In today’s briefing:
- Arm IPO – Don’t Worry, It’ll Be Fine
- ARM Holdings IPO Valuation Analysis
- Doosan Robotics: Bankers Provide Additional P/S Valuation and Surge in Price of Rainbow Robotics
- VNG IPO: The Bear Case
- VNG Pre-IPO – Local Peers Comparison
- Shiva Pharmachem Pre-IPO Tearsheet
- Revu Corporation IPO Valuation Analysis
- Pre-IPO Xiamen Yan Palace Bioengineering – Concerns About Profitability and Growth Sustainability
Arm IPO – Don’t Worry, It’ll Be Fine
- So the terms are out for Softbank’s attempt to list Arm.
- In typical sparkling form, Masayoshi Son has clocked a ~19% drawdown within weeks.
- Good thing all the bankers will easily get their $8bn loan paid back in full and aren’t subject to conflicting interests…?
ARM Holdings IPO Valuation Analysis
- Our base case valuation of Arm Holdings is target price of US$36.3 per share, which represents 23% lower than the lower end of the IPO price range.
- We estimate Arm’s sales to reach US2,832 million in FY2024 (up 5.7% YoY) and US$3,038 million in FY 2025 (up 7.3% YoY).
- Given the lack of upside, we have a NEGATIVE view of Arm Holdings. Our valuation sensitivity analysis suggests implied price of US$29.4 to US$43.9 per share.
Doosan Robotics: Bankers Provide Additional P/S Valuation and Surge in Price of Rainbow Robotics
- The bankers provided additional valuation framework using P/S basis for Doosan Robotics and based on this methodology, the IPO price range is from 19,000 won to 24,000 won.
- This does not mean that the bankers have actually lowered the IPO price range but rather they have provided another framework to value the company.
- We continue to have a Positive view of the Doosan Robotics IPO.
VNG IPO: The Bear Case
- VNG (VinaGame) (VNG US) is Vietnam’s leading, homegrown digital ecosystem. VNG has filed for a Nasdaq listing to raise US$300 million.
- In VNG IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The bear case rests on the Communications and Media business’ faltering fundamentals, the Fintech business’ uncertain path to profitability and VNG’s underlying cash burn.
VNG Pre-IPO – Local Peers Comparison
- VNG (VinaGame) (VNG US), Vietnam’s leading internet platform, aims to raise up to US$300m in its US IPO.
- VNG is Vietnam’s leading homegrown digital ecosystem, as per the company, with diverse product offerings across games, communications and media, fintech and other opportunities
- We looked at the company’s past performance in our earlier notes. In this note, we undertake a comparison versus its local competitors.
Shiva Pharmachem Pre-IPO Tearsheet
- Shiva Pharmachem Limited (9155347Z IN) is looking to raise around US$110m in its upcoming India IPO. The bookrunners on the deal are JM Financial and Kotak.
- Shiva PharmaChem (SP) is a manufacturer in the Indian specialty chemicals business.
- As per Frost & Sullivan (F&S), the firm is the largest manufacturer of acid and alkyl chlorides by volume in CY22 in India and a key player globally.
Revu Corporation IPO Valuation Analysis
- Our base case valuation of Revu Corp is target price of 19,403 won, which is 47% higher than the high end of the IPO price range (13,200 won).
- Revu’s main business is marketing using influencers who are major content providers in the SNS advertising market.
- The influencer based marketing/advertising is one of the highest growing segments and we believe Revu Corp has an attractive platform to further expand its business on a profitable basis.
Pre-IPO Xiamen Yan Palace Bioengineering – Concerns About Profitability and Growth Sustainability
- Although Yan Palace prioritizes R&D capabilities in prospectus, its revenue growth and business model are mainly relied on large investment in marketing/promotion.The root cause is the efficacy problem of EBN.
- Whether Yan Palace’s future performance growth can be sustained is a question mark if marketing/promotion cannot drive growth anymore. Net profit margin is low. EBN is not a profitable business.
- Yan Palace’s products do not have core competitiveness or high moat. Compliance risks are also worth being vigilant about. The valuation of Yan Palace should be lower than Giant Biogene.
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