IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jd-industrials" target="_blank" data-smartkarma-citation="entities:36875:1" rel="noopener">JD Industrials (2231713D CH)</a>/JDI, a leading industrial supply chain technology and service provider in China, has filed for a US$1bn IPO. <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a> owns a 77.95% stake.</li>
<li>In <em><strong><a href="https://www.smartkarma.com/insights/jd-industrials-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:103407" rel="noopener">JD Industrials IPO: The Bull Case</a></strong></em>, we highlighted the key elements of the bull case. In this note, we outline the bear case.</li>
<li>The key elements of the bear case rest on slowing SME growth, declining key accounts take rate and gross margin, unnecessary factoring and transfer of most cash for treasury management.</li>
</ul>



JD Industrials (2231713D CH)/JDI, a leading industrial supply chain technology and service provider in China, has filed for a US$1bn IPO. JD.com Inc (ADR) (JD US) owns a 77.95% stake.
In JD Industrials IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The key elements of the bear case rest on slowing SME growth, declining key accounts take rate and gross margin, unnecessary factoring and transfer of most cash for treasury management.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/jd-industrials" target="_blank" data-smartkarma-citation="entities:36875:1" rel="noopener">JD Industrials (2231713D CH)</a>/JDI, a leading industrial supply chain technology and service provider in China, has filed for a US$1bn IPO. <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a> owns a 77.95% stake.</li>
<li>JDI is the largest industrial supply chain technology and service provider in China in terms of GMV, customer coverage and SKU offerings in 2022, according to CIC.</li>
<li>The key elements of the bull case rest on large addressable markets, market share gains, robust product revenue growth underpinned by key accounts, improving underlying margin and strong cash generation.</li>
</ul>



JD Industrials (2231713D CH)/JDI, a leading industrial supply chain technology and service provider in China, has filed for a US$1bn IPO. JD.com Inc (ADR) (JD US) owns a 77.95% stake.
JDI is the largest industrial supply chain technology and service provider in China in terms of GMV, customer coverage and SKU offerings in 2022, according to CIC.
The key elements of the bull case rest on large addressable markets, market share gains, robust product revenue growth underpinned by key accounts, improving underlying margin and strong cash generation.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/zkh-group" target="_blank" data-smartkarma-citation="entities:36818:1" rel="noopener">ZKH Group (ZKH US)</a>, a leading MRO (maintenance, repair, and operations) procurement service platform in China, is pre-marketing an NYSE IPO to raise US$200-300 million.</li>
<li>In <em><strong><a href="https://www.smartkarma.com/insights/zkh-group-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:97653" rel="noopener">ZKH Group IPO: The Bull Case</a></strong></em>, we highlighted the key elements of the bull case. In this note, we outline the bear case.</li>
<li>The key elements of the bear case rest on market share losses, slowing top-line growth, declining take rates and persistent cash burn.</li>
</ul>



ZKH Group (ZKH US), a leading MRO (maintenance, repair, and operations) procurement service platform in China, is pre-marketing an NYSE IPO to raise US$200-300 million.
In ZKH Group IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The key elements of the bear case rest on market share losses, slowing top-line growth, declining take rates and persistent cash burn.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/zkh-group" target="_blank" data-smartkarma-citation="entities:36818:1" rel="noopener">ZKH Group (ZKH US)</a>, a leading MRO (maintenance, repair, and operations) procurement service platform in China, is pre-marketing an NYSE IPO to raise US$200-300 million.</li>
<li>The ZKH platform is for enterprise customers and the GBB platform is for micro businesses. Key backers include <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> and Tiger Global.</li>
<li>The key elements of the bull case rest on large addressable markets, solid customer loyalty, improving gross margin, lower operating losses and a strong balance sheet.</li>
</ul>



ZKH Group (ZKH US), a leading MRO (maintenance, repair, and operations) procurement service platform in China, is pre-marketing an NYSE IPO to raise US$200-300 million.
The ZKH platform is for enterprise customers and the GBB platform is for micro businesses. Key backers include Tencent (700 HK) and Tiger Global.
The key elements of the bull case rest on large addressable markets, solid customer loyalty, improving gross margin, lower operating losses and a strong balance sheet.


<div><p><a href="https://www.smartkarma.com/entities/linklogis" target="_blank" data-smartkarma-citation="entities:31126:1" rel="noopener">Linklogis (9959 HK)</a> is a leading technology solution provider for supply chain finance in China. Its solutions optimise the payment cycle of supply chain transactions and digitalize the entire workflow of supply chain finance. Linklogis will commence trading on Friday, 9 April. Linklogis priced its IPO at HK$17.58 and <a href="https://inews.hket.com/article/2926566/%E3%80%90%E6%96%B0%E8%82%A1IPO%E3%80%91%E8%81%AF%E6%98%93%E8%9E%8D%E7%A7%91%E6%8A%809959%E6%9A%97%E7%9B%A4%E3%80%80%E7%8F%BE%E5%8D%876-%E3%80%81%E6%97%A9%E6%AE%B5%E6%9B%BE%E8%B7%8C%E8%BF%91%E4%B8%80%E6%88%90?mtc=40001&amp;srkw=IPO%E6%9C%80%E5%BF%AB%E6%9C%80%E9%BD%8A" target="_blank" rel="noopener">currently trading around 6% higher</a> at HK$18.70 in the Futu securities grey market. The grey market performance is a welcome surprise in light of the choppy market conditions and declining market sentiment on Chinese tech names. The most recent HKEx tech IPO, <a href="https://www.smartkarma.com/entities/bairong" target="_blank" data-smartkarma-citation="entities:31486:1" rel="noopener">Bairong (1569395D CH)</a>, closed -16% below its IPO price on the first day and has not yet recovered.    </p></div><div><p>In <a href="https://www.smartkarma.com/insights/linklogis-ipo-initiation-isupply" target="_blank" data-smartkarma-citation="insights:47017" rel="noopener">Linklogis IPO Initiation: ISupply</a>, we stated that Linklogis is an attractive play on China’s supply chain finance market by combining a sensible monetisation model, high customer retention rate (good revenue visibility) and strong operating leverage. In <a href="https://www.smartkarma.com/insights/linklogis-ipo-every-little-helps" target="_blank" data-smartkarma-citation="insights:49480" rel="noopener">Linklogis IPO: Every Little Helps</a>, we noted that based on the PHIP which discloses the 2020 results and recent developments, we continue to believe that Linklogis’ fundamentals are attractive. In <a href="https://www.smartkarma.com/insights/linklogis-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:49693" rel="noopener">Linklogis IPO: Valuation Insights</a>, we noted that the IPO price range is reasonable.</p></div><div><div><div class="content-highlight"><p>Updating for the final IPO net raise, our base-case DCF derived price target of HK$19.28 per share. Our DCF sensitivity analysis shows that the IPO price remains reasonable and the grey market factors in achievable market share and margin forecasts. We continue to think that the IPO price represents good value. </p></div></div></div>

Linklogis (9959 HK) is a leading technology solution provider for supply chain finance in China. Its solutions optimise the payment cycle of supply chain transactions and digitalize the entire workflow of supply chain finance. Linklogis will commence trading on Friday, 9 April. Linklogis priced its IPO at HK$17.58 and currently trading around 6% higher at HK$18.70 in the Futu securities grey market. The grey market performance is a welcome surprise in light of the choppy market conditions and declining market sentiment on Chinese tech names. The most recent HKEx tech IPO, Bairong (1569395D CH), closed -16% below its IPO price on the first day and has not yet recovered.    In Linklogis IPO Initiation: ISupply, we stated that Linklogis is an attractive play on China’s supply chain finance market by combining a sensible monetisation model, high customer retention rate (good revenue visibility) and strong operating leverage. In Linklogis IPO: Every Little Helps, we noted that based on the PHIP which discloses the 2020 results and recent developments, we continue to believe that Linklogis’ fundamentals are attractive. In Linklogis IPO: Valuation Insights, we noted that the IPO price range is reasonable.Updating for the final IPO net raise, our base-case DCF derived price target of HK$19.28 per share. Our DCF sensitivity analysis shows that the IPO price remains reasonable and the grey market factors in achievable market share and margin forecasts. We continue to think that the IPO price represents good value. 

Finland

BasWare Oyj develops, markets, and sells software solutions for financial processes and buyer/supplier related transactions. The Company's product line includes solutions for electronic business such as purchase management and invoicing, and financial management solution tools for various financial tasks. BasWare operates in Northern Europe and the United States.

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BasWare OYJ (BAS1V FH)

JD Industrials IPO: The Bear Case

The key elements of the bear case rest on slowing SME growth, declining key accounts take rate and gross margin, unnecessary factoring and transfer...

Arun George

JD Industrials IPO: The Bull Case

The key elements of the bull case rest on large TAMs, market share gains, robust product revenue growth underpinned by key accounts, improving...

Arun George

ZKH Group IPO: The Bear Case

The key elements of the bear case rest on market share losses, slowing top-line growth, declining take rates and persistent cash burn.

Arun George

ZKH Group IPO: The Bull Case

The key elements of the bull case rest on large addressable markets, solid customer loyalty, improving gross margin, lower operating losses and a...

Arun George

Linklogis IPO: Trading Debut

Linklogis priced its IPO at HK$17.58 and trading around 6% higher at HK$18.70 in the Futu securities grey market. We continue to think that the IPO...

Arun George

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