Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of IPO & Placements for Aequitas Research. At Aequitas we cover all IPOs and placements across Asia-Pac with a deal size of at least US$100m. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%. 
Prior to Aequitas. I was heading Content Strategy for Smartkarma, along with covering IPOs & Placement. In an earlier life I have covered ASEAN property and the banking space in India.

Head of Research, IPOs & Placements

Could be the start of a few more cornerstone exits

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Dalian Wanda Commercial Properties / Equity Capital Markets

Dalian Wanda Commercial Properties (1567411D HK)

We would take the deal.For Momentum/Liquidity Strategy investors the deal scores reasonably well on our Momentum-Adjusted IPO Framework, while for long-term/value investors the scores are marginal. Positives for the deal include: 1) recent outperformance of peers vs. the index; 2) steady growth outlook, owing to pipeline of asset completion; 3) strong cornerstone book taking up 56% of the deal; 4) reasonable valuation of over 40% discount to NAV as compared to 25-40% for larger peers; and 5) in addition, due to its size, the stock will likely be a member of all major indices, entailing passive money flow and will also find strong support from the property funds.On the flip side, our primary concerns stem from: 1) high debt levels, which are unlikely to materially subside post listing given the heavy capex lined up; 2) high level of related party transactions (18% of rental income); and 3) on a macro level an overall slowdown in China property, combined with continued rising threat to shopping malls sales from e-commerce.

We would take the deal.For Momentum/Liquidity Strategy investors the deal scores reasonably well on our Momentum-Adjusted IPO Framework, while for long-term/value investors the scores are marginal. Positives for the deal include: 1) recent outperformance of peers vs. the index; 2) steady growth outlook, owing to pipeline of asset completion; 3) strong cornerstone book taking up 56% of the deal; 4) reasonable valuation of over 40% discount to NAV as compared to 25-40% for larger peers; and 5) in addition, due to its size, the stock will likely be a member of all major indices, entailing passive money flow and will also find strong support from the property funds.On the flip side, our primary concerns stem from: 1) high debt levels, which are unlikely to materially subside post listing given the heavy capex lined up; 2) high level of related party transactions (18% of rental income); and 3) on a macro level an overall slowdown in China property, combined with continued rising threat to shopping malls sales from e-commerce.

Reasonable valuation and possible index inclusion make us positive on the deal despite debt concerns