ECM Weekly (20th June 2021) - Didi, Nayuki, Soulgate, Hutchmed, Full Truck, CTOS, Cloud Village

It has been a busy week in the ECM space.

For ongoing/live IPOs, in the U.S, Chinese freight-as-a-service provider, Full Truck Alliance, launched its bookbuild on Wednesday and closed a day earlier on the back of strong demand. It had obtained indications of interest for up to 40% of the total deal. Pricing is expected to come in on Monday, after the US market closes.

• 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

• Full Truck Alliance IPO - Decent Investor Line-Up, at Best a Punt at These Valuations

Soulgate Inc, which operates Soul app, an algorithmic-driven online social playground, launched its US$198m IPO bookbuild. Shares will trade on Thursday.

• Soulgate Pre-IPO - Unsustainable Virtual Connection

• Soulgate IPO - MIHOYO Could Change the Game, Worth a Bet

In Hong Kong, Nayuki, launched its US$656m bookbuild this week. Books will close on Wednesday and shares will debut on 30th June.

• 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

• Nayuki (奈雪) IPO - Not Cheap but Should Still Do Well

US and London-listed bio pharma company, Hutchmed (China), launched its bookbuild for its US$590m Hong Kong secondary listing. The deal will price on Wednesday and debut on 30th June. We covered the firm’s earlier attempt to list back in 2019:

• Hutchison-China Meditech (和黄医药) H-Share Listing: MNC Partnerships Endorsed Its R&D Capabilities

• HCM Secondary Listing: Not a Good Performer

Chinese property management company, Yuexiu Services, also launched its US$300m bookbuild on Tuesday. Books were reportedly covered. The deal will price on Monday and debut on 28th June.

• Yuexiu Services (越秀服务) IPO - Interesting but Not Outstanding

For upcoming IPOs, in Hong Kong, medical devices company, Zylox-Tonbridge, and ophthalmic medical services group, Chaoyu Eye Care, began pre-marketing their respective US$400m and US$300m IPOs.

• Zylox-Tonbridge (归创通桥) Pre-IPO: Competition Is the Key Concern

• 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

Shanghai Bio-Heart, a medical devices provider, is currently pre-marketing its US$300m IPO as well. The firm manufactures devices to treat artery diseases and hypertension. We covered the deal earlier.

• Shanghai Bio-Heart (上海百心安) Pre-IPO: Needs a Long Runway

Kindstar Globalgene Technology, an independent esoteric clinical testing service provider has also begun pre-marketing its US$400m IPO. Pre-marketing will end on Wednesday and we have covered the deal earlier:

• Kindstar (康圣环球) Pre-IPO: Issues with Scalability

• Kindstar (康圣环球) Pre-IPO: Is It Worth the Premium?

Chinese beauty brand e-commerce service provider, eBeauty Holdings, and Chinese biotech company Brii Biosciences, are both seeking listing approval for their respective US$600 and US$400m IPOs, respectively.

• Brii Biosciences (腾盛博药) Pre-IPO: A Hopeful Tackle on HBV

Other HK IPOs seeking listing approval include real estate developer, Sanxun Holdings Group, property management company, Ling Yue Services, and automobile dealership, BetterLife Services. They are each looking to raise US$100m, US$100m, US$150m, respectively.

We also continued our coverage on Didi’s expected US$10bn IPO with a competitive outlook note. We took a look at segment margins for its main and international business.

• 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

• DIDI (滴滴) Pre-IPO: Competitive in Car Hailing, Uncompetitive In “Others”, Generally Valuable

Following our ongoing coverage of fresh food retailers, Dingdong Maicai and MissFresh, where both are seeking a US$500m IPO each, Ming Lu went on the ground to compare these two peers with Meituan as well.

• Dingdong Maicai Pre-IPO - Increasing Market Share, Fast Growth but No Signs of Profit

• Missfresh Limited (每日优鲜) Pre-IPO - Worrying and Unsustainable Trend

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

• Dingdong (叮咚买菜): Fresh Food Competition in and Outside of Frontline Warehouse

For initiation coverage, we looked at LinkDoc Technology, a medical data company backed by Alibaba Health. The company filed earlier this week and has begun pre-marketing.

• LinkDoc (零氪科技) Pre-IPO - Intricately Embedded in the Oncology Industry

Also in the U.S, we initiated on Chinese boutique hotel operator, Atour Lifestyle’s which was said to be looking to raise US$300m.

• Atour Lifestyle Holdings Pre-IPO - Visible Growth, Resilient Operations

In Hong Kong, we initiated on music streaming service, Cloud Village (Netease Music). It is expected to raise about US$1bn. The firm boasts a strong lineup of backers which includes Baidu, Alibaba, Yunfeng Capital and Boyu Capital.

• Cloud Village (NetEase Music) Pre-IPO - Was in the Slow Stream, Playing Catch-Up

In Malaysia, Creador-backed credit reporting agency, CTOS Digital managed to secure strong participation from 20 cornerstones for its US$291m IPO. The deal size is a step up from the initial planned US$150m. The deal will come later this month.

• CTOS Digital Pre-IPO - Credit Where Credit’s Due

For debuts, IPOs in Hong Kong flopped. China Youran declined as low as 21% below its IPO price before recovering to close 11% below. CARsgen did slightly better. It opened about 10% below IPO price, clawed back most of its lost grounds intraday before closing 8% below. Things were better in the U.S, AiHuiShou closed 22.9% higher on its Friday debut.

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

• AiHuiShou IPO Trading - Probably Close to Fair Value but Has a Long Runway

• CARsgen (科济药业) IPO Trading: Not Likely a Pop on Debut

• China Youran Dairy(悠然牧业) IPO Trading - Weak Demand

Credits to Clarence Chu for helping with the note.