ECM Weekly (13th June 2021) - Didi, AiHuiShou, Dingdong Maicai, MissFresh, Full Truck, Nayuki

It was a busy week for the ECM space where multiple IPOs were filed the past week. Topping in deal size was Didi Chuxing. The company is looking to raise up to US$10bn in the US which would be one of the largest IPOs globally this year. We published a preliminary tearsheet discussing their background, financial overview, along with a follow-up piece looking at the revenue accounting and touching on valuations:

• DiDi Chuxing Pre-IPO - One of Asia’s Largest IPOs This Year - Tearsheet

• DiDi Chuxing Pre-IPO - Has a Principal Agent Problem, Rumoured Target Valuation Is a Stretch

On-demand e-commerce and groceries firms, Dingdong Maicai and MissFresh, both filed for their US IPO, looking to raise US$500m. We initiated coverage on these two firms and compared their performance.

• Dingdong Maicai Pre-IPO - Increasing market share, fast growth but no signs of profit

• Missfresh (每日优鲜) Pre-IPO - Worrying and unsustainable trend

• Dingdong Maicai Vs Miss Fresh Pre-IPO - One Clear Winner

Boutique hotel operator, Atour Lifestyle Holdings, also filed for its US$300m IPO in the US. There were two new filings in India namely, integrated diagnostics chain Vijaya Diagnostic Centre, and component manufacturer, Sansera Engineering, where both are seeking US$225m and US$200m, respectively. This is the latter’s second attempt to go public.

Hong Kong's new IPO filings this week include surgical robotic solutions, Microport Medbot, Chinese medicine clinic chain, Gushengtang, and pharmacy chain, Quanyuantang Pharmacy,looking to raise US$1bn, US$400m, US$300m, respectively.

For ongoing IPOs, in the U.S, AiHuiShou launched its bookbuild on Friday. The company is looking to raise up to US$243m, which is significantly lower than the US$500 - 1bn deal size that was reported earlier.

• AiHuiShou IPO - Priced to Go but Won’t Do a Kanzhun

• AiHuiShou Pre-IPO - Mostly Positive - Pre-Owned but Well Loved.

• AiHuiShou Pre-IPO - First Stab at Valuation

• Aihuishou (爱回收) Pre-IPO: Pricing My Mobile Handset at Physical Stores

In Hong Kong, Clear aligner player, Angelalign, closed its books a day earlier and was priced at the top end. The deal raised US$375m and comes off the back of overwhelming demand from institutional and retail investors. Shares will debut on Wednesday.

• Angelalign (时代天使) Pre-IPO: Medical device player with consumer feature

• Angelalign (时代天使) Pre-IPO: Deserves a Premium to Peers

• Angelalign (时代天使) Pre-IPO: A Strong Ending of 2020

• Angelalign (时代天使) IPO: A Hot Deal that Will Go Above Fair Value

PAG-backed dairy producer, China Youran Dairy, launched their bookbuild over the week and was priced at the bottom end. Shares will begin trading on Friday.

• China Youran Dairy(悠然牧业) Pre-IPO - A Leader Pulling Ahead in a Fragmented Market

• China Youran Dairy(悠然牧业) Pre-IPO - PHIP Updates - Much Better Disclosure

• China Youran Dairy(悠然牧业) Pre-IPO - Peer Comparison - Youran Is the Leader

• China Youran Dairy(悠然牧业) IPO - Reasonable Valuation but There Will Be Significant Overhang

Biopharmeceutical company, CARsgen, closed its books early and was reportedly priced at the top end, where nine cornerstones took up 58% of the deal. Shares will also debut on Friday.

• CARsgen (科济药业) Pre-IPO: Scientific bet on new CAR-T targets

• CARsgen (科济药业) Pre-IPO: Thoughts on Valuation

• CARsgen (科济药业) IPO: Not the Best Deal but Will Be Decent

Online recruitment platform, Kanzhun, priced its IPO at the top-end and almost doubled on its Friday debut, closing 95% higher. This brought an end to the China ADR listing slump.

• Kanzhun Pre-IPO -Bumble meets Linkedin

• Kanzhun IPO - Fast Growth, Strong Investor Support, Cash Flow Positive…

• Kanzhun IPO Trading - Should Be Able to Turn the China ADR Sentiment Around

For upcoming IPOs, we discussed forecasts, assumptions and valuation of digital freight platform, Full Truck Alliance.

• Full Truck Alliance Pre-IPO - The Positives - Category Leader

• Full Truck Alliance Pre-IPO - The Negatives - Still a Mixed Bag

• Full Truck Alliance Pre-IPO - Valuation, Even the Previous Round Might Have Been a Stretch

Continuing our coverage on Nayuki, we compared the company to industry and listed peers and shared our thoughts on assumptions and valuation.

• Nayuki (奈雪) Pre-IPO - Fast-Growing, Cash Flow Positive Teahouse Chain
• Nayuki (奈雪) Pre-IPO - PHIP Updates - 4Q20 Results Shows Improvement
• Nayuki (奈雪) Pre-IPO - Industry Landscape and Peer Comparison
• Nayuki (奈雪) Pre-IPO - Forecast and Thoughts on Valuation

We also initiated on Keymed Biosciences Inc. The firm focuses on therapeutic areas of autoimmune and oncology and is seeking US$300m from its planned float.

• Keymed (康诺亚生物) Pre-IPO: Differentiated Products but Far from Commercialization

Ophthalmic medical services group, Chaoju Eye Care, and biopharmaceutical company, Hutchison Med, both secured listing approval for their respective US$300m and US$500m IPOs. The duo will begin pre-marketing next week. Our coverage from earlier:

• Chaoju Eye Care (朝聚眼科) Pre-IPO: Growth Prospect Far from Being Impressive
• Chaoju Eye Care (朝聚眼科) Pre-IPO: How Does It Fare Against Industry Leader
• Hutchison-China Meditech (和黄医药) H-Share Listing: MNC Partnerships Endorsed Its R&D Capabilities

Chinese property management companies, SCE Intelligent Commercial Management and Ronshine, are also currently in the midst of pre-marketing their respective US$300m and US$100m IPOs.

In India, automotive technology company Sona Comstar launched its US$761m IPO (downsized from US$829m), where anchor books opened on Friday and the rest of the offer will last this coming Monday to Wednesday. This will be India’s first EV-related IPO..

• Sona Comstar Pre-IPO - Inconsistent growth, patchy disclosures

• Sona Comstar - Has Its Positives, but We Remain Unconvinced

We also followed up on the Holding Foreign Companies Accountable act, which seeks to stop China ADRs from being traded on the US exchanges. We discussed the implications in:

• China ADRs - A New Act Aims to Put an End to China ADR IPOs

For placements, in Japan, semiconductor manufacturer, Renesas Electronics, raised US$3.6bn from a global follow-on. It was priced at a 3% discount to Wednesday’s close price. Books were multiple times oversubscribed, consisting of mainly long-only funds and sovereign wealth funds.

• Renesas Placement Update - Doing Much Better than Its past Deals. Could Impact Post-Deal Performance

Ganfeng Lithium raised US$628m in Hong Kong to fund capacity expansion plans and for potential investment. Shares were sold at a 5% discount to undisturbed price and closed 10.1% above deal price.

• Ganfeng Lithium Placement - Recent Momentum Has Been Weakening, Last Deal Did Exceptionally Well

Convertible bond holders of Pharmaron, sold shares to hedge their exposure, raising just US$67m (initially US$125m). It has since traded higher to close 10.6% above deal price on Friday.

• Pharmaron Placement - Strong Track Record

Up Fintech (Tiger Brokers) raised US$159min its follow-on offering. Shares were priced at 2.35% discount to undisturbed price and have since traded higher to close 16.4% above deal price on Friday.

• Up Fintech (Tiger Brokers) Placement - Needs a Large Correction, Just like Futu