In today’s briefing:
- Krafton Placement – Stock Has Been Doing Well, Momentum Remains Strong
- Sichuan Baicha Baidao IPO Trading – Tepid Demand, While Peers Have Corrected
- Remegen (9995.HK/688331.CH) – The Placement Won’t Solve the Problem
Krafton Placement – Stock Has Been Doing Well, Momentum Remains Strong
- SK Square is looking to raise around US$198m via selling 2.1% of Krafton (259960 KS).
- The stock has been doing well over the past few months and its earnings and price momentum remain strong.
- In this note, we will run the deal through our ECM framework and talk about the recent updates.
Sichuan Baicha Baidao IPO Trading – Tepid Demand, While Peers Have Corrected
- Sichuan Baicha Baidao Industrial (2555 HK) (SBBI) raised around US$330m in its HK IPO.
- SBBI sells new-style tea drinks through its ChaPanda stores. According to F&S, SBBI ranked third in China’s new-style tea shop market with a market share of 6.8% in FY23.
- We have looked at the company’s performance and valuations in our past note. In this note, we talk about the trading dynamics.
Remegen (9995.HK/688331.CH) – The Placement Won’t Solve the Problem
- Remegen’s product revenue fails to cover R&D expenses and its sales profit is negative, which means that RemeGen’s cost control is disappointing, and the main problem is high selling expenses.
- If RemeGen continues to follow the old path, breakeven will be further out of reach. In other words, we don’t think that the A-share placement will materially change the outlook.
- Remegen’s reasonable market value is RMB12-18 billion. If above RMB18 billion, it’s recommended investors take profits in time. If below RMB12 billion, investors could buy and wait for a rebound.
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