This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
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1. Bloks Group IPO (0325.HK): Global Offering, The Initial Price Range Is Seen As Attractively Valued
- Shanghai-Based Bloks Group, a leader of assembly character toys in China, has announced the initial price range for its IPO in Hong Kong.
- The offering is expected to be between HK$55.65 and HK$60.35, implying a market cap of ~HK$14B or ~$1.8B at the midpoint of the price range.
- Assuming IPO offer price of HK$58.00, UBS AM Singapore, Greenwoods AM and Fullgoal Investors have agreed to invest ~HK$388M or ~$50M in the offering.
2. Pre-IPO Bloks Group (PHIP Updates) – Some Points Worth the Attention
- The assembly character toy segment market size is not big and Bloks is already China’s largest player. So, there will be a day when the growth ceiling is reached.
- Bloks’ business model is more similar to Pop Mart, rather than LEGO, but Bloks’ profitability is lagging behind both of them. The current high revenue growth may not be sustainable.
- Pre-IPO valuation of Bloks reached RMB7.2 billion. Valuation of Bloks should be lower than Pop Mart. If Bloks’ valuation could reach the industry average after IPO, it is already good.
3. Bloks Group IPO – PHIP Updates – Momentum Remains Strong, Although Some Lingering Doubts Persist
- Bloks Group (1850960D CH) is looking to raise US$188m in its Hong Kong IPO.
- Bloks Groups (Bloks) operates in the toy segment where it primarily assembles character and brick-based toys.
- In our previous note, we looked at the firm’s past performance. In this note, we discuss the latest PHIP updates.
4. Didi Global Q324 Results & Two Key Reasons Company May Consider A New Listing in 2025
- In Q324, Didi grew slowly, but core margin improved significantly on higher “take rate”
- Q324 liquidity position sound, but pace of 2024 investment difficult to sustain
- Two important reasons Didi could list shares in ’25, even if cash needs aren’t urgent
5. S.F. Holding (6936 HK) – Here’s Why Post-IPO Share Price Performance Is So “Boring”
- The Time-definite express services are actually a double-edged sword for S.F.- Although it helps S.F. establish core competitiveness, such strategy limits the Company’s market share and growth ceiling in China.
- The issue here is that S.F. has encountered growth bottlenecks, but due to its heavy asset model, the only truly suitable solution is internationalization, which however is full of uncertainties.
- S.F. is facing many challenges. The IPO final offer price of HK$34.3 is expensive, which might explain why S.F.’s share price has been a bit “boring” since its listing.
6. LG CNS: Updated IPO Valuation Analysis
- According to our updated valuation analysis of LG CNS, it suggests a base case implied market cap of 7.4 trillion won, representing target price of 76,383 won per share.
- Our base case valuation target price of 76,383 won is 23% higher than the high end of the IPO price range.
- We lowered our target price by 6%, mainly due to greater political risks arising from the recent cancelled martial law and ongoing impeachment of President Yoon.
7. LG CNS IPO: The Bear Case
- LG CNS (LGCNSZ KS), the IT service unit of LG Corp (003550 KS), seeks to raise up to US$837 million through a primary/secondary offering.
- In LG CNS IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The bear case rests on fading growth momentum, mid-tier revenue growth, weak non-AI growth, high contract assets, bottom-tier FCF margin and large share overhang.
8. Pre-IPO Ascentage Pharma – The US Stock Listing Will Stimulate Future Growth Potential
- Ascentage has filed with the SEC to raise up to US$100 million in a US IPO. We think its future market value is expected to surpass that of Hutchmed.
- The outlook of olverembatinib is clear. Takeda can give more possibilities to olverembatinib. 2025 Sales of olverembatinib is expected to reach RMB500 million.Market value contribution from olverembatinib is US$1-1.5 billion.
- Investors have higher expectations on APG-2575 to be out-licensed to MNCs. We think the peak sales of APG-2575 is expected to surpass that of olverembatinib in overseas markets.
9. Orum Therapeutics Lowers IPO Price Range
- Orum Therapeutics (475830 KS) has lowered its IPO price range to 24,000 won to 30,000 won.
- The IPO offering amount will be between 60 billion won to 75 billion won. The expected market cap of the IPO is between 531 billion won to 664 billion won.
- Our updated valuation of Orum Therapeutics suggests implied target price of 24,939 won per share, which is 8% lower than the mid-point of the revised down IPO price range.
10. Initial Thoughts on the DN Solutions IPO
- DN Solutions is planning to complete its IPO in Korea in 2025. The expected value of DN Solutions is estimated to be about 5 trillion won to 6 trillion won.
- DN Solutions’ revenue and operating profit increased at CAGR of 19.9% and 62.2%, respectively from 2020 to 2023.
- Currently, the largest shareholder of DN Solutions is GMT Holdings which has a 90.32% stake. DN Automotive (007340 KS) owns a 100% stake in GMT Holdings.
