IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

Arun has over 15 years’ experience covering the Technology sector. During this time, he has worked with technology start-ups and as an equity analyst in investment banks and independent research firms. He was formerly a Technology Analyst for Canaccord Genuity, Altium Securities, Espirito Santo Investment Bank, Noble Group and Clear Capital. He has a dual Master’s degree in Financial Engineering and Industrial and Operations Engineering from the University of Michigan. He obtained his Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Bombay. He is also a CFA charterholder.

IPOs and Catalysts/Events

Nongfu Spring IPO: Update Points to Green Shoots of Recovery

Nongfu Spring IPO Initiation: Still or Sparkling?

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Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/nongfu-spring" target="_blank" data-smartkarma-citation="entities:28955:1" rel="noopener">Nongfu Spring (9633 HK)</a> is a leader in the packaged drinking water and beverage business in China. Nongfu had the leading market share in the packaged drinking water market in China for eight consecutive years from 2012 to 2019, according to Frost &amp; Sullivan. Nongfu will commence trading on Tuesday, 8 September. Nongfu priced its IPO at HK$21.50 per share, at the top end of the indicative price range of $19.50-21.50 per H share. Nongfu raised net proceeds of HK$8,149 million ($1.1 billion).</p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/nongfu-spring-ipo-initiation-still-or-sparkling" target="_blank" rel="noopener">our initiation note</a>, we stated that Nongfu is a play on the attractive growth of the Chinese soft beverage markets, which is underpinned by the increasing urbanisation rate, the growing health awareness and consumption upgrade. In <a href="https://www.smartkarma.com/insights/nongfu-spring-ipo-update-points-to-green-shoots-of-recovery" target="_blank" rel="noopener">our PHIP update note</a>, we opined that the key negative remains the large pre-IPO dividends with RMB7,800 million ($1.1 billion) cash dividend declared on 14 August. Overall, we continue to believe that Nongfu remains attractive at the IPO price due to a reasonable PEG valuation.</p></div></div></div>

Nongfu Spring (9633 HK) is a leader in the packaged drinking water and beverage business in China. Nongfu had the leading market share in the packaged drinking water market in China for eight consecutive years from 2012 to 2019, according to Frost &amp; Sullivan. Nongfu will commence trading on Tuesday, 8 September. Nongfu priced its IPO at HK$21.50 per share, at the top end of the indicative price range of $19.50-21.50 per H share. Nongfu raised net proceeds of HK$8,149 million ($1.1 billion).In our initiation note, we stated that Nongfu is a play on the attractive growth of the Chinese soft beverage markets, which is underpinned by the increasing urbanisation rate, the growing health awareness and consumption upgrade. In our PHIP update note, we opined that the key negative remains the large pre-IPO dividends with RMB7,800 million ($1.1 billion) cash dividend declared on 14 August. Overall, we continue to believe that Nongfu remains attractive at the IPO price due to a reasonable PEG valuation.

Nongfu Spring

Nongfu Spring IPO: Trading Debut