This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
1. HD Hyundai Marine Solution IPO Preview
- HD Hyundai Marine Solution is getting ready to complete its IPO in KOSPI in May 2024. This will be one of the largest IPOs in Korea in 2024.
- The IPO price range is from 73,300 won to 83,400 won. The IPO offering amount is from 652.4 billion won to 742.3 billion won.
- A key beneficiary of HD Hyundai Marine Solution IPO is HD Hyundai (62% ownership). Our NAV analysis suggests implied price of 95,632 for HD Hyundai (40% higher than current price).
2. Globalwafers GDR Offering – Coming to Market Earlier than Anticipated
- Globalwafers (6488 TT) is looking to raise up to US$681m in its GDR offering. The proceeds will be used to purchase raw materials overseas.
- The deal is a somewhat large one to digest at 20.2 days of three month ADV and the proceeds will be used to purchase raw materials overseas.
- In this note, we run the deal through our ECM framework and comment on deal dynamics.
3. Shinhan Financial Group Placement – Another Selldown, Momentum Is Strong but Deal Is Large
- BNP Paribas (BNP FP) is looking to raise around US$680m via selling 3.5% of its stake in Shinhan Financial (055550 KS).
- This will be the fourth selldown for the stock since the start of the year. It will also be the largest one of the lot, so far.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
4. Local Color on HD Hyundai Marine Solution’s Excessive IPO Valuation
- Valuation controversy arises from comparing HD Hyundai Marine Solution, a ship AS specialist, with diverse global companies, leading to a target market cap of ₩5T.
- HD KSOE’s inclusion worsens the valuation controversy. Applying HD KSOE’s last year PER without adjusting for a significant one-off profit seems to inflate HD Hyundai Marine Solution’s PER.
- Currently, major local IPO funds see HD Hyundai Marine’s valuation nearing ₩4T as excessive, despite the industry’s revival and potential growth in eco-friendly ship conversions, impacting the upcoming bookbuilding process.
5. ECM Weekly (25th Mar 2024) – TCS, Akeso, Coforge, ABSL, Tokio Marine, Trial, Migao, Mixue, Reddit
- 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, Trial Holdings (5882 JP) ended up doing better than we expected, while Hong Kong finally got its first US$100m+ listing for the year.
- For placements, India was again at the forefront, this time with a not-so-pleasant results of Tata Consultancy Svcs (TCS IN).
6. Mankind Pharma Placement – Well Flagged, past Deals Have Done Well but Its Expensive
- ChrysCap is looking to raise around US$295m via selling a 2.8% stake in Mankind Pharma.
- MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
- We have looked at the IPO, lock-up release and prior placement in our earlier notes. In this note, we talk about the current deal dynamics.
7. Bharti Hexacom IPO: Valuation Insights
- Bharti Hexacom (6597372Z IN), a 70% owned subsidiary of Bharti Airtel (BHARTI IN), aims to raise up to US$513 million at an IPO price range of Rs542-570 per share.
- We previously discussed the IPO in Bharti Hexacom IPO: The Bull Case and Bharti Hexacom IPO: The Bear Case.
- Our valuation analysis suggests that the IPO price range is unattractive. Therefore, we would not participate in the IPO.
8. HD Hyundai Marine Solution IPO – Strong Profitability Growth but Lacking in Disclosures
- HD Hyundai Marine Solution (443060 KS) is looking to raise up to US$555m in its Korean IPO.
- HD Hyundai Marine Solution (HMS from hereon) is a ship aftermarket service provider that provides necessary services throughout a ship’s life cycle after the delivery of a new ship.
- In this note, we talk about the company’s historical performance.
9. Bharti Hexacom IPO: The Bull Case
- Bharti Hexacom (6597372Z IN), a 70% owned subsidiary of Bharti Airtel (BHARTI IN), aims to raise around US$500 million at a valuation of US$3.3-4.2 billion.
- The offer is a pure secondary offering. The Government of India aims to reduce its stake from 30% to 15% of outstanding shares.
- The bull case rests on market share gains, ARPU growth, low churn rates, improving margins, cash generation and low leverage.
10. Bharti Hexacom IPO – Unexciting and at a Half-Decent Discount
- Bharti Hexacom is looking to raise up to US$513m in its upcoming India 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 looked at the company’s past performance in our earlier notes. In this note, we talk about valutions.
