In today’s briefing:
- Bilibili Follow-On Offering – Seems Opportunistic
- China Education Group Placement – Recent Momentum Has Been Strong but past Deals Were Mixed
- Lotte Chemical Offering: Schedule Clarifications & Trading Considerations
- TEMC: Reduces IPO Price & Bookbuilding Results
- Aequitas 2022 IPOs and Placements Performance Review – From the Busiest Year to the Slowest Year
- Bilibili Follow-On Offering: Limited Upside
- Honasa Consumer Pre-IPO Tearsheet
Bilibili Follow-On Offering – Seems Opportunistic
- Bilibili Inc (BILI US) aims to raise around US$400m via a follow-on ADS offering.
- The company plans to use most of the proceeds to redeem its 2026 notes.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
China Education Group Placement – Recent Momentum Has Been Strong but past Deals Were Mixed
- China Education Group (839 HK) is looking to raise up to US$209m in its top-up placement.
- This will be the fourth placement by the group since its listing in 2017, we have earlier looked at the past three placements as well.
- In this note, we will look at the deal dynamics and run the deal through our ECM framework.
Lotte Chemical Offering: Schedule Clarifications & Trading Considerations
- The subscription starts on January 19, so the pricing is January 16, three trading days earlier. The shorting restriction runs until January 16, which means the 16th is inclusive.
- There was no arb spread opening during the last four trading days of the subscription rights trade period. Nonetheless, this event had some impact on Lotte Chemical’s futures trading.
- Considering this, the trade that can be considered at this point would be unhedged shorting. We target potential inflow to adjust the second issuing price downwardly and post-listing overhangs.
TEMC: Reduces IPO Price & Bookbuilding Results
- TEMC announced its IPO price of 28,000 won, which was lower than the IPO price range of 32,000 won to 38,000 won.
- There were 560 institutions that participated in the IPO bookbuilding survey and the demand ratio was 31.3 to 1.
- Our base valuation is 38,363 won per share, representing a 37% upside to the IPO price of 28,000 won. The reduced IPO price has made the IPO more attractive.
Aequitas 2022 IPOs and Placements Performance Review – From the Busiest Year to the Slowest Year
- 2022 marked our seventh year covering Equity Capital Markets (ECM) in Asia Pacific. 2022 was rather quiet ending with us covering one of the lowest number of IPOs and placements.
- We ended 2022 with an accuracy rate of 74.6% across 55 IPOs that we covered and 70.5% across 78 placements.
- For those not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific, including China ADRs.
Bilibili Follow-On Offering: Limited Upside
- Bilibili announced a follow-on equity offering of 15.34m ADS priced at $26.65 per ADS partially in exchange for convertible senior notes due 2026 (US$384.8m) and to replenish its cash reserves.
- Each ADS represents one ordinary share and new equity offering of 15.34m shares will account for approx. 3.7% of the company’s extended share capital post follow-on offering.
- Bilibili Inc (BILI US) ADS dropped 5.76% following the announcement of the follow-on offering and we believe there is limited upside.
Honasa Consumer Pre-IPO Tearsheet
- Honasa Consumer (1652951D IN) is looking to raise about US$350m in its upcoming India IPO. The deal will be run by Kotak, Citibank, JM Financial and JP Morgan.
- Honasa Consumer is the largest digital-first beauty and personal care (BPC) company in India in terms of revenue for FY22 (Year ended 31st Mar 2022) according to RedSeer.
- Honasa Consumer’s product portfolio includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.
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