ECM Weekly (9th May 2021) - JD Logistics, Anjuke, Waterdrop, Ximalaya, Qiniu, Monde Nissin

On Friday, Bloomberg reported that China Securities Regulatory Commission’s (CSRC) was weighing tighter rules for Chinese companies listing overseas which could have an impact on upcoming large IPOs such as ByteDance and Didi Chuxing.

However, shortly after, on the same day, CSRC came forward to deny it. While the rumor has been dispelled quickly, one should keep in mind that it wasn’t too long ago that the SEC tightened its restrictions on Chinese companies as it sought public comments for the Holding Foreign Companies Accountable Act (HFCAA). The push and pull factors that we highlighted in our China ADRs note last year seem to remain strong with both sides wanting to limit Chinese companies listing in the US.

• JD Logistics (京东物流) Pre-IPO - Peer Comparison - Shielded from Price War
• JD Logistics (京东物流) Pre-IPO - Tethered to JD Group and Looking Beyond
• JD Logistics (京东物流) Pre-IPO - Thoughts on Valuation
• JD Logistics (京东物流) Pre-IPO - PHIP Updates and Fine-Tuning Valuation
• JD Logistics (京东物流) Pre-IPO - Index Implications - It Will Cut Close
• JD Logistics (京东物流) Pre-IPO - Bull/​Bear Case + Valuation Sensitivity

SF REIT launched its IPO bookbuild this week. Books were reportedly covered and will close this coming Monday. The company will debut on 17th May.

• SF REIT Pre-IPO -One trick pony, who’s not doing the trick.

• SF REIT IPO - Don’t See a Clear Reason to Buy

Central China Management (PHIP filed) and New Hope Service have also started premarketing and both companies are looking to raise up to US$150m each. We also heard that Betta Pharma will seek approval next week.

This week’s notable filings include ANE in Hong Kong (US$500m), Nuvoco Vistas and Chemplast Sanmar in India (US$680m and US$450m, respectively) and CTOS Holdings in Malaysia (US$290m).

This week, we initiated coverage on Anjuke (ANJ HK), a real estate information and transaction service provider, and shared our preliminary thoughts on the valuation of Angelalign Technology (AAT HK).

• Anjuke Pre-IPO - Mixed (Positive and Negative) Developments
• Angelalign (时代天使) Pre-IPO: Deserves a Premium to Peers

In the US, Waterdrop Inc. (WDH US), despite closing books a day earlier and pricing its NYSE IPO at the top end, closed almost 20% below its IPO price.

• Waterdrop Pre-IPO - The Positives - Fast Growth, Strong Backers

• Waterdrop Pre-IPO - The Negatives - Scandals, Shutdowns, Competing with Giants, Regulation

• Waterdrop IPO - Valuation Has Nearly Tripled over the past Year

• Waterdrop IPO Trading - Ant’s Mutual Aid Admissions Showcase the Regulatory Overhang

We initiated coverage on Ximalaya (XIMA US) and Qiniu (QNIU US) which filed their prospectus last week. Both companies are in the midst of premarketing.

• Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening

• Ximalaya Pre-IPO - The Negatives

• Qiniu Cloud (七牛云) Pre-IPO: PaaS Doesn’t Warrant a Premium

For Hello Inc. (1883864D US), Ming Lu went on the ground and compared Hello Inc’s bike sharing services against its competitors like Meituan (3690 HK) and Didi Bike (青桔单车).

• Hello Inc (哈罗出行) Pre-IPO - Nowhere near Being Sustainable

• Hello (HI): Competition on the Ground, Hard to Reach Profitability

In the Philippines, Monde Nissin Corp (0191881D PM) bookbuild is scheduled to open on Tuesday. It was reported that the company has already drawn over US$1bn of orders from investors and is in talks with over a dozen cornerstone investors.

• Monde Nissin Pre-IPO - The Positives - High Market Share

• Monde Nissin Pre-IPO - The Negatives - High Debt, Div Payments, Floundering MA

• Monde Nissin Pre-IPO - Peer Comparison for Food Business

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

• Monde Nissin Pre-IPO - Thoughts on Valuation

• Monde Nissin Pre-IPO - Not Cheap but Sensible

In Thailand, Ngern Tid Lor (NTL TB) will trade on Monday. Demand for the IPO had likely been good considering that, last month, it closed its bookbuild five days early and priced at the top-end.

• Ngern Tid Lor IPO Trading - Should Be a Steady Listing

There is a flurry of IPOs coming to market in Australia. Aurora Healthcare, Australia Venue Company, and Keypath Education have kicked off their IPOs this week and will launch bookbuild this coming Monday. We will publish on Aurora Healthcare and Australia Venue Company by Monday.

Placements took a backseat this week. There was only Ascendas REIT (AREIT SP)’s placement in Singapore. This marks their second placement in under six months. This time the REIT raised US$315m to acquire the remaining 75% stake in Galaxis, in the one-north precinct.

• AREIT Placement - Expected to Be DPU Accretive but the Acquisition Might Take a While
• AREIT - Paying for Acquisition with Only Equity Doesn’t Add Up, DPU to Fall by 3-4%
• Ascendas REIT Placement - Multiple Acquisitions to Be Made, Starting From US Office Properties
• Ascendas REIT Placement - Smaller than the Last Deal, Should Be Accretive as Well

Credits to Clarence Chu for helping out with the note.