In today’s briefing:
- Shriram Finance Placement – Well Flagged Cleanup but Watch Out for the Recent Spike
- Tata Technologies Pre-IPO – Thoughts on Valuation
- CJ CGV: A Rights Offering 74.7 Million Shares (Destroying Shareholder Value)
- J&T Global Express IPO: The Bear Case
- SML Group Pre-IPO – Guided Decline in Profitability but Spike in Dividend Payout
- Workday Inc.: Expanding The Global Footprint
- The Cooper Companies Inc.: Is It The Future Of Vision Correction? – Key Drivers
- Zscaler Inc.: Is Zero Trust Architecture The Future of Security? – Key Drivers
- Big C Retail Pre-IPO – The Positives – Has a Strong Presence
- Lululemon Athletica Inc.: Community-Based Model Remains The Key To Success – Major Drivers
Shriram Finance Placement – Well Flagged Cleanup but Watch Out for the Recent Spike
- Piramal Enterprises (PIEL IN) plans to raise around US$600m via selling its entire 8.3% stake in Shriram Finance.
- The deal is very well flagged with Piramal having sold half its stake in 2019 and having publicly stated its intention to completely exit as well.
- In this note, we will run the deal through our ECM framework and comment on other deal dynamics.
Tata Technologies Pre-IPO – Thoughts on Valuation
- Tata Technologies (TATATECH IN) (TT) is looking to raise around US$600m in its upcoming India IPO.
- Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs) and their tier 1 suppliers.
- We have looked at the company’s past performance and undertaken a peer comparison in our earlier notes. In this note we talk about valuations.
CJ CGV: A Rights Offering 74.7 Million Shares (Destroying Shareholder Value)
- CJ CGV announced a massive capital increase plan of nearly 1 trillion won which includes a rights offering of 570 billion won and 450 billion won of in-kind investments.
- This capital increase is likely to negatively impact CJ CGV’s share price in the coming months. Through this capital raise, the existing shareholders are likely to be diluted significantly.
- The expected rights offering price is 7,630 won, which is 47% discount to its current price.
J&T Global Express IPO: The Bear Case
- J&T Global Express (1936374D CH), a leading express delivery business in Southeast Asia and China has filed for a HKEx IPO to raise US$1 billion, according to press reports.
- In J&T Global Express 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 organic revenue decline in SEA/China, deteriorating contract liabilities, SEA margin pressure, high cash burn and weak balance sheet.
SML Group Pre-IPO – Guided Decline in Profitability but Spike in Dividend Payout
- SML Group (SMLGZ HK) is looking to raise about US$200m in its upcoming Hong Kong IPO.
- SML Group (SMLG) is a vertically integrated digital identification solutions provider. It primarily engages in developing, manufacturing and selling label and tag products with radio frequency identification (RFID).
- SMLG’s revenue growth rebounded post-COVID on the back of improved consumer sentiment. However, the firm’s profitability growth has been slowing down yet it has undertaken additional debt to payout dividends.
Workday Inc.: Expanding The Global Footprint
- Workday managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
- In the quarter, subscription revenue increased by 20% year over year to $1.53 billion.
- Outside of the United States, overall revenue was $420 million, which represents 25% of total sales.
The Cooper Companies Inc.: Is It The Future Of Vision Correction? – Key Drivers
- Cooper delivered a solid result and managed an all-around beat in the last quarter.
- CooperSurgical also reported high revenues and achieved ten consecutive quarters of double-digit organic revenue growth, led by their fertility business.
- In addition to the strong financial performance, CooperVision’s new product launches, expanded product ranges, and market-leading flexibility contributed to the positive results.
Zscaler Inc.: Is Zero Trust Architecture The Future of Security? – Key Drivers
- Zscaler managed to exceed analyst expectations in terms of revenue as well as earnings.
- The company’s disciplined approach, high gross retention rates, and high operating income contributed to its success.
- We give Zscaler a ‘Hold’ rating with a revised target price.
Big C Retail Pre-IPO – The Positives – Has a Strong Presence
- Big C Supercenter (BIGC TB) is looking to raise around US$1bn in its upcoming Thailand IPO.
- Big C is engaged in modern retail business and wholesale and trade support business. As of Dec 22, it had 1,651 retail stores in Thailand
- In this note, we talk about the company background and the positive aspects of the deal.
Lululemon Athletica Inc.: Community-Based Model Remains The Key To Success – Major Drivers
- Lululemon Athletica managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
- They surpassed their guidance with strong top and bottom-line results.
- We give Lululemon Athletica a ‘Hold’ rating with a revised target price.
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