ECM Weekly (6th June 2021) - Kanzhun, Full Truck, Aihuishou, Angelalign, Del Monte PH, WM, Renesas

The ECM space continued to record a slew of placements this week.

Leading in deal size was Japanese semiconductor manufacturer, Renesas Electronics, looking to raise US$3.4bn via selling a mix of primary and secondary shares. Bookbuild began on Thursday and will close this Tuesday. Proceeds will be used to fund the acquisition of the UK’s Dialog Semiconductor and repay borrowings.

• Renesas Placement - Very Well Flagged, past Deals Have Done Well but Large Size Warrants Correction

In Hong Kong, undisclosed institutional investors sold about US$341m of shares in Evergrande Property Services right as lock-up expired on Wednesday. We flagged this earlier when China Evergrande Group sold shares in Evergrande New Auto last month.

• Evergrande Property Services (恒大物业) Placement - An Expected Selldown but Not from the One Expected

• Evergrande Property Services Lock-Up Expiry Trade - The Next One to Be Sold by Evergrande

Metals miner MMG raised US$302m from an upsized placement (up from US$220m). Books were multiple times oversubscribed, with the majority of demand coming from long-only investors. We thought the deal was opportunistic, the shares closed 5.06% below its deal price on Friday.

• MMG Limited Placement - Share near Highs Driven by Cooper Prices, Which Too Are at Highs

Warburg Pincus raised US$213m from a sell-down in Hygeia Healthcare. The stock has been holding up well, trading 1.5% above deal price.

• Hygeia Healthcare Placement - Past Deals Have Done Well but the Shares Are Now Very Expensive

In the A-share market, Intco Medical, released a pre-sell down disclosure which stated that its key shareholder and management plan to sell shares in the company. We discussed the implications of the sell-down on its planned US$1bn Hong Kong IPO.

• Intco Medical (英科医疗) A+H: A-Share Sell-Down a Red Flag

Other placements include C&D International Investment Group which raised US$121.5m to repay loans, expand land reserves, and for general working capital.

For potential placements, JD Health and PopMart are the two IPOs that will see their lock-up expire soon. In both IPOs, investors are sitting on handsome returns and could come to market to sell.

• Pop Mart Lock-Up Expiry - US$5bn Worth of Shares Will Come off Lock-Up

• JD Health (京东健康) Lock-Up Expiry - US$6.6bn Pre-IPO Shares Unlocked, Sitting on 400%+ Gain

For live IPOs, Kanzhun launched the terms of its bookbuild on Friday and drew interests from reputable financial investors, leaving roughly 60% of deal for other investors.

• Kanzhun IPO - Fast Growth, Strong Investor Support, Cash Flow Positive

In Hong Kong, Angelalign launched its US$375m IPO bookbuild on Thursday. Books were reportedly covered an hour later. The deal will price this Tuesday and trade on 16th June.

• Angelalign (时代天使) Pre-IPO: Medical device player with consumer feature

• Angelalign (时代天使) Pre-IPO: Deserves a Premium to Peers

• Angelalign (时代天使) Pre-IPO: A Strong Ending of 2020

• Angelalign (时代天使) IPO: A Hot Deal that Will Go Above Fair Value

CARsgen Therapeutics released the terms of its IPO and bookbuild will open on Monday. Shares will trade on 18th June. We covered the IPO earlier in:

• CARsgen (科济药业) Pre-IPO: Scientific bet on new CAR-T targets

• CARsgen (科济药业) Pre-IPO: Thoughts on Valuation

Following our coverage on WM Tech, Ming Lu went on the ground to discuss Wumart’s store locations and goods for sale in the supermarkets. WM Tech is aiming to raise US$1bn from its IPO.

• WM Tech Pre-IPO - Digitalization Efforts Coming Through but Not Well Substantiated

• WM Tech Pre-IPO: Wumart as Main Brand, Marginalized on the Ground

In the US, China's Uber for Trucks, Full Truck Alliance, which filed last week and has begun pre-marketing its US$1.5bn IPO.

• Full Truck Alliance Pre-IPO - The Positives - Category Leader

• Full Truck Alliance Pre-IPO - The Negatives - Still a Mixed Bag

We also initiated on pre-owned consumer electronics transactions and services platform, Aihuishou, which aims to raise US$1bn. JD.com, its largest shareholder, owns a 34.7% stake and other backers include Morningside and Tiger Global.

• AiHuiShou Pre-IPO - Mostly Positive - Pre-Owned but Well Loved

• AiHuiShou Pre-IPO - First Stab at Valuation

Zhangmen Education downsized its IPO deal size from the initial US$100m (placeholder) to US$47m amidst looming regulatory crackdown. We will not be covering the deal further.

• Zhangmen Education (掌门教育) - Leader in One-On-One Market but There Are Concerns

In the Philippines, we initiated on F&B producer Del Monte Philippines, which is looking to raise US$791m in its upcoming IPO. In our notes, we discussed the company’s business model and potential HoldCo trade for Del Monte Pacific Limited through this listing.

• Del Monte Philippines Pre-IPO - Dominant Market Leader But There Are Issues to Be Clarified

• Del Monte Pacific HoldCo Trade - Potential 50% Upside from DMPI IPO

Monde Nissin's debut had been lackluster, closing 0.7% below its IPO price, which was similar to past Philippines' IPO performance, as discussed in our trading update note.

• Monde Nissin Pre-IPO - The Positives - High Market Share, and Monde Nissin Pre-IPO - The Negatives - High Debt, Div Payments, Floundering MA

• Monde Nissin Pre-IPO - Peer Comparison for Food Business and Monde Nissin Pre-IPO - Peer Comparison for Meat Alternative Business

• Monde Nissin Pre-IPO - Thoughts on Valuation and Monde Nissin Pre-IPO - Not Cheap but Sensible

• Monde Nissin IPO - Might Not Be a High Flyer but Worth the Ride, Quorn Tastes Good

• Monde Nissin IPO Trading - Most Get off to a Slow Start, Peers Trading up Should Help