ECM Weekly (21st March 2021) - Bairong, Bilibili HK, Energy Monster, Zhihu, IDP Edu, Ming Yuan Cloud

Hong Kong had a busy week. Bairong (1569395D CH) launched its bookbuild on Thursday this week and books were covered after the first day despite the lack of support from reputable names in the cornerstone list.

• Bairong Pre-IPO - PHIP and Valuation Updates - Better 4Q20, but Client Data Isn’t as Encouraging
• Bairong Pre-IPO - Earnings Forecast, Peer Comparison and Valuation
• Bairong IPO - Decent Valuation Probably Weighed Down by Regulation

For secondary listings, Bilibili Inc (9626 HK) launched bookbuild to raise about US$2.8bn and books were covered,as per news reports. Baidu (9888 HK)'s secondary listing, which opened books last week, was said to be priced at HK$252 per share and will list this coming Tuesday.

• Bilibili Secondary Listing - Volatile but Should Be Hot
• Bilibili Secondary Listing Early Look - Will Probably Be More like JD and NetEase
• Bilibili Secondary Listing Early Look - 4Q20 Results Quick Note.
• Baidu Secondary Listing - Smaller than Expected, Doing the Bare Minimum

For other upcoming IPOs, Linklogis (LINK HK) is said to have won HKEX approval and will be starting its pre-marketing this coming Monday. We have covered the IPO earlier in:

• Linklogis Pre-IPO - The Positives - Fast Growing Blockchain Driven Supply Chain Financier
• Linklogis Pre-IPO - The Negatives - Inconsistent Growth and Margins, Well Funded Competitors
• Linklogis Pre-IPO - Earnings Forecast, Peer Comparison and First Stab at Valuation

We also initiated coverage on Monde Nissin Corp (0191881D PM)'s IPO, which is expected to raise about US$1bn.

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

In the U.S., Tuya Inc (TUYA US) went through a speedy IPO process. It launched its books on Monday, closed it a day later, and was already listed by Thursday. Its successful debut continued the Asia ADR (including Coupang) win streak. It debuted 28% higher but closed just 19% above IPO price. The strong sentiment should bode well for other upcoming China ADRs like Zhihu Technology (ZH US) and Smart Share Global (EM US) (also known as Energy Monster).

• Smart Share Global (怪兽充电) Pre-IPO - Growing Fast and Is Profitable but Competition Is Picking Up
• Zhihu (知乎): Censorship as Top Risk, May Follow Fate of Weibo
• Tuya (涂鸦智能) IPO Trading - Strong Momentum but Watch Out for the Post Debut Fizzle
• Tuya (涂鸦智能) IPO - Pushing for a Pricey Connection

Placements in Asia this week were scattered across different countries. There was a long-dated Japan international follow-on offering by Change Inc (3962 JP) and Carlyle's overnight partial selldown of their stake in SBI Cards & Payment Services (SBICARD IN).

We also think that there will likely be blocks sold by shareholders of Tencent Holdings (700 HK), Ming Yuan Cloud Group (909 HK) and IDP Education (IEL AU).

• Tencent Placement Lock-Up Expiry - Block and Buyback Linked Holdco Trade Update
• IDP Education Placement Early Look - US$800m Block a Given in 2021
• Ming Yuan Cloud (明源云) Lock-Up Expiry Trade Idea - A Chunky Potential
• Change Inc. Follow-On Offering - Ambitious Change
• SBI Cards Placement - No Surprise