Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. 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%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>Weibo plans to raise around US$470m in its secondary listing in Hong Kong. </li>
<li>We have covered most aspects of the deal in our previous note, <a href="https://www.smartkarma.com/insights/weibo-secondary-listing-needs-to-come-at-a-discount" target="_blank" rel="noopener">Weibo Secondary Offering - Needs to come at a discount</a>.</li>
<li>In this note, we'll talk about the deal pricing and structure.</li>
</ul>


Weibo plans to raise around US$470m in its secondary listing in Hong Kong. 
We have covered most aspects of the deal in our previous note, Weibo Secondary Offering - Needs to come at a discount.
In this note, we'll talk about the deal pricing and structure.


Weibo Secondary Listing - Going Down the Autohome Route

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

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.

Event-Driven

iClick Interactive Asia Group / Event-Driven

<a href="https://www.smartkarma.com/entities/iclick-interactive-asia-group-limited" target="_blank" data-smartkarma-citation="entities:27314:1" rel="noopener">iClick Interactive Asia Group (ICLK US)</a> is a leading enterprise and marketing cloud platform in China. It is a platinum provider to <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> in social advertising and provides one-stop solutions in user acquisition and engagement.On 18 September, iClick announced a second non-binding privatisation proposal from Infinity Equity Management. The bid of $7.50 in cash per ADS represents a premium of 32.7% to the undisturbed price of $5.65 (on 23 September prior to the first proposal from PAG and Oasis). As a reminder, on 24 September, iClick announced a non-binding privatisation proposal from PAG and Oasis Management of $6.75 in cash per ADS. Infinity’s offer represents an 11.1% bump to the offer from PAG and Oasis.  As iClick is incorporated in the Cayman Islands, for the privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. Infinity has not disclosed a shareholding. iClick’s three largest shareholders are Wing Hong Sammy Hsieh (co-founder and Chairman), Jian Tang (co-founder and CEO) and <a href="https://www.smartkarma.com/entities/baozun-inc" target="_blank" data-smartkarma-citation="entities:24184:1" rel="noopener">Baozun Inc. (BZUN US)</a>. Mr Hsieh and Mr Tang together represent around 62% of voting interests. Borrowing a page from PAG and Oasis’ playbook, Infinity’s letter to the board mentions an intention to acquire all the shares other than those “other than management owned shares and those existing shareholders of the Company who elect to roll over.” The wording suggests that Infinity is vying with PAG and Oasis to get the upper hand in discussions with the co-founders and Baozun. In <a href="https://www.smartkarma.com/insights/iclick-s-privatisation-bid-from-pag-and-oasis" target="_blank" data-smartkarma-citation="insights:58109" rel="noopener">IClick’s Privatisation Bid from PAG and Oasis</a>, we stated that the PAG and Oasis offer is unattractive in comparison to historical share prices and multiples. We also noted that the PAG and Oasis offer is designed to take advantage of the sell-off in Chinese tech names by enriching insiders at the expense of minorities.<div class="content-highlight">While we did not expect a competing bid, Infinity’s offer while providing a bump to PAG and Oasis' offer still leaves minorities short-changed. Nevertheless, the emergence of two bidders suggests that there is a decent chance of another bidding round. At the last close of $6.50 per ADS, the gross spread to the Infinity offer price is 15.4%.  </div>

iClick Interactive Asia Group (ICLK US) is a leading enterprise and marketing cloud platform in China. It is a platinum provider to Tencent (700 HK) in social advertising and provides one-stop solutions in user acquisition and engagement.On 18 September, iClick announced a second non-binding privatisation proposal from Infinity Equity Management. The bid of $7.50 in cash per ADS represents a premium of 32.7% to the undisturbed price of $5.65 (on 23 September prior to the first proposal from PAG and Oasis). As a reminder, on 24 September, iClick announced a non-binding privatisation proposal from PAG and Oasis Management of $6.75 in cash per ADS. Infinity’s offer represents an 11.1% bump to the offer from PAG and Oasis.  As iClick is incorporated in the Cayman Islands, for the privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. Infinity has not disclosed a shareholding. iClick’s three largest shareholders are Wing Hong Sammy Hsieh (co-founder and Chairman), Jian Tang (co-founder and CEO) and Baozun Inc. (BZUN US). Mr Hsieh and Mr Tang together represent around 62% of voting interests. Borrowing a page from PAG and Oasis’ playbook, Infinity’s letter to the board mentions an intention to acquire all the shares other than those “other than management owned shares and those existing shareholders of the Company who elect to roll over.” The wording suggests that Infinity is vying with PAG and Oasis to get the upper hand in discussions with the co-founders and Baozun. In IClick’s Privatisation Bid from PAG and Oasis, we stated that the PAG and Oasis offer is unattractive in comparison to historical share prices and multiples. We also noted that the PAG and Oasis offer is designed to take advantage of the sell-off in Chinese tech names by enriching insiders at the expense of minorities.While we did not expect a competing bid, Infinity’s offer while providing a bump to PAG and Oasis' offer still leaves minorities short-changed. Nevertheless, the emergence of two bidders suggests that there is a decent chance of another bidding round. At the last close of $6.50 per ADS, the gross spread to the Infinity offer price is 15.4%.  

IClick’s Improved Privatisation Bid from a Second Suitor

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

In recent years,  it has become common practice for Chinese "tech" companies listed in the US to be privatised, on the expectation of being relisted on the Mainland (where often higher multiples are assigned) or Hong Kong. Following the passing of the <a href="https://en.wikipedia.org/wiki/Holding_Foreign_Companies_Accountable_Act" target="_blank" rel="noopener">Holding Foreign Companies Accountable Act</a> last year, there is an added impetus to take these companies private. Or at the very least, seek a dual listing in Hong Kong.
More often than not, these takeovers are initiated by the controlling shareholders. Which makes this latest non-binding proposal for <a href="https://www.smartkarma.com/entities/iclick-interactive-asia-group-limited" target="_blank" data-smartkarma-citation="entities:27314:1" rel="noopener">iClick Interactive Asia Group (ICLK US)</a> a little unusual.
iClick <a href="https://ir.i-click.com/2021-09-24-iClick-Interactive-Asia-Group-Limited-Announces-Receipt-of-a-Preliminary-Non-Binding-Indicative-Proposal-to-Acquire-the-Company" target="_blank" rel="noopener">announced</a> on the 24 September it had received a preliminary indicative proposal from PAG Pegasus Fund and Oasis Management to acquire all of its outstanding shares for US$6.75 per ADS, in cash.
That's a 19% premium to last close, yet 63% below its all-time high close of US$18.30 in February last year, and 16% below its $8/share IPO price in December 2018.
Should a firm Offer unfold, this long-form merger would require two-thirds majority approval from all shareholders.
Sammy Hsieh, the chairman of the board of directors and co-founder, Jian Tang, iClick's CEO, and co-founder, collectively own 4,385,078 Class B ordinary shares, which due to their super-voting rights, is equivalent to ~62% of the voting power. This proposal is a non-starter without the support of either Hsieh or Tang.
In addition, <a href="https://www.smartkarma.com/entities/baozun" target="_blank" data-smartkarma-citation="entities:29712:1" rel="noopener">Baozun (9991 HK)</a> controls a further 10% of the voting power. Should all three side with the buyer consortium, this deal is done. 
But I doubt this will be the outcome. A more likely scenario is the consortium's low-balled Offer is a means to triggering a response from a key player, such as <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, to make a counteroffer.
More below the fold.

In recent years,  it has become common practice for Chinese "tech" companies listed in the US to be privatised, on the expectation of being relisted on the Mainland (where often higher multiples are assigned) or Hong Kong. Following the passing of the Holding Foreign Companies Accountable Act last year, there is an added impetus to take these companies private. Or at the very least, seek a dual listing in Hong Kong.
More often than not, these takeovers are initiated by the controlling shareholders. Which makes this latest non-binding proposal for iClick Interactive Asia Group (ICLK US) a little unusual.
iClick announced on the 24 September it had received a preliminary indicative proposal from PAG Pegasus Fund and Oasis Management to acquire all of its outstanding shares for US$6.75 per ADS, in cash.
That's a 19% premium to last close, yet 63% below its all-time high close of US$18.30 in February last year, and 16% below its $8/share IPO price in December 2018.
Should a firm Offer unfold, this long-form merger would require two-thirds majority approval from all shareholders.
Sammy Hsieh, the chairman of the board of directors and co-founder, Jian Tang, iClick's CEO, and co-founder, collectively own 4,385,078 Class B ordinary shares, which due to their super-voting rights, is equivalent to ~62% of the voting power. This proposal is a non-starter without the support of either Hsieh or Tang.
In addition, Baozun (9991 HK) controls a further 10% of the voting power. Should all three side with the buyer consortium, this deal is done. 
But I doubt this will be the outcome. A more likely scenario is the consortium's low-balled Offer is a means to triggering a response from a key player, such as Tencent (700 HK), to make a counteroffer.
More below the fold.

IClick(ICLK US): PAG & Oasis Shake The Trees

<a href="https://www.smartkarma.com/entities/iclick-interactive-asia-group-limited" target="_blank" data-smartkarma-citation="entities:27314:1" rel="noopener">iClick Interactive Asia Group (ICLK US)</a> is a leading enterprise and marketing cloud platform in China. It is a platinum provider to <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> in social advertising and provides one-stop solutions in user acquisition and engagement. iClick was listed on Nasdaq in December 2017 at $8.00 per ADS and raised net proceeds of $23.3 million.  On 24 September, iClick announced a non-binding privatisation proposal from PAG and Oasis Management. The bid of $6.75 in cash per ADS represents a premium of 19.5% to the undisturbed price (on 23 September). As iClick is incorporated in the Cayman Islands, for the privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. PAG and Oasis have not disclosed a shareholding. iClick’s three largest shareholders are Wing Hong Sammy Hsieh (co-founder and Chairman), Jian Tang (co-founder and CEO) and <a href="https://www.smartkarma.com/entities/baozun-inc" target="_blank" data-smartkarma-citation="entities:24184:1" rel="noopener">Baozun Inc. (BZUN US)</a>. Mr Hsieh and Mr Tang together represent around 62% of voting interests. PAG and Oasis’ letter to the board mentions an intention to acquire all the shares other than those “shares held by the members of management and other strategic shareholders of the Company that may be rolled over in connection with the proposed transaction.” The wording suggests that PAG and Oasis are in advanced stages of discussions with the co-founders and <a href="https://www.smartkarma.com/entities/baozun" target="_blank" data-smartkarma-citation="entities:29712:1" rel="noopener">Baozun (9991 HK)</a>. iClick’s shares reached an all-time high of $18.30 per ADS on 18 February 2021 on the back of the announcement that Baozun acquired 4% of outstanding shares and 10% voting interest at $13.262 per ADS. In part due to China’s regulatory clampdown on tech names, the shares have since headed downwards to reach a YTD low of $4.16 per ADS on 20 August. <div class="content-highlight">The offer is unattractive in comparison to historical share prices and multiples, in our view. The offer is designed to take advantage of the sell-off in Chinese tech names by enriching insiders at the expense of minorities. The timing of the offer announcement points to PAG and Oasis’ confidence in gaining the co-founders and/or Bazoun’s support as rollover shareholders. We think that there is a decent chance that privatisation succeeds. At the last close of $5.91 per ADS, the gross spread to the offer price is 14.2%.  </div>

iClick Interactive Asia Group (ICLK US) is a leading enterprise and marketing cloud platform in China. It is a platinum provider to Tencent (700 HK) in social advertising and provides one-stop solutions in user acquisition and engagement. iClick was listed on Nasdaq in December 2017 at $8.00 per ADS and raised net proceeds of $23.3 million.  On 24 September, iClick announced a non-binding privatisation proposal from PAG and Oasis Management. The bid of $6.75 in cash per ADS represents a premium of 19.5% to the undisturbed price (on 23 September). As iClick is incorporated in the Cayman Islands, for the privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. PAG and Oasis have not disclosed a shareholding. iClick’s three largest shareholders are Wing Hong Sammy Hsieh (co-founder and Chairman), Jian Tang (co-founder and CEO) and Baozun Inc. (BZUN US). Mr Hsieh and Mr Tang together represent around 62% of voting interests. PAG and Oasis’ letter to the board mentions an intention to acquire all the shares other than those “shares held by the members of management and other strategic shareholders of the Company that may be rolled over in connection with the proposed transaction.” The wording suggests that PAG and Oasis are in advanced stages of discussions with the co-founders and Baozun (9991 HK). iClick’s shares reached an all-time high of $18.30 per ADS on 18 February 2021 on the back of the announcement that Baozun acquired 4% of outstanding shares and 10% voting interest at $13.262 per ADS. In part due to China’s regulatory clampdown on tech names, the shares have since headed downwards to reach a YTD low of $4.16 per ADS on 20 August. The offer is unattractive in comparison to historical share prices and multiples, in our view. The offer is designed to take advantage of the sell-off in Chinese tech names by enriching insiders at the expense of minorities. The timing of the offer announcement points to PAG and Oasis’ confidence in gaining the co-founders and/or Bazoun’s support as rollover shareholders. We think that there is a decent chance that privatisation succeeds. At the last close of $5.91 per ADS, the gross spread to the offer price is 14.2%.  

IClick’s Privatisation Bid from PAG and Oasis

Hutchison Whampoa / Equity Capital Markets

<div>
<a href="https://www.smartkarma.com/entities/hutchmed-china-ltd" target="_blank" data-smartkarma-citation="entities:133:1" rel="noopener">Hutchmed China Ltd (13 HK)</a> has launched a $603 million secondary listing on HKEx by offering 104.0 million ordinary shares at a maximum offer price of HK$45.00 per share. Bookbuilding is scheduled to run until the pricing on 23 June. The net proceeds will be used to fund the late-stage clinical programs (savolitinib, surufatinib, fruquintinib, HMPL-689 and HMPL-523), to support further proof-of-concept studies and strengthen commercialisation capabilities.
HutchMed has primary listings on Nasdaq and on UK AIM. The HKEx secondary listing will be supported by five cornerstone investors which will subscribe for HK$2,535 million ($325 million) of the offer shares (54.17% of the offer shares at the maximum offer price). The cornerstone investors are <a href="https://www.smartkarma.com/entities/carlyle-group-inc" target="_blank" data-smartkarma-citation="entities:33402:1" rel="noopener">Carlyle Group Inc (CG US)</a>, CPP Investments, General Atlantic, <a href="https://www.smartkarma.com/entities/hbm-healthcare-investments-ag" target="_blank" data-smartkarma-citation="entities:22373:1" rel="noopener">HBM Healthcare Investments AG (HBMN SW)</a> and CICC Capital.
HutchMed is a China-based, globally focused, biopharma company, active in discovery, development, manufacturing, and commercialisation. The investment case centres on the success of its oncology/immunology platform, which has several near-term clinical and regulatory catalysts from the novel highly selective small molecule (tyrosine kinase inhibitor) pipeline. Notably, in-house discovered drugs, Elunate (fruquintinib) and Sulanda (surufatinib), together with a likely approval for savolitinib, are transforming China prospects. Elunate is performing well in China, with NRDL inclusion boosting volumes. The first global launch is likely to be surufatinib with a US launch targeted for late 2021 or early 2022.
</div><div><div class="content-highlight">In this note, we will look at HutchMed’s potential HK-ADS premium/(discount). As per the norm, HutchMed will price its H-shares at a discount to its ADSs/UK shares to entice investors to participate in the secondary listing. HutchMed pricing its H-shares at a discount of 2-3% to its ADSs will be reasonable, in our view.</div></div>


Hutchmed China Ltd (13 HK) has launched a $603 million secondary listing on HKEx by offering 104.0 million ordinary shares at a maximum offer price of HK$45.00 per share. Bookbuilding is scheduled to run until the pricing on 23 June. The net proceeds will be used to fund the late-stage clinical programs (savolitinib, surufatinib, fruquintinib, HMPL-689 and HMPL-523), to support further proof-of-concept studies and strengthen commercialisation capabilities.
HutchMed has primary listings on Nasdaq and on UK AIM. The HKEx secondary listing will be supported by five cornerstone investors which will subscribe for HK$2,535 million ($325 million) of the offer shares (54.17% of the offer shares at the maximum offer price). The cornerstone investors are Carlyle Group Inc (CG US), CPP Investments, General Atlantic, HBM Healthcare Investments AG (HBMN SW) and CICC Capital.
HutchMed is a China-based, globally focused, biopharma company, active in discovery, development, manufacturing, and commercialisation. The investment case centres on the success of its oncology/immunology platform, which has several near-term clinical and regulatory catalysts from the novel highly selective small molecule (tyrosine kinase inhibitor) pipeline. Notably, in-house discovered drugs, Elunate (fruquintinib) and Sulanda (surufatinib), together with a likely approval for savolitinib, are transforming China prospects. Elunate is performing well in China, with NRDL inclusion boosting volumes. The first global launch is likely to be surufatinib with a US launch targeted for late 2021 or early 2022.
In this note, we will look at HutchMed’s potential HK-ADS premium/(discount). As per the norm, HutchMed will price its H-shares at a discount to its ADSs/UK shares to entice investors to participate in the secondary listing. HutchMed pricing its H-shares at a discount of 2-3% to its ADSs will be reasonable, in our view.

HutchMed Secondary Listing: HK-ADS Premium/​​​(Discount) Views

China

Baozun is a leading brand e-commerce solutions provider and digital commerce enabler in China. The company offers end-to-end e-commerce solutions, including IT solutions, online store operations, digital marketing, customer services, warehousing, and fulfillment, alongside brand management services. Founded in 2007, Baozun is headquartered in Shanghai, People's Republic of China.

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Baozun (9991 HK)

Weibo Secondary Listing - Going Down the Autohome Route

Weibo plans to raise around US$470m in its secondary listing in Hong Kong. In this note, we will talk about the deal pricing and structure.

Sumeet Singh

IClick’s Improved Privatisation Bid from a Second Suitor

iClick announced another privatisation proposal, this time from Infinity Equity at $7.50 in cash per ADS. The emergence of two bidders suggests...

Arun George

IClick(ICLK US): PAG & Oasis Shake The Trees

Buying around here is probably going to have limited downside. I think PAG/Oasis' intent is to shake out potential suitors - including the co...

David Blennerhassett

IClick’s Privatisation Bid from PAG and Oasis

The $6.75 per ADS offer is designed to take advantage of the market sell-off by enriching insiders at the expense of minorities. If the co-founders...

Arun George

HutchMed Secondary Listing: HK-ADS Premium/(Discount) Views

HutchMed has launched a $603 million secondary listing on HKEx. In this note, we will look at HutchMed’s potential HK-ADS premium/(discount).

Arun George

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52-week Range

Market Cap (USDm)

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Weibo Secondary Listing - Going Down the Autohome Route

Weibo plans to raise around US$470m in its secondary listing in Hong Kong. In this note, we will talk about the deal pricing and structure.

Sumeet Singh

IClick’s Improved Privatisation Bid from a Second Suitor

iClick announced another privatisation proposal, this time from Infinity Equity at $7.50 in cash per ADS. The emergence of two bidders suggests...

Arun George

IClick(ICLK US): PAG & Oasis Shake The Trees

Buying around here is probably going to have limited downside. I think PAG/Oasis' intent is to shake out potential suitors - including the co...

David Blennerhassett

IClick’s Privatisation Bid from PAG and Oasis

The $6.75 per ADS offer is designed to take advantage of the market sell-off by enriching insiders at the expense of minorities. If the co-founders...

Arun George

HutchMed Secondary Listing: HK-ADS Premium/​​​(Discount) Views

HutchMed has launched a $603 million secondary listing on HKEx. In this note, we will look at HutchMed’s potential HK-ADS premium/(discount).

Arun George

HutchMed Secondary Listing: HK-ADS Premium/(Discount) Views