Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

An inquisitive investment analyst with background in both finance and computing. Covering ECM research, biotech, market data analytics.

Asia Pac IPO & Placement Research, China biotech

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GOME Retail Holdings / Equity Capital Markets

We it's a negative sign that Bain Capital is closing its position in the company. Bain Capital used to be a strategic partner that drived Gome's growth, even though the stock has failed to show growth over the past few years!&nbsp; We would like to avoid the deal.&nbsp;The deal doesn't scores well in our placement evaluation framework, due to limited discount (5%) to last traded price given its volatility, and lukewarm performance of past deals. The average 1 month performance of 11.5% post deal is upward skewed by deals pre-GFC. Furthermore, we note that the performance to-date for Bain's previous sell down in July 2014 is -10%.&nbsp;However, we note that street is bullish in the name, with a consensus strong Buy rating, yet the stock has recorded lackluster return in 2014, down &nbsp;by 20%.

We it's a negative sign that Bain Capital is closing its position in the company. Bain Capital used to be a strategic partner that drived Gome's growth, even though the stock has failed to show growth over the past few years!&nbsp; We would like to avoid the deal.&nbsp;The deal doesn't scores well in our placement evaluation framework, due to limited discount (5%) to last traded price given its volatility, and lukewarm performance of past deals. The average 1 month performance of 11.5% post deal is upward skewed by deals pre-GFC. Furthermore, we note that the performance to-date for Bain's previous sell down in July 2014 is -10%.&nbsp;However, we note that street is bullish in the name, with a consensus strong Buy rating, yet the stock has recorded lackluster return in 2014, down &nbsp;by 20%.

GOME: Bain Capital Selling last tranche 15% below its previous sell down - we would avoid the deal