In today’s briefing:
- CPF Global Food Solution Pre-IPO – The Positives – One of the Largest Players in the Industry
- Lalatech IPO: Huge Drop in Operating Costs Prior to IPO Is Concerning
- Horizon Construction Development IPO: The Bull Case
- Pre-IPO YSB Inc (YSB.HK) – The Business Model Is Facing Challenges
- Esco Lifesciences (1891571D SP) Pre-IPO: A Profitable Revenue Growth Saga
- CPF Global Food Solution Pre-IPO – The Negatives – Muted Growth Prospects
- Ross Stores Inc.: Collaboration With Adidas & Other Drivers
- Omnicom Group Inc.: Success in Precision Marketing and Public Relations – Key Drivers
- Analog Devices Inc.: The Next Big Thing in Mission-Critical Equipment – Key Drivers
CPF Global Food Solution Pre-IPO – The Positives – One of the Largest Players in the Industry
- CPF Global Food Solution (2247162D TB) is looking to raise around US$1bn in its upcoming Thailand IPO.
- CPF Global Food Solution (CPFGS) is a subsidiary of CP Foods Group, offering food products and services to food operators and consumers locally and internationally.
- In this note, we talk about the positive aspects of the deal.
Lalatech IPO: Huge Drop in Operating Costs Prior to IPO Is Concerning
- Lalatech Holdings Co Ltd (LALA HK) is a technology driven logistics transportation platform with a global footprint. The company has filed for an IPO and plans to raise about US$1bn.
- The company’s financials have shown significant improvement over the last 2 years with the company turning profitable at the operating profit line in 2022.
- Huge drop in selling and marketing costs have helped cut down losses which seems too realistic and the company hasn’t provided sufficient explanation on these cost cuts.
Horizon Construction Development IPO: The Bull Case
- Horizon Construction Development (1887128D HK)/HCD, a subsidiary of Far East Horizon (3360 HK), is pre-marketing an HKEx IPO to raise US$200-250 million, according to press reports.
- HCD is the largest equipment operation service provider in China in terms of revenue in 2021, according to Frost & Sullivan.
- The key elements of the bull case rest on market share gains, an anticipated post-COVID recovery boost, high revenue visibility, stable operating margin and young equipment life.
Pre-IPO YSB Inc (YSB.HK) – The Business Model Is Facing Challenges
- The margins of pharmaceutical circulation B2B business is low. If there’s not enough incremental space of terminal customers, the simple B2B trading model is difficult to form a leapfrog growth.
- Based on YSB’s business model, if terminal customers choose to use other platforms like JD Health/Alibaba Health, etc., YSB would face the risk of losing upstream and downstream users.
- So far, we haven’t seen that YSB has established core competitiveness or moat to secure the terminal customers pool, casting doubts on its business model, investment logic and outlook.
Esco Lifesciences (1891571D SP) Pre-IPO: A Profitable Revenue Growth Saga
- Esco Lifesciences Group (1891571D SP), a profitable lifesciences tool provider with a global presence, is looking to raise $300M in its upcoming HK IPO.
- The company clocked revenue of S$117M in 2019, which steadily rose to S$155M in 2020 and S$172M in 2021, representing CAGR of 21%, outpacing lifesciences equipment market growth of 10%.
- In May 2021, Esco raised $200M through series-A fund raising with investors holding nearly 24% of the shares. This puts its valuation at around $840M.
CPF Global Food Solution Pre-IPO – The Negatives – Muted Growth Prospects
- CPF Global Food Solution (2247162D TB) is looking to raise around US$1bn in its upcoming Thailand IPO.
- CPF Global Food Solution (CPFGS) is a subsidiary of CP Foods Group, offering food products and services to food operators and consumers locally and internationally.
- In this note, we talk about the not-so-positive aspects of the deal.
Ross Stores Inc.: Collaboration With Adidas & Other Drivers
- Ross Stores delivered strong fourth-quarter sales and profitability results despite a very competitive holiday season, owing to customers’ positive response to the company’s expanded selection and value offerings.
- The company delivered an all-around beat with earnings per share for Q4 reported at $1.31 on a net income of $447 million.
- These figures compare to earnings per share of $1.04 on net earnings of $367 million for the 13 weeks ended January 29, 2022.
Omnicom Group Inc.: Success in Precision Marketing and Public Relations – Key Drivers
- Omnicom Group delivered an all-around beat as its revenues increased by 1%, while non-GAAP adjusted operating income remained unchanged.
- Net interest expense decreased as interest income exceeded the company’s expectations.
- We give Omnicom Group a ‘Hold’ rating with a revised target price.
Analog Devices Inc.: The Next Big Thing in Mission-Critical Equipment – Key Drivers
- Despite significant macroeconomic uncertainty in the first quarter of fiscal 2023, Analog Devices managed to deliver an all-around beat.
- These successes were driven by the company’s unwavering commitment to customer collaboration, the rising demand for cutting-edge technologies, and effective operational management.
- We give Analog Devices a ‘Hold’ rating with a revised target price.
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