In today’s briefing:
- The Honda (7267) Offering – Much Easier Than It Looks
- Honda (7267 JP): The Current Playbook
- Gigabyte GDR Offering – Not Wholly Convinced, but Discount at Wide End Is Inline with the Average
- Hyundai Motor India IPO: The Bear Case
- OneStream IPO Preview and Valuation Analysis: Modest Upside and Top-Tier Backers
- I-Scream Media IPO Valuation Analysis
- Niva Bupa Health Insurance Pre-IPO Tearsheet
- ZIP Placement – Worth a Small Punt, at Best
- Pre-IPO Bloks Group – High Growth May Not Be Sustainable
- Timee IPO: Forecasts and Valuation
The Honda (7267) Offering – Much Easier Than It Looks
- At the beginning of this month, we got a scoop from Reuters about a US$3bn selldown of Honda Motor (7267 JP) by P&C insurers and others.
- We knew this was coming at some point. The FSA had pushed the insurers to unwind cross-holdings, and it is otherwise of the zeitgeist.
- It came out as heavily retail-oriented, and the supply/demand details are otherwise interesting. To boot, there is an EPS boost to come.
Honda (7267 JP): The Current Playbook
- Since the US$3.3 billion secondary placement announcement, Honda Motor (7267 JP)’s shares are down 5% from the undisturbed price of JPY1,791 per share (4 July).
- Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Honda’s shares have followed the pattern of previous large placements.
- The offering will likely be priced on 17 July. Investors who have participated in previous large Japanese placements tend to secure positive returns.
Gigabyte GDR Offering – Not Wholly Convinced, but Discount at Wide End Is Inline with the Average
- Gigabyte Technology (2376 TT) is looking to raise up to US$307m in its global depository receipts (GDRs) offering. The firm is also looking to raise another US$300m via convertible bonds.
- Similar to previous GDR listings, the firm has undergone a long drawn out process prior to launching the deal, having to jump through a number of board/shareholder/regulatory approval loops.
- In this note, we run the deal through our ECM framework and comment on deal dynamics.
Hyundai Motor India IPO: The Bear Case
- Hyundai Motor India (1342Z IN), a subsidiary of Hyundai Motor (005385 KS), aims to raise up to US$3.0 billion at a valuation of US$17 billion.
- In Hyundai Motor India IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The bear case rests on market share losses in the key SUV sub-segment, bottom-quartile revenue growth, higher royalty rates and dividends to Hyundai ahead of the IPO.
OneStream IPO Preview and Valuation Analysis: Modest Upside and Top-Tier Backers
- OneStream, the financial software maker and enterprise-focused technology company, set terms for its IPO and plans to raise ~$441M at the midpoint of the range at $18.00 per share.
- The company was backed by American global investment company KKR, D1 Capital Partners, Investment Group of Santa Barbara and Tiger Global Management.
- The offering is attractively valued vs. peers given 30%+ growth rates at scale and cash flow generation. OneStream shares are expected to list on the Nasdaq next week.
I-Scream Media IPO Valuation Analysis
- Our valuation analysis suggests a base case implied market cap of 567 billion won or implied price per share of 41,450 won.
- This suggests a 3% upside to the high end of the IPO price range. We would not subscribe to this IPO due to lack of upside.
- Our base case valuation is based on P/E of 18.8x using the company’s net profit of 30.2 billion won in 2023.
Niva Bupa Health Insurance Pre-IPO Tearsheet
- Niva Bupa Health Insurance (1226871D IN) is looking to raise US$360m in its upcoming India IPO. The bookrunners on the deal are MS, Kotak, Axis, ICICI, HDFC, and Motilal Oswal.
- Niva Bupa Health Insurance (Niva Bupa) is a health insurance firm. Its portfolio consists of health (including retail and group), personal accident, and travel insurance.
- As per Redseer, the firm was one of India’s largest and fastest growing standalone health insurers (SAHI) based on overall health gross direct premium income (GDPI) in FY24.
ZIP Placement – Worth a Small Punt, at Best
- Zip (ZIP AU) plans to raise around US$145m in order to repay its outstanding debt.
- The company has undertaken a number of deals in the past and has a mixed track record.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Pre-IPO Bloks Group – High Growth May Not Be Sustainable
- The key for high growth in 2023/24Q1 lies in its assembly character toys with renowned IPs,which may not be sustainable or even collapse if Bloks fails to renew license agreements.
- The advantages of Bloks in development prospects, self-developed IPs, brand stickiness are not obvious. The latest valuation reached RMB7.2 billion, but the founder has already cashed out before IPO.
- Hong Kong stock market has been “lukewarm” to toy companies. Except Pop Mart, valuation/share price of peers are quite weak.How to gain investor/market’s recognition for Bloks is a question mark.
Timee IPO: Forecasts and Valuation
- Timee has set an indicative IPO price range of ¥1,350-1,450 per share and will raise US$280m (at the midpoint) where existing shareholders will sell down part of their ownership.
- We expect Timee’s earnings to grow as the company is still in its early stages and with further growth in scale, we expect Timee’s margins to continue to expand further.
- Our analysis shows that Timee Inc (215A JP) IPO is valued attractively as the company has better-than-peer margin profile which suggests that there is further upside to implied valuation multiples.
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