In today’s briefing:
- Xiaomi US$5.3bn Placement – Relatively Small, Strong Momentum but Is Expensive
- Revisiting Korea’s Local Rights Issue Arb Setup
- LG Electronics India IPO: It’s A Big Deal. Potential Pricing and Valuation Preview
- Lotte Global Logistics IPO Preview
- Nanshan Aluminium IPO Trading: Low Institutional Coverage, Likely to Trade Weak
- DN Solutions Pre-IPO – Peer Comparison
- LXJ International Holdings Pre-IPO – Further Revenue & Margin Pressures Ahead
- DN Solutions IPO: The Bear Case
- Pre-IPO Duality Biotherapeutics (PHIP Updates) – Some Points Worth the Attention
- Jiangsu Zenergy Battery Technologies Pre-IPO- The Negatives – Margin Pressures & Concentration Risks
Xiaomi US$5.3bn Placement – Relatively Small, Strong Momentum but Is Expensive
- Xiaomi Corp (1810 HK) is looking to raise around US$5.3bn via selling 3% additional shares.
- The shares have done exceedingly well this year and are now trading at their all time highs.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Revisiting Korea’s Local Rights Issue Arb Setup
- Korea’s rights issues offer a clean arb setup—track stock rights vs. spot price, with first price as a cap, and lock in predictable entry vs. exit costs.
- Aggressive locals skip hedging, betting the discount holds between final pricing and listing. History backs it, but it’s a case-by-case call—not a blanket recommendation.
- Samsung SDI and Hanwha Aerospace’s KRW 5.5T raise is massive, likely flooding stock rights into the market—prime setup for arb plays.
LG Electronics India IPO: It’s A Big Deal. Potential Pricing and Valuation Preview
- LG Electronics India has secured regulatory approval for its IPO, expected to raise between USD 1 to 1.5 billion.
- However, it remains unclear whether the company will delay the launch until market sentiment shows further improvement.
- LG Electronics India (123D IN) IPO is a 100% offer for sale by parent and hence the entire proceeds from the IPO will accrue to LG Electronics (066570 KS).
Lotte Global Logistics IPO Preview
- Lotte Global Logistics is getting ready to complete its IPO in KOSPI in May 2025. IPO price range is from 11,500 won and 13,500 won.
- At the high end of the IPO price range, the expected public offering amount is 202 billion won.
- According to the bankers’ valuation, the expected market cap after the IPO is 479 billion won to 562 billion won.
Nanshan Aluminium IPO Trading: Low Institutional Coverage, Likely to Trade Weak
- Nanshan Aluminium International Holdings (NAI HK) , raised around US$302m in its Hong Kong IPO.
- It is a leading high-quality alumina manufacturer in Southeast Asia.
- We have looked at the company’s past performance and valuations in our previous notes. In this note, we will talk about the trading dynamics.
DN Solutions Pre-IPO – Peer Comparison
- DN Solutions (298440 KS) (DNS) aims to raise around US$1.1bn in its Korea IPO via selling a mix of primary and secondary shares.
- DNS is engaged in the manufacture and sale of machine tools and the business of automation solutions and services related thereto.
- We have looked at its past performance in our earlier notes. In this note, we will undertake a peer comparison.
LXJ International Holdings Pre-IPO – Further Revenue & Margin Pressures Ahead
- LXJ International Holdings Limited (LXJIH) is looking to raise at least US$100m in its upcoming Hong Kong IPO.
- As a market leader in the Chinese-style QSR market in China, LXJIH was focused on its self-operated restaurant model for expansion but has recently ramped up its franchise business.
- Post-COVID, LXJIH’s margins have bounced but if LXJIH continues to expand its franchise business while converting self-operated restaurants, there might be pressure on revenue growth and margins going forward.
DN Solutions IPO: The Bear Case
- DN Solutions (298440 KS), the third-largest machining centre/turning centre machine tool manufacturer, seeks to raise US$1.1 billion in a KRX IPO.
- In DN Solutions 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 tepid growth due to volume declines, early indications of margin pressure, rising cash conversion cycle, and mid-tier FCF margin.
Pre-IPO Duality Biotherapeutics (PHIP Updates) – Some Points Worth the Attention
- Since DB-1303 has no advantage in clinical data in front of competing products, the commercialization outlook is gloomy. The priority for DB-1311 is to verify the druggability of this target.
- Considering that the current capital market has become more and more rational toward innovative drug/biotech companies, the absence of commercialized products of Duality will obviously affect valuation expectations.
- The post-money valuation after Series B+ financing is about US$270 million (or about RMB2 billion), which is not expensive, and there is a chance to obtain valuation premium after IPO.
Jiangsu Zenergy Battery Technologies Pre-IPO- The Negatives – Margin Pressures & Concentration Risks
- Jiangsu Zenergy Battery Technologies (JSZENERGY CH) is looking to raise up to US$300m in its upcoming HK IPO.
- Zenergy is an EV and energy storage system battery manufacturer providing integrated battery solutions, encompassing battery cells, modules, packs and battery management systems dedicated to large-scale applications of electrochemical products.
- In this note, we talk about the not-so-positive aspects of the deal.
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