This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
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1. HD Hyundai Marine Solution IPO Valuation Analysis
- Our base case valuation of HD Hyundai Marine Solution is target price of 98,254 won per share, representing an 18% upside from the high end of the IPO price range.
- The company’s ROE averaged 67% in 2022 and 2023. In comparison, the comps’ ROE averaged 10.6% in the same period. [HD Hyundai Marine Solution > Comps]
- Our base case valuation is based on 24.7x P/E (comps’ average) using our estimated net profit of 178.7 billion won for the company in 2024.
2. Samsung Electronics Placement – Better Timing This Time Around
- KEB Hana Bank, on behalf of Lee Boo-Jin, is looking to raise up to US$325m via selling 0.1% of Samsung Electronics (005930 KS).
- The deal appears to be somewhat well flagged and the company recently reported better operating numbers for 1Q24.
- In this note, we will run the deal through our ECM framework and talk about the recent updates.
3. WT Micro Placement – Another Well-Flagged Taiwan GDR Offering, This One Is Easier to Digest
- WT Microelectronics (3036 TT) is looking to raise US$341m in its GDR offering. The proceeds will be used to purchase raw materials overseas.
- The deal is a very well flagged one, and will be a relatively small one to digest at just 4.8 days of the stock’s three month ADV.
- In this note, we run the deal through our ECM framework and comment on the deal dynamics.
4. Bharti Hexacom IPO Trading – Strong Insti and Anchor, Retail Gave It a Miss
- Government of India raised around US$513m via selling some of its stake in Bharti Hexacom’s IPO.
- Bharti Hexacom (BH) is a communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services to customers in the Rajasthan and the North East telecommunication circles in India.
- We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.
5. HD Hyundai Marine Solution IPO Industry Analysis
- In this insight, we highlight some of the important industry factors impacting HD Hyundai Marine Solution.
- Eco-Friendly ships are high-value-added ships that require more parts than conventional ships and are mechanically more complex, so the unit cost of parts is higher than that of conventional ships.
- Therefore, the ship AM (aftermarket) is a key industry that is expected to benefit from higher customer demand and increase service prices.
6. ZEEKR IPO: Latest Updates as the IPO Process Restarts
- ZEEKR (ZK US), a premium Chinese BEV manufacturer and a subsidiary of Geely Auto (175 HK), has restarted its IPO process to raise US$500 million by listing on the NYSE.
- We previously discussed the IPO in ZEEKR IPO: The Bull Case and ZEEKR IPO: The Bear Case.
- The latest SEC filings reinforce the bear case due to weak industry sentiment, rapidly slowing growth, ongoing operating losses and volatile FCF.
7. Baicha Baidao IPO: The Bull Case
- Sichuan Baicha Baidao Industrial (SCBCBDID CH), a leading freshly made tea drinks company, will launch an HKEx IPO to raise US$300 million next week, according to press reports.
- Biacha is China’s third largest freshly-made tea shop company in terms of retail sales value in 2023, according to Frost & Sullivan.
- The bull case rests on a rising market share, high revenue growth, sector-leading margins, cash generation and a strong balance sheet.
8. ECM Weekly (8th Apr 2024) – Hyundai Marine, Waaree Energies, Horizon Robotics, Bharti Hexacom
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- On the IPO front, the focus remained on HD Hyundai Marine Solution (443060 KS) and Bharti Hexacom (6597372Z IN).
- On the placement front, India remained at the forefront with JSW Energy Ltd (JSW IN) and the potential share sale of Vodafone Idea (IDEA IN).
9. ICTK IPO Preview
- ICTK is getting ready to complete its IPO in KOSDAQ in May. The IPO price range is from 13,000 won to 16,000 won.
- According to the bankers’ valuation, the expected market cap of the company after the listing is 171 billion won to 210 billion won.
- ICTK is a security company specializing in Internet of Things (IoT) based on physical copy prevention technology.
10. Trial to Become 5th Biggest Supermarket Post-IPO
- Trial, the discount FMCG and retail technology company, completed its IPO last month, achieving an initial market capitalisation higher than most of its rivals in the supermarket sector.
- If forecasts for FY2023 are achieved, it will become the 5th largest chain in the country and its proprietary technology should give it an important advantage in the medium term.
- But its position at the centre of the fast-growing discount sector will drive the real growth, and the Kyushu-based firm will emerge as challenger to leading retailers.
