Brief IPOs & Placements: Maoyan Entertainment (猫眼娱乐) Post-IPO: The CNY Box Office Catalyst Hasn’t Materialized and more

In this briefing:

1. Maoyan Entertainment (猫眼娱乐) Post-IPO: The CNY Box Office Catalyst Hasn’t Materialized
2. Hansoh Pharma IPO Preview: A Decent Story Tarnished by a Huge Pre-IPO Dividend
3. MINT Placement – Well Flagged Placement but Only Marginally Accretive, Past Deals Have Done Well

1. Maoyan Entertainment (猫眼娱乐) Post-IPO: The CNY Box Office Catalyst Hasn’t Materialized

We mentioned in our previous note prior to the listing of Maoyan Entertainment on Feb 4th that Chinese New Year (CNY) Box office from the two movies, namely Pegasus and The New King of Comedy that the company invested could be a catalyst post listing. However, our analysis of CNY box office data suggests although Pegasus reported box office revenues slightly north of RMB 1bn, it is far behind the number one movie, The Wandering Earth’s RMB 2bn box office. In addition to the company-specific movie investment, the overall box office for the CNY holiday has been disappointing, suggesting a challenging year for the movie industry in 2019. 

• Entertainment Plus (猫眼娱乐) IPO: The Engineered Movie Ticketing Leader that Runs Out of Steam (Part 1)
• Entertainment Plus (猫眼娱乐) IPO: The Coming Regulatory Bang Isn’t That Bad (Part 2)
• Maoyan Entertainment (猫眼娱乐) IPO: Turning Profitable, Thoughts on Valuation
• Maoyan Entertainment (猫眼娱乐) IPO: Lackluster Demand but CNY Blockbusters Could Be a Catalyst

2. Hansoh Pharma IPO Preview: A Decent Story Tarnished by a Huge Pre-IPO Dividend

Hansoh Pharmaceutical (HANSOH HK) claims to be one of the few R&D driven Chinese pharmaceutical companies. According to press reports, Hansoh aims to launch its Hong Kong IPO to raise $1 billion this month. Over the track record period, Hansoh’s financial performance shows accelerating revenue growth, relatively stable margins and solid cash generation.

3. MINT Placement – Well Flagged Placement but Only Marginally Accretive, Past Deals Have Done Well

Mapletree Industrial Trust (MINT SP) plans to raise around US$130m to part fund its recent acquisitions. 

The deal scores well on our framework given the company’s good track record and recent price momentum. In addition, past deals have done well. Furthermore, when the acquisition of 18 Tai Seng was announced the company had also highlighted that it could look to raise equity to part fund the acquisition. Thus, the deal isn’t likely to be a surprise for existing unitholders.

However, as per the company’s own forecast’s the deal is likely to be only marginally accretive adding less than 1% to DPU. Thus, even though its well flagged and past deals have done well, short-term returns might be limited.