ECM Weekly (20 Oct 2019) - China Feihe, Metro Pac Hospital, Onsite Rental, CMGE Tech

This week, we welcome Ming LU to the Aequitas Research team with his debut on-the-ground research on China Feihe (FEIHE HK)'s upcoming IPO! He visited a local supermarket and shared his thoughts on Feihe's product and the local sentiment. Ming Lu will continue to cover China tech companies and work closely with us

• Feihe IPO: Actively Promoted in Supermarkets, Some Concerns on Industrial History

Complementing Ming Lu's research, Ke Yan, CFA, FRM looked at the company from a quantitative perspective, comparing it with peers, and gave his thoughts on valuation.

• China Feihe (中国飞鹤) IPO: Peer Comparison and Thoughts on Valuation

Overall, Hong Kong IPOs are going full steam ahead in Q4. Languang Justbon Services (2606 HK) closed 15% above its IPO price on debut (way better than our expectation), riding on positive sentiment of recently listed smaller IPOs and the general outperformance of the HK-listed property management companies of late.

We are also hearing that JS Global Lifestyle (JSG HK) and ESR Cayman (ESR HK) will launch their bookbuilds on Monday. JSG is looking to raise about US$400 - 500m while ESR is likely launching a US$1.3bn deal size with about the same deal size as before (in June). Other than that, CMGE Tech (CMGE HK) launched its US$166m IPO bookbuild this week with some interesting cornerstone investors and we heard that books were already covered. Megvii is also said to be targeting to list by the end of the year despite the recent U.S. blacklist souring sentiment.

• CMGE Tech (中手游) IPO Review - Back in Homeland After a Long Wait

In the Philippines, Metro Pacific Hospital Holdings Inc (HOSP PM) which was stipulated to list in November, put its IPO on hold just when we published our early thoughts on valuation the same day. The company sold about 42.5% stake to a KKR-led consortium. ECM in the country is looking active with Cal-Comp Tech (Philippines) (CCTP PH) being approved for a US$180m IPO up from its earlier expected deal size of US$120m.

• Metro Pacific Hospitals Pre-IPO Review - Early Thoughts on Valuation
• Cal-Comp Tech (Philippines) Pre-IPO Review - Muted Growth in Core Products

In Australia, unlike other countries, momentum has yet to build up despite the pipeline of IPOs coming to the market. Latitude Financial Services (1272471D AU) was pulled even after cutting its IPO price by 11% ahead of its bookbuild. Valuation was still expensive compared to peers like FlexiGroup. So far, we have yet to hear anything ahead of PropertyGuru (PGU AH) bookbuild but Onsite Rental (ONSITE AU) is already prepping up for its IPO.

• PropertyGuru IPO - Agents Q&A Shows Its Stranglehold in S'pore; Throws up Some Interesting Nuggets
• Onsite Rental IPO - Still on the Acquisition Led Growth Path, Despite the Recapitalisation

In India, we are hearing that SAMHI Hotels is pre-marketing its US$350m IPO and looking to launch Q1 2020 and Equitas Holdings Ltd/India (EQUITAS IN) appointed JM Financial, IIFL and Edelweiss Financial, for the Equitas Small Finance Bank’s IPO.