In this briefing:
- 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
- Zhongliang (中梁地产) Pre-IPO Review – Incredible Growth Bogged Down by Related Party Transactions
- CIMC Vehicle (中集车辆): Market Leader of Semi-Trailers but Little Growth Ahead
1. 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.
2. 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
3. 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.
4. Zhongliang (中梁地产) Pre-IPO Review – Incredible Growth Bogged Down by Related Party Transactions
Zhongliang Holdings (ZLH HK) is looking to raise about US$800m in its upcoming IPO.
ZLH is a fast-growing real estate developer in China. Its completed projects are mostly in the Zhejiang Province but its projects under development are spread across the country.
It was highly leveraged in FY2016 as it ramped up its expansion efforts but had been able to reduce it significantly to about 260% net debt to equity levels while effective interest rates on debt has been falling every year.
In this insight, we will look at the company’s operations and financials, identify key corporate governance issues, and share our thoughts on peer valuation.
5. CIMC Vehicle (中集车辆): Market Leader of Semi-Trailers but Little Growth Ahead
CIMC Vehicle, the largest manufacturer of semi-trailers in the world and a subsidiary of CIMC, will start to pre-market its USD300-500 million IPO in Hong Kong, as per media reports. In this insight, we will cover the following topics:
- Company background
- Semi-trailer and truck body industry
- Shareholders and pre-IPO investors
- Our thoughts on valuation
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