In today’s briefing:
- Trading Strategy of Doosan Robotics in the First Day of Trading Post Book Building Results
- United Laboratories International Holdings Placement (3933.HK) – Valuation Pullback Seems Inevitable
- Asicland IPO Preview: The Only Value Chain Alliance (VCA) Company of TSMC in Korea
- 4Paradigm IPO: Valuation Insights
- R R Kabel IPO Trading – Average Subscription Rates but Strong Insti Demand
- Seoul Guarantee Insurance Pre-IPO – The Negatives – The Tide Could Be Turning. Overhang Looms
- Asicland IPO Valuation Analysis
- Pre-IPO Shulan Health Management – Hard to Bring Investors Expected Returns Due to Poor Profit Model
Trading Strategy of Doosan Robotics in the First Day of Trading Post Book Building Results
- Doosan Robotics (454910 KS) reported excellent IPO book building results. The IPO price has been finalized at 26,000 won (upper end of the IPO price range).
- A total of 1,920 institutional investors participated in the IPO demand forecast survey and the demand ratio was 272 to 1.
- The trading strategy on the first day of IPO is to take some profits (25%-50% of total) if the share price shoots much higher than the IPO price by 70-100%+.
United Laboratories International Holdings Placement (3933.HK) – Valuation Pullback Seems Inevitable
- Last year, United Lab mainly relied on antibiotics to make money. However, after the pandemic is under control, antibiotic sales may decline. United Lab’s performance could be under pressure.
- As a late comer, sales of United Lab’s weight management products could be lower than expected in the future under increasing competition. The veterinary drugs business requires time to cultivate.
- RMB12 billion market value of United Lab has priced in all positive factors.There could be a pullback in valuation. RMB6 billion market value is a safe place to go long.
Asicland IPO Preview: The Only Value Chain Alliance (VCA) Company of TSMC in Korea
- Asicland is one of eight companies in the world and the only TSMC VCA (Value Chain Alliance) company in Korea.
- The IPO price range is from 19,100 won to 21,400 won. The IPO offering amount is from 50.4 billion won to 56.4 billion won.
- Asicland’s sales and operating profit increased at a CAGR of 71.8% and 220%, respectively from 2020 to 2022. Operating margin improved from 4.7% in 2020 to 16.5% in 2022.
4Paradigm IPO: Valuation Insights
- 4Paradigm (1764934D HK), a leader in enterprise artificial intelligence (AI) in China, has launched an HKEx IPO to raise up to US$144 million.
- We previously discussed the IPO in 4Paradigm IPO: The Bull Case and 4Paradigm IPO: The Bear Case.
- In this note, we discuss forecasts and valuation. Our analysis suggests that the IPO price range of HK$55.60-61.16 per share is unattractive. We would give the IPO a pass.
R R Kabel IPO Trading – Average Subscription Rates but Strong Insti Demand
- R R Kabel (2333180Z IN) raised around US$238m in its India IPO, after the deal was priced at INR1,035/share. It will begin trading tomorrow on 20th Sep 2023.
- R R Kabel is an Indian consumer electrical company, which primarily sells wires, cables and fast moving electrical goods (FMEG).
- We have looked at various aspects of the deal in our previous notes. In this note, we talk about demand and trading dynamics.
Seoul Guarantee Insurance Pre-IPO – The Negatives – The Tide Could Be Turning. Overhang Looms
- Seoul Guarantee Insurance (031210 KS) is looking to raise around US$270m in its Korean IPO.
- Seoul Guarantee Insurance (SGI) is a guarantee insurance firm operating predominantly in Korea.
- In this note, we will talk about the not so positive aspects of the deal.
Asicland IPO Valuation Analysis
- Our base case valuation of Asicland is target price of 40,571 won per share, which is 90% higher than the high end of the IPO price range (21,400 won).
- Our target price of 40,571 won is based on 43x P/E using our estimated net profit of 10.1 billion won in 2024.
- Asicland is one of eight companies in the world and the only TSMC VCA (Value Chain Alliance) company in Korea.
Pre-IPO Shulan Health Management – Hard to Bring Investors Expected Returns Due to Poor Profit Model
- Private general hospitals are the core business of Shulan, but the business model for general hospitals is not good – heavy assets, challenging operations, low profits, difficult to expand nationwide.
- Even with the endorsement of renowned academician Dr. Li Lanjuan, whether Shulan’s hospitals can attract constantly sufficient patient flow remains a question. Most patients still prioritize public hospitals for treatment.
- Due to the lack of solid profit model and expansion model, we’re not optimistic about Shulan’s profitability and future financial performance. Shulan may be in a state of long-term loss.
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