ECM Weekly (7 June 2020) - JD & NetEase HK Bookbuild, Burning Rock & Nongfu Spring Valuation

Hong Kong ECM is looking even busier than next week. This week we got the bookbuild launches of NetEase Inc (NTES US) and JD.com Inc (ADR) (JD US)'s secondary listings in Hong Kong. NetEase will list next Thursday (11th June) while JD will list the Thursday (18th June) after.

• JD Secondary Listing - Early to File but Late to Launch Puts It in a Peculiar Position
• NetEase Secondary Listing - Doing a BeiGene Rather than a Baba, Risk Reward Shifting
• NetEase Secondary Listing - Relatively Bigger than Baba, Should Offer Relatively Bigger Discount

We are also hearing that Hygeia (US$300m) and Immunotech (US$100m) have sought for listing approvals on Thursday and Bohai Bank is trailing closely, seeking approval next week. We covered these companies earlier in:

• Hygeia Healthcare (海吉亚) Pre-IPO: The Making of Jinxin in the Oncology Segment
• Immunotech Biopharm (永泰生物) IPO: Challenges for Cellular Immunotherapies

There are also a number of lock-up expiry events coming up this month, from listings earlier this year/December last year. We had a look at these companies in:

• Alphamab Lock-Up Expiry: Promising Clinical Data Since IPO, Worth a Reverse Inquiry
• Poly Property Development (保利物业发展) Trade Idea - Lock-Up Expiry - Valuation Getting Heady

We also had a first look at Nongfu Spring (NON HK)'s valuation and on-the-ground survey of their products:

• Nongfu Spring Pre-IPO - Peer Comparison - Superior Margins and Growth
• Nongfu Spring (农夫山泉) IPO: Bottle Size Matters, Photos on the Ground

China ADR listings were also in play this week despite tension between China and U.S. Dada Nexus (DADA US) debuted well but failed to hold its ground while Legend Biotech (LEGN US), after pricing above its top-end price range, closed 60% higher. We covered the deals and trading update in:

• Dada Nexus (达达集团) IPO Trading - Larger Deal Size with Decent Potential Upside
• Legend Biotech (传奇生物) IPO Trading: +27% Upside from Pricing

Following the success of Legend Biotech, Burning Rock Biotech (BNR US) launched its IPO price range on Friday. Ke Yan, CFA, FRM has already shared his thoughts on valuation earlier this week:

• Burning Rock (燃石医学) Pre-IPO: Thoughts on Valuation

Overall, ECM activity in Asia has heated up. Placements are more frequent as companies/investors seem to be more opportunistic in locking in cash/profits at these price levels and probably a good time to keep one's eyes peeled on IPO lock-up expiry deals.

• Ever Sunshine Lifestyle Placement - Up 7x in 18 Months, Look Expensive but Momentum Is Strong
• ESR Cayman Placement - Hasn't Done Much Since Listing, Liquidity Remains Tight
• China MeiDong Auto Placement - Great Track Record but Back-To-Back Deals Don't Make the Cut