In today’s briefing:
- Onewo Space-Tech Pre-IPO – Thoughts on Valuation
- WCP: First Day IPO Trading Strategy
- Onewo Space-Tech IPO: A Deep Dive into the Largest Business Segment
- YSB Inc Pre-IPO – The Negatives – However, It Comes at a Cost to Profitability
- NVIDIA Corporation: Supporting The Metaverse
- Model Solution IPO Valuation Analysis
- Lululemon Athletica: Expansion In Spain & Other Drivers
- Cummins Inc: The Meritor Acquisition & Other Drivers
- Marathon Oil: Enhancement of Retail Operations & Other Drivers
- Ross Stores: New Store Additions & Other Drivers
Onewo Space-Tech Pre-IPO – Thoughts on Valuation
- Onewo Space-Tech (ONEWO HK) aims to raise upto US$2bn in its Hong Kong IPO. OST is a property management service provider primarily owned by China Vanke (2202 HK).
- As per Frost & Sullivan, amongst the residential community service providers in China, OST ranked first. It also ranked first in the commercial space integrated services market in China.
- In this note, we provide our earnings estimates and thoughts on valuation.
WCP: First Day IPO Trading Strategy
- The IPO book building for WCP starts on 14 September. We have updated our earnings estimates following the company’s 2Q 2022 results.
- Our base case target price of WCP is 78,317 won per share, which is 2% lower than the low end of the IPO price range of 80,000 won.
- To derive our target price, we used 22.4x EV/EBITDA in 2023, which is the average multiple of its peers in 2023.
Onewo Space-Tech IPO: A Deep Dive into the Largest Business Segment
- Onewo Space-Tech (ONEWO HK) is a leading property management service provider in China focused on offering basic property management services.
- Backed by China Vanke Co Ltd (H) (2202 HK) , the company has filed for an IPO on the HKEx and plans to raise proceeds of around US$2bn.
- In this insight, we discuss the company’s business model and deep dive into the largest business segment Community Space Living Consumption Services.
YSB Inc Pre-IPO – The Negatives – However, It Comes at a Cost to Profitability
- YSB Inc (YSB HK) is looking to raise about US$500m in its upcoming Hong Kong IPO.
- YSB Inc. (YSB) operates a pharmaceutical platform, digitizing the pharmaceutical transaction and service segment.
- However, gross margins have fluctuated owing to a changing sales mix. Growth has also come at the cost of profitability and YSB has consistently burned cash over its track period.
NVIDIA Corporation: Supporting The Metaverse
- Nvidia has been among the priciest semiconductor stocks for a while now.
- The company matched market expectations and delivered an earnings beat though the stock is still very expensive.
- We provide the stock of Nvidia with a ‘Hold’ rating with a revision in the target price.
Model Solution IPO Valuation Analysis
- Our base case valuation of Model Solution is implied market cap of 156 billion won and target price of 24,417 won.
- The IPO valuation range is from 24,000 won to 27,000 won and our target price would be close to the low end of the IPO price range.
- Given the low upside relative to the IPO price range, we have a Negative view of this IPO.
Lululemon Athletica: Expansion In Spain & Other Drivers
- Throughout the second quarter, Lululemon’s momentum remained strong.
- The company’s total revenue accelerated by 29% compared to last year and 28% on a 3-year CAGR basis, helping the company surpass Wall Street expectations.
- It has been benefitting heavily from this launch as hiking has become increasingly popular among visitors since the pandemic.
Cummins Inc: The Meritor Acquisition & Other Drivers
- Cummins delivered a third consecutive all-around beat in a quarter that was marked by a number of significant developments including many ke partnerships.
- The company announced partnerships with Daimler Truck, Scania, and North America for delivering fuel cell electric powertrains for heavy-duty truck applications, with Komatsu on developing haulage equipment zero-emission which includes hydrogen fuel cell solutions for the large mining haul truck applications.
- It also achieved a significant milestone in the quarter related to two acquisitions, namely Meritor and Jacobs Vehicle Systems.
Marathon Oil: Enhancement of Retail Operations & Other Drivers
- Marathon’s previous quarter was one of its best financial performances since transitioning to an independent E&P company.
- Despite these factors, the company delivered an all-around beat and continues to reward its shareholders with capital returns.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
Ross Stores: New Store Additions & Other Drivers
- Ross Stores had quite a disappointing quarter where its revenues were well below Wall Street expectations.
- Comparable store sales were low in comparison to a strong increase in the second quarter of the last year.
- We provide the stock of Ross Stores with a ‘Hold’ rating with a revision in the market price.
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