1. Asahi Group Placement – Relatively Small One when Compared to Previous Large JP Secondary Selldowns
- A group of shareholders are looking to raise US$1.3bn (JPY197.8bn) by selling their respective stakes in Asahi Group Holdings (2502 JP) via an extended secondary follow-on.
- The deal would represent 23 days of Asahi’s three month ADV. Its latest extended large primary deal has done very well.
- While the deal isn’t particularly well flagged, it is an extended one allowing the market to price in the impact of the share sale.
2. Zeekr Pre-IPO – The Positives – Has Been Growing Very Fast While Meeting Its Targets
- Zeekr, a premium EV brand by Geely Auto (175 HK) , aims to raise around US$500m in its US listing.
- Zeekr was formed in Mar 2021 as a JV between Geely and its founder. Its first model was launched in Apr 21 with deliveries starting in Oct 21.
- In this note, we talk about the positive aspects of the deal.
3. Zeekr Pre-IPO – The Negatives – Remains Highly Dependent on Geely
- ZEEKR, a premium EV brand by Geely Auto (175 HK), aims to raise around US$500m in its US listing.
- Zeekr was formed in Mar 2021 as a JV between Geely and its founder. Its first model was launched in Apr 21 with deliveries starting in Oct 21.
- In this note, we talk about the not-so-positive aspects of the deal.
4. Ajinomoto Placement – Share Buyback Should Aid Group Selling
- A group of shareholders are looking to raise US$444m by trimming their respective stakes in Ajinomoto Co (2802 JP) via an extended secondary follow-on.
- While the selldown doesn’t seem particularly well flagged, it won’t be a very large one to digest at just eight days of three month ADV.
- In a bid to cushion the selldown, Ajinomoto plans to buyback its stock to the tune of 10m shares, which would amount to 80% of the base shares on offer.
5. WuXi XDC Cayman IPO Trading – Strong Subscription Rates Heading into Listing
- WuXi XDC Cayman (1877628D HK) raised US$470m in its Hong Kong IPO.
- WuXi XDC Cayman (WXDC) is a CRDMO focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
- In our previous notes, we looked at the company’s past performance and valuations. In this note, we talk about the trading dynamics.
6. Steadfast Group Placement – While Accretion Here Is Limited, Past Deals Have Done Well
- Steadfast (SDF AU) is looking to raise around A$280m (US$180m) to fund the acquisition of Sure Insurance, and provide headroom for potentially additional acquisitions over the year.
- SDF has undertaken a number of capital raises in the past to similarly fund its active acquisition strategy. Overall, the firm’s past deal record has been strong.
- In this note, we will talk about the acquisition and run the deal through our ECM framework.
7. Wuxi XDC: Thoughts on First Day Trading
- Wuxi XDC priced its IPO at HK$20.60 per share (upper-end of range), and raised HK$3.5bn (US$417m) at a market capitalisation of HK$24.3bn and post-money EV of HK$20.4bn.
- Both HK offering and the international offering of the company were significantly oversubscribed by 49.96x and 19.6x respectively.
- Our DCF value per share is still at a significant premium to the final IPO price, and we expect Wuxi XDC’s IPO to have a strong debut.
8. WuXi XDC IPO: Trading Debut
- WuXi XDC Cayman (1877628D HK) priced its IPO at HK$20.60 per share to raise the gross proceeds of US$470 million. The shares will start trading tomorrow.
- We previously discussed the IPO in WuXi XDC IPO: The Bull Case, WuXi XDC IPO: The Bear Case and WuXi XDC IPO: Valuation Insights.
- The market sentiment on the sector has modestly weakened. However, the IPO price is attractive, with our DCF valuation of HK$22.89 per share, 11.1% above the IPO price.
9. Ecopro Materials IPO Trading – One of the Weakest Subscription Rates of the Year
- EcoPro Materials (ECO123 KS) raised around US$320m, after downsizing the deal and pricing its IPO at the low end of the range at KRW36,200/share.
- Ecopro Materials (EPM) manufactures and sells high-nickel precursors, one of the key materials for high-nickel cathode materials for secondary (rechargeable) batteries.
- In this note, we will talk about the demand for the deal and other trading dynamics.
10. ZEEKR IPO: The Bull Case
- ZEEKR (ZK US), a premium Chinese BEV manufacturer and a subsidiary of Geely Auto (175 HK), has filed for a US$500 million IPO to list on the NYSE.
- ZEEKR has launched three models – the luxury shooting brake coupe ZEEKR 001, the luxury pure electric MPV – ZEEKR 009 and the new luxury versatile SUV – ZEEKR X.
- The bull case rests on bestselling premium BEVs, rapid vehicle sales growth, rising gross margin, debt-free balance sheet and a favourable cash conversion cycle.
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