ECM Weekly (4th July 2021) - Xpeng, Medbot, Medlive, Brii Bio, CTOS, LinkDoc, Devyani, Manycore

We still have a few more trading debuts next week Zylox-Tonbridge Medical Technology (2190 HK) will trade on Monday, Chaoju Eye Care Holdings (2219 HK) and Xpeng (XPEV US) HK on Wednesday, and Keymed Biosciences Inc (2162 HK) on Thursday.

But, new Hong Kong IPO filings was all the rage this week because 30th June was the last day for applicants with audited financials as of December 31, 2020 to file. There were 29 filings this week with 15 done on 30th June alone.

Notable filings include AIM Vaccine (US$1bn), the largest privately owned vaccine company in China, APM Monaco (US$500m), a popular fashion jewelry company backed by TPG, Adicon (US$400m), a Carlyle-backed laboratory services provider in China, and Arrail Group (~US$200m), Temasek-backed dental service provider in China.

For live/ongoing IPOs, in Hong Kong, biotech/healthcare deals are running hot. Medlive Technology (2192 HK) is looking to raise up to US$543m with Tencent, Fidelity, GIC, OrbiMed among its cornerstone investor line-up. Particularly, Tencent's participation could be game-changing. The company will price this coming Wednesday and debut on 15th July.

• Medlive (医脉通) IPO: Candidate for Multi-Bagger

Brii Biosciences (2137 HK) opened books to raise up to US$320m. We think valuation is reasonable and the cornerstone line-up is strong. The company will price this coming Tuesday and debut on 13th July.

• Brii Biosciences (腾盛博药) IPO: Not a Demanding Valuation for Its Differentiation

Kindstar Globalgene Technology (9960 HK) is looking to raise US$285m. The company also boasts a few reputable institutional investors as cornerstone but we think the company is fairly valued and competition is tough. The company will price this coming Thursday and debut on 16th July.

• Kindstar Globalgene (康圣环球) IPO: Fairly Valued for a Questionable Moat

In Malaysia, CTOS Digital (1054055D MK) launched its bookbuild to raise up to US$291mb, bumped up from the initial US$150m deal size owing to strong demand. The company boasts a long line of reputable investors as cornerstone. We heard books were covered at launch and closed on Friday, well ahead of its 6th July target. The company will debut on 19th July.

• CTOS Digital IPO - Market Leader, Strong PE Record and Cornerstone

Lastly, in the U.S, LinkDoc (LDOC US) launched its US$211m bookbuild which was still well above our initial valuation exercise. IPO valuation puts it 92% higher than its Series D valuation which was completed in February 2021. The company will debut on 9th July.

• LinkDoc (零氪科技) Pre-IPO - Thoughts on Valuation
• LinkDoc (零氪科技) IPO - Revised Thoughts on Valuation

For new initiations and ongoing coverage,in Hong Kong, we initiated on Transcenta Holding (THL HK), a clinical-stage biopharmaceutical company backed by Temasek and Hillhouse among pre-IPO investors. The company was said to be pre-marketing its US$200m IPO.

• Transcenta (创胜) Pre-IPO: Buy the Experienced Team

Acotec Scientific Holdings (ASH HK) is also pre-marketing its US$300m. The company is a leading peripheral-vascular interventional device company in China with an early mover advantage.

• Acotec (先瑞达) Pre-IPO: Early Mover Advantage in Peripheral DCB

We also initiated on MicroPort Medbot, a surgical robot company. The company is looking to raise about US$1bn but it is in pre-revenue stage and there is strong competition coupled with low penetration of robot-assisted surgeries in China

• MicroPort MedBot Pre-IPO - RoboDoc - Pre-Revenue, Has a Large Competitor but a Large Market as Well

We continued our coverage on EBeauty Holdings (1894926D HK) which had filed its PHIP documents late June and was said to be looking to raise about US$500m. Peer comparison showed worrying underlying trends despite its high profit margins.

• EBeauty Holdings (悠可集团) Pre-IPO - PHIP Updates and Peer Comparison
• EBeauty Holdings (悠可集团) Pre-IPO - Largest E-Commerce Enablement but Competition Is Intensifying

In India, we initiated on Devyani International (6590204Z IN), Yum Brand’s largest franchisor in India, which is looking to raise about US$200m. There are lots to like about the company. However, unlike Burger King India, it isn't the sole franchisor for Yum in India.

• Devyani Pre-IPO - Might Not Do Another Burger King India but Should Be Good

In the U.S, we looked at the newly filed Manycore Tech (KOOL US), which was world’s largest platform for 3D interior design, decoration and construction, as per iResearch. The company is looking to raise at least US$100m and is backed by IDG, GGV and Hillhouse.

• Manycore Tech Pre-IPO - High but Declining Market Share

Halting/deferring IPOs seem to be more common than before in the U.S. Atour Lifestyle Holdings (ATAT US)'s IPO was halted but not pulled, according to Chinese news sources. But we haven't heard guidance on when it will debut.

Overall, China ADR ECM situation is in an awkward place. Full Truck Alliance (YMM US), despite its strong debut, collapsed through IPO price a week later and it is back to IPO price on Friday. DiDi Chuxing (DIDI US) opened strong, pared its gains by the end of its debut but is still holding up. But on Friday there were news reports that Didi is under investigation and has stopped new account registration. Then, there was Missfresh (MF US)'s rush to IPO which led to disastrous first week performance but Dingdong Maicai (DDL US) managed to do well due to its downsized IPO but liquidity was abysmal.

For placements this week, in Korea, STIC sold its remaining stake in HYBE (352820 KS) which has managed to hold up well for the week. In Japan, GLP J-REIT (3281 JP) is looking to raise US$230m to acquire four assets.

• GLP J-REIT Placement - Almost All the past Deals Have Done Well but Shares Are at an All Time High
• Hybe Block/Placement - Big Block for Big Hit