ECM Weekly (1 September 2018) - Meituan, NIO, Aavas, Hua Medicine, Qutoutiao

Unsurprisingly, shortly after markets in the U.S. made new all-time highs, companies are rushing to get themselves onto the market to ride on the momentum. Another round of IPO filings and live IPOs are starting to trickle in as we ramp up towards Q4.

First of all, starting with what we have heard on the street, there are news reporting that Meituan Dianping (MEITUAN HK) is setting its IPO valuation at up to US$55bn which is close the the upper range of Ke Yan, CFA, FRM's conservative fair value estimate in his latest note, Meituan Dianping (美团点评) IPO: Thoughts on Valuation - The Market Structure and the Variables (Part 3). In India, Aavas Financiers Ltd (AAVAS IN) is targeting a Rs20bn IPO in September while Lodha Developers (LODHA IN) trimmed its targets after IPO delay.

There are also a handful of live deals ongoing and investors are probably spoilt for choice as to which IPO to subscribe to. Starting off with the largest deal size, NIO Inc (NIO US) is raising up to US$1.3bn and will be closing its book on the 11th of September. As per our analysis, NIO's valuation is only at a small discount to peers even after we used blue sky assumptions to work out the company's valuation.

In Hong Kong, China Chunlai Education (CHUNLAI HK)'s US$113m IPO will be closing on the 6th of September while Hua Medicine Ltd (2552 HK) will be closing on the 7th.