In today’s briefing:
- Kokusai Electric IPO: The Bear Case
- Weekly Deals Digest (01 Oct) – Cainiao, Kokusai, Doosan, IMAX China, Keiyo, Toyo, Liontown
- Cainiao Pre-IPO: An on the Ground Introduction
- Seoul Guarantee Insurance IPO: Valuation Insights
- Seibu Giken IPO Trading – Still Not Particularly Enticing
- Lalatech IPO: New Filing’s H123 P&L Shows Impressive Growth, Unanswered Questions
Kokusai Electric IPO: The Bear Case
- Kokusai Electric (6525 JP) is a speciality manufacturer of semiconductor production equipment. KKR & (KKR US) seeks to raise about US$750 million through listing Kokusai.
- In Kokusai Electric 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 a declining revenue trend, a challenging near-term growth target, high China revenue risk, margins on a downward trend, increasing inventory days and deteriorating FCF.
Weekly Deals Digest (01 Oct) – Cainiao, Kokusai, Doosan, IMAX China, Keiyo, Toyo, Liontown
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments Kokusai Electric (6525 JP), Doosan Robotics (454910 KS), Seoul Guarantee Insurance (031210 KS), Cainiao Smart Logistics (1437124D HK), J&T Global Express (1936374D CH),VNG (VinaGame) (VNG US) IPOs.
- Event-Driven developments – Keiyo Co Ltd (8168 JP), System Information (3677 JP), Toyo Construction (1890 JP), IMAX China Holding (1970 HK), Nws Holdings (659 HK), Symbio Holdings (SYM AU).
Cainiao Pre-IPO: An on the Ground Introduction
- We talk about what we see and hear here on the ground, that the company may not mention in its prospectus.
- We believe Cainiao has the ambition to take the whole logistics chain from retailers’ doors to shoppers’ doors since the company’s inception.
- We also believe Cainiao has been trying to take competitors’ market share by taking their client lists.
Seoul Guarantee Insurance IPO: Valuation Insights
- Seoul Guarantee Insurance (031210 KS), a leading guarantee provider in Korea, is pre-marketing an IPO to raise up to KRW362 billion (US$272 million).
- We previously discussed the IPO in Seoul Guarantee Insurance IPO: The Bull Case and Seoul Guarantee Insurance IPO: The Bear Case.
- In this note, we look at the syndicate’s valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive, and we would pass on the IPO.
Seibu Giken IPO Trading – Still Not Particularly Enticing
- Seibu Giken (6223 JP) (SG) raised around US$93m in its Japan IPO after pricing at the top of its downward revised range.
- SG sells desiccant dehumidifiers and VOC concentrators in over fifty countries globally. Its two main products accounted for over 90% of its revenue in 2022.
- In our previous notes, we looked at the company’s past performance and valuation. In this note, we talk about the trading dynamics.
Lalatech IPO: New Filing’s H123 P&L Shows Impressive Growth, Unanswered Questions
- In an updated HKEX filing posted on September 28th, Lalatech disclosed H123 financial results
- Solid Revenue growth plus sharp expense reductions led to +28 ppt OP margin expansion
- Is this progress sustainable, defendable? Lalatech management needs to explain gains
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