ECM Weekly (6 September 2020) - Ant Group, Blue Moon, Ming Yuan Cloud, A-City, Yum China

We were mostly busy with placements this week. Hong Kong alone had four placements, another two in Australia, and one coming soon in Singapore. They were a mix of primary and secondary placements, and considering how markets have traded towards the end of the week, these placements were timely. We covered them in:

• IOOF Placement - A Big Deal but Will Take Some Time to Complete
• Xero Placement - Founders Selling Down
• SMIC Placement - Not a Big Deal
• Xinyi Solar Placement - Opportunistic Raise but Outlook Remains Strong
• Venus Medtech (启明医疗) Placement - Already Has Ample Cash but Doesn't Hurt to Have More for R&D
• Wuxi Biologics Placement - Another One Before Lock-Up, but Just in Time for the Index Inclusion
• Asahi Group Placement - Quick Note - Needs to Correct Some More or Offer a Bigger Discount
• FCT Placement Early Look - Taking a Big Bite, It Will Soon Be the Only Pure Play SG Suburban Play

For IPOs, next week, Nongfu Spring (9633 HK) and Yum China Holdings Inc (9987 HK) will start trading in Hong Kong. Recall that valuation for Nongfu wasn't cheap by Sumeet Singh's assessment but investors get what they pay for; a reputable and stable business. Further to that, considering the lack of close comps, it will be interesting to see where it eventually trades at. Whereas, Yum China's bookbuild closed early, suggesting strong demand.

• Nongfu Spring IPO - Not Cheap by Any Measure but Is a Quality Name
• Yum China HK Listing - Relatively Bigger, Should Offer a Bigger Discount

For upcoming IPOs, China Resources property management arm, CR Mixc Lifestyle, and Cheerwin Group filed for their draft prospectus for expecting to raise about US$1bn and US$300m in their IPO, respectively. We are also hearing Ant Financial (1051260D CH) is looking to seek approval by the end of the month whereas Ming Yuan Cloud Group (MYCG HK) has sought approval on Friday. There were also news that Didi Chuxing is considering a Hong Kong IPO that could raise up to $500m.

• Ant Group (蚂蚁集团) Pre-IPO: Things to Clarify/Questions to Ask - Falling Fees, Margins, Cash Flow
• Ming Yuan Cloud (明源云) Pre-IPO - Leaning on Regional Partners for Growth but Hefty Commissions Paid
• Blue Moon Group Pre-IPO - Initial Thoughts on Valuation
• A-City Group (雅居乐雅城集团) Pre-IPO - Strong Growth, Relatively Poorer Visibility

In Malaysia, we are hearing that MR D.I.Y. Group (1706769D MK) will be pre-marketing its IPO next week. We have covered the IPO earlier in and we will share our thoughts on the updated filing when it is available. In Thailand, there were reports that SCG Packaging (SCGP TB) is targeting to launch its US$1.5bn IPO next month.