ECM Weekly (16th May 2021) - JD Logistics, New Hope Svc, Ximalaya, Soulgate

China ADR pipeline continues its momentum. ForU, JD-backed Chinese logistics firm, and Chinese social networking app operator, Soulgate, both filed with the SEC over the past week. They are looking to raise up to US$500m and US$300m, respectively.

Other filings in Hong Kong include Chinese spicy snack maker, Weilong Delicious Holdings, and Chinese biotech company, Broncus, which are looking to raise US$1bn and US$300m respectively. Weilong Delicious Holdings is backed by Hillhouse, Tencent, Yunfeng Capital, and Sequoia. Filings in India over the past week include Go Airlines, Penna Cement, Fincare, and Medi Assist Healthcare.

Over the week, two Australia IPOs, Australia Venue Co. and Aurora Healthcare, were shelved. The former cited uncertainty arising from the pandemic while Aurora Healthcare said that it received weak investor interests.

• Australian Venue Co. IPO - Stagnant Industry but Acquisitions Could Rev It Up

• Aurora Healthcare IPO - A Mixed Bag

For upcoming IPOs, our focus will be mainly split between Hong Kong and China ADRs next week.

It was reported that JD Logistics is set to open books on Monday, looking to raise about US$3.5 – 3.9bn at a range of US$31.3 to 34.5bn valuation, which is lower than the initial US$40bn target. The IPO was said to have attracted seven cornerstone investors that will likely take up about 40% of the float.

• JD Logistics (京东物流) Pre-IPO - Peer Comparison - Shielded from Price War

• JD Logistics (京东物流) Pre-IPO - Tethered to JD Group and Looking Beyond

• JD Logistics (京东物流) Pre-IPO - Thoughts on Valuation

• JD Logistics (京东物流) Pre-IPO - PHIP Updates and Fine-Tuning Valuation

• JD Logistics (京东物流) Pre-IPO - Index Implications - It Will Cut Close

• JD Logistics (京东物流) Pre-IPO - Bull/Bear Case + Valuation Sensitivity

• JD Logistics (京东物流) Pre-IPO - Quick Note - New PHIP with 1Q21 Results Changes Narrative

China Youran Dairy is looking to pre-market its US$800m IPO on Monday and will likely be approved by HKEX soon. LexinFintech is also considering a Hong Kong secondary listing in the second half of the year, which will potentially raise up to US$300m. We covered China Youran Dairy earlier in:

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

New Hope Property Group’s property management service arm, New Hope Service, launched its IPO this week and books were reportedly covered. The company will debut on 25th May. Whereas SF REIT will list this Monday.

• New Hope Service (新希望服务) IPO - Nothing Particularly Enticing

• SF REIT IPO Trading - Tepid Demand

In the US, we continued our coverage on Chinese podcast and radio startup, Ximalaya, and initiated on Chinese social networking app operator, Soulgate.

• Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening

• Ximalaya Pre-IPO - The Negatives

• Ximalaya Pre-IPO - Peer Comparison

• Ximalaya (XIMA): Has Large Market Share, But Small Competitors Have Big Bosses

• Ximalaya Pre-IPO - Earnings Forecast and Valuation

• Soulgate Pre-IPO Unsustainable virtual connection

PowerGrid Infrastructure Investment Trust debuted on Friday and closed 3% above its IPO price.

• POWERGRID InvIT Pre-IPO - Always going to be tricky with a declining yield

• POWERGRID InvIT IPO - Assets Are Fine, Declining Yield Is Not

• POWERGRID InvIT IPO Trading - Not a Bad Subscription Result

In the Philippines, books were covered for Monde Nissin. The deal attracted more than ten cornerstones, earmarking 70% of the deal. Shares will trade on 1st June. We covered the IPO earlier.

• Monde Nissin Pre-IPO - The Positives - High Market Share

• Monde Nissin Pre-IPO - The Negatives - High Debt, Div Payments, Floundering MA

• Monde Nissin Pre-IPO - Peer Comparison for Food Business

• Monde Nissin Pre-IPO - Peer Comparison for Meat Alternative Business

• Monde Nissin Pre-IPO - Thoughts on Valuation and Monde Nissin Pre-IPO - Not Cheap but Sensible

• Monde Nissin IPO - Might Not Be a High Flyer but Worth the Ride, Quorn Tastes Good

For placements, Interglobe Aviation (Indigo)’s board approved its qualified institutional placement (QIP). This is the 2nd time over the past year that the company has obtained board approval to undertake a fund raising. Pendal Group in Australia raised US$147m in an institutional placement to acquire a US Investment Manager which is expected to be accretive.

• Interglobe Aviation (Indigo) QIP Early Look - Headwinds Lead to a Change of Heart

• Pendal Group Placement - Accretive Acquisition

In Hong Kong, Danone SA sold its 9.8% stake in China Mengniu. The deal was widely anticipated and books were said to be multiple times covered. Evergrande Real Estate Group raised US$1.37bn from the selldown of its stake in Evergrande Auto. The deal was upsized to 260m shares from 200m shares initially offered. Books were well covered and both placements have been holding well above their respective placement price.

• China Mengniu Placement - Danone’s Expected Exit - One and Done

• China Evergrande New Energy Vehicle Placement - The Selling Begins