ECM Weekly (24 November 2018) - Koolearn, IDreamsky, Tongcheng, Babytree, Fosun Tourism, Wuxi Apptec

Before the IPO rush even started, the market has already claimed two victims in the ECM space. This week, we heard that Sinochem Energy (1644249D HK) has put its listing preparation on hold in light of recently dampened market and oil price decline. Heathley Healthcare REIT (HHR AU)'s IPO was also put on hold, citing poor market sentiment. Australia IPOs have been quite consistent this past two years. That is, consistent in launching their IPO and getting it pulled before it trades.

Next week there will finally be two IPOs, Tongcheng-Elong Holdings Ltd (780 HK) and Babytree Group (1761 HK), debuting in Hong Kong. Babytree was priced at the low end while Tongcheng managed to price slightly above the low end. Tongcheng's institutional and retail books were slightly oversubscribed, suggesting poor sentiment but its share price rose to close at HK$11.32 on PhilipMart's gray market trading, 15.5% above IPO price.

In deal approvals, we heard that Xinyi Energy is gauging demand for its IPO while iDreamsky and Natural Food are set to open their IPOs book build on Monday and Tuesdau respectively. Beijing Hujiang which is a close competitor to Koolearn has also been approved and filed its PHIP on HKEX with Koolearn.

Meanwhile, in the US, Tencent Music Entertainment (TME US) is said to be planning for a December IPO after delaying its IPO last month. A Chinese article circulating on WeChat said that the company is raising less than US$1bn and it is aiming for a US$22 - 25bn valuation. Mogu (MOGU US) has also set its IPO terms of 4.75m ADS at US$14 - 16 per share. That will imply a US$76m deal size, down from the initial guided deal size of US$200m. The company said in its update F-1/A filing that JD.com Inc (ADR) (JD US) will buy US$30m of shares in Mogu through either a concurrent placement or from the IPO.