ECM Weekly (22nd August 2021) - Biel Crystal, EDDA, Neusoft Xikang and Medical, CATL, RLC REIT

Events next week:

• Nuvoco Vistas IPO Trading - Tepid Demand

It has been a fairly slow week for Asia ECM but the deal pipeline is building up for a busy Q4. This week, we had eight India IPO filings with expected deal size of more than US$100m. Whereas in Hong Kong, more healthcare and AI tech companies, such as Samoyed, Medlinker, Sensetime, are getting closer to filing their draft prospectus with the exchange.

This week, we initiated on a handful of upcoming Hong Kong IPOs; Biel Crystal, EDDA, Neusoft Xikang, and Neusofit Medical are looking to raise up to US$2bn, US$300m, US$400m, and US$400m, respectively.

• Biel Crystal (伯恩光学) Pre-IPO - Cash Flow Generative Business but Underlying Trend Is Worrying
• EDDA Healthcare Pre-IPO - RoboDoc - Has Been Around for a While but Is Just Getting the Robo Going
• Neusoft Xikang (东软熙康) Pre-IPO: A Long Way to Profit
• Neusoft Medical Systems (东软医疗系统) Pre-IPO: Unattractive Fundamentals

For upcoming IPOs, RL Commercial REIT opened its books on Monday and closed on Friday with an expected debut date of 14th September. We think it should be able to trade in line with, at best, AREIT so to get some upside, the IPO needs to be priced at a discount.

• RL Commercial REIT IPO - Needs to Come at a Discount
• RL Commercial REIT and MREIT Peer Comparison - One Is Much Better Shape

Most IPO debuts this week such as, CarTrade (CARTRADE IN), Lotte Rental (089860 KS), Shanghai HeartCare Medical Technology (6609 HK), had been a disappointment, breaking IPO price on debut with the exception of Devyani International (DEVYANI IN).

• Cartrade Tech IPO Trading - Decent Demand but It Remains Expensive
• Devyani IPO Trading - Strongest of the Lot
• Lotte Rental IPO Trading - Good 1H21 Results, but Relatively Pricey
• Heartcare (心玮医疗) IPO Trading: Risk-Off for Institutional Investors

Placement activity is also looking up. Daiwa House Reit Investment (8984 JP) and Obic Business Consultants (4733 JP) launched their bookbuilds this week and will be pricing on the 24th and 30th of August, respectively. We also took a brief look at fundamentals and deal dynamics of CATL (A) (300750 CH)'s planned US$9bn placement, which will still need shareholder and CSRC approval before it can launch.

• Daiwa House REIT Placement - A Little Late for Its Annual Offering but Still an Accretive One
• OBIC Business Consultants Placement - Large Deal Needs a Large Correction - Remains in Transition
• CATL (宁德时代) Placement - Back in the Market Again to Fund Expansion
• Steadfast Group Placement - An Immediately Accretive Acquisition

Pipeline is also building up as there are news of Prudential PLC (2378 HK), Samsung Heavy Industries (010140 KS), Synergy Grid & Development Philippines (SGP PM) and PH Resorts Group (PHR PM) looking to launch their respective share sale soon.