In today’s briefing:
- Kokusai Electric IPO: Trading Debut
- WuXi XDC Cayman Pre-IPO – Peer Comparison – Has Grown Rapidly Although Margins Remain Under Pressure
- Waystar IPO Valuation Analysis: Lack of Bullish Catalysts and Weak Post-Listing Performance
Kokusai Electric IPO: Trading Debut
- Kokusai Electric (6525 JP) priced its IPO at JPY1,840 per share to raise secondary proceeds of US$723 million. The shares will start trading on 25 October.
- We previously discussed the IPO in Kokusai Electric IPO: The Bull Case, Kokusai Electric IPO: The Bear Case and Kokusai Electric IPO: Lower Price Range Is Reasonable.
- The peers have modestly derated since the lowered IPO price range was announced on 10 October. However, the IPO price remains attractive. Our DCF valuation is JPY2,058.
WuXi XDC Cayman Pre-IPO – Peer Comparison – Has Grown Rapidly Although Margins Remain Under Pressure
- WuXi XDC Cayman Inc (1877628D HK) is looking to raise around US$500m in its upcoming Hong Kong IPO.
- WuXi XDC Cayman (WXDC) is a CRDMO focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
- In our previous note we looked at the company’s past performance, in this note we will undertake a peer comparison.
Waystar IPO Valuation Analysis: Lack of Bullish Catalysts and Weak Post-Listing Performance
- Waystar Holding will be valued like other unprofitable healthcare IT unicorns on a multiple of forward revenue. I used EV/Revenue valuation methodology and FY23 EV/Revenue multiples to value the Waystar.
- In 2019, CPPIB and EQT acquired a majority stake in Waystar, valuing the company at $2.7B, which implies an EV/FY23E revenue multiple of ~ 6x, including a debt of ~$2.3B.
- My ~$3.6B IPO valuation contemplates a ~5x EV/Revenue on my FY23E revenue of $795M and is supported by my analysis of healthcare IT comps.
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