In today’s briefing:
- Asahi Group Placement – Relatively Small One when Compared to Previous Large JP Secondary Selldowns
- Steadfast Group Placement – While Accretion Here Is Limited, Past Deals Have Done Well
- Wuxi XDC: Thoughts on First Day Trading
- WuXi XDC IPO: Trading Debut
- Karoon Energy Placement – Not Well Flagged but Will Be an Accretive One
- ZEEKR IPO: The Bear Case
- Tata Technologies Pre-IPO – RHP Updates – Headline Growth Picking Up
- Jana Small Finance Bank Pre-IPO – Has Grown Decently Fast but Keep an Eye on Its CRAR
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.
Steadfast Group Placement – While Accretion Here Is Limited, Past Deals Have Done Well
- 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.
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.
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.
Karoon Energy Placement – Not Well Flagged but Will Be an Accretive One
- Karoon Energy Ltd (KAR AU) seeks to raise approximately A$170m (US$110m) through its primary placement.
- The deal is a large one to digest at 28.5 days of three month ADV and 14.1% of current mcap.
- In this note, we will talk about the placement and run the deal through our ECM framework.
ZEEKR IPO: The Bear 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.
- In ZEEKR 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 growth slowdown in the second-largest business, high related-parties dependence, Virdi/CEVT gross margin pressure, ongoing operating losses and FCF burn.
Tata Technologies Pre-IPO – RHP Updates – Headline Growth Picking Up
- Tata Technologies (TATATECH IN) (TT) is looking to raise around US$370m in its upcoming India IPO.
- Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs) and their tier 1 suppliers.
- We have looked at the company’s past performance and undertaken a peer comparison and provided our initial thoughts on valutions. In this note we talk about the RHP updates.
Jana Small Finance Bank Pre-IPO – Has Grown Decently Fast but Keep an Eye on Its CRAR
- Jana Small Finance Bank (3667144Z IN) is looking to raise at least US$100m in its upcoming India IPO.
- Jana Small Finance Bank (JSFB) is the fourth largest small finance bank in India in terms of AUM and deposit size as of FY23 (Year ended 31st Mar 2023).
- JSFB has grown its number of banking outlets and amount of deposits fast, which allowed the firm to grow its gross advances by 1.5x over the track record period.
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