ECM Weekly (2 August 2020) - ByteDance KE Holdings, Tigermed, Jinke Svcs, Li Auto

For Hong Kong IPOs, Nongfu Spring (NON HK) got approved from the China Securities Regulatory Commission (CSRC) to launch its IPO. Sumeet Singh and Ming Lu have already covered the company in detail:

• Nongfu Spring (农夫山泉) IPO: Bottle Size Matters, Photos on the Ground
• Nongfu Spring (农夫山泉) IPO: Beverage for the Young, In-Store Photos
• Nongfu Spring Pre-IPO - First Stab at Valuation
• Nongfu Spring Pre-IPO - Peer Comparison - Superior Margins and Growth
• Nongfu Spring Pre-IPO - The Positives - Leaves One Thirsty for More
• Nongfu Spring Pre-IPO - The Negatives - Doesn’t Need to List or Expand Production Facilities

As for next week, there will only be the Hangzhou Tigermed Consulting (H) (3347 HK)'s H-share listing which Ke Yan, CFA, FRM shared his thoughts on valuation and A-H premium.

• Tigermed (泰格医疗) A+H: Past A+H Listings Suggest Upside Might Be Limited

There were also news reporting that WeDoctor (1737089D HK) is likely to delay its HK IPO to early next year and is considering a private fundraising round before the IPO whereas Wumart has just picked bankers and it is looking complete its US$1 - 2bn IPO, possibly before the end of this year. Our coverage of other upcoming IPOs this week:

• RemeGen (荣昌生物) Pre-IPO: Top-Notch R&D Capability and a Strong Team
• ByteDance (字节跳动) Pre-IPO: Global Ambition Meets Regulatory Challenges
• Toplist China Pre-IPO - Overwhelmingly More Negatives than Positives
• Jinke Smart Services (金科智慧服务) Pre-IPO - GFA Growth at the Expense of Fees

In the U.S., China ADR listing pipeline is still looking busy. This week, Li Auto Inc. (LI US) closed its books early and started trading on Thursday, a day ahead of its stipulated timetable. The company traded well, closing 43% above its IPO price on the first day, and managed to hold onto the gains as of Friday's close. We shared our thoughts on valuation:

• Li Auto (理想汽车) Trading Update - No Mention of Hillhouse's Investment
• Li Auto (理想汽车) IPO - Worth a Ride, at the Low -End

Coincidentally, various news sources were also reporting that Xpeng Motors, another Chinese EV car maker, is looking to list in the US in August and will likely be looking to raise up to US$700m. Sumeet Singh also shared this thoughts on another large (~US$2bn) upcoming US IPO, KE Holdings Inc (BEKE US), the owner and operator of Lianjia and Beike.

• KE Holdings/Beike Pre-IPO - The Positives - Fast Growth, High Market Share
• KE Holdings/​Beike Pre-IPO - The Negatives - Questions, Margins, P2P

Last, but not least, we will also be keeping a close eye on REIT listings in Philippines and India. Mindspace Business Parks REIT (MBP IN) and Areit (AREIT PM) will debut in about two weeks' time and these listings will go on to set the stage for future REIT listings in their respective countries. In fact, in India, we are already hearing that Brookfield Asset Management is planning a US$500m India REIT listing.

Placement coverage this week:

• Wuxi Apptec (药明康德) Placement: Well-Flagged Deal in the Hot Sector
• Industrial and Infra REIT Placement: Cheap Purchase Aids DPU Accretive
• Perpetual Placement: Attractive Discount and EPS Accretiveness
• Waypoint REIT Placement - Charterhall Selling After 5 Months of Ownership