In today’s briefing:
- JMDC Placement – Lots to like but past Deals Have Been Mixed and It Is Expensive
- Tencent Increases Its Stake in Ubisoft
- Ninja Van: SEA’s Last-Mile Courier with ~100% Regional Coverage
- Open Edges Technology IPO Valuation Analysis
- IQiyi: Improving Profitability but Headwinds Continue
- Carro: Southeast Asia’s Leading Used Car Marketplace
- UI: Revenue Rebounds, Target to $375
JMDC Placement – Lots to like but past Deals Have Been Mixed and It Is Expensive
- JMDC Inc (4483 JP) aims to raise around US$235m, US$150m coming via an international offering and the rest via issuing shares to its largest shareholder, Omron Corp (6645 JP) .
- The company plans to use the proceeds to repay some of its debt that was taken on earlier to acquire other companies.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Tencent Increases Its Stake in Ubisoft
- It was reported in August that Tencent was looking to raise its stake in Ubisoft and had reached out to Ubisoft’s founding family Guillemot who currently owns 14.0% of Ubisoft.
- Tencent has acquired a 49.9% economic stake in Guillemot Brothers for EUR300m and as part of the deal, will be allowed to up its current stake in Ubisoft.
- Ubisoft announced on Tuesday that its board of directors have authorised Tencent to increase its direct stake in Ubisoft from 4.5% to 9.99%.
Ninja Van: SEA’s Last-Mile Courier with ~100% Regional Coverage
- Ninja Van is a leading Singapore-based logistics company in Southeast Asia with almost 100% last-mile courier coverage of the region.
- The company was valued at $1.85bn based on its previous capital raise in September 2021.
- An investment in the company could offer indirect and broader exposure to Southeast Asia’s e-commerce sector since it counts most of the e-commerce players in the region as its clients.
Open Edges Technology IPO Valuation Analysis
- Our valuation analysis suggests an implied target price of 24,813 won per share, representing 38% higher than the high end of the IPO price range of 18,000 won.
- Given the solid upside, we have a Positive view of the Open Edges Technology, despite the weak IPO market conditions.
- Open Edges Technology is one of the leading companies in Korea that specializes in the semiconductor design asset platforms.
IQiyi: Improving Profitability but Headwinds Continue
- IQIYI Inc (IQ US) reported 2Q2022 earnings last week. Revenue decreased 12.5% YoY to RMB6.66bn (vs consensus RMB6.67bn) and reported an OP of RMB125.8m (vs consensus RMB30.4m).
- The company also announced a US$500m private placement of convertible notes with PAG (PAG HK) and the transaction is expected to close in 4Q2022.
- The company also has entered into a content licensing agreement with Douyin which will likely bring in high-margin business for content distribution segment.
Carro: Southeast Asia’s Leading Used Car Marketplace
- An online used car marketplace in Singapore that offers full-stack services across a customer’s car ownership lifecycle.
- The company facilitated an annual run-rate GMV of ~S$1 billion (with >2 million MAUs) in 2020 and managed to earn a revenue of c. $465m in FY21.
- It reached unicorn status in the previous round of fund raise in Jun 2021 and has started preparing for an IPO internally.
UI: Revenue Rebounds, Target to $375
- Ubiquiti showcased a rebound in its business in the June 2022 quarter with revenue rising by nearly 24 percent from the March 2022 quarter
- Ubiquiti reported fiscal fourth quarter revenue of $443.1 million compared to our estimate of $387.0 million
- The increase in revenue during the June quarter suggests demand remains healthy enough to put Ubiquiti back on pace for potentially exceeding $500 million in revenue in a single quarter
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