In today’s briefing:
- WuXi XDC Cayman IPO – Decent Upside from IPO Range, Bulk of the Deal Taken up by Marquee Investors
- Trading Strategy of Ecopro Materials IPO Post Book Building Results and Short Selling Ban
- WuXi XDC Cayman IPO: Robust Top Line Growth but Margins Remain Under Pressure
- Sichuan Baicha Baidao Pre-IPO – The Positives – Riding on Franchise Store Expansion
- WuXi XDC IPO Valuation Analysis: Premium Multiples Reflect 100%+ Top-Line Growth
- Muthoot Microfin Pre-IPO – Accelerating Profitability Growth
WuXi XDC Cayman IPO – Decent Upside from IPO Range, Bulk of the Deal Taken up by Marquee Investors
- WuXi XDC Cayman (1877628D HK) is looking to raise US$470m in its Hong Kong IPO.
- WuXi XDC Cayman (WXDC) is a CRDMO focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
- In this note, we will look at the deal dynamics and share our final thoughts on valuation.
Trading Strategy of Ecopro Materials IPO Post Book Building Results and Short Selling Ban
- Ecopro Materials reported disappointing IPO book building results. IPO price has been finalized at 36,200 won, which is at the low end of the IPO price range.
- The demand ratio was 17.2 to 1 which was low. Total IPO offering amount was 419 billion won. Ecopro Materials will start trading on 17 November.
- Our base case valuation of Ecopro Materials is target price of 37,436 won per share, which is 3.4% higher than the IPO price. We remain negative on this IPO.
WuXi XDC Cayman IPO: Robust Top Line Growth but Margins Remain Under Pressure
- WuXi XDC Cayman (1877628D HK) is a leading contract research, development and manufacturing organisation (CRDMO) focused on the global antibody-drug conjugate (“ADC”) and broader bioconjugate market.
- The company has announced the terms for its HKEx IPO and plans to raise proceeds of around US$470m through the IPO.
- Wuxi XDC’s revenues have seen robust growth during the last 3-years driven by growth in ADC market while margins have continued to decline.
Sichuan Baicha Baidao Pre-IPO – The Positives – Riding on Franchise Store Expansion
- Sichuan Baicha Baidao Industrial (SBBI) is looking to raise up to US$300m in its upcoming HK IPO.
- SBBI sells new-style tea drinks through its ChaPanda stores. According to F&S, SBBI ranked third in China’s new-style tea shop market with a market share of 6.6%.
- In this note, we talk about the positive aspects of the deal.
WuXi XDC IPO Valuation Analysis: Premium Multiples Reflect 100%+ Top-Line Growth
- WuXi XDC set terms for an upcoming IPO: the fast-growing CRDMO offers 178.4M shares at the price range of HK$19.90-HK$20.60, implying a market cap of ~HK$23.9B (~$3B) at the midpoint.
- Cornerstone investors agreed to subscribe and buy ~116M shares, assuming the IPO price of HK$20.25 at the midpoint. WuXi XDC shares will begin trading on Friday, November 17.
- My PT of HK$25.57 implies a ~26% upside to the IPO price at the midpoint. WuXi XDC’s premium multiples reflect 100%+ top-line growth and the company’s leadership position.
Muthoot Microfin Pre-IPO – Accelerating Profitability Growth
- Muthoot Microfin (1363943D IN) is looking to raise up to US$163m in its upcoming India IPO.
- Muthoot Microfin (MMF) is a microfinance institution providing micro-loans to women customers with a focus on the rural regions of India.
- MMF has undergone fast network expansion, which allowed the firm to nearly double its AUM over the track record period.
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