In today’s briefing:
- SG Holdings Placement – Had Suffered from Weak Price Momentum, Buyback Should Support Share Price
- JMDC Offering – Smaller Than It Looks
- CALB IPO: The Bear Case
- Global Health Pre-IPO – Stiff Competition Makes Growth Look Mediocre
- Top Material IPO Preview
- Interglobe Aviation (Indigo) Placement – The Beginning of the End of the Overhang
- Workday Inc: Growing Customer Base
- Ulta Beauty: The Beauty& Campaign
SG Holdings Placement – Had Suffered from Weak Price Momentum, Buyback Should Support Share Price
- MUFG Bank and Sumitomo Mitsui Banking Corp are looking to raise a combined US$210m from trimming their respective stakes in SG Holdings (9143 JP).
- While representing 16 days of three month ADV, comprising only 10.1m shares, 1.57% of the firm’s current market cap, the deal is a small one on an absolute basis.
- In this note, we will talk about the placement and run the deal through our ECM framework.
JMDC Offering – Smaller Than It Looks
- In February 2022, Noritsu Koki (7744 JP) – longtime holder of JMDC Inc (4483 JP) – sold 2/3 of its holdings to Omron (6645). Omron made a US$1bn new bet.
- Shares fell after Q1 results, and then fell another 7% in 2 days after the company announced a primary offering for ¥22bn to international investors, ¥11bn to Omron.
- High PER but Fundamental Forecasts are up-and-to-the-right, and there is a surprising amount of flow mitigation from passive investor activity the next 3 months.
CALB IPO: The Bear Case
- CALB (CALBLZ CH), a leading EV battery manufacturer, is seeking to raise US$2.0 billion through an HKEx IPO, according to press reports.
- In CALB 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 its small scale, low profitability and high FCF burn compared to listed peers.
Global Health Pre-IPO – Stiff Competition Makes Growth Look Mediocre
- Global Health (Medanta) (GH IN) is looking to raise approximately US$270m in its upcoming India IPO.
- Global Health (GH) is a hospital network that operates under the Medanta brand. The firm currently has five hospitals in operation and one more planned for development.
- The company has managed to remain profitable throughout COVID-19 and even experienced margin expansion in FY22. However, its post-COVID growth might be short-lived given stiff competition amongst peers.
Top Material IPO Preview
- Top Material is getting ready for an IPO in October in Korea. The IPO price range is from 27,000 won to 30,000 won.
- Established in 2012, Top Material’s main business is in system engineering. It also provides high performance electrode and cathode materials for the lithium ion based rechargeable batteries.
- Top Material had sales of 31.9 billion won (up 375% YoY) and operating profit of 4.8 billion won (up 930% YoY) in 2021.
Interglobe Aviation (Indigo) Placement – The Beginning of the End of the Overhang
- InterGlobe Aviation Ltd (INDIGO IN)’s co-founder Rakesh Gangwal aims to raise around US$250m via selling 2.8% of the company.
- He had earlier stated his intention to pare down his stake after a long drawn, and very public battle, with the other co-founder Rahul Bhatia.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Workday Inc: Growing Customer Base
- Workday delivered another all-around beat, outperforming market expectations with respect to its operating indicators, highlighting the ongoing significance of digital transformation for finance and HR.
- Along with the significant expansion of their core HCM and financial apps, Q2 saw remarkable momentum throughout their broader spectrum of solutions.
- Customers create apps with Extend customized for their specific use cases, potentially eliminating the need for additional specialized development tools.
Ulta Beauty: The Beauty& Campaign
- Ulta Beauty performed well in this quarter and delivered an all-around beat.
- Based on point-of-sale statistics from the NPD Group, all key categories for the quarter exceeded its expectations, and they grew their market share in prestige beauty compared to the previous year.
- Haircare, their second-largest category, experienced double-digit growth for another quarter due to newness and excellent participation in their semi-annual Gorgeous Hair Event.
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