ECM Weekly (13 April 2019) - So-Young, Japan Post Trio, Shenwan Hongyuan, Changliao, Uber

This is another busy week in the placement space. Sumeet Singh covered a grand total of six placements.

This week, updates on Japan Post privatization presented an opportunity to set up a trade on Japan Post Holdings (6178 JP) and Japan Post Bank (7182 JP). This came after the Japanese government said that it plans to sell another 1.06bn share of JPH as soon as Sep 2019.

We think that we might see a selldown of JPB shares before Sep and, if that were to happen, JPH could buyback and absorb a big chunk of the government sale of JPH which could be a positive on JPH in the long term. Read more in:

• Japan Post Holdings and Japan Post Bank - Early Thoughts on a Choice of Two Trades

Back in Hong Kong, there was Guotai Junan Securities (H) (2611 HK)'s US$340m placement which was partially upsized to about US$404m. The share price was struggling to hold but still managed to close above its fixed deal price on Friday.

Our idea on Dongzheng Automotive Finance (2718 HK) last week worked out well. It has managed to claw back lost grounds (up about 20% from HK$2.57) to close just 1 cent above its IPO price after a disastrous debut. The name is still fairly liquid for now, traded about US$14m per day.

As for upcoming IPOs, we heard that Duiba Group (1649112D CH) and Viva Biotech (1577881D HK) are pre-marketing for their IPO. There will be a note on Duiba next week while Ke Yan, CFA, FRM has already penned down his early thoughts on Viva Bio in:

• Viva Biotech (维亚生物) IPO: When CRO Becomes Early Stage Biotech Investor
• Viva Biotech (维亚生物) IPO: Warning Signs from 2018 Numbers (Part 2)

We are also hearing that Yunji Inc. (YJ US) has started premarketing for its US IPO while So-Young (SY US) just filed for a US$150 IPO. We think the latter is interesting given that it has already turned profitable and seemed to have found a good niche within the medical aesthetic industry. Read more in:

• So-Young (新氧) Pre-IPO Review - Au Naturel

And, of course, not forgetting that the much-anticipated Uber Technologies (0084207D US) has finally filed for IPO in the US!