ECM Daily Briefs | Page 82 of 118

In today’s briefing:

LG Energy IPO – What to Watch Leading Into Listing Day
LG Energy Post-Listing Flow Tracking by Date: Passive Inflows & Lockup Release Outflows
Citicore Energy REIT IPO – Stable Dividend Generation but Needs to Come at a Wider Discount to Peers
Huitongda IPO: Huge Churn Rate Indicates That Things Could Go Bad Very Quickly
Voronoi IPO Preview
Pre-IPO OrbusNeich Medical Group: A Scale Player, With Comprehensive Portfolio in PCI Balloon Market
Beijing Yuanxin (北京圆心) Pre-IPO – Growing at the Expense of Margins
Microport NeuroTech (微创脑科学) Pre-IPO: Decent Name for Neuro-Interventional Devices

LG Energy IPO – What to Watch Leading Into Listing Day

By Mio Kato

LG Energy Solutions priced its IPO at the top of the range amid massive oversubscription numbers.
If anything it was slightly surprising that pricing was not raised above the range.
Nevertheless, we feel prospects here are mixed even if slightly tilted positive.

LG Energy Post-Listing Flow Tracking by Date: Passive Inflows & Lockup Release Outflows

The KOSPI inclusion will be officially implemented on January 28. As a result, local active funds benchmarking the KOSPI will compete to buy LG Energy on the listing date.
Passive Inflow appears one week after listing, particularly MSCI and KODEX/TIGER battery ETFs. The KODEX/TIGER rebalancing effective date is virtually confirmed on February 10, meaning rebalancing trading on February 9.
Another two weeks later, the KOSPI 200 and KRX BBIG rebalancing await us. Combined with KRX BBIG, there will be a passive inflow of about 0.5% of SO.

Citicore Energy REIT IPO – Stable Dividend Generation but Needs to Come at a Wider Discount to Peers

By Clarence Chu

Citicore Energy REIT (CREIT PM) is looking to raise around US$170m in its Philippines IPO.
The initial portfolio will consist of the Clark Solar Power Plant, Armenia Property, Toledo Property, Silay Property, and the Dalayap Property, which had a total appraised valuation of PHP10.9bn (US$214.3m).
In this note, we will look at peer comparison and share our thoughts on valuation.

Huitongda IPO: Huge Churn Rate Indicates That Things Could Go Bad Very Quickly

By Oshadhi Kumarasiri

Alibaba Group (9988 HK) backed B2B e-commerce business, Huitongda (1566215D CH) is looking to go public to raise $500m to save the business.
With churn rates as high as 50%, things could get ugly rather quickly if customer acquisition falls below sub optimal levels.
We fear this is an attempt to save a failing business that could be worthless in few years.

Voronoi IPO Preview

By Douglas Kim

Voronoi (VOR KS) is getting ready to complete its IPO in Korea in March. The IPO offering base deal size is from $84 million to $109 million.
The company has developed a genotype-directed therapy that is effective for tumors caused by mutations in kinases, and has successfully conducted global technology transfers.
The total amount of accumulated milestones for three global technology exports of Voronoi is $1.79 billion (about 2.1 trillion won) which is very impressive.

Pre-IPO OrbusNeich Medical Group: A Scale Player, With Comprehensive Portfolio in PCI Balloon Market

By Tina Banerjee

OrbusNeich Medical Group focuses on coronary and peripheral interventional instruments, such as balloons and stents used in PCI (coronary)/PTA (peripheral) procedures.
Comprehensive and innovative product portfolio for endovascular interventional procedures, established global sales network, and robust pipeline are the major strength of OrbusNeich.
Fierce competition, commoditized nature of the offering, centralized procurement leading to substantial price drop are some of the concerns for the company.

Beijing Yuanxin (北京圆心) Pre-IPO – Growing at the Expense of Margins

Beijing Yuanxin Tech (BYT) is looking to raise US$500m in its upcoming Hong Kong IPO.
As per F&S, the firm is the No. 1 integrated healthcare fulfilment platform in China focusing on prescription drugs
In this note, we look at the company’s fundamentals and operations and share our thoughts about the IPO.

Microport NeuroTech (微创脑科学) Pre-IPO: Decent Name for Neuro-Interventional Devices

By Ke Yan, CFA, FRM

Microport NeuroTech is a leading neuro-interventional device company in China. The company is looking to raise up to USD 300m via a Hong Kong listing.
We look at the company’s key segments and products. We like the company’s comprehensive coverage of neuro-interventional devices.
Its management team has decent experience as it is a spin-off from Microport. We also highlight the risk of the stock.

Before it’s here, it’s on Smartkarma

Jan 24

Equity Capital Markets: Adani Wilmar, Remegen Co Ltd and more

In today’s briefing:

Adani Wilmar IPO Initiation: Cooking up a Business
Pre-IPO Remegen Co Ltd – Some Points Worth the Attention

Adani Wilmar IPO Initiation: Cooking up a Business

Adani Wilmar (6596700Z IN) is a leading FMCG food company in India. It is set to launch an IPO to raise Rs36,000 million ($483 million) at a price of Rs218-230.
The business is navigating the high commodity prices by delivering high growth (price increases) and creditable margin performance in face of higher raw material costs.
Overall, this IPO is worth a closer look. The offer period is from 27 to 31 January. The shares will be listed on 8 February.

Pre-IPO Remegen Co Ltd – Some Points Worth the Attention

By Xinyao (Criss) Wang

RC48’s commercialization performance in China market could be lower than expected. The breakthrough point is whether the deal with Seagen can bring any surprise in the global markets.
Due to large R&D and selling expenses, Remegen Co Ltd (9995 HK) is facing cash flow pressure, indicating that this IPO in SSE STAR market is very important for the Company.
Let’s see if RemeGen would in-license some unique late-stage candidates or reach new blockbuster license-out deals that surprise us again, both of which would help turn things around.

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Jan 22

Equity Capital Markets: LG Energy Solution, Luckin Coffee, Hyundai Engineering Co Ltd and more

In today’s briefing:

LG Energy Allocation Results: Immediate Float Confirmed at 8.8%
LG Energy Solution: Confirmed Allocations, Float, & Lock-Up Periods
Luckin Coffee Relisting: Could Be Another Attempt to Deceive Investors
Hyundai Eng Listing Date Confirmed as Feb 15: Passive Flow Schedule, Incl. Local Sector ETFs

LG Energy Allocation Results: Immediate Float Confirmed at 8.8%

Foreign institutions received 60% of the total institutional allocation. They only accounted for 0.58% of the orders applied. Many of these are large foreign institutions with long-term holding tendencies.
The fact that they rarely make lockup pledges due to internal policies is in line with LG Energy’s need for an immediate float rate of 10% while having long-term investors.
As a result, the nominal float rate is 8.85%. quite exquisite results as it is just enough to satisfy KOSPI 200’s 10% minimum float rate rule.

LG Energy Solution: Confirmed Allocations, Float, & Lock-Up Periods

By Douglas Kim

LG Energy Solution provided the confirmed IPO allocations and lock-up periods for institutional investors today.
The final tally for the locked-up shares is 13.6 million shares, representing 58.3% of total shares allocated for the institutional investors.
The immediate free float on the first day of trading will be 20.7 million shares (8.9% of total outstanding shares).

Luckin Coffee Relisting: Could Be Another Attempt to Deceive Investors

By Oshadhi Kumarasiri

Following an improvement in the financial performance, The FT reported that Luckin Coffee (LKNCY US) is plotting to relist its shares in the US sometime this year.
Although financials have improved, relisting seems a bit premature, especially since Luckin is still not a completely clean house.
This relisting feels a bit like another attempt by the ex-chairman to deceive minority investors to get the best possible exit price.

Hyundai Eng Listing Date Confirmed as Feb 15: Passive Flow Schedule, Incl. Local Sector ETFs

The listing date of Hyundai Engineering has been confirmed as February 15 (Tuesday).
As a result, we can expect the passive flow schedule as specified in the below DETAIL section.
The indexes creating a significant level of passive flow for Hyundai Engineering are as follows: KOSPI 200, MSCI Standard, FTSE AW, KRX Construction, KOSPI 200 Construction, and FnGuide Hydrogen Economy.

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Jan 20

Equity Capital Markets: LG Energy Solution, Aquila Acquisition Corporation, Delhivery, KakaoBank and more

In today’s briefing:

LG Energy Solution IPO: Record Retail Demand Amount
Aquila Acquisition Corporation: Hong Kong’s CMB-Backed SPAC
Delhivery IPO Initiation: Can It Deliver?
Kakao Bank Six-Month Lock-Up – Over US$2.5bn Stock Release Will Only Add to the Recent Rout

LG Energy Solution IPO: Record Retail Demand Amount

By Douglas Kim

LG Energy Solution completed its two days retail subscription demand on 18-19 January.
LG Energy Solution raised 114 trillion won in IPO subscription margin and achieved a new record in the Korean IPO market. The retail demand ratio was 69.3 to 1.
In this insight, we provide a detailed retail demand analysis of the LG Energy Solution IPO, which is getting ready to start trading on 27 January.

Aquila Acquisition Corporation: Hong Kong’s CMB-Backed SPAC

By David Blennerhassett

Aquila Acquisition Corporation (AAC HK), a SPAC backed by China Merchants Bank, has applied for listing in Hong Kong.
Aquila is the first SPAC company to seek listing since new rules allowing such listings came into effect on the 1 January 2022.
Aquila is targeting technology-enabled companies in “new economy” sectors (such as green energy, life sciences, advanced technology and manufacturing) in Asia, with a focus on China.

Delhivery IPO Initiation: Can It Deliver?

Delhivery (1058656D IN) is the largest and fastest-growing 3PL express parcel delivery player in India by revenue in FY21. It has won SEBI approval to raise up to $1 billion.
The fundamentals are mixed as it has been unable to leverage its leading position and strong growth to deliver profits or cash generation.
Based on the draft red herring prospectus, we are cautious about this potential IPO as the negatives outweigh the positives.

Kakao Bank Six-Month Lock-Up – Over US$2.5bn Stock Release Will Only Add to the Recent Rout

Kakao Bank’s six month IPO lock-up will end on 6th Feb 2022.
It will result in freeing up another US$2.5bn+ worth of shares held by a number of pre-IPO and local IPO investors.
In this note, we will talk about the upcoming lock-up expiry.

Before it’s here, it’s on Smartkarma

Jan 18

Equity Capital Markets: Qingdao Ainnovation Technology Group Co Ltd, Hyundai Engineering Co Ltd, Wanda Commercial Management Group and more

In today’s briefing:

Qingdao AInnovation Technology Group IPO – Fairly Valued with Mediocre Cornerstones
Hyundai Engineering IPO: Valuation Insights
AInnovation Technology IPO: Valuation Insights
Wanda Commercial Management Group Pre-IPO – The Positives – Aiming for One of HK’s Largest 2022 IPOs

Qingdao AInnovation Technology Group IPO – Fairly Valued with Mediocre Cornerstones

By Clarence Chu

Qingdao Ainnovation Technology Group Co Ltd (1853807D CH) is looking to raise up to US$157m in its Hong Kong IPO.
Qingdao AInnovation Technology Group is an AI solutions provider offering full-stack AI-based products and solutions.
While we don’t have a fundamental issue with the listing, at asking valuations, the firm appears to be fairly valued with limited upside on its FY23 numbers.

Hyundai Engineering IPO: Valuation Insights

Hyundai Engineering Co Ltd (HEC KS) has launched its IPO to raise US$0.8-1.0 billion at the price range of KRW57,900-75,700 per share.
In Hyundai Engineering IPO Initiation: Building on Good Foundations, we stated that HEC has attractive fundamentals with a strong backlog, healthy book-to-bill, improving 3Q21 revenue growth and improving margins.
In this note, we look at the syndicate’s valuation methodology and present our valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive.

AInnovation Technology IPO: Valuation Insights

AInnovation Technology (AIT HK) is a fast-growing enterprise AI solutions provider in China. It has launched an HKEx IPO to raise up to US$157 million.
In AInnovation Technology IPO Initiation: Code Amber, we stated that the negatives outweigh the positives and we would give the IPO a pass.
Our valuation analysis suggests that the IPO price is fair. Due to our concerns about the fundamentals, we remain on the sidelines. Pricing is 20 January, listing on 27 January.

Wanda Commercial Management Group Pre-IPO – The Positives – Aiming for One of HK’s Largest 2022 IPOs

Wanda Commercial Management Group (WCMG) is looking to raise up to US$4bn in its upcoming Hong Kong IPO.
WCMG is a commercial operation service provider. As of Oct 2021, the firm managed 398 malls with total gross floor area (GFA) under management of 56.5m sqm.
In this note, we will talk about the positive aspects of the deal.

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Jan 17

Equity Capital Markets: Qingdao Ainnovation Technology Group Co Ltd and more

In today’s briefing:

AInnovation Technology IPO Initiation: Code Amber

AInnovation Technology IPO Initiation: Code Amber

AInnovation Technology (AIT HK) is a fast-growing enterprise AI solutions provider in China. It is set to launch an HKEx IPO to raise up to US$157 million.
The fundamentals are mixed as diverging growth profiles of key segments, low market share and cash burn are accompanied by a narrowing loss margin.
Overall, we believe the negatives outweigh the positives and we would give the IPO a pass.

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Jan 16

Equity Capital Markets: LG Energy Solution and more

In today’s briefing:

ECM Weekly (16th Jan 2022) – LG Energy, Hyundai Engineering, Nippon Paint, Sunac, JL Mag, JREITs

ECM Weekly (16th Jan 2022) – LG Energy, Hyundai Engineering, Nippon Paint, Sunac, JL Mag, JREITs

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
LG Energy Solution (373220 KS) saw very strong demand for its mega US$10bn+ IPO.
While other IPO markets were in torpor, a number of placements continued to flow in.

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Jan 15

Equity Capital Markets: LG Energy Solution and more

In today’s briefing:

LG Energy Bookbuilding: Detailed Results

LG Energy Bookbuilding: Detailed Results

This IPO led to unusually high interest from local active funds. This is evidenced by the order volume
Nevertheless, many local institutions must have felt burdened with LG Energy’s valuation, so they wanted to avoid setting the offering price above the upper end.
As for the relatively poor lockup result, the issuer’s refusal to incentivize lockup to set the float rate to around 10% may also have played a part.

Before it’s here, it’s on Smartkarma

Jan 12

Equity Capital Markets: Hyundai Engineering Co Ltd, CTOS Digital Bhd, Huitongda and more

In today’s briefing:

Hyundai Engineering IPO Initiation: Building on Good Foundations
CTOS Digital Lock-Up Expiry:High Chance of Slow Motion Creador Exit but There Should Be Ample Buyers
Huitongda (汇通达) Pre-IPO – PHIP Updates and Competitive Landscape

Hyundai Engineering IPO Initiation: Building on Good Foundations

Hyundai Engineering Co Ltd (HEC KS)/HEC is a leading global EPC (Engineering, Procurement and Construction) contractor. It is seeking to raise up to $1 billion.
HEC is offering 16.0 million shares with a primary/secondary split of 25/75 at an indicative price range of KRW57,900-66,800 per share.
HEG has attractive fundamentals with a strong backlog, healthy book-to-bill, improving 3Q21 revenue growth and improving margins.

CTOS Digital Lock-Up Expiry:High Chance of Slow Motion Creador Exit but There Should Be Ample Buyers

CTOS Digital (CTOS) raised around US$291m in its Malaysian IPO in Jul 2021. It is majority owned by Creador, a PE firm.
The stock has done well since listing and is now trading 72% above its IPO price.
In this note, we talk about the updates since listing and the upcoming lock-up expiry.

Huitongda (汇通达) Pre-IPO – PHIP Updates and Competitive Landscape

By Clarence Chu

Huitongda (1566215D CH) is looking to raise up to US$500m in its upcoming Hong Kong IPO.
While the numbers from the growth of member stores look promising, it did not translate to stronger revenue from member stores and HTD did not give a clear explanation.
In this note, we look at PHIP updates and competitive landscape.

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Jan 10

Equity Capital Markets: Nippon Paint Holdings and more

In today’s briefing:

Nippon Paint Holdings Placement – Nothing Particularly Exciting, Needs to Correct

Nippon Paint Holdings Placement – Nothing Particularly Exciting, Needs to Correct

A group of shareholders of Nippon Paint Holdings, plan to raise around US$1.4bn via selling nearly 6% of the stock.
The shares haven’t done much this year and despite having corrected by around 40% since the start of 2021, they are trading just about inline with analyst average target price.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Before it’s here, it’s on Smartkarma