In today’s briefing:
- Tianqi Lithium H Share Listing: AH Discount Views
- Li Auto’s US$2 Billion ATM Offering
- Miniso Dual Primary Listing: Positive on Momentum, Valuation and Acceleration of Global Expansion
- Thai Life Insurance IPO – Can’t Pinpoint the Upside
- Socar IPO Valuation Analysis
Tianqi Lithium H Share Listing: AH Discount Views
- Sichuan Tianqi Lithium Industries, Inc (002466 CH) has upped its targeted H Share raise from US$1.0-1.5 billion to US$1.5–2.0 billion. The listing will kick off on Thursday.
- In Tianqi Lithium H Share Listing: Riding the Wave, we noted that Tianqi is well-placed to leverage the high lithium prices to deliver growth, margin and cash generation.
- In this note, we examine the likely discount that Sichuan Tianqi Lithium Industries, Inc. (TIANQI HK) will offer its H Shares in comparison to the A Shares.
Li Auto’s US$2 Billion ATM Offering
- Li Auto Inc. (LI US) has announced an ATM offering to sell US$2.0 billion of ADS. The offering appears to be timed to take advantage of the share price rally.
- Li Auto (2015 HK)‘s strong balance sheet and cash generation do not necessitate the need for the offering. The impending launch of the Li L9 underpins its prospects.
- However, with the recent rally, the shares are at best fully valued at the last close. We prefer remaining on the sidelines for now.
Miniso Dual Primary Listing: Positive on Momentum, Valuation and Acceleration of Global Expansion
- MINISO Group Holdings (MNSO US) rallied more than 70% this month before receiving approval for a $100m placement on the Hong Kong Stock Exchange yesterday (27th June 2022).
- The company has no requirement for extra cash and this Hong Kong listing is mostly a precautionary measure against a potential delisting of Chinese companies from US markets.
- Overall, we are positive about this placement on account of momentum, reasonableness of current valuation and positive reception of what we would regard as an intention to accelerate expansion.
Thai Life Insurance IPO – Can’t Pinpoint the Upside
- Thai Life Insurance (TLI) is looking to raise up to US$975m in its upcoming Thailand IPO. Cornerstone investors including GIC have taken up around 54% of the deal.
- Thai Life Insurance is one of the largest life insurance companies in Thailand, third by assets. As of Mar 2022, it had 64,000 insurance agents.
- In this note we will talk about the deal dynamics and run the deal through our ECM framework.
Socar IPO Valuation Analysis
- Our base case valuation of Socar is target price of 27,967 won, which is 18% lower than the low end of the IPO price range of 34,000 won.
- Given the lack of upside, we would Pass on this IPO. Our valuation is also 23% lower than the valuation that Lotte Rental paid for its 13.9% stake in Socar.
- We estimate Socar to generate sales of 396.4 billion won (up 37.2% YoY) and EBITDA margins of 12.6% in 2022.
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