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

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Zhejiang Cangnan Instrument / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/27212" target="_blank" data-smartkarma-citation="entities:27212:1">Zhejiang Cangnan Instrument (1743 HK)</a> plans to raise up to US$114m in its IPO via an issuance of primary shares.Over FY15-17, sales grew at 36% CAGR while adjusted PATMI grew at nearly a 100% CAGR. Its growth record makes the asking multiples look cheap. However, its margins seem very high for an equipment manufacturer, even more so when one considers that it sells mostly to companies and not to retail. To add to that the stupendous growth in FY17 hasn't flown through to operating cash flow as receivables have ballooned, with some being due for well over a year. There are also a few corporate governance issues.Given the smallish size of the deal and a tight deadline, this is a very quick note of mostly bullet points along with charts, tables and snippets, with minimal additional writing.

Zhejiang Cangnan Instrument (1743 HK) plans to raise up to US$114m in its IPO via an issuance of primary shares.Over FY15-17, sales grew at 36% CAGR while adjusted PATMI grew at nearly a 100% CAGR. Its growth record makes the asking multiples look cheap. However, its margins seem very high for an equipment manufacturer, even more so when one considers that it sells mostly to companies and not to retail. To add to that the stupendous growth in FY17 hasn't flown through to operating cash flow as receivables have ballooned, with some being due for well over a year. There are also a few corporate governance issues.Given the smallish size of the deal and a tight deadline, this is a very quick note of mostly bullet points along with charts, tables and snippets, with minimal additional writing. 

Zhejiang Cangnan Instrument IPO - Quick Thoughts - Probably at Peak Growth and Peak Margins