In this briefing:
- Embassy Office Parks REIT Trading Update – Lowest Volume Traded for Any Indian Listing Since 2018
- Last Week in GER Research: Lyft, Rakuten, Lynas, Yunji IPO, Xinyi IPO and Ruhnn IPO
- Qutoutiao Offering: Funding a Costly Battle
- PNB Metlife Pre-IPO Quick Take – Doesn’t Stack up Well Versus Its Larger Peers
- QTT Placement: Liquidity Warrants a Quick Trade
1. Embassy Office Parks REIT Trading Update – Lowest Volume Traded for Any Indian Listing Since 2018
Embassy Office Parks REIT (EOP IN) raised US$665m in its IPO, making it the first REIT listing for India.
In my previous insights I’ve covered the company background, its projected growth, compared it to its main listed peer and other yield assets in India:
- Embassy Office Parks REIT – Good Assets but Projections Might Be a Tad Too Bullish
- Embassy Office Parks REIT – Comparison with AIT and a Look at the Required Yield, and
- Embassy Office Parks REIT IPO – FY19 Revised Down, Yield Propped up by Zero Coupon Bond
In this insight, I will re-visit some of the deal dynamics, comment on share price drivers and provide a table with implied valuations.
2. Last Week in GER Research: Lyft, Rakuten, Lynas, Yunji IPO, Xinyi IPO and Ruhnn IPO
Below is a recap of the key analysis produced by the Global Equity Research team. This week, we update on Lyft Inc (LYFT US) now that it is below its IPO price and remind of the potentially muted impact for strategic holder Rakuten Inc (4755 JP). On the M&A front, Arun digs into the conditional deal for Lynas Corp Ltd (LYC AU) from Wesfarmers Ltd (WES AU). With regards to IPO research, we initiate on e-commerce player Yunji Inc. (YJ US) and solar company Xinyi Energy Holdings Ltd (1671746D HK) while we update on the IPO valuation of Ruhnn Holding Ltd (RUHN US).
In addition, we have provided an updated calendar of upcoming catalysts for EVENT driven names below.
Best of luck for the new week – Arun, Venkat and Rickin
3. Qutoutiao Offering: Funding a Costly Battle
On Friday, Qutoutiao Inc (QTT US) unveiled plans to raise around $11 million (based on the closing price of $11.45 per ADS) through a public offering of 1.1 million ADS. Also, certain selling shareholders will offer 7.5 ADS in the offering. The public offering comes hot on the heels of the announcement of a $171.1 million convertible loan from Alibaba Group Holding (BABA US) on 28 March.
We remain cautious on Qutoutiao as it faces an inescapable catch-22 as it cannot attract users without increasing its user acquisition spend and it cannot reach breakeven without lowering its user acquisition costs. Overall, we would not participate in the public offering.
4. PNB Metlife Pre-IPO Quick Take – Doesn’t Stack up Well Versus Its Larger Peers
Pnb Metlife (PNBM IN) plans to raise around US$350m in its IPO via a secondary sale. All the owners plan to sell a part of their stake in the IPO. The deal will likely be launched in 2H19.
While operations have been on the right track in terms of growth and product mix, the company still lags its larger peers on most key parameters. Thus, despite its large distribution network the company has failed to gain market share over the past few years.
In this insight, I’ll do a quick comparison of PNB Metlife versus its listed peers. You can find my prior IPO coverage for the sector at these links:
- ICICI Pru Life IPO Review – Cheaper than HDFC-Max Life but Still Might Be Only Fairly Valued
- SBI Life IPO – Faster, Better and Soon to Be Bigger but Expensive Nonetheless
- HDFC Standard Life IPO – Great Brand, Prudent Product Mix but Not Such a Great Price
5. QTT Placement: Liquidity Warrants a Quick Trade
Qutoutiao Inc (QTT US) announced a USD 100 million share sales by the company and its shareholders, slightly more than two weeks after the lock-up expiration on March 13th. In this insight, we will provide our quick thought on the deal.
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