ECM Weekly (4 July 2020) - Smoore, Ocumension, Zhenro Services, Archosaur Games

It was another week of mad IPO rush in Hong Kong. This week alone, nine IPOs, with deal size more than US$100m, launched their bookbuilds and, out of the lot, we thought that Ocumension Therapeutics (1477 HK), Smoore International (6969 HK), Zhenro Services (6958 HK), and Archosaur Games (9990 HK) looked promising. Read more in:

• Ganglong China Property IPO - Rapid Earnings Growth Has Been Putting Balance Sheet Under Stress
• Smoore Intl (思摩尔国际) IPO: Upside in the Absence of Global Investors, Stock Connect in 2021
• Zhenro Services (正荣服务) - Decent Upside at the Low-End of Price Range
• Ocumension (欧康维视) IPO: Hot Deal, Small Float
• GreenTown Management Holdings (绿城管理) IPO - Cheap for a Reason
• Shandong Fengxiang IPO - Looks Cheap but Is at Peak Margins
• Cathay Media (华夏视听) IPO: The Repackaging & Valuation
• China Bohai Bank (渤海银行) IPO - Youngest but Not the Best of the Lot
• Archosaur Games (祖龙娱乐) IPO - Reasonable Valuation for a Quality Developer

Aside from IPO launches, there was also a surge of new application proofs filed with the HKEX. The list of new filings is included further below in this note. There was also news flow of other potential listings such as Hangzhou Wahaha Group, a China F&B giant, seeking US$1bn in its Hong Kong IPO and Baozun Inc. (BZUN US) was the latest US ADR to mull a Hong Kong secondary listing.

On the other hand, US ADR listings doesn't seem to be doing too well. DoubleDown Interactive Co Ltd (DDI US) was reported to have pulled their IPO while Royole, a China flexible display producer which was initially looking to list in the U.S, is now mulling a China listing instead.

That said, we are finally seeing some of ECM activity spill over into Southeast Asia as we get more updates on upcoming IPOs. In Philippines, Ayala Land Inc (ALI PM) has started gauging demand for its REIT IPO. Warburg Pincus-backed Converge ICT, which was expected to raise US$700m, has filed its prospectus with the Philippines securities exchange.

Whereas in Thailand, we may start to see more IPOs coming to market or reviving their plans to list after the strong performance of Sri Trang Glove's listing. The shares closed 67% higher than its IPO price on the first day then trade well and closed the week almost 100% higher.

• Sri Trang Gloves IPO Trading - Riding on COVID-19 Second Wave

Placements this week:

• Wuxi Biologics Placement - This Time It's Different
• China Jinmao (中国金茂) Placement - Sinochem's Participation Helps and Past Deals Have Done Well