In this briefing:
- AsiaInfo Tech (亚信科技) IPO: What You Need to Know Before the Trading Debut
- Softbank Corp IPO – Trading Strategies
- Metropolis Healthcare Pre-IPO Quick Take – Steady Performance but Growth Lagged Network Expansion
- SoftBank Corp IPO Valuation: Bull/Bear Case DCF Scenarios
- Luzhou City Commercial Bank IPO (泸州市商业银行) Trading Update – Low Liquidity, as Expected
1. AsiaInfo Tech (亚信科技) IPO: What You Need to Know Before the Trading Debut
AsiaInfo Tech priced its IPO at HKD 10.50/share and will start trading today. Prior to the trading debut, in this short note, we summarize the latest information with updates on our valuation.
Our Previous Insight on AsiaInfo Tech:
- AsiaInfo Tech (亚信科技) IPO: Cost Control Is the Key (Part 1)
- AsiaInfo Tech (亚信科技) IPO: Lessons from Privatization and Three Bearish Trends (Part 2)
- AsiaInfo Tech (亚信科技) IPO: Latest Numbers Showcase the Company’s Questionable Expansion Plan
- AsiaInfo Tech (亚信科技) IPO: Valuation Rich Vs Delisting and Peers
2. Softbank Corp IPO – Trading Strategies
Bloomberg reported Softbank Corp (9434 JP)‘s international bookbuild was 2 – 3x covered while retail offering was at almost 2x. There were other reports of bookrunners struggling to sell shares to retail investors.
In this insight, we will look at how peers and market have performed since bookbuild and provide a sensitivity table with implied valuations for different price points and thoughts on the price range for near-term trading.
We have already covered most aspects of Softbank Corp (9434 JP) ‘s IPO in our previous insights:
- Valuation from a retail investor POV – Softbank IPO Review – Attractive from a Retail Perspective, Could Provide Short-Term Upside
- Valuation from an institutional investor POV – Softbank Corp IPO Review – Yield Ensured Demand May Not Guarantee Performance
- Updates from prospectus – Softbank Corp IPO Review – Segment Breakdown, Capex, and Risks
- Operating metric comparison – Softbank Telecom Pre-IPO – Higher Yield to Compensate for Poorer Metrics
- Impact of Rakuten entry and FCF and dividend sustainability analysis – Softbank Telecom Pre-IPO – All About the Yield
- Company background and overview – Softbank Telecom Pre-IPO Review – Vision Is Needed to Arrive at US$90bn Valuation
3. Metropolis Healthcare Pre-IPO Quick Take – Steady Performance but Growth Lagged Network Expansion
Metropolis Health Services Limited (MHL IN) (MHL) plans to raise US$100m+ in its Indian IPO. MHL is one of the largest diagnostic chains in the country. Carlyle invested in the company in 2015.
MHL has registered steady growth and margins over the past few years. It has also aggressively expanded its network over the past few years, although revenue growth hasn’t matched the network expansion.
MHL’s recent financial performance has been in-line with its listed peers, Dr Lal Pathlabs (DLPL IN) and Thyrocare Technologies (THYROCAR IN), while the company continues to lead its two listed peers in terms of revenue generated per test.
4. SoftBank Corp IPO Valuation: Bull/Bear Case DCF Scenarios
Softbank Group (9984 JP) is set to raise JPY2.65 trillion ($23.5 billion) through the Softbank Corp (9434 JP) IPO, Japan’s biggest-ever IPO. However, SoftBank Corp’s IPO which is set for 19 December is oversubscribed by less than double, according to press reports. This level of oversubscription is well below blockbuster Japanese stock debuts such as Mercari Inc (4385 JP) and Recruit Holdings (6098 JP).
Based on client discussion on SoftBank Corp’s intrinsic value, we have put together a DCF-based valuation along with scenario analysis. Our conclusion remains the same that SoftBank Corp is overvalued at the proposed IPO price of JPY1,500 per share.
5. Luzhou City Commercial Bank IPO (泸州市商业银行) Trading Update – Low Liquidity, as Expected
Luzhou Commercial Bank Co Ltd (1983 HK) IPO raised about US$222m at HKD3.18 per share, close to the bottom end of its price range. We have covered the IPO in our previous insight, Luzhou City Commercial Bank IPO (泸州市商业银行) – Earnings Lagging Asset Growth Owing to Tightening Spread.
In this insight, we will update on the deal dynamics, implied valuation, and include a valuation sensitivity table.
