In today’s briefing:
- Pertamina Geothermal IPO: Valuation Insights
- Hesai Group IPO – Thoughts on Valuation
- Hesai Group IPO: The Bear Case
- HESAI Group IPO Valuation Analysis
- Alphamab Co Ltd Placement (9966.HK) – Has No Potential to Be a Biopharma; Just Remain as a Biotech
Pertamina Geothermal IPO: Valuation Insights
- Pertamina Geothermal (0125738D IJ)/PGE, a subsidiary of PT Pertamina (Persero) (PERT IJ), is seeking to raise up to US$600 million at a narrowed price range of IDR875-880 per share.
- We previously discussed the IPO in Pertamina Geothermal IPO: The Investment Case.
- PGE is attractively valued at the IPO price range. We would participate. Books will be closed on 10 February and the shares will start trading on 24 February.
Hesai Group IPO – Thoughts on Valuation
- Hesai Group (HSAI US) is looking to raise around US$170m in its upcoming US IPO.
- HSAI is a manufacturer of three-dimensional light detection and ranging (Lidar) solutions. It has shipped over 103,000 Lidar units from 2017 to the end of 2022.
- We have looked at the company’s past performance and undertaken a peer comparison in our previous notes. In this note, we will talk about valuations.
Hesai Group IPO: The Bear Case
- Hesai Group (HSAI US) has launched a Nasdaq IPO to raise up to US$171 million at an indicative price range of US$17-19 per ADS.
- In Hesai Group IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The key elements of the bear case rest on continuing pricing pressure, declining contract liabilities, gross margin decline, ongoing losses, worsening cash conversion cycle and FCF burn.
HESAI Group IPO Valuation Analysis
- Our base case valuation of Hesai Group is implied market cap of US$3.4 billion or target price of US$27.1 per share.
- Our target price is 43% higher than the high end of the IPO price of US$19 per share. Given the solid upside, we have a positive view of this IPO.
- The company’s superior technology in the LiDAR product segment along with its global market leadership should help Hesai Group to successfully complete this IPO despite political risks related to China.
Alphamab Co Ltd Placement (9966.HK) – Has No Potential to Be a Biopharma; Just Remain as a Biotech
- Unlike ADC, there’re still doubts on the outlook of whole bispecific antibody mechanism. Alphamab Oncology doesn’t actively promote related head-to-head trials, which makes people doubt the competitiveness of its products.
- Investors’ trust in Alphamab Oncology continues to decline, mainly because the Company often missed the guidance/milestones it announced before. This will greatly affect the credibility of Alphamab Oncology.
- The current valuation is expensive and has basically priced in all the positive factors. The Company is more suitable for short-term trading to capture the rebound rather than long-term holding.
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