In today’s briefing:
- Giant Biogene IPO – Reasonable Valuation but in Unreasonable Markets
- GoTo Lock-Up: A Sizeable Secondary Offering Incoming
- Giant Biogene IPO: Peer Comparison and Valuation
- Giant Biogene IPO: Valuation Insights
- Sunshine Insurance Group Pre-IPO – The Negatives – Lacks Growth
- Incyte Corp: Acquisition of Villaris Therapeutics & Other Drivers
- Omnicom Group Inc: Launch of Transact & Other Drivers
- Paychex Inc: New Voice Assist Launch & Other Drivers
Giant Biogene IPO – Reasonable Valuation but in Unreasonable Markets
- Giant Biogene (GB) is now looking to raise around US$80m in its Hong Kong IPO, down from its earlier target of US$500m raising.
- GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
- We had looked at the company’s past performance and undertaken a peer comparison in our previous notes. In this note, we’ll talk about valuations and other deal dynamics.
GoTo Lock-Up: A Sizeable Secondary Offering Incoming
- GoTo (GOTO IJ) confirmed that it is exploring a coordinated secondary offering of shares held by pre-IPO shareholders. The Series A shareholders’ lock-up expires on 30 November 2022.
- The lock-up of 89.63% of the outstanding shares expires on 30 November. Within these shares, Alibaba (ADR) (BABA US) and Softbank Group (9984 JP) stakes are worth a combined US$2.6bn.
- GoTo continues to grow but with material losses and cash burn. The shares are fairly valued but the sizeable secondary offering (US$1 billion based on reports) will pressure the price.
Giant Biogene IPO: Peer Comparison and Valuation
- Giant Biogene Holding (GBH HK) designs, develops and manufactures professional skin treatment products with recombinant collagen as the key bioactive ingredient in China.
- The company’s IPO offering has been downsized and now plans to raise approx. US$80m through issuing 22.6m shares at an indicative IPO price range of HK$24.3-27.7 per share.
- Our analysis shows that Giant Biogene’s IPO is attractively priced compared to domestic and international peers, however, we expect the upside to be limited given the current market volatility.
Giant Biogene IPO: Valuation Insights
- Giant Biogene Holding (GBH HK) has launched its HKEx listing atHK$24.30-27.70 per share to raise up to US$80 million, materially below previous expectations of a US$500 million raise.
- We previously discussed the IPO in Giant Biogene IPO: The Bull Case, Giant Biogene IPO: The Bear Case andGiant Biogene IPO: Valuation First Look.
- The China A Share peers have derated due to the sharp sell-off in the last few days. Nevertheless, Biogene is attractively valued at the IPO price range. We would participate.
Sunshine Insurance Group Pre-IPO – The Negatives – Lacks Growth
- Sunshine Insurance Group (SIG), a life, health and P&C insurance company, aims to raise up to US$1bn in its HK IPO.
- SIG is an integrated insurance provider which offers both life and health (L&H) and property and casualty (P&C) insurance in China.
- In this note, we talk about the not-so-positive aspects of the deal.
Incyte Corp: Acquisition of Villaris Therapeutics & Other Drivers
- Incyte has started appreciating with its financial results being just around the corner.
- In the last quarter, the company’s revenues rose 29% and it managed an all-around beat.
- With an increase in new patient starts across all 3 indications, Jakafi’s net revenues increased 13% to $598 million.
Omnicom Group Inc: Launch of Transact & Other Drivers
- Omnicom had a decent financial performance this quarter with organic growth that was broad-based across its client sectors, regions, disciplines, and agencies.
- The introduction of Transact by Omnicom follows the blossoming interest from the agencies in getting a piece of the retail media pie.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
Paychex Inc: New Voice Assist Launch & Other Drivers
- Paychex’s stock has started seeing the first signs of recovery after the company delivered a good result, outperforming Wall Street expectations in terms of revenues and earnings.
- This is a logical extension of Paychex’s vast, constantly expanding, and widely used self-service capabilities.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
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