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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zeekr-intelligent-technology-holding" target="_blank" data-smartkarma-citation="entities:36785:1" rel="noopener">ZEEKR (ZK US)</a>, a premium Chinese BEV manufacturer and a subsidiary of <a href="https://www.smartkarma.com/entities/geely-automobile-holdings-ltd" target="_blank" data-smartkarma-citation="entities:127:1" rel="noopener">Geely Auto (175 HK)</a>, has filed for a US$500 million IPO to list on the NYSE.</li>
<li>In <a href="https://www.smartkarma.com/insights/zeekr-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:117508" rel="noopener">ZEEKR IPO: The Bull Case</a>, we highlighted the key elements of the bull case. In this note, we outline the bear case.</li>
<li>The bear case rests on growth slowdown in the second-largest business, high related-parties dependence, Virdi/CEVT gross margin pressure, ongoing operating losses and FCF burn.</li>
</ul>



ZEEKR (ZK US), a premium Chinese BEV manufacturer and a subsidiary of Geely Auto (175 HK), has filed for a US$500 million IPO to list on the NYSE.
In ZEEKR IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on growth slowdown in the second-largest business, high related-parties dependence, Virdi/CEVT gross margin pressure, ongoing operating losses and FCF burn.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/zeekr-intelligent-technology-holding" target="_blank" data-smartkarma-citation="entities:36785:1" rel="noopener">ZEEKR (ZK US)</a>, a premium Chinese BEV manufacturer and a subsidiary of <a href="https://www.smartkarma.com/entities/geely-automobile-holdings-ltd" target="_blank" data-smartkarma-citation="entities:127:1" rel="noopener">Geely Auto (175 HK)</a>, has filed for a US$500 million IPO to list on the NYSE.</li>
<li>ZEEKR has launched three models - the luxury shooting brake coupe ZEEKR 001, the luxury pure electric MPV – ZEEKR 009 and the new luxury versatile SUV – ZEEKR X.</li>
<li>The bull case rests on bestselling premium BEVs, rapid vehicle sales growth, rising gross margin, debt-free balance sheet and a favourable cash conversion cycle.</li>
</ul>



ZEEKR (ZK US), a premium Chinese BEV manufacturer and a subsidiary of Geely Auto (175 HK), has filed for a US$500 million IPO to list on the NYSE.
ZEEKR has launched three models - the luxury shooting brake coupe ZEEKR 001, the luxury pure electric MPV – ZEEKR 009 and the new luxury versatile SUV – ZEEKR X.
The bull case rests on bestselling premium BEVs, rapid vehicle sales growth, rising gross margin, debt-free balance sheet and a favourable cash conversion cycle.


Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/vinfast" target="_blank" data-smartkarma-citation="entities:36550:1" rel="noopener">VinFast (1905332D VN)</a>, a Vietnamese EV (electric vehicle) manufacturer and a majority-owned affiliate of <a href="https://www.smartkarma.com/entities/vingroup-jsc" target="_blank" data-smartkarma-citation="entities:13213:1" rel="noopener">Vingroup Jsc (VIC VN)</a>, completed its merger with Black Spade. </li>
<li>The shares closed 3.7x up on the first day with a market cap of US$86bn. The pop is partly due to low float resulting from the controlling shareholder's 99.0% stake. </li>
<li>VinFast faces headwinds of poor reviews, declining customer traction, ongoing losses and cash burn. VinFast is trading at a material premium to peers on growth-adjusted multiples.  </li>
</ul>



VinFast (1905332D VN), a Vietnamese EV (electric vehicle) manufacturer and a majority-owned affiliate of Vingroup Jsc (VIC VN), completed its merger with Black Spade. 
The shares closed 3.7x up on the first day with a market cap of US$86bn. The pop is partly due to low float resulting from the controlling shareholder's 99.0% stake. 
VinFast faces headwinds of poor reviews, declining customer traction, ongoing losses and cash burn. VinFast is trading at a material premium to peers on growth-adjusted multiples.  


<ul>
<li>
<a href="https://www.smartkarma.com/entities/zhejiang-leapmotor-technology" target="_blank" data-smartkarma-citation="entities:35968:1" rel="noopener">Leapmotor (9863 HK)</a> priced its H Share at HK$48.00 per share to raise net proceeds of HK$6,057.4 million (US$772 million). The H Share will start trading tomorrow.</li>
<li>The H Shares of peers posted no first-day gains and are currently below the listing prices. Market sentiment on peers has remained weak since the release of the prospectus.</li>
<li>Leapmotor, at best, should trade in line with median peer multiples. Leapmotor is fairly valued at the IPO price. We continue to remain on the sidelines.</li>
</ul>



Leapmotor (9863 HK) priced its H Share at HK$48.00 per share to raise net proceeds of HK$6,057.4 million (US$772 million). The H Share will start trading tomorrow.
The H Shares of peers posted no first-day gains and are currently below the listing prices. Market sentiment on peers has remained weak since the release of the prospectus.
Leapmotor, at best, should trade in line with median peer multiples. Leapmotor is fairly valued at the IPO price. We continue to remain on the sidelines.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/zhejiang-leapmotor-technology" target="_blank" data-smartkarma-citation="entities:35968:1" rel="noopener">Leapmotor (2007699D HK)</a> has launched its HKEx listing at HK$48.00-62.00 per share to raise up to US$1.0 billion. Books are open from 20 to 23 September.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/leapmotor-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:79449" rel="noopener">Leapmotor IPO: The Bull Case</a>, <a href="https://www.smartkarma.com/insights/leapmotor-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:79536" rel="noopener">Leapmotor IPO: The Bear Case</a>, <a href="https://www.smartkarma.com/insights/leapmotor-ipo-look-before-you-leap" target="_blank" data-smartkarma-citation="insights:79904" rel="noopener">Leapmotor IPO: Look Before You Leap</a>, <a href="https://www.smartkarma.com/insights/leapmotor-ipo-valuation-first-look" target="_blank" data-smartkarma-citation="insights:80089" rel="noopener">Leapmotor IPO: Valuation First-Look</a>. </li>
<li>Leapmotor, at best, should trade in line with median peer multiples. Leapmotor is fairly valued at the low end of the IPO price range. We pass on the IPO.</li>
</ul>



Leapmotor (2007699D HK) has launched its HKEx listing at HK$48.00-62.00 per share to raise up to US$1.0 billion. Books are open from 20 to 23 September.
We previously discussed the IPO in Leapmotor IPO: The Bull Case, Leapmotor IPO: The Bear Case, Leapmotor IPO: Look Before You Leap, Leapmotor IPO: Valuation First-Look. 
Leapmotor, at best, should trade in line with median peer multiples. Leapmotor is fairly valued at the low end of the IPO price range. We pass on the IPO.


United States

Canoo Inc. operates as an electric vehicle company. The Company specializes in cars, mini buses, and commercial vehicles for rental and sharing services. Canoo serves customers in the United States.

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Canoo Inc (GOEV US)

ZEEKR IPO: The Bear Case

The bear case rests on growth slowdown in the second-largest business, high related-parties dependence, Virdi/CEVT gross margin pressure, ongoing...

Arun George

ZEEKR IPO: The Bull Case

The bull case rests on bestselling premium BEVs, rapid vehicle sales growth, rising gross margin, debt-free balance sheet and a favourable cash...

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VinFast: Inexplicable Valuation

VinFast faces headwinds of poor reviews, declining customer traction, ongoing losses and cash burn. VinFast is trading at a material premium to...

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Leapmotor IPO: Trading Debut

Market sentiment on peers has remained weak since the release of the prospectus. Leapmotor, at best, is fairly valued at the IPO price. We continue...

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Leapmotor IPO: Valuation Insights

Leapmotor, at best, should trade in line with median peer multiples. Leapmotor is fairly valued at the low end of the IPO price range. We pass on...

Arun George

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