In today’s briefing:
- Zensho Placement – Good Price to Raise At, at Least for the Company
- Pre-IPO Xiamen Yan Palace Bioengineering (PHIP Updates) – Some Points Worth the Attention
Zensho Placement – Good Price to Raise At, at Least for the Company
- Zensho Holdings (7550 JP) aims to raise around US$300m via a public offering.
- As per the company it will use the proceeds from the deal for potential M&A transactions.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Pre-IPO Xiamen Yan Palace Bioengineering (PHIP Updates) – Some Points Worth the Attention
- From 2020 to 2022, Yan Palace has spent RMB831 million on advertising and promotion, while total net profit of the Company during the same period was only about RMB500 million.
- OneNest is the main product with the highest gross margin, which is driven by price increase strategy.However, raising price may not work. Revenue growth in 2023H2/2024 could further slow down.
- The question is are investors really satisfied with such low-margin business for a company with strong consumption attributes? Valuation of Yan Palace should be lower than Dong E E Jiao.
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