Equity Analyst, LightStream Research

Oshadhi Kumarasiri

An equity research analyst with over 7 years of experience in multiple sectors. Previously worked for one of the world's largest asset managers with about USD2.5trn in AUM, covering small and micro-cap companies in the consumer sphere across Europe and developed Asia. Also experienced in covering multiple industries including banking, insurance and asset management, retail, tech, telco and REIT.

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

Litian Pictures Holdings Ltd / Equity Capital Markets

Chinese drama series distribution company, <a href="https://www.smartkarma.com/entities/litian-pictures-holdings-ltd" target="_blank" data-smartkarma-citation="entities:29040:1" rel="noopener">Litian Pictures Holdings Ltd (9958 HK)</a> is planning to raise HK$ 192-288m via a Hong Kong IPO. The company will issue 75m (27.71% of post-IPO shares outstanding) new shares (excluding an overallotment option of 11.25m shares) at an offer price range of HK$ 2.56-3.84 per share to raise funds primarily for content production and purchase. Book building ends on 15th June 2020 at 12.00 noon. The IPO price will be announced on 19th June, and the shares are expected to start trading from 22nd June 2020.<table class="table table-striped"><tbody>
<tr>
<td style="width: 230.0pt;">Litian Pictures Holdings Limited</td>
<td style="width: 49.0pt;">Low</td>
<td style="width: 55.0pt;">High</td>
</tr>
<tr>
<td style="width: 230.0pt;">IPO Price Range – HK$</td>
<td style="width: 49.0pt;">2.56</td>
<td style="width: 55.0pt;">3.84</td>
</tr>
<tr>
<td style="width: 230.0pt;">Post-IPO Shares Outstanding (in millions)</td>
<td style="width: 49.0pt;">300</td>
<td style="width: 55.0pt;">300</td>
</tr>
<tr>
<td style="width: 230.0pt;">Market Capitalisation - Post Money (HK$m)</td>
<td style="width: 49.0pt;">768</td>
<td style="width: 55.0pt;">1,152</td>
</tr>
<tr>
<td style="width: 230.0pt;">Net Debt/Cash - Post Money (HK$m)</td>
<td style="width: 49.0pt;">-6</td>
<td style="width: 55.0pt;">-15</td>
</tr>
<tr>
<td style="width: 230.0pt;">EV - Post Money (HK$m)</td>
<td style="width: 49.0pt;">762</td>
<td style="width: 55.0pt;">1,137</td>
</tr>
<tr>
<td style="width: 230.0pt;">EV/Revenue - FY2019</td>
<td style="width: 49.0pt;">1.8</td>
<td style="width: 55.0pt;">2.7</td>
</tr>
<tr>
<td style="width: 230.0pt;">EV/EBITDA - FY2019</td>
<td style="width: 49.0pt;">6.1</td>
<td style="width: 55.0pt;">9.1</td>
</tr>
<tr>
<td style="width: 230.0pt;">P/Tangible BV</td>
<td style="width: 49.0pt;">4.3</td>
<td style="width: 55.0pt;">6.1</td>
</tr>
</tbody></table><div class="content-caption">Source: Company Disclosures, *EV/EBITDA excludes IPO related consultancy fees</div>Use of Proceeds <ul>
<li>Approximately 50.0% (or HK$94m) will be used to produce 7 drama series and 4 web series across several major genres.</li>
<li>37.5% (or HK$71m) will be used to purchase copyrights (or broadcasting rights) of drama series produced by third parties.</li>
<li>7.5% (or HK$14m) will be used to expand the headcount of experienced professionals.</li>
<li>5.0% (or HK$9m) will be used to fund working capital and general corporate needs.</li>
</ul>

Chinese drama series distribution company, Litian Pictures Holdings Ltd (9958 HK) is planning to raise HK$ 192-288m via a Hong Kong IPO. The company will issue 75m (27.71% of post-IPO shares outstanding) new shares (excluding an overallotment option of 11.25m shares) at an offer price range of HK$ 2.56-3.84 per share to raise funds primarily for content production and purchase. Book building ends on 15th June 2020 at 12.00 noon. The IPO price will be announced on 19th June, and the shares are expected to start trading from 22nd June 2020.

Litian Pictures Holdings Limited
Low
High


IPO Price Range – HK$
2.56
3.84


Post-IPO Shares Outstanding (in millions)
300
300


Market Capitalisation - Post Money (HK$m)
768
1,152


Net Debt/Cash - Post Money (HK$m)
-6
-15


EV - Post Money (HK$m)
762
1,137


EV/Revenue - FY2019
1.8
2.7


EV/EBITDA - FY2019
6.1
9.1


P/Tangible BV
4.3
6.1

Source: Company Disclosures, *EV/EBITDA excludes IPO related consultancy feesUse of Proceeds 
Approximately 50.0% (or HK$94m) will be used to produce 7 drama series and 4 web series across several major genres.
37.5% (or HK$71m) will be used to purchase copyrights (or broadcasting rights) of drama series produced by third parties.
7.5% (or HK$14m) will be used to expand the headcount of experienced professionals.
5.0% (or HK$9m) will be used to fund working capital and general corporate needs.


Litian Pictures Holdings IPO Valuation: Overvalued at 4.3-6.1x Price To Tangible Book Value