In today’s briefing:
- CUBox IPO Valuation Analysis
- Rakuten Bank IPO: Leveraging the Power of the Rakuten Ecosystem to Lead Japan’s Digital Banking
- Avalon Technologies IPO- Forensic Analysis
- Monde Nissin: The Investment Case
- ZJLD Group IPO: The Bear Case
- Growatt Update: No Signs of Slowing Down
- JD Industrials Pre-IPO Tearsheet
CUBox IPO Valuation Analysis
- Our base case valuation of CUBox is target price of 34,172 won per share, which is 47% higher than the high end of the IPO price range of 23,200 won.
- Our base case valuation uses our estimated sales of 24.5 billion won for the company in 2023 and P/S multiple of 17.2x.
- Given that CUBox is a leading player in the AI technology driven facial recognition in Korea, many investors are likely to pay higher premium for its technology.
Rakuten Bank IPO: Leveraging the Power of the Rakuten Ecosystem to Lead Japan’s Digital Banking
- Rakuten Bank (5838 JP) has an advantage over competitors due to its connection with the Rakuten ecosystem, which has 39+ million monthly active users.
- It’s NIM has decreased, but the cost-to-income ratio is the lowest among digital banks, and its net-fee and commission-income has grown significantly, thanks to its association with the Rakuten ecosystem.
- The IPO price range is reasonable given its advantageous position. Therefore we intend to subscribe to the IPO when it opens.
Avalon Technologies IPO- Forensic Analysis
- Avalon Technologies (6594468Z IN) has launched its Initial Public Offering.
- The company states to have one of the highest ROCEs in the industry, one of the important reasons of high ROCE is unusual accounting treatment of capital reserve.
- Other forensic concerns include lack of cash generation and some auditor discomforts.
Monde Nissin: The Investment Case
- Monde Nissin Corp (MONDE PM) shares are down 18% on the back of FY22 results which revealed a net loss of PHP13 billion mainly due to a large impairment charge.
- While softening demand in meat alternatives is a headwind, Monde should benefit from the tailwinds of market share gains (in APAC BFB) and margin improvement (easing cost inflation).
- The valuation is undemanding (SOTP valuation of PHP10.21 per share) and will prove attractive to investors with a longer-term investment horizon.
ZJLD Group IPO: The Bear Case
- ZJLD Group (ZJLD HK), a baijiu company in China, is pre-marketing an HKEx IPO to raise up to US$400 million, according to press reports.
- In ZJLD Group IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The key elements of the bear case rest on the sharpest revenue slowdown, lowest operating margin and FCF margin vs peers along with a deterioration in lead growth indicators.
Growatt Update: No Signs of Slowing Down
- Growatt is a distributed energy solution provider with the #1 market share for PV inverters and energy storage inverters, allowing them strong potential to benefit from a growing market.
- The company has filed for an IPO on the HKEx with a placeholder value of US$1bn and following the lapse of its application, has refiled for an IPO.
- In this follow-up insight, we have highlighted and discussed some of the key new data points from the company’s latest IPO filing document which contains full-year 2022 results.
JD Industrials Pre-IPO Tearsheet
- JD Industrials (2231713D CH) is looking to raise about US$1bn in its upcoming HK IPO. The deal will be run by Bank of America, Goldman Sachs and Haitong International.
- JD Industrials (JDI) is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
- JDI’s platform offers 48 product categories and approximately 42.5m SKUs as of FY22 (31st Dec 2022).
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