In today’s briefing:
- Midea Group (000333 CH): Potential H-Share Listing Thoughts
- Softbank (9984 JP): Arm IPO Done, the Hard Part Comes Next
- SignatureGlobal (India) IPO- Forensic Analysis
- JSW Infrastructure IPO – Would Need a Wider Discount to Its Larger and More Dominant Peer
- Seoul Guarantee Insurance IPO: The Bear Case
- 4Paradigm IPO: Forecasts and Valuation
- DPC Dash IPO – US$400m Lockup Expiry Should Provide a Liquidity Boost
Midea Group (000333 CH): Potential H-Share Listing Thoughts
- Midea Group Co Ltd A (000333 CH) announced on September 18 the approval for H-share listing for a total of not more than 10% of its outstanding shares (before overallotment).
- Reasons for the listing include the possible share incentive program for overseas employees and more exposure to foreign investors.
- The H-share listing could be a safe bet given the current valuation profile, especially if the discount to A-share is larger than 10%.
Softbank (9984 JP): Arm IPO Done, the Hard Part Comes Next
- Softbank’s successful Arm Holdings IPO is a relief for Masa, with Arm valued at USD57bn and Arm shares trading above the issue price; this supports the SoftBank share price
- Arm’s key challenge is delivering on the growth strategy to justify its super-premium valuation; Arm’s historic price to sales is at a big premium to its peer group, excluding Nvida
- On current market values including Arm, Softbank shares trade at a 52% NAV discount; however, Arm’s current valuation seems unsustainable to us, threatening to erode the near term NAV lift
SignatureGlobal (India) IPO- Forensic Analysis
- SignatureGlobal India Pvt Ltd (1468641D IN) IPO will go live for subscription this week.
- The company is one of the renowned players in the NCR and Haryana in the affordable and lower mid segment housing.
- The company has grown well in the recent times, however there are certain forensic takeaways such as poor health of subsidiaries, related party transactions, etc.
JSW Infrastructure IPO – Would Need a Wider Discount to Its Larger and More Dominant Peer
- JSW Infrastructure (5978490Z IN) is looking to raise US$336m in its India IPO.
- JSW Infrastructure (JSWI) is the fastest growing port-related infrastructure company in terms of growth in installed cargo handling capacity and cargo volumes handled during FY20 to FY22, according to CRISIL.
- In this note, we will look at JSWI’s RHP updates, undertake a peer comparison, and share our thoughts on valuation.
Seoul Guarantee Insurance IPO: The Bear Case
- 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).
- In Seoul Guarantee Insurance 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 ongoing market share losses, weak performing credit insurance business, a 1H23 increase in the combined ratio and a decline in ROA/ROE metrics.
4Paradigm IPO: Forecasts and Valuation
- 4Paradigm has announced the terms for its IPO. The company plans to raise gross proceeds of $131-144m through issuing 18.4m shares at an indicative price range of HK$55.6-61.16 per shares.
- The company’s IPO is timed perfectly when AI adoption is expected to expand on a large scale with the popularity of ChatGPT and other AI applications.
- Though we liked 4Paradigm (1764934D HK) for its improving financials and growth prospects, our analysis suggests that the IPO is expensive.
DPC Dash IPO – US$400m Lockup Expiry Should Provide a Liquidity Boost
- DPC Dash (1405 HK) raised around US$75m in its Hong Kong IPO in Mar 2023. Its IPO linked lockup is set to expire soon.
- The company is the exclusive master franchisee for Domino’s Pizza in China, HK and Macau. DPC operated 672 stores across 20 cities, as of Jun 2023.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
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