In this briefing:
- SNK Corp IPO Preview
- Jinxin Fertility (锦欣生殖) Pre-IPO: Strong Foothold in Sichuan but Weak Sentiment for Sector
- Ruhnn (如涵) IPO Review – Expensive Influence
- Yunji (云集) Pre-IPO Review – Poor Disclosure on Data
- ESR Cayman Pre-IPO- First Stab at Valuation
1. 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.
2. 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
3. Ruhnn (如涵) IPO Review – Expensive Influence
Ruhnn Holding Ltd (RUHN US) is looking to raise up to US$155m in its upcoming IPO. We have previously covered the company’s fundamentals in: Ruhnn (如涵) Pre-IPO Review- Significant Concentration Risk.
In this insight, we will value the company business segments by parts, look at the deal dynamics, and run the deal through our IPO framework.
4. Yunji (云集) Pre-IPO Review – Poor Disclosure on Data
Yunji Inc. (YJ US) is looking to raise about US$200m in its upcoming IPO.
YJ is a membership-based social e-commerce platform. Growth from FY2016 to FY2018 has been stupendous. Revenue has grown at a 218% CAGR while gross profit grew at 175% CAGR. Losses have been shrinking as a percentage of revenue and the company seems to be close to break even.
However, the disclosure of data is poor. There is no clear explanation how the company has achieved such strong growth in FY2018 without having to provide a proportionately larger incentive in the same period.
5. ESR Cayman Pre-IPO- First Stab at Valuation
ESR Cayman (ESR HK) aims to raise up to US$1.5bn in its planned Hong Kong listing, as per media reports. The company is backed by Warburg Pincus and counts APG, the Netherlands’ largest pension provider, as one of its main investors.
In my earlier insights: I touched upon the company’s business model and provided an overview of its operations, ESR Cayman Pre-IPO – A Giant in the Making and talk about the financials and the drivers for each of the three segments, ESR Cayman Pre-IPO – Earnings and Segment Analysis.
In this insight, I’ll look at valuing each of the segments.
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