Equity Capital Markets

1. Denso (6902 JP): The Current Playbook

By Michael Causton, JapanConsuming

Since the US$4.0 billion secondary placement announcement, Denso Corp (6902 JP)’s shares are down 4.3% from the undisturbed price of JPY2,298 per share (28 November).
Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Denso’s shares have followed the pattern of previous large placements.
The offering will likely be priced on 13 December. Investors participating in previous large Japanese placements tend to secure positive returns.

2. Zozo-Owned Yutori IPO This Month

Zozo may lead in online fashion malls but its customer base, while young, is getting older.
In 2020, it acquired a majority stake in Yutori, a fledgling fashion mall targeting the young, which will now list this month.
Yutori has grown sales to ¥2.47 billion since launching five years ago. As well as Japan, it sees a major opportunity across Asia given Japanese street fashion popularity there.

3. GoTo: Thoughts on the New Tokopedia/TikTok Partnership

By Shifara Samsudeen, ACMA, CGMA, LightStream Research

GoTo Gojek Tokopedia Tbk PT (GOTO IJ) announced on Monday a partnership with TikTok which would combine former’s e-commerce biz Tokopedia with TikTok Shop Indonesia.
TikTok was forced to close its e-commerce services in Indonesia following regulations banning online shopping on social media platforms in September citing protection of smaller merchants and data privacy.
It seems TikTok will certainly be a winner if the deal is approved but surprised at GoTo’s move to retain a minority stake given e-commerce business is nearing profits.

4. Merdeka Battery Materials Lockup Expiry – US$1.5bn Lockup Expiry, Some Have Sold Beforehand

Merdeka Battery Materials (MBMA IJ) was listed on 18th Apr 2023, when it raised around US$591m in its Indonesian IPO. Its eight-month lockup will expire on 11th Dec 2023.
MBMA owns one of the world’s largest nickel mines in terms of contained nickel at the Konawe Nickel Mine.
In this note, we will talk about the lock-up dynamics and updates since our last note.

5. DS Dansuk IPO Bookbuilding Results Analysis

DS Dansuk reported solid bookbuilding results. DS Dansuk IPO price has been determined at 100,000 won per share, which is 12.4% higher than high end of the IPO price range.
A total of 1,843 institutional investors participated in this IPO book building. The demand ratio was 342 to 1. DS Dansuk IPO will start trading on 22 December.
Given the strong IPO bookbuilding results, we believe shares of DS Dansuk are likely to trade above the high end of the IPO sensitivity analysis (137,877 won).

6. Mankind Pharma Placement – Its Expensive, but at Least It’s High Quality

A group of shareholders is looking to raise around US$600m via selling a 6.9% stake in Mankind Pharma.
MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
We have looked at the IPO and lock-up release earlier. In this note, we talk about the other deal dynamics.

7. DOMS Industries IPO – Thoughts on Valuation – Isn’t Cheap, Neither Are Its Peers Cheap

Doms (DOMS IN) is looking to raise around US$140m in its India IPO.
DOMS is a leading player and brand in India’s stationery and art products market. It designs, manufactures, and sells a wide range of products, primarily under its flagship brand ‘DOMS’.
We have looked at the company’s past performance in our earlier note. In this note, we talk about valuations.

8. Rept Battero IPO: Valuation Insights

REPT BATTERO Energy (1998104D CH), a leading EV battery manufacturer, has launched an HKEx IPO to raise up to US$306 million. Pricing is on 14 December.
We previously discussed the IPO in Rept Battero IPO: The Bull Case and Rept Battero IPO: The Bear Case.
There are no cornerstone investors. Our valuation analysis suggests that the IPO price range is unattractive. Therefore, we would pass on the IPO.

9. India Shelter Finance IPO – Strong Track Record Could Justify a Premium Valuation

India Shelter Finance (0570670D IN) is looking to raise US$144m from its India IPO.
India Shelter Finance (ISF) is a retail-focused HFC targeting the self-employed customer with a focus on first time home loan takers in the low and middle income group.
In this note, we will look at past performance, and share our thoughts on valuation.

10. Inox India IPO – Offering Access to a Niche Sector

INOX India Limited (INOX IN) is looking to raise up to US$175m in its Indian IPO.
Inox India is a manufacturer of cryogenic equipment. As per CRISIL, the firm was the largest Indian exporter of cryogenic tanks in terms of FY23 sales.
In our previous note, we looked at the company’s background. In this note, we talk about the company’s performance and share our quick thoughts on valuation.

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Dec 10

Weekly Top Ten Equity Capital Markets – Dec 10, 2023

1. Rakuten Bank (5838 JP) Overnight Offering at a Fat Discount

After the close today, Rakuten Group (4755 JP) announced the sale of 25.5mm shares of Rakuten Bank (5838 JP), right as the IPO lockup was reaching its expiry. Expected.
Pricing is 6-7 Dec (pre-Tokyo open 7 Dec), delivery 11 Dec 2023. Indicative price range is 8.5-12.5% discount for a deal of US$425mm or so.
In an interesting technical detail, this will take Rakuten below 50%. There is some near-term index demand, some in April, some next October. Rheos could be more overhang.

2. Toyota To Sell Harmonic Drive (6324 JP) Shares in Overseas Offering

Today, Toyota Motor (7203 JP) announced it would sell 4.379mm shares (4.55%) of Harmonic Drive Systems (6324 JP) in an overseas placement.
This is not so big as it is emblematic, adding to the recent news on Toyota unwinds.
Harmonic Drive is heavily held by foreign institutions. This is a foreigners-only deal. But it will need to be absorbed by that group too.

3. Rakuten Bank Placement – Was Expected at Some Point, Current Timing Seems Opportunistic

Rakuten Group (4755 JP) aims to raise US$430m via selling around 14.6% of Rakuten Bank (5838 JP).
RB is the largest internet bank in Japan, by number of accounts. As of Sep 23, it had 14.3m deposit accounts with a total deposit base of JPY9.5tn.
In this note, we will talk about the deal dynamics and updates since our last note.

4. REPT BATTERO Energy Pre-IPO – PHIP Updates – Leaning on ESS

REPT BATTERO Energy (REPT HK) is now looking to raise around US$300m in its upcoming Hong Kong IPO, down from the US$1bn it was aiming for earlier.
REPT BATTERO Energy (REPT) is a lithium-ion battery manufacturer in China, focusing on R&D, production, and sales of EV/ESS lithium-ion battery products such as battery cells, modules and packs.
We have looked at the company’s past performance in our previous note. In this note, we talk about its PHIP updates.

5. Harmonic Drive Placement – Cleanup Share Sale Will Remove the Overhang

Toyota Motor (7203 JP) is looking to raise US$116m from selling its entire stake in Harmonic Drive Systems (6324 JP).
Toyota Motors has indicated over the past one-two weeks that it will be looking to sell/trim its stakes in various entities as part of its exit from its multiple cross-holdings.
While the deal would be a relatively large one to digest at 10 days of ADV, Toyota Motors will be selling its entire stake, clearing the overhang.

6. Evolution Mining Placement – Back to Equity Markets Again to Fund Another M&A Deal

Evolution Mining (EVN AU) is looking to raise around US$350m to partially fund its acquisition of an 80% stake in the Northparkes copper and gold mines.
While the acquisition wasn’t explicitly flagged, the firm has guided that it had been eyeing acquisitions into gold/copper pathways. Thus, we would argue that the deal is somewhat well flagged.
That being said, at 14 days of three month ADV, the deal isn’t a particularly small one for the firm to digest.

7. Dekon Food and Agriculture Group IPO Trading – Tight Float at Listing, Subscription Rates Were Tepid

Dekon Food and Agriculture Group (DFAG CH) raised around US$128m in its Hong Kong IPO.
Dekon Food and Agriculture Group (DFAG) is a vertically integrated livestock farming enterprise in China.
We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

8. 2024 Major IPOs Pipeline in Korea

This is our 9th “Annual Edition of the Major Korean IPOs Pipeline Preview” at Smartkarma.
This insight will feature 50 of the biggest potential IPOs in Korea in 2024.
These 50 IPOs in Korea are likely to represent more than 80% of all capital raised through IPOs in Korea next year.

9. Rept Battero IPO: The Bull Case

REPT BATTERO Energy (1998104D CH), a leading EV battery manufacturer, is premarketing a US$300 million HKEx IPO, according to press reports.
According to Frost & Sullivan, in 1H23, Rept was the tenth-largest lithium-ion battery manufacturer globally for annual installations for new energy applications.
The bull case rests on rapid ESS revenue growth, reducing customer concentration risks, ambitious capacity expansion plans, promising margin trajectory and improving cash collection cycle.

10. Kasumigaseki Capital (3498 JP) – An Offering Worth Examining

Kasumigaseki Capital is a small cap consulting real estate speculator/developer. They have an interesting, aggressive model. People will recognise the model from pre-GFC but this one is structured better.
The company had planned explosive growth and in October, brought growth plans forward and guidance way up. Now there is an offering to fund that growth.
It appears to also be an offering to get a very large short position out of a risk of potential squeeze. For that, I expect this goes smoothly.

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Dec 03

Weekly Top Ten Equity Capital Markets – Dec 3, 2023

1. Denso Offering, Buyback, and New Cross-Holding Reduction Policy – It WAS a Trap

15 minutes after I published what I thought was a considered analysis, Denso dumps the details. I thought it might be a trap. It looks like a trap.
A holistic view of the three different documents here suggests, indeed, “It was a trap”.
This giant offering is not bearish overhang but likely tilts bullish with greenshoe support, a large buyback, a new cross-holding reduction policy, and the follow-on effects from that.

2. Huge Denso (6902) Secondary Sale by Toyota Group – Admiral Ackbar Says “It’s A Trap!”

Yesterday, Reuters reported that multiple Toyota Group companies would sell ~10% of Denso Corp (6902 JP) worth ¥700bn in a secondary share sale by year-end.
The sellers would be Toyota, selling down to just over 20%, Toyota Industries (6201) (selling down a bit more than half, and Aisin Seiki (7259 JP) selling its 2% stake.
Denso would buy back shares. This whole thing is both interesting and complicated so I discuss the interesting complications below. It looks bigger than it probably is.

3. Denso (6902 JP): US$4.0 Billion Secondary Offering and US$1.4 Billion Buyback

Denso Corp (6902 JP) announced a secondary offering of up to 294.8 billion shares (including overallotment) and a buyback (maximum shares of 125 million or maximum value of JPY200 billion).
Denso also announced a cross-holding reduction policy. In an unspecified timeframe, it will sell part of its holdings in Toyota Industries (6201 JP) and Aisin (7259 JP).
Looking at recent large Japanese placements is instructive to understand the potential offer price. The pricing date will fall between 13 and 18 December (likely 13 December).

4. Asahi Group (2502 JP): The Current Playbook

Since the US$1.3 billion secondary placement announcement, Asahi Group Holdings (2502 JP)’s shares are down -6.2% from the undisturbed price of JPY5,804 per share (16 November).
Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Asahi’s shares have followed the pattern of previous large placements.
The offering will likely be priced on 28 November. Investors participating in previous large Japanese placements tend to secure positive returns.

5. Zensho Placement – Good Price to Raise At, at Least for the Company

Zensho Holdings (7550 JP) aims to raise around US$300m via a public offering.
As per the company it will use the proceeds from the deal for potential M&A transactions.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

6. Denso Corp Placement – Toyota to Raise US$4.4bn, as Expected

Following yesterday’s news release by Reuters that Toyota Motor (7203 JP) could sell up to 10% of Denso Corp (6902 JP), the deal was officially launched today.
Toyota is the company’s largest shareholder and its largest customer.
We have covered the deal background in our earlier note, Denso Corp Placement – Possible Placement by Toyota to Raise US$4.7bn. In this note, we talk about the final terms.

7. Zeekr Pre-IPO – Quick Note – Recent Filing Updates – 007, Earnings on Track

ZEEKR (ZK US), a premium EV brand by Geely Auto (175 HK), aims to raise around US$500m in its US listing.
Zeekr was formed in Mar 2021 as a JV between Geely and its founder. Its first model was launched in Apr 21 with deliveries starting in Oct 21.
We have looked at the company’s past performance and valuations in our earlier notes. In this note, we talk about the updates from its recent filings.

8. Tata Technologies IPO: Trading Debut

Tata Technologies (TATATECH IN) priced its IPO at Rs500 per share to raise gross proceeds of US$365 million. The shares will start trading tomorrow.
We previously discussed the IPO in Tata Technologies IPO: The Investment Case and Tata Technologies IPO: Valuation Insights.
The market sentiment on the sector has improved. In 2023, Indian IPOs with a >US$100 million raise had an average first-day gain of 28.3%. The IPO price is attractive.

9. LS Materials IPO Bookbuilding Results Analysis

LS Materials IPO price has been determined at 6,000 won per share, which is higher than the high end of the IPO price range (5,500 won).
A total 2,025 institutional investors participated in this IPO book building. The demand ratio was 396.8 to 1. The IPO offering amount is 87.8 billion won.
We believe that its share price is likely to trade higher than the high end of our valuation range (7,953 won per share) post IPO.

10. Sino-Synergy Hydrogen IPO – High Potential but Comes with Ample Issues

Sino-Synergy Hydrogen Energy Technology (9663 HK) (SHET) is looking to raise around US$200m in its Hong Kong IPO.
SHET is a hydrogen fuel cell company in the PRC focusing on research, development, production and sales of hydrogen fuel cell stacks and hydrogen fuel cell systems.
In this note, we will look at the company’s background and talk about valuations.

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Nov 26

Weekly Top Ten Equity Capital Markets – Nov 26, 2023

1. Large GS Yuasa (6674) Placement – 20% Dilution, Needs Lots of Love

Today after the close, noted Japanese battery maker Gs Yuasa Corp (6674 JP) announced a public equity offering accompanied by a 3rd party placement to Honda Motor (7267 JP).
Total $300mm+ raise is nearly 20.0mm shares against ~80mm shares out now. That’s 20% EPS dilution at a still-decent discount to book value.
This creates a weird situation of a low ROE stock becoming lower ROE, at a lower PBR, with “more growth ahead” in a hyper-competitive space.

2. Tata Technologies IPO: Valuation Insights

Tata Technologies (TATATECH IN), the largest India-based ER&D service provider, seeks to raise gross proceeds up to US$366 million in a pure secondary offering.
We previously discussed the IPO in Tata Technologies IPO: The Investment Case, Tata Technologies IPO: The Bull Case and Tata Technologies IPO: The Bear Case.
Our valuation analysis suggests that the IPO price range of Rs475-500 per share is attractive. Therefore, we would participate in the IPO.

3. Zeekr Pre-IPO – Thoughts on Valuation

ZEEKR (ZK US), a premium EV brand by Geely Auto (175 HK), aims to raise around US$500m in its US listing.
Zeekr was formed in Mar 2021 as a JV between Geely and its founder. Its first model was launched in Apr 21 with deliveries starting in Oct 21.
We have looked at the company’s past performance and undertaken a peer comparison in our earlier notes. In this note, we will talk about valuations.

4. GS Yuasa Placement – Well Flagged but Relatively Large Deal, Liquidity Might Be an Issue

Gs Yuasa Corp (6674 JP) (GSY) is looking to raise around US$240m via a public offering, along with placing shares via third-party allotment with Honda Motor (7267 JP) .
The company formed a JV with Honda Motors earlier this year and will use the bulk of the proceeds for investments in the JV.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

5. DS Dansuk IPO Preview

By Nitin Mangal, India Independent Insight

DS Dansuk is getting ready to complete its IPO in Korea in the next several weeks. The IPO price range is from 79,000 won to 89,000 won.
The book building for the institutional investors will be from 5-11 December. The IPO offering amount is from 96.4 billion won to 108.6 billion won.
According to the bankers’ valuation, DS Dansuk’s valuation would range from 462 billion won to 522 billion won.

6. Flair Writing Industries IPO- Forensic Analysis

Flair Writing Industries (1656496D IN) ‘s INR 5.9 bn upcoming IPO consists of fresh issue worth INR 2.9 bn and OFS worth INR 3 bn (at the upper end).
The company is the largest pen manufacturer in India and one of the top three players in the Indian Writing Instruments Industry.
While the company has shown a handsome growth since the pandemic, some operating metrics pertaining to employees don’t seem to add up.

7. WuXi XDC (2268.HK) – How Long Will the Rally Last?

By Xinyao (Criss) Wang

WuXi XDC’s shares surged since IPO. Obviously, ADC industry is in a “honeymoon period”. The market is optimistic about ADC due to high certainty and growth visibility in short term.
Pharmaceutical companies believe this platform would produce blockbuster products continuously. However, if there’s any “persuasive event” to change optimistic expectations on ADC, it’s time for investors to reconsider WuXi XDC.
“Positive sentiment + non-falsifiable short-term logic” would indeed push WuXi XDC’s shares to a new high. As long as sales of major ADCs are in line with expectations, party continues.

8. Tata Technologies IPO- Forensic Analysis

By Nitin Mangal, India Independent Insight

Tata Technologies (TATATECH IN) awaited IPO is set to launch for subscription this week.
The company is one of the largest ER&D player that is based in India with revenues crossing INR 44 bn in F23.
Balance sheet remains strong and cash rich. There are however, doubts on revenue recognition policy, forex risk and reliance on Tata Group.

9. Zensho Holdings (7550) – ¥50bn Offering Is Not Meant For You

Zensho Holdings (7550 JP) has had a great couple of years in share price movement. And this year is seeing earnings explode to new highs. M&A and FX.
Now they want to build a “war chest” equivalent to 4% of market cap to go do more M&A.
This seems opportunistic. And the shareholder register is extraordinarily lopsided. There is really only one buyer for this deal.

10. Zeekr Pre-IPO – Peer Comparison – Catching up with Little Spending

ZEEKR (ZK US), a premium EV brand by Geely Auto (175 HK), aims to raise around US$500m in its US listing.
Zeekr was formed in Mar 2021 as a JV between Geely and its founder. Its first model was launched in Apr 21 with deliveries starting in Oct 21.
We have looked at the company’s past performance in our earlier notes . In this note, we will undertake a peer comparison.

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Nov 19

Weekly Top Ten Equity Capital Markets – Nov 19, 2023

1. Asahi Group Placement – Relatively Small One when Compared to Previous Large JP Secondary Selldowns

A group of shareholders are looking to raise US$1.3bn (JPY197.8bn) by selling their respective stakes in Asahi Group Holdings (2502 JP) via an extended secondary follow-on.
The deal would represent 23 days of Asahi’s three month ADV. Its latest extended large primary deal has done very well.
While the deal isn’t particularly well flagged, it is an extended one allowing the market to price in the impact of the share sale.

2. Zeekr Pre-IPO – The Positives – Has Been Growing Very Fast While Meeting Its Targets

Zeekr, a premium EV brand by Geely Auto (175 HK) , aims to raise around US$500m in its US listing.
Zeekr was formed in Mar 2021 as a JV between Geely and its founder. Its first model was launched in Apr 21 with deliveries starting in Oct 21.
In this note, we talk about the positive aspects of the deal.

3. Zeekr Pre-IPO – The Negatives – Remains Highly Dependent on Geely

ZEEKR, a premium EV brand by Geely Auto (175 HK), aims to raise around US$500m in its US listing.
Zeekr was formed in Mar 2021 as a JV between Geely and its founder. Its first model was launched in Apr 21 with deliveries starting in Oct 21.
In this note, we talk about the not-so-positive aspects of the deal.

4. Ajinomoto Placement – Share Buyback Should Aid Group Selling

A group of shareholders are looking to raise US$444m by trimming their respective stakes in Ajinomoto Co (2802 JP) via an extended secondary follow-on.
While the selldown doesn’t seem particularly well flagged, it won’t be a very large one to digest at just eight days of three month ADV.
In a bid to cushion the selldown, Ajinomoto plans to buyback its stock to the tune of 10m shares, which would amount to 80% of the base shares on offer.

5. WuXi XDC Cayman IPO Trading – Strong Subscription Rates Heading into Listing

WuXi XDC Cayman (1877628D HK) raised US$470m in its Hong Kong IPO.
WuXi XDC Cayman (WXDC) is a CRDMO focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
In our previous notes, we looked at the company’s past performance and valuations. In this note, we talk about the trading dynamics.

6. Steadfast Group Placement – While Accretion Here Is Limited, Past Deals Have Done Well

By Shifara Samsudeen, ACMA, CGMA, LightStream Research

Steadfast (SDF AU) is looking to raise around A$280m (US$180m) to fund the acquisition of Sure Insurance, and provide headroom for potentially additional acquisitions over the year.
SDF has undertaken a number of capital raises in the past to similarly fund its active acquisition strategy. Overall, the firm’s past deal record has been strong.
In this note, we will talk about the acquisition and run the deal through our ECM framework.

7. Wuxi XDC: Thoughts on First Day Trading

Wuxi XDC priced its IPO at HK$20.60 per share (upper-end of range), and raised HK$3.5bn (US$417m) at a market capitalisation of HK$24.3bn and post-money EV of HK$20.4bn.
Both HK offering and the international offering of the company were significantly oversubscribed by 49.96x and 19.6x respectively.
Our DCF value per share is still at a significant premium to the final IPO price, and we expect Wuxi XDC’s IPO to have a strong debut.

8. WuXi XDC IPO: Trading Debut

WuXi XDC Cayman (1877628D HK) priced its IPO at HK$20.60 per share to raise the gross proceeds of US$470 million. The shares will start trading tomorrow.
We previously discussed the IPO in WuXi XDC IPO: The Bull Case, WuXi XDC IPO: The Bear Case and WuXi XDC IPO: Valuation Insights.
The market sentiment on the sector has modestly weakened. However, the IPO price is attractive, with our DCF valuation of HK$22.89 per share, 11.1% above the IPO price.

9. Ecopro Materials IPO Trading – One of the Weakest Subscription Rates of the Year

EcoPro Materials (ECO123 KS) raised around US$320m, after downsizing the deal and pricing its IPO at the low end of the range at KRW36,200/share.
Ecopro Materials (EPM) manufactures and sells high-nickel precursors, one of the key materials for high-nickel cathode materials for secondary (rechargeable) batteries.
In this note, we will talk about the demand for the deal and other trading dynamics.

10. ZEEKR IPO: The Bull Case

ZEEKR (ZK US), a premium Chinese BEV manufacturer and a subsidiary of Geely Auto (175 HK), has filed for a US$500 million IPO to list on the NYSE.
ZEEKR has launched three models – the luxury shooting brake coupe ZEEKR 001, the luxury pure electric MPV – ZEEKR 009 and the new luxury versatile SUV – ZEEKR X.
The bull case rests on bestselling premium BEVs, rapid vehicle sales growth, rising gross margin, debt-free balance sheet and a favourable cash conversion cycle.

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Nov 12

Weekly Top Ten Equity Capital Markets – Nov 12, 2023

1. Renesas Electronics Placement – Well Flagged US$1.8bn Deal, Accelerated but Index Flows Should Help

INCJ aims to raise around US$1.8bn via a secondary sell-down in Renesas Electronics (6723 JP). This will be a clean-up trade as INCJ has been paring down its stake.
The deal is a slightly large one to digest at 12 days of three month ADV and around 6% of current mcap.
In this note, we will talk about the placement and run the deal through our ECM framework.

2. WuXi XDC Cayman IPO – Decent Upside from IPO Range, Bulk of the Deal Taken up by Marquee Investors

WuXi XDC Cayman (1877628D HK) is looking to raise US$470m in its Hong Kong IPO.
WuXi XDC Cayman (WXDC) is a CRDMO focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
In this note, we will look at the deal dynamics and share our final thoughts on valuation.

3. Will Semiconductor GDR Listing – Well Flagged and Short Interest Has Been on the Rise

Will Semiconductor Shan (603501 CH) is looking to raise US$450m in its Switzerland GDR listing. The bookrunners on the deal are UBS and JP Morgan.
In its base deal, the firm is offering 31m GDRs (1 GDR to 1 ordinary A-share) for sale, at a 5.4-17.2% discount to last close on its A-share leg.
The base deal would be a relatively small one for the firm to digest, representing just 3.8 days of three month ADV on its A-share leg.

4. WuXi XDC IPO: Valuation First-Look

WuXi XDC Cayman (1877628D HK), a leading contract research, development and manufacturing organization (CRDMO), is pre-marketing an HKEx IPO to raise US$500 million, according to press reports.
We previously discussed the IPO in WuXi XDC IPO: The Bull Case and WuXi XDC IPO: The Bear Case.
In this note, we present our forecasts and take the first look at WuXi XDC’s potential valuation range.

5. WuXi XDC IPO: Valuation Insights

WuXi XDC Cayman (1877628D HK), a leading contract research, development and manufacturing organization (CRDMO), has launched an HKEx IPO to raise up to US$470 million.
We previously discussed the IPO in WuXi XDC IPO: The Bull Case and WuXi XDC IPO: The Bear Case.
Blue-Chip cornerstones will purchase US$300 million of the offer. Our base-case DCF valuation is HK$22.84 per share, 12.8% above the midpoint of the IPO price range.

6. Bajaj Finance QIP – Very Well Flagged US$1bn Raising, past Deals Have Done Well

Bajaj Finance Ltd (BAF IN) , one of India’s largest NBFCs, aims to raise around US$1bn via a QIP.
Bajaj Finance is an NBFC offering auto, consumer and home loans, along with other products as well.
In this note, we run the deal through our ECM framework and talk about the deal dynamics.

7. Trading Strategy of Ecopro Materials IPO Post Book Building Results and Short Selling Ban

By Shifara Samsudeen, ACMA, CGMA, LightStream Research

Ecopro Materials reported disappointing IPO book building results. IPO price has been finalized at 36,200 won, which is at the low end of the IPO price range.
The demand ratio was 17.2 to 1 which was low. Total IPO offering amount was 419 billion won. Ecopro Materials will start trading on 17 November.
Our base case valuation of Ecopro Materials is target price of 37,436 won per share, which is 3.4% higher than the IPO price. We remain negative on this IPO.

8. WuXi XDC IPO Valuation Analysis: Premium Multiples Reflect 100%+ Top-Line Growth

By Andrei Zakharov

WuXi XDC set terms for an upcoming IPO: the fast-growing CRDMO offers 178.4M shares at the price range of HK$19.90-HK$20.60, implying a market cap of ~HK$23.9B (~$3B) at the midpoint.
Cornerstone investors agreed to subscribe and buy ~116M shares, assuming the IPO price of HK$20.25 at the midpoint. WuXi XDC shares will begin trading on Friday, November 17.
My PT of HK$25.57 implies a ~26% upside to the IPO price at the midpoint. WuXi XDC’s premium multiples reflect 100%+ top-line growth and the company’s leadership position.

9. WuXi XDC Cayman IPO: Robust Top Line Growth but Margins Remain Under Pressure

WuXi XDC Cayman (1877628D HK) is a leading contract research, development and manufacturing organisation (CRDMO) focused on the global antibody-drug conjugate (“ADC”) and broader bioconjugate market.
The company has announced the terms for its HKEx IPO and plans to raise proceeds of around US$470m through the IPO.
Wuxi XDC’s revenues have seen robust growth during the last 3-years driven by growth in ADC market while margins have continued to decline.

10. Hybe Placement- Another Block Incoming

HYBE (352820 KS)‘s second-largest shareholder, Netmarble, seeks to raise approximately US$408m through a secondary block deal, selling approximately 2.5m shares (6% of TSO).
The deal is a slightly large one to digest at 10.9 days of three month ADV and 5.5% of current mcap.
In this note, we will talk about the placement and run the deal through our ECM framework.

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