Equity Capital Markets

Weekly Top Ten Equity Capital Markets – Jan 26, 2025

By January 26, 2025 No Comments
This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

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1. Korea’s Financial Regs Drop New IPO Allocation and Delisting Rules: What It Means and What to Expect

By Sanghyun Park, Clepsydra Capital

  • We might see a liquidity crunch post-listing, with tighter regulations and mandatory holding drying up liquidity, causing more volatile price swings.
  • Big local players with heavy lock-ups will take a large allocation, creating significant overhang risk at the six-month mark. Stronger IPO eligibility boosts costs, pushing funds toward riskier trades.
  • Overall, this feels like a quick fix. Rather than focusing on long-term market improvements, we should focus on the new pricing patterns likely to emerge in the short term.

2. HKEx Consultation Paper – What Matters for ECM Investors

By Ke Yan, CFA, FRM, Aequitas Research

  • Stock Exchange of Hong Kong issued a consultation paper titled Proposals to Optimise IPO Price Discovery and Open Market Requirements with new mechanisms proposed for the IPO in the future.
  • In this note, we summarize key points for ECM investors and analyze the impact from a historical perspective the impact for ECM investors.
  • We are of the view that overall the changes will benefit ECM investors by reallocating a portion of the profits from cornerstone investors.

3. Smithfield Foods (SFD): Terms Set for WH Group’s Spin-Off

By IPO Boutique, IPO Boutique

  • Spin-Off of WH Group’s could raise up to $939 million if priced at the high-end of the range
  • The IPO is set to price on Monday January 27th for a Tuesday, January 28th debut
  • Flash numbers revealed sales for the three months ended December 29, 2024 will range from $3,873 million to $3,953 million (prev. year $3,998 million)

4. Details of New IPO System Improvement Measures in Korea

By Douglas Kim, Douglas Research Advisory

  • The FSC announced the details of its new IPO system improvement measures in Korea on 21 January.  
  • New rules will discourage the rampant first day trading of Korean IPOs. In 74 out of 77 IPOs in 2024, institutional investors were “net sellers” on the listing date. 
  • Rather, the new rules will encourage the investors to take more longer term approach to investing in Korean IPOs. 

5. Venture Global Inc. (VG): IPO Terms Slashed by 40% in Reworking of Deal

By IPO Boutique, IPO Boutique

  • The company reduced the range from $40-$46 to $23-$27 and increased the amount of shares offered by the company from 50.0mm shares –> 70.0mm shares.
  • It is highly unusual that the underwriting lineup, company and buy-side was so misaligned on valuation leading to this massive slashing of the deal.
  • The deal is considered “oversubscribed” with several significant anchor orders placed following the reworking of terms.

6. Guming Holdings (Good Me) IPO: The Bull Case

By Arun George, Global Equity Research Ltd

  • Guming Holdings (GUM HK) (Good me), a freshly-made tea store brand, is pre-marketing an HKEx IPO to raise US$300 million, according to press reports. 
  • Guming is China’s largest mid-priced freshly-made tea store brand and the second largest freshly-made brand across all price ranges, regarding GMV in 2023.
  • The bull case rests on a rising market share, strong franchisee profitability, top-tier revenue growth, high margins, cash generation and a strong balance sheet. 

7. Sichuan Biokin (百利天恒) H-Listing: Impressive Clinical Results so Far

By Ke Yan, CFA, FRM, Aequitas Research

  • Sichuan Biokin is looking at a A-H listing and is looking to raise up to USD 500 million. 
  • In this note we look at the company’s fundamentals briefly including its heavyweight product BL-B01D1. We also examine its deal with BMS.
  • The stock has performed well on Shanghai STAR board since its A share listing. 

8. Pre-IPO Guming Holdings (PHIP Updates) – Some Points Worth the Attention

By Xinyao (Criss) Wang

  • Due to intense competition, freshly-made beverage market has shown signs of saturation after rapid growth in previous years. Guming is currently in a bottleneck period. Future performance growth will decline.
  • Due to a decrease in consumption, we have seen the price war in this industry. We think Guming’s profit margin performance will decline in the future if it reduces prices.
  • Guming’s valuation should be higher than Nayuki Holdings (2150 HK) and Sichuan Baicha Baidao Industrial (2555 HK) due to larger revenue scale/higher net profit margin, but lower than MIXUE.

9. HDB Financial Services Pre-IPO – The Negatives – Performance Has Been Slipping

By Sumeet Singh, Aequitas Research

  • HDB Financial Services is looking to raise around US$1.5bn in its upcoming India IPO.
  • HDBFS is a leading retail-focused non-banking financial company (NBFC) in India, in terms of total gross loan book size, according to the CRISIL Report.
  • In this note, we talk about the not-so-positive aspects of the deal.

10. Guming (Good Me) IPO: Key Facts and Financials at First Glance

By Devi Subhakesan, Investory

  • Guming Holdings (GUM HK), a leading player in China’s freshly-made branded beverage sector, is widely expected to launch its IPO soon.
  • Guming’s Good Me brand is China’s largest mid-priced freshly-made tea store brand in terms of store count as well as GMV.
  • Guming reported robust revenue and profit growth for first nine months of 2024 led by new store openings, although same-store sales declined due to rising competition and weak consumer spending.