This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
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1. APR IPO Preview
- APR is getting ready to complete an IPO in KOSPI in February 2024. The IPO price range is from 147,000 won to 200,000 won.
- According to the bankers’ valuation, the company’s valuation is expected to range from 1.1 trillion won to 1.6 trillion won post IPO.
- The company’s best selling product is its skin care beauty device product called Medicube Age-R.
2. Ola Electric IPO: The Bull Case
- Ola Electric (1700674D IN), the largest Indian electric two-wheel vehicles (E2W) player, is seeking US$660 million from a primary raise along with a secondary raise at a US$7-8 billion valuation.
- Ola is the best-selling E2W brand in India in terms of monthly E2W registrations on the VAHAN Portal of the Ministry of Road Transport and Highways.
- The bull case rests on rising market share in a growing market, a rapid growth phase, increasing gross margin and a favourable cash conversion cycle.
3. Hyundai Hyms IPO Preview
- Hyundai Hyms is getting ready to complete its IPO in KOSDAQ in January. The total IPO offering amount is 43.5 billion to 54.9 billion won.
- The company is offering 8.7 million shares in this IPO, of which 40% are old shares and 60% are new shares.
- Hyundai Hyms specializes in shipbuilding equipment. Hyundai Hyms’s main business includes shipbuilding equipment and related services.
4. APR IPO Valuation Analysis
- Our base case valuation of APR is implied price of 370,809 won per share, representing an 85% upside from the high end of the bankers’ valuation range.
- We estimate APR to generate sales of 683.9 billion won (up 25.7% YoY) and operating profit of 114.6 billion won (up 39.5% YoY) in 2024.
- APR is one of the best IPOs in the Korean cosmetics sector in the past several years.
5. Hyundai Hyms IPO Valuation Analysis
- Our base case valuation of Hyundai Hyms is implied target price of 8,025 won per share, which is 27% higher than the high end of the IPO price range.
- We believe Hyundai Hyms’ valuation premium to the comps is appropriate due to much stronger operating profit growth and its strong relationships with HD Hyundai Heavy Industries.
- Hyundai Hyms’s main business includes shipbuilding equipment and related services. The company manufactures a wide variety of items necessary for ship construction, such as ship unit blocks and piping manufacturing.
6. Pre-IPO QuantumPharm – Good Stories May Not Be Backed up by Performance
- The essential difference between QuantumPharm and InSilico in terms of business models is that InSilico is an end-to-end generative AI-driven biotech but QuantumPharm is more of a platform-based service provider.
- It’s difficult for QuantumPharm to achieve significant increase in revenue scale in short time,because the service fee amount is usually not large, and it takes time to accumulate order volume.
- If there is no substantial performance contribution, these good stories would not bring about a sustained leap in valuation. QuantumPharm’s valuation in last funding round before IPO is too expensive.
7. MIXUE Group IPO: The Investment Case
- Mixue Group (MIX HK), a world-leading freshly made drinks company, filed for an HKEx IPO to raise US$0.5-1.0 billion.
- Mixue is China’s largest and the world’s second-largest freshly made drinks company, in terms of both the number of stores and cups sold in 9M23, according to CIC.
- The investment case rests on a strong brand, leading market share, high revenue growth, robust cost control, stable profitability and cash generation.
8. Weekly Deals Digest (07 Jan) – Ola Electric, Mixue, Aoki Super, Hollysys, Weiqiao Textile, Vinda
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – Ola Electric (1700674D IN) and Mixue Group (MIX HK) IPOs.
- Event-Driven developments – Aoki Super (9977 JP), Hollysys Automation Technologies (HOLI US), Weiqiao Textile Co (2698 HK), Vinda International (3331 HK).
9. J&T Global Express FY23 Earnings Preview | Revenue Growth & Margin | China, SE Asia, ‘Other’
- In this insight we preview J&T’s maiden earnings report as a listed company
- We focus on revenue growth & margin trends in the China & SE Asia businesses
- We fear slowing organic growth & margin deterioration could spook investors
10. Cloudbreak Pharma (拨康视云) Pre-IPO: Old Drug, New Formulation
- Cloudbreak Pharma, a China-based clinical-stage biotechnology company, plans to raise up to US$200m via a Hong Kong listing.
- In this note, we examine the company’s core products, namely CBT-001 and CBT-009, for pterygium and juvenile myopia respectively.
- We are seeing a lack of convincing sustainable innovation from the company. Pre-IPO investors and management are mediocre.
