ECM Weekly (22 Mar 2020) - ByteDance, Topsports, Budweiser, Innocare, Shanghai Henlius

Even though global markets are still volatile, Asia Pacific IPO pipeline is still looking optimistic if things turnaround later this year as we are still getting news of companies looking to IPO.

In Hong Kong, there were news reporting that Blue Moon, Hillhouse-backed liquid detergent maker, is in the process of picking banks for their upcoming IPO. The deal size is expected to be about US$1bn. Cathay Media, TV programmes and films distributor and producer, has also re-filed for a Hong Kong IPO in hopes of market turnaround in the near term as it is aiming to list in 2Q 2020. Nongfu Spring, one of China’s biggest bottled water and beverage companies, has filed an application with CSRC for approval to raise at least US$1bn in its Hong Kong IPO. Last, but not least, InnoCare Pharma Ltd (9969 HK) is braving the volatile market to list with a handful of hedge funds backing the company as cornerstone investors. It will be interesting to watch how this trades. Ke Yan, CFA, FRM shared his thoughts in:

• InnoCare (诺诚健华) IPO Trading: At the Mercy of Retail Flipping

In Thailand, sentiment hasn't been great especially after Central Retail (CRC TB) share price continued to collapse after a brief respite. There were reports that SCG Packaging (SCGP TB) will delay its IPO due to market conditions but the company has yet to confirm the news. That said, Thai Life Insurance has requested pitches from banks for a potential US$700m IPO. The process is still in the early innings and details of the IPO can still change.

In Philippines, Converge ICT Solutions, an internet service provider which counts Warburg Pincus as an investor, was said to have hired Morgan Stanley, UBS, BDO Capital and BPI Capital to work on an IPO of around US$500m. If markets turnaround, it will look to IPO in 2H of 2020.

In the US, there were reports that Xpeng Motors, backed by Alibaba Group and count IDG and Hillhouse as investors, has invited banks to pitch for a potential US$1bn IPO. However, it hard to imagine how the market would react to the deal especially after NIO Inc (NIO US)'s disastrous performance post-IPO. The company was last said to be valued at almost US$4bn.