ECM Weekly (28th March 2021) - Bairong, Bilibili HK, Linklogis, Energy Monster, Zhihu, Monde Nissin

In Hong Kong, Bairong (1569395D CH) closed a day earlier and was priced at the top end, raising HK$3.94bn (US$508m). Bilibili Inc (9626 HK) raised US$2.6bn at HK$808 per share. Bilibili will list on Monday while Bairong on Wednesday.

• 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
• 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
• Bilibili Secondary Trading - Hot Demand, Baba Takes Another Bite, but Still Set for a Weak Listing

Tencent-backed Linklogis (LINK HK) launched its IPO on Friday and boasts an impressive cornerstone line-up. The deal will price this coming Wednesday:

• 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
• Linklogis IPO - Pricey for a Reason

We also looked at two upcoming Hong Kong biotech IPOs, namely Shanghai Bio-Heart Biological Technology (BHT HK) and Kindstar Globalgene Technology (1868874D HK) :

• Shanghai Bio-Heart (上海百心安) Pre-IPO: Needs a Long Runway
• Kindstar (康圣环球) Pre-IPO: Issues with Scalability
• Kindstar (康圣环球) Pre-IPO: Is It Worth the Premium?

In the US, China ADRs have been hammered in the past week due to the Holding Foreign Companies Accountable Act by the SEC. Sumeet addressed the market’s knee jerk reaction and how the sentiment might have been exaggerated in the note:

• China ADRs - SEC Notice - Instead of Three, Probably Have Four Years till 2025 - Correction Overdone

Affected by poor sentiment, Zhihu Technology (ZH US) priced its IPO at the bottom end. Peers took another leg down on Friday on the back of rumors of education policies likely to be changed. Zhihu’s share price opened 15.3% below IPO price and went on to trade lower intraday. We published an update regarding a rumoured document. We thought the selldown for Zhihu was overdone.

• Zhihu (知乎) Pre-IPO - In the Early Stages of Monetization
• Zhihu (知乎): Censorship as Top Risk, May Follow Fate of Weibo
• Zhihu (知乎) IPO - Monetizing Curiosity
• Zhihu (知乎) IPO Trading - Peers Have Corrected Significantly but Still Has a Modest Upside
• Zhihu (知乎) IPO Trading Update - Peers Took Another Leg Down on the Back of Rumored Document

We also shared our thoughts on competitive landscape and valuation of Smart Share Global (EM US) :

• Smart Share Global (怪兽充电) Pre-IPO - Growing Fast and Is Profitable but Competition Is Picking Up
• Smart Share Global (怪兽充电): Rent A Power Bank on the Ground
• Smart Share Global (怪兽充电) Pre-IPO - Pulling Ahead in a Highly Competitive Landscape
• Smart Share Global (怪兽充电) Pre-IPO - Forecasts, Assumptions, and Valuation

The previous week, we initiated coverage on Monde Nissin Corp (0191881D PM), which is expected to raise US$1bn in its upcoming IPO in the Philippines. This week, we focused on the negatives of the company which can be found:

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

• Monde Nissin Pre-IPO - The Negatives - High Debt, Div Payments, Floundering MA

Kalyan Jewellers traded down 15% on its debut despite having a decently strong line-up of investors backing the deal, which included GIC. As per Sumeet’s earlier notes, this seemed to be a case of mispricing as we see no reason to pay an expensive valuation for company with no track record of any growth.:

• Kalyan Jewellers Pre-IPO - Strategy Missteps Led to Earnings Flatlining

• Kalyan Jewellers IPO - No Glitter

• Kalyan Jewellers IPO Trading - Subdued Demand

On placements the past week, we covered Japan’s freee (4478 JP) placement, that was priced at the bottom end on 25th Mar 21:

• Freee Placement - Needs to Correct by a Whole Lot More