In today’s briefing:
- Pertamina Geothermal Energy IPO Trading – Should Be a Steady Listing
- Pertamina Geothermal IPO: Trading Debut
- Star Entertainment (SGR AU): A$800m Highly Dilutive Raise to Fix the Balance Sheet
- Fangzhou Pre-IPO – The Negatives – Hard to Shake off Loss-Making Tendencies
- Guangzhou Tinci Materials GDR Listing Early Look – US$1.5bn Raising Could Further Aid Growth Plans
- Pre-IPO Fangzhou Group – The Business and the Concerns
Pertamina Geothermal Energy IPO Trading – Should Be a Steady Listing
- Pertamina Geothermal Energy (PGE) raised around US$600m in its Indonesia IPO. PGE is an Indonesian state owned power producer which utilizes geothermal energy to produce electricity.
- PGE currently manages 13 Geothermal Working Areas with a total capacity of 1,877 MW, of which 672 MW is owned by it, while 1,205 MW is via joint operations.
- In our previous notes, we looked at the company’s past performance and valuations. In this note, we talk about the deal dynamics ahead of its listing.
Pertamina Geothermal IPO: Trading Debut
- Pertamina Geothermal Energy (PGEO IJ) priced its IPO at IDR875 per share to raise gross proceeds of IDR9.1 trillion (US$600 million). The shares will start trading tomorrow.
- We previously discussed the IPO in Pertamina Geothermal IPO: The Investment Case and Pertamina Geothermal IPO: Valuation Insights.
- Peers have modestly re-rated and the IPO price continues to imply a discount to the median peer CY2023 EV/EBITDA multiple. Therefore, the IPO price remains attractive.
Star Entertainment (SGR AU): A$800m Highly Dilutive Raise to Fix the Balance Sheet
- Star Entertainment Group (SGR AU) will raise A$800 million with a fully underwritten 3:5 pro rata accelerated non-renounceable entitlement offer and institutional placement at A$1.20, a 13.6% discount to TERP.
- The equity raise of A$800 million will maintain leverage within the targeted 2.0x-2.5x net debt/EBITDA long-term range in our fines high-case scenario.
- Adjusting for the raise, Star trades at a discount to peers. While the shares will be under short-term pressure due to the raise, there is long-term value for the brave.
Fangzhou Pre-IPO – The Negatives – Hard to Shake off Loss-Making Tendencies
- Fangzhou Group (FANGZHOU HK) is looking to raise about US$300m in its upcoming Hong Kong IPO.
- Fangzhou (FZ) is an online chronic disease management (CDM) service provider in China.
- In this note, we will talk about the not-so-positive aspects of the deal.
Guangzhou Tinci Materials GDR Listing Early Look – US$1.5bn Raising Could Further Aid Growth Plans
- Guangzhou Tinci Materials Technlgy (002709 CH) is looking to raise up to US$1.5bn in its upcoming Swiss GDR listing. Bookrunners on the deal are CICC, HSBC, and JPMorgan.
- As per the firm’s filings, it is to issue no more than 289m A-shares, or not exceeding 15% of the firm’s total ordinary share capital.
- In this note, we discuss the GDR’s timeline, and the firm’s recent financial performance.
Pre-IPO Fangzhou Group – The Business and the Concerns
- Fangzhou initially launched online retail pharmacy to address the needs of chronic disease patients, and then expand to online chronic disease management. However,the investment logic of this business is problematic.
- Due to the low willingness to pay/high acquisition cost of C-end patients, it is difficult to achieve large-scale profits. Developing To B business would be important for Fangzhou’s future development.
- Either To B business or To C business, the key point is to accumulate/retain large physician resources, but Fangzhou hasn’t had “a panacea” in this regard.
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