPO – Refiling Updates, No Change to Price Tag

One Store IPO: Changes Comps But Maintains Same IPO Price Range

One Store revised its IPO filings, changing the comps but maintaining the same price range of 34,300 won to 41,700 won.
The bankers used new comps in the valuation analysis (Tencent, Naver, Kakao Corp, and Nexon). The P/S multiple is slightly higher than previously but IPO discount range is also higher.
Our target price of 48,713 won is 28% higher than the mid-point of the IPO price range of 38,000 won.

One Store IPO – Refiling Updates, No Change to Price Tag

ONE Store (ONE KS) is looking to raise up to US$228m in its Korean IPO.
One Store delayed its bookbuild by two weeks, with book building slated to run between 9th-10th May 2022. Listing, as well, has been pushed back to end May.
Peers have slightly corrected since our last note and in our view, from a historical perspective, the low end seems justified.

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Apr 17

Equity Capital Markets: GoTo and more

In today’s briefing:

ECM Weekly (17th Apr 2022)- Sk Shieldus, One Store, LIC, GoTo, Zhihu, Park24, PHC Holding, Visional

ECM Weekly (17th Apr 2022)- Sk Shieldus, One Store, LIC, GoTo, Zhihu, Park24, PHC Holding, Visional

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 IPOs front, Zhihu and the SK twins were the main active deals, with LIC being in the pipeline for a potential launch in the coming week.
Placement flows remained slow over the holiday shortened week. With Japan continuing to favour accelerated book build.

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Apr 16

Equity Capital Markets: Taelim Paper and more

In today’s briefing:

Tailim Paper IPO Preview

Tailim Paper IPO Preview

Tailim Paper is the number one company in Korea specializing in the production of corrugated cardboard.
Tailim Paper is getting ready to complete an IPO towards the end of May. The IPO price range is from 19,000 won to 22,000 won.
According to the bankers’ valuation, the expected market cap of Tailim Paper is from 616 billion won to 713 billion won.

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Apr 15

Equity Capital Markets: Visional Inc, Kakao Games Corp and more

In today’s briefing:

Visional IPO Lock-Up – Shares Have Performed Well, a Small Lock-Up Expiry to Look At
Lionheart Studio Getting Ready for an IPO as Early as 2H 2022: A Near-Term Negative for Kakao Games

Visional IPO Lock-Up – Shares Have Performed Well, a Small Lock-Up Expiry to Look At

Visional Inc (4194 JP) had raised US$609m in its Japan IPO in April 2021, where it had been priced at the top end after books were reportedly multiple times covered.
Visional is a HR technology company based in Japan. The company operates BizReach, an online recruiting platform that helps to connect professional job seekers to direct employers and third-party recruiters.
The Pre-IPO shareholder, YJ2 Investment, will be released from its lockup on 16th Apr 2022, 360 days post-listing.

Lionheart Studio Getting Ready for an IPO as Early as 2H 2022: A Near-Term Negative for Kakao Games

Lionheart Studio Corp, which is one of the fastest growing game making companies in Korea, is getting ready to complete its IPO as early as 2H 2022.
Lionheart Studio is best known for its popular mobile game Odin which ranked first in app market sales right after its launch in June of last year.
Kakao Games’ share price could fall further as some investors that are enthusiastic about Odin would rather invest invest in Lionheart Studio directly rather than in Kakao Games.

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Apr 14

Equity Capital Markets: SK Shieldus, CIMB Group Holdings, Hyundai Oilbank Co Ltd and more

In today’s briefing:

SK Shieldus IPO – Peer Comparison – Better Top Line Growth, Worse Margin Decline
CIMB Holdings Placement – Routine Selldown, Past Deals Have Held onto Deal Price
SK Shieldus IPO – Fairly Valued, at Best
Hyundai Oilbank: Getting Ready for an IPO as Early as June 2022

SK Shieldus IPO – Peer Comparison – Better Top Line Growth, Worse Margin Decline

SK Shieldus (SKS) aims to raise around US$800m via issuing a mix of primary and secondary shares in its Korea IPO.
SKS is the security subsidiary of SK Square. It provides security services across four main categories: information security/Cybersecurity, convergence security, physical security, and Safety & Care.
In this note, we undertake a peer comparison for its two largest verticals.

CIMB Holdings Placement – Routine Selldown, Past Deals Have Held onto Deal Price

Khazanah Nasional Bhd (KNBZ MK) aims to raise around US$104m via selling 0.8% of CIMB Group Holdings (CIMB MK).
The deal is a routine one, where the vendor had previously sold multiple times, with the most recent selldown in Sept 2021.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

SK Shieldus IPO – Fairly Valued, at Best

SK Shieldus (SKS) aims to raise around US$800m via issuing a mix of primary and secondary shares in its Korea IPO.
SKS is the security subsidiary of SK Square. It provides security services across four main categories: information security/Cybersecurity, convergence security, physical security, and Safety & Care.
In this note, we look at valuations for its main segments.

Hyundai Oilbank: Getting Ready for an IPO as Early as June 2022

Hyundai Oilbank is getting ready to complete its IPO as early as June 2022, which would make it one of the largest IPOs in Korea this year.
Local media have mentioned that the value of Hyundai Oilbank could be as high as 10 trillion won post IPO.
Our NAV analysis suggests a base case valuation of 69,231 won per share for HD Hyundai (formerly Hyundai Heavy Industries Holdings), representing a 21% upside from current levels.

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Apr 13

Equity Capital Markets: Park24 Co Ltd, Samsung Biologics Co.,, Zhihu Technology, ONE Store and more

In today’s briefing:

Park24 Placement – Large Deal to Digest and a Long Settlement Period
Samsung Biologics: Post-Offering Trading Dynamics on Potential Overhang
Zhihu Dual-Primary Listing: HK-ADS Premium/(Discount) Views
One Store IPO – Outpaced Industry, Bottom-End Seems Justified

Park24 Placement – Large Deal to Digest and a Long Settlement Period

Park24 Co Ltd (4666 JP) aims to raise around JPY25.5bn (US$210m) via selling 16m new shares at a fixed price of JPY1,644, representing a 9.9% discount to last close.
Proceeds from the deal will be geared towards digital investment towards improving the firm’s business efficiency and for expanding its mobility fleet.
In this note, we will talk about the firm’s track record and run the deal through our ECM framework.

Samsung Biologics: Post-Offering Trading Dynamics on Potential Overhang

By Sanghyun Park

Samsung Biologics (207940 KS) has succeeded in a rights offering worth ₩3.2T to the existing shareholders. The subscription rate of the existing shareholders and the ESOP came out at 100.25%.
The size of immediately floatable shares is estimated at 1 million, representing 1.55% of SO and 22.82x ADTV. It is a size that will significantly impact the short-term flow.
There is a sufficient circumstantial probability that the 1M new stocks, currently at a 20% return, will lead to immediate profit realization after listing.

Zhihu Dual-Primary Listing: HK-ADS Premium/(Discount) Views

By Arun George

Zhihu Technology (ZH US) has launched an HKEx dual-primary listing to raise $150-200 million. The H Shares will be priced on 14 April and listed on 22 April.
In Zhihu Dual-Primary Listing: A Question of Judgment, we stated that while a loss-making tech name is not everybody’s cup of tea, Zhihu has resilient performance and an undemanding valuation.
In this note, we will look at Zhihu’s potential HK-ADS premium/(discount). Zhihu pricing its H-shares at a discount of 3-4% to its ADSs will be reasonable, in our view.

One Store IPO – Outpaced Industry, Bottom-End Seems Justified

ONE Store (ONE KS) is looking to raise up to US$228m in its Korean IPO.
One Store is a mobile app market platform, formed by a cooperation between South Korea’s three telecom carriers, together with Naver Corp, an internet firm in South Korea.
Given the lack of direct comparables, one way to look at valuation would be to compare the firm to its historical asking valuations.

Before it’s here, it’s on Smartkarma

Apr 12

Equity Capital Markets: PHC Holdings, Zhihu Technology, Kurly Inc and more

In today’s briefing:

PHC Holdings IPO Lock-Up – Stock Might Be Cheap but It’s Stuck with a US$1bn Overhang
Zhihu HK Secondary – Going Further than Autohome and Weibo, Stock Might Go Further Down as Well
Kurly’s Mgmt Needs to Drastically Lower Valuation Expectations to Complete IPO in Next 6 Months
Zhihu Secondary: There Is Upside Potential but Be Cautious

PHC Holdings IPO Lock-Up – Stock Might Be Cheap but It’s Stuck with a US$1bn Overhang

PHC Holding had raised US$645m in its Japan IPO in Oct 2021, after the deal was downsized and priced at the low-end.
PHC is engaged in the development, manufacturing and sale of healthcare devices and services. The company has three main segments: Diabetes Management; Healthcare Services; and Diagnosis/Life Science.
The pre-IPO shareholders will be released from the lockup today on 11th Apr 2022. Its largest shareholder is KKR, who still owns a 39% stake in the company.

Zhihu HK Secondary – Going Further than Autohome and Weibo, Stock Might Go Further Down as Well

Zhihu plans to raise around US$130m via a dual primary listing in Hong Kong.
Unlike all the prior dual primary/secondary listings which have been done via offering either only primary or a mix of primary+secondary shares, Zhihu’s offering will consist of only secondary shares.
In this note, we’ll talk about the deal dynamics and structure.

Kurly’s Mgmt Needs to Drastically Lower Valuation Expectations to Complete IPO in Next 6 Months

By Shifara Samsudeen, ACMA, CGMA

Kurly’s management team needs to drastically lower its valuation expectation in this difficult market environment.
Due to weak market conditions, it is likely to have a difficult time completing this IPO if its valuation is stretched to about 6 trillion won to 7 trillion won.
In our view, the company could complete its IPO if the valuation is close to about 3.5 trillion won to 4.5 trillion won.

Zhihu Secondary: There Is Upside Potential but Be Cautious

Zhihu has filed for a dual primary listing on the HKEx through offering of 26m shares (Class A) by existing shareholders at a maximum offer price of HK$51.8 per share.
Two ADS represent one Class A ordinary share and shares closed at US$2.56 per ADS, and the maximum offer price implies a 31.5% premium to the last close.
Zhihu’s business model seems to work in favour and the company’s shares are extremely cheap at the current multiples. There is upside but we would remain cautious.

Before it’s here, it’s on Smartkarma

Apr 11

Equity Capital Markets: Life Insurance Corp of India (LIC), Zhihu Technology and more

In today’s briefing:

ECM Weekly (10th Apr 2022)- LIC, GoTo, Shieldus, One Store, China ADRs, Air NZ, Chrysos, Zhihu
Zhihu Dual-Primary Listing: A Question of Judgment

ECM Weekly (10th Apr 2022)- LIC, GoTo, Shieldus, One Store, China ADRs, Air NZ, Chrysos, Zhihu

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
This week we looked at the South Korean SK twins that are looking to list. In addition, LIC appears to be testing waters again.
Placement flows slowed down a bit with the mid-week HK holiday, although Australia and India blocks have continued to flow-in.

Zhihu Dual-Primary Listing: A Question of Judgment

By Arun George

Zhihu Technology (ZH US) has launched an HKEx dual-primary listing to raise $150-200 million. Zhihu will not receive any of the net proceeds as it is offering from selling shareholders.
Zhihu shares are down 73% from the IPO price of $9.50 per ADS (March 2021) largely due to the tech sell-off and regulatory uncertainty on ADR listings.
While a loss-making Chinese tech name is not everybody’s cup of tea in the current environment, Zhihu has delivered resilient performance and the valuation is undemanding.

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Apr 10

Equity Capital Markets: CJ Corp and more

In today’s briefing:

CJ Olive Young: Well Positioned to Complete IPO in 2H 2022 After Solid Results in 2021

CJ Olive Young: Well Positioned to Complete IPO in 2H 2022 After Solid Results in 2021

CJ Olive Young is the number one health and beauty (H&B) store chain in Korea. CJ Olive Young is well positioned to complete its IPO in 2H 2022.
The local media have noted that CJ Olive Young’s market value could reach 3.5 trillion won to 4.0 trillion won after the IPO.
If CJ Olive Young is valued at 3.5 trillion won, CJ Corp’s 51.1% stake would be 1.8 trillion won, which would be worth 71% of CJ Corp’s current market cap.

Before it’s here, it’s on Smartkarma