In today’s briefing:
- Weekly Deals Digest (23 Feb) – JXAM, Canvest, CNBM, Tam Jai, Proto, Domain, Mayne, SG Fleet
- MIXUE Group (2097 HK) IPO: Reasonably Attractive Pricing
- Mixue Group IPO: The Good, The Bad and Valuations
- MIXUE Group (2097 HK) IPO: The Bear Case
- Pre-IPO MIXUE Group (2097.HK) – The IPO Is Attractively Priced
- ECM Weekly (24th Feb 2025) – JX Advance, Mixue, Hexaware, Geekplus, Trualt, Goodman, Xtalpi, Hyundai
Weekly Deals Digest (23 Feb) – JXAM, Canvest, CNBM, Tam Jai, Proto, Domain, Mayne, SG Fleet
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: Mixue Group (MIX HK) and JX Advanced Metals (5016 JP) IPOs.
- Event-Driven developments: Canvest Environmental Protection Group (1381 HK), China National Building Material (3323 HK), Tam Jai International (2217 HK), Proto Corp (4298 JP), Domain Holdings Australia (DHG AU).
MIXUE Group (2097 HK) IPO: Reasonably Attractive Pricing
- Mixue Group (MIX HK)‘s IPO price of HK$202.5 looks attractive, as it is priced at 16.6x FY24 and 13.5x FY25 PER, below the mainland China peer average.
- We estimate a P/B of 4.6x, putting it marginally lower than the sector best-fit line. We think there is potential for at least a 20-30% upside after the IPO.
- MIXUE offers the possibility to participate in the spin-off of its overseas businesses in the medium term, which is explicitly spelt out as a plan.
Mixue Group IPO: The Good, The Bad and Valuations
- Mixue Group (MIX HK) is offering 17.1 million shares at a price of HK$202.50 in its Hong Kong IPO aiming to raise up to HK$3.45 Bn.
- The company demonstrated stellar growth in store count, revenue, and profits, focusing on the mass-market freshly made beverage segment despite a sector slow down in 2024.
- Mixue’s pace of store expansion may slow down going forward, however its ultra-low prices (RMB4-10) and scale provide a strong foundation for long-term sustainable performance.
MIXUE Group (2097 HK) IPO: The Bear Case
- Mixue Group (MIX HK), a world-leading manufacturer of freshly made drinks, is seeking to raise US$445 million through an HKEx IPO.
- In MIXUE Group (2097 HK) 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 unsustainable growth rates, pressure on KPIs, bottom-tier R&D spending, high capex intensity, and bottom-tier FCF generation.
Pre-IPO MIXUE Group (2097.HK) – The IPO Is Attractively Priced
- MIXUE’s valuation should be higher than peers such as Guming and Baicha Baidao Industrial. A comfortable valuation range is 18-20 P/E, higher than peers. So, the IPO pricing is attractive.
- 2024 full-year net profit is HK$4.8 billion.Net profit could reach HK$5.7 billion (up 19% YoY), HK$6.6 billion (up 16% YoY), HK$7.6 billion (up 15% YoY) in 2025, 2026, 2027, respectively.
- Since Nongfu Spring’s revenue scale/net profit margin is higher than MIXUE, MIXUE’s valuation should be lower than Nongfu Spring. Investors need to be alert to the post-IPO performance growth pressure.
ECM Weekly (24th Feb 2025) – JX Advance, Mixue, Hexaware, Geekplus, Trualt, Goodman, Xtalpi, Hyundai
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, Mixue Group (MIX HK) and Chifeng Jilong Gold (600988 CH) might go live in the coming week, with JX Advanced Metals (5016 JP) following after.
- On the placements front, there were a few mega deals this week.
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