ECM Weekly (19th September 2021) - PHC, StarHealth, TDCX, Biel Crystal, DRCBank, Transcenta, Broncus

Events next week:

There was a mix of good and bad news this week in the APAC ECM space this week. Starting with the good, Hyundai Heavy Industries (329180 KS) ended its first trading day 85% higher on the back of one of the best subscription rates among Korean IPOs even though we thought valuation was too expensive compared to peers.

• Hyundai Heavy IPO Trading - One of the Strongest Demand but KSOE Is Not Budging

But, other Korea IPOs may not be as fortunate. In light of the regulatory backdrop, Kakao Pay (377300 KS) may its IPO again whereas Simone Accessories Collection (381920 KS) which we covered this week, has pushed back its bookbuild dates to mid October.

• Simone Pre-IPO - A Leader in the Industry but Recovery Will Be Slow and Blackstone’s Stake Weighs

Japan IPOs aren't looking great either. Our further analysis on PHC Holdings (6523 JP) suggest that the company doesn't standout compared to peers, neither did valuation make much sense given that it seemed to be a messy amalgamation of various unsynergetic businesses.

• PHC Holdings Pre-IPO - Peer Comparison
• PHC Holdings Pre-IPO - Thoughts on Valuation

In Hong Kong, Dongguan Rural Commercial Bank (DRCOBZ HK) opened its books on Friday and will be pricing on this coming Thursday. Shares will trade on 29th September. As with many Chinese banks that came before DRC Bank, valuation is unappealing.

• Dongguan Rural Commercial Bank IPO - Mind the Valuation Gap

There were two other biotech IPO launches in Hong Kong as well, Transcenta Holding (6628 HK) and Broncus (2216 HK). The latter's bookbuild saw strong demand, closing a day earlier and pricing at the top-end. They will debut on 29th September and 24th September (coming Friday), respectively.

• Transcenta (创胜) IPO: Fairly Valued Despite Downsizing
• Broncus (堃博医疗) Pre-IPO: Thoughts on Valuation
• Broncus (堃博医疗) IPO: Long Term Faith Needed

For upcoming IPOs, it was reported that ANE Logistics (1292621D CH) has won HKEX approval and will be pre-marketing its IPO this coming week. We also continued our coverage on Biel Crystal (0924581D HK), comparing the company to other Apple suppliers.

• ANE Logistics Pre-IPO - Margins Expanding but Appears to Be Falling Behind
• Biel Crystal (伯恩光学) Pre-IPO - Industry Landscape & Peer Comparison - Auto Is the Wildcard

In India and US, we initiated on Star Health (7584769Z IN) and TDCX (TDCX US). The former is looking to raise about US$1bn while the latter is targeting a US$400m IPO.

• Star Health Insurance Pre-IPO - Leading the Retail Healthcare Insurance Space
• TDCX Inc. Pre-IPO - Past Growth Looks Good, the Rest Is Iffy, Including the Founders S$325m Payout

Last but not least, tearsheets for upcoming IPOs:

• Laowang Holding Pre-IPO Tearsheet (Hong Kong)
• TDCX Inc. Pre-IPO Tearsheet (US)
• Healthium Medtech Pre-IPO Tearsheet (India)
• CE Info Systems (MapmyIndia) Pre-IPO Tearsheet (India)
• Tamilnad Mercantile Bank Pre-IPO Tearsheet (India)

It was a fairly busy week in the placement space too for Australia and Japan. The most notable one would be Demae-Can Co., Ltd. (2484 JP)'s massive dilution which raised more than US$700m. Share price ripped higher the day after the announcement of the placement but it is currently sitting right on deal price.

• Worley Placement - Selldown by Jacobs but Could Be a Tough One to Digest
• Vulcan Energy Placement - Strong Momentum, Favorable Deal Dynamics
• Demae-Can Placement - Massive Dilution to Pursue Market Share