In this briefing:
- LYFT: Wouldn’t It Be Ironic if This Was an IPO to Rent but Not Own?
- Koolearn (新东方在线) Trading Update – A Wobbly Start
- CanSino Biologics (康希诺) IPO Trading Update – Time to Cash Out
- SNK Corp IPO Preview
- Jinxin Fertility (锦欣生殖) Pre-IPO: Strong Foothold in Sichuan but Weak Sentiment for Sector
1. LYFT: Wouldn’t It Be Ironic if This Was an IPO to Rent but Not Own?
Lyft Inc (LYFT US) announced an increase in its IPO price range from $62-68 to $70-72 after previous reports had indicated that the IPO became oversubscribed very early.
There has been significant coverage of the name on Smartkarma but a disappointing lack of obvious puns:
Lyft IPO: Key Takeaways from In-Depth Interviews with Drivers by Johannes Salim, CFA
Lyft IPO: Valuation Analysis (Prudent Investment or Quasi-Gambling?) and Lyft IPO Preview by Douglas Kim
Lyft IPO Preview: Maybe We’ll Just Walk? by Rickin Thakrar
LYFT Pre-IPO – Drivers and Shared Rides Hold the Key But the Numbers Are Missing by Sumeet Singh
We would highlight Johannes’ interview piece as being well worth a read to understand the driver perspective, as well as Sumeet’s piece and the comments sections for discussions of business model strengths and weaknesses.
Ultimately, this issue isn’t going to be bought for its cheapness and we would guess that it will be successful (initially) due to pent up demand and relatively strong broad stock market performance over the last few months. Below, however, we examine NY transportation data to point out what we feel are misconceptions about the overall value proposition of the ride sharing industry.
2. Koolearn (新东方在线) Trading Update – A Wobbly Start
Koolearn (1797 HK) raised about US$214m at HK$10.20 per share, the mid-point of its IPO price range. We have previously covered the IPO in:
- Koolearn (新东方在线) IPO Review – Yet to See Results from Increased Spending
- New Regulatory Tightening on Online Education Reads Badly on Koolearn IPO
- Koolearn (新东方在线) Pre-IPO – Profitable Online Edu Company but Poor Sentiment Weighs
In this insight, we will update on the deal dynamics, implied valuation, and include a valuation sensitivity table.
3. CanSino Biologics (康希诺) IPO Trading Update – Time to Cash Out
CanSino Biologics raised USD 148 million at HKD 22/share, at the high end of its guided price range. We have previously covered the IPO in the following note:
- CanSino Biologics (康希诺) IPO: Promising Pre-Clinical Results but Vaccine Scandal Weighs (Part 1)
- CanSino Biologics (康希诺) IPO: Thoughts on Valuation (Part 2)
- CanSino Biologics (康希诺) IPO: Valuation Update (Part 3)
- CanSino Biologics (康希诺) IPO: Valuation Attractive, Lilly Asia Doubling Up (Part 4)
In this insight, we will update on the deal dynamics, implied valuation, and include a valuation sensitivity table.
4. SNK Corp IPO Preview
SNK Corp (950180 KS), a Japanese game company founded in 1978, is trying to complete its IPO in the Korean stock market (KOSDAQ) in April. SNK is well known its The King of Fighters game. The IPO price range is between 30,800 won and 40,400 won. The IPO base deal size ranges from $114 million to $150 million.
This is the second time that SNK Corp is trying to complete the IPO after a failed attempt in late 2018. The company has reduced the average IPO price range by 12% this time compared to the first try in late 2018.
The bankers used four comparable companies including Webzen, NCsoft, Pearl Abyss, and Netmarble Games to value SNK Corp. Using P/B valuation method, the bankers derived an average P/B multiple of 4.1x. The bankers then took the applied equity (controlling interest) of the company and applied the P/B multiple of 4.1x to derive an implied value of the company. After applying additional 8.57% to 32.99% IPO discount, the bankers derived an IPO price range of 34,300 – 46,800 won.
5. Jinxin Fertility (锦欣生殖) Pre-IPO: Strong Foothold in Sichuan but Weak Sentiment for Sector
Jinxin Fertility, a leading privately owned assisted reproductive service provider in China and the US, refiled to list in Hong Kong. Per news reports, the company planned to raise up to USD 500 million. In this insight, we will cover the following topics:
- Business lines and its hospitals
- The assisted reproductive service industry
- Key risks
- Shareholders and use of proceeds
- Our early thoughts on valuation
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