ECM Weekly (8 December 2018) - Tencent Music, Softbank Corp, Asiainfo Tech, Yestar, Ascentage

This week's IPOs have performed within our expectations. iDreamsky Technology Limited (1119 HK) and Yancoal Australia (YAL AU) traded below their IPO price on debut while Mogu (MOGU US), despite opening 14% below IPO price on debut, managed to claw back its losses to close flat.

The theme for this week is float and trading liquidity. The Top 5 investors in Yancoal including cornerstone took up almost the entire institutional tranche while Mogu's adjusted free float was only 3.2%, which meant that both IPOs will likely trade with low liquidity going forward. iDreamsky's IPO shares offered also represented just 10% of its total outstanding shares and it has only about 37% of its adjusted free float.

For bookbuilds, Softbank Corp (9434 JP)'s IPO almost looked it was not going to debut well when the news of network outage was reported. Fortunately, the updates confirmed that it was triggered by a shutdown of Ericsson equipment running on their networks which probably meant that it was not Softbank's fault. There is also news reporting that the international bookbuild has been allocated to a good mix of long-only and hedge funds.

There will be more IPO debuts in Hong Kong and another in the US, arguably one of the more anticipated IPO in Q4, Tencent Music Entertainment (TME US). The IPOs will keep us busy for a while and do look out for trading notes for comments on deal dynamics and updates on valuation for each IPO.