Daily IPOs & Placements: Uber IPO: Its Sprawling Empire And Battle Lines (Part 3) and more

In this briefing:

1. Uber IPO: Its Sprawling Empire And Battle Lines (Part 3)
2. Chunbo Co. IPO Preview
3. Hansoh Pharma (翰森制药) IPO: A Leading Generic Player with Regulatory Overhang (Part 1)
4. Anmol Industries Pre-IPO Quick Take – No Growth, Generous Payments to Founders
5. Softbank Corp: When Does It Become a Buy?

1. Uber IPO: Its Sprawling Empire And Battle Lines (Part 3)

Although Uber aims to be an Amazon for transport, we will focus on the ride-hailing market in part 3 of this series. Here, we try to answer the following questions:

1. What are the indicative ride-hailing market shares of Uber vs Lyft in North America?
2. What is Uber’s share in other key countries?
3. What are the lawsuits investors should watch out for?
4. How do Uber’s revenue drivers compare with Lyft’s?
5. What are the timelines and key figures for both companies’ IPOs?

This is the third note in a series about the expected 2019 IPO of global ride-hailing giant Uber Technologies (0084207D US) and Lyft. Please read the earlier two pieces in the series for better contexts:

Uber IPO Preview: Its Sprawling Empire and Battle Lines (Part 1) written by me.

Uber IPO Preview: Fast-Growing Uber Eats Has Become a Material Part of Uber (Part 2) written by Daniel Hellberg

2. Chunbo Co. IPO Preview

• Chunbo Co Ltd (278280 KS) is a provider of fine chemical materials in Korea, and it is expected to complete its IPO in January 2019. Its chemical materials are used in numerous industries including the display, semiconductors, rechargeable batteries, and pharmaceutical. 
• The bankers used nine comparable companies, including Sk Materials (036490 KS), Foosung Co Ltd (093370 KS), and Iljin Materials (020150 KS), to value Chunbo Co Ltd (278280 KS). The bankers used the annualized net profit of these companies from 1Q-3Q18 in their valuation analysis. The average P/E multiple of the comps were 25.3x. The bankers then applied Chunbo’s annualized net profit of 19.8 billion won from 1Q18 to 3Q18 and applied the P/E multiple of 25.3x to derive an implied market cap of 501.3 billion won. After applying an IPO discount of 20.2% to 30.2%, the bankers derived an IPO range of 35,000 to 40,000 won. 
• The company has a consistent record of generating solid growth in sales and profits in the past few years. The company’s sales increased 18.4% CAGR from 2014 to 2017. Its operating margin averaged 21% from 2014 to 3Q18. 

3. Hansoh Pharma (翰森制药) IPO: A Leading Generic Player with Regulatory Overhang (Part 1)

Hansoh Pharma, a leading generic pharmaceutical manufacturer, filed an application to list on the Hong Kong Stock Exchange. In this insight, we will cover the following topics:

• Hansoh Pharma’s core products and major pipeline drug candidates.
• The industry backdrop.
• The company’s shareholders and investors.

• Junshi Bioscience (君实医药) IPO: Thoughts on Valuation (Part 2)
• Junshi Bioscience (君实医药) IPO: Early in Application but Behind in Key Indications (Part 1)
• CanSino Biologics (康希诺) IPO: Promising Pre-Clinical Results but Vaccine Scandal Weighs (Part 1)

• AOBiome Therapeutics IPO: Hope for Natural Therapeutic Treatment
• Stealth Biotherapeutics IPO: Cure the Symptoms but Not the Cause (Part 1)
• Innovent Biologics (信达生物) IPO: Pricing the PD-1 and Biosimilars Competition (Part 2)
• Innovent Biologics (信达生物) IPO: A Major PD-1 MAb Competitor Might Have Just Emerged (Part 1)
• MicuRx Pharma (盟科医药) IPO: Betting on Single Drug in the Not so Attractive Antibiotic Segment
• Hua Medicine (华领医药) IPO: Thoughts on Valuation
• Hua Medicine (华领医药) IPO: Reviving Roche’s Failed Attempt?
• BeiGene (百济神州) IPO: Dual-Listing with Upside Capped in the Near Term
• Ascletis Pharma (歌礼制药) IPO: Valuation Not Justified by Ganovo and Ravidasvir NPV (Part 3)
• Ascletis Pharma (歌礼制药) IPO: Three Valuation Risk Factors (Part 2)
• Ascletis Pharma (歌礼制药) IPO: Emerging Player in the Crowded HCV Drug Market
• China Isotope & Radiation IPO: Oligopoly, Visible Growth and High Barrier to Entry
• Zai Lab IPO: Thoughts on Valuation, Risks and Upsides (Part 2)
• Zai Lab IPO: Experienced Team, Promising In-Licensing Drug Pipeline (Part 1)

4. Anmol Industries Pre-IPO Quick Take – No Growth, Generous Payments to Founders

Anmol Industries (ANMOL IN) plans to raise US$100m+ in its India IPO via a sell-down of secondary shares. As per Frost & Sullivan, Anmol is the fourth largest biscuit manufacturer in India, behind the likes of Britannia Industries (BRIT IN), Parle and Sunfeast (owned by ITC Ltd (ITC IN)).

In FY17, the company undertook a restructuring wherein it merged three of its operating entities and demerged its treasury operations. Owing to this one can’t really come up with a clear picture of its past performance.

The picture on the demerger is a lot clearer though, as it led to the founders getting US$38m worth of liquid investments. Furthermore, the founder’s employment arrangements seem to be designed in such a way to let them take 12% of the PATMI each year, with no strings attached and additional 13% of FY17 PATMI as salary.

5. Softbank Corp: When Does It Become a Buy?

Although we were bearish on the IPO initially and turned increasingly so following the relatively poor reception among retailers that was discussed in Softbank IPO: Signs Point to Risk of Early IPO Price Break, we were still a touch surprised at the extent of the drop today, with the stock finishing down 14.53% to close at the lows with 271.5m shares changing hands. With a rising dividend yield and looming buying from passive funds on the on hand and a potentially large overhang from retailers who may have been looking to flip for a profit on the other, we discuss what would turn us more bullish below.