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

Blue Moon Group Holdings / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/blue-moon-group-holdings" target="_blank" data-smartkarma-citation="entities:29179:1" rel="noopener">Blue Moon Group Holdings (6993 HK)</a> is a leading consumer household care company in China.  Blue Moon will commence trading on Wednesday, 16 December. Blue Moon priced its IPO at HK$13.16 and <a href="http://www.aastocks.com/en/stocks/news/aafn-con/NOW.1063245/ipo-news" target="_blank" rel="noopener">opened 14% higher</a> at HK$15.00 in the grey market and last stood at HK$14.90.</p></div><div><p>In <a href="https://www.smartkarma.com/insights/blue-moon-ipo-initiation-laundry-list" target="_blank" data-smartkarma-citation="insights:41086" rel="noopener">Blue Moon IPO Initiation: Laundry List</a>, we stated that on balance we think the positives (market-leading brand, strong margin progression, solid cash generation) outweigh the negatives (declining revenue growth and short-term COVID-19 impact). In <a href="https://www.smartkarma.com/insights/blue-moon-ipo-doing-the-wash" target="_blank" data-smartkarma-citation="insights:45481" rel="noopener">Blue Moon IPO: Doing the Wash</a> we noted that the 1H20 results disclosed in the PHIP show that the Blue Moon has creditably navigated the adverse revenue decline on its core business due to the COVID-19 outbreak by improving margin and cash generation. In <a href="https://www.smartkarma.com/insights/blue-moon-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:46033" rel="noopener">Blue Moon IPO: Valuation Insights</a>, we noted that the IPO price range is attractive.</p></div><div><div><div class="content-highlight"><p>Our base-case DCF derived price target of HK$15.21 per share. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis shows that the IPO price continues to provide good upside potential. </p></div></div></div>

Blue Moon Group Holdings (6993 HK) is a leading consumer household care company in China.  Blue Moon will commence trading on Wednesday, 16 December. Blue Moon priced its IPO at HK$13.16 and opened 14% higher at HK$15.00 in the grey market and last stood at HK$14.90.In Blue Moon IPO Initiation: Laundry List, we stated that on balance we think the positives (market-leading brand, strong margin progression, solid cash generation) outweigh the negatives (declining revenue growth and short-term COVID-19 impact). In Blue Moon IPO: Doing the Wash we noted that the 1H20 results disclosed in the PHIP show that the Blue Moon has creditably navigated the adverse revenue decline on its core business due to the COVID-19 outbreak by improving margin and cash generation. In Blue Moon IPO: Valuation Insights, we noted that the IPO price range is attractive.Our base-case DCF derived price target of HK$15.21 per share. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis shows that the IPO price continues to provide good upside potential. 

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<p><a href="https://www.smartkarma.com/entities/guangzhou-blue-moon-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:29179:1" rel="noopener">Blue Moon Group Holdings (BMG HK)</a> is a leading consumer household care company in China. At the proposed IPO price range of HK$10.20-13.16 per share, Blue Moon will have a market cap of HK$58,621-75,632 million ($7.6-9.8 billion). At the mid-point of the IPO price range, the total net proceeds are HK$8,492 million ($1.1 billion). </p>
<p>Six cornerstone investors will subscribe for HK$1,821 million ($235 million) of the offer shares (20.87% of the offer shares at the mid-point of the price range). The cornerstone investors are BOCHK Asset Management, <a href="https://www.smartkarma.com/entities/shanghai-dazhong-public-utilities-a" target="_blank" data-smartkarma-citation="entities:7847:1" rel="noopener">Shanghai Dazhong Public Utilities - A (600635 CH)</a>,  Fullerton, Changjia Group, Greater Bay Area Fund and Veritas Asset Management.</p>
</div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/blue-moon-ipo-initiation-laundry-list" target="_blank" data-smartkarma-citation="insights:41086" rel="noopener">Blue Moon IPO Initiation: Laundry List</a>, we stated that on balance we think the positives (market-leading brand, strong margin progression, solid cash generation) outweigh the negatives (declining revenue growth and short-term COVID-19 impact). In <a href="https://www.smartkarma.com/insights/blue-moon-ipo-doing-the-wash" target="_blank" data-smartkarma-citation="insights:45481" rel="noopener">Blue Moon IPO: Doing the Wash</a> we noted that the 1H20 results disclosed in the PHIP show that the Blue Moon has creditably navigated the adverse revenue decline on its core business due to the COVID-19 outbreak by improving margin and cash generation. Overall, we would participate in the IPO due to an attractive IPO price range.</p></div></div>


Blue Moon Group Holdings (BMG HK) is a leading consumer household care company in China. At the proposed IPO price range of HK$10.20-13.16 per share, Blue Moon will have a market cap of HK$58,621-75,632 million ($7.6-9.8 billion). At the mid-point of the IPO price range, the total net proceeds are HK$8,492 million ($1.1 billion). 
Six cornerstone investors will subscribe for HK$1,821 million ($235 million) of the offer shares (20.87% of the offer shares at the mid-point of the price range). The cornerstone investors are BOCHK Asset Management, Shanghai Dazhong Public Utilities - A (600635 CH),  Fullerton, Changjia Group, Greater Bay Area Fund and Veritas Asset Management.
In Blue Moon IPO Initiation: Laundry List, we stated that on balance we think the positives (market-leading brand, strong margin progression, solid cash generation) outweigh the negatives (declining revenue growth and short-term COVID-19 impact). In Blue Moon IPO: Doing the Wash we noted that the 1H20 results disclosed in the PHIP show that the Blue Moon has creditably navigated the adverse revenue decline on its core business due to the COVID-19 outbreak by improving margin and cash generation. Overall, we would participate in the IPO due to an attractive IPO price range.

<div><p><a href="https://www.smartkarma.com/entities/guangzhou-blue-moon-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:29179:1" rel="noopener">Blue Moon Group Holdings (BMG HK)</a> is a leading consumer household care company in China. In 2019, Blue Moon ranked first in China’s liquid laundry detergent market, concentrated liquid laundry detergent market and liquid soap market as measured by retail sales value, with a market share of 24.4%, 27.9% and 17.4%, respectively, according to Frost &amp; Sullivan. Blue Moon aims to kick-off its $1 billion IPO as soon as this week and one of the underwriters (UBS) has valued Blue Moon at HK$78.0-93.6 billion, according to <a href="http://www.aastocks.com/en/stocks/news/aafn-con/NOW.1059856/ipo-news" target="_blank" rel="noopener">press reports</a>.</p></div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/blue-moon-ipo-initiation-laundry-list" target="_blank" data-smartkarma-citation="insights:41086" rel="noopener">Blue Moon IPO Initiation: Laundry List</a>, we stated that on balance we think the positives (market-leading brand, strong margin progression, solid cash generation) outweigh the negatives (declining revenue growth and short-term COVID-19 impact). In <a href="https://www.smartkarma.com/insights/blue-moon-ipo-doing-the-wash" target="_blank" data-smartkarma-citation="insights:45481" rel="noopener">Blue Moon IPO: Doing the Wash</a> we noted that the 1H20 results disclosed in the PHIP show that the Blue Moon has creditably navigated the adverse revenue decline on its core business due to the COVID-19 outbreak by improving margin and cash generation. Overall, based on valuation analysis, we think that the underwriters' valuation range can be justified.</p></div></div>

Blue Moon Group Holdings (BMG HK) is a leading consumer household care company in China. In 2019, Blue Moon ranked first in China’s liquid laundry detergent market, concentrated liquid laundry detergent market and liquid soap market as measured by retail sales value, with a market share of 24.4%, 27.9% and 17.4%, respectively, according to Frost &amp; Sullivan. Blue Moon aims to kick-off its $1 billion IPO as soon as this week and one of the underwriters (UBS) has valued Blue Moon at HK$78.0-93.6 billion, according to press reports.In Blue Moon IPO Initiation: Laundry List, we stated that on balance we think the positives (market-leading brand, strong margin progression, solid cash generation) outweigh the negatives (declining revenue growth and short-term COVID-19 impact). In Blue Moon IPO: Doing the Wash we noted that the 1H20 results disclosed in the PHIP show that the Blue Moon has creditably navigated the adverse revenue decline on its core business due to the COVID-19 outbreak by improving margin and cash generation. Overall, based on valuation analysis, we think that the underwriters' valuation range can be justified.

<p><a href="https://www.smartkarma.com/entities/guangzhou-blue-moon-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:29179:1" rel="noopener">Blue Moon Group Holdings (BMG HK)</a> is a leading consumer household care company in China. In 2019, Blue Moon ranked first in China’s liquid laundry detergent market, concentrated liquid laundry detergent market and liquid soap market as measured by retail sales value, with a market share of 24.4%, 27.9% and 17.4%, respectively, according to Frost &amp; Sullivan. Blue Moon has filed its PHIP and is pre-marketing for a Hong Kong IPO to raise $1 billion, according to press reports.</p><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/blue-moon-ipo-initiation-laundry-list" target="_blank" data-smartkarma-citation="insights:41086" rel="noopener">Blue Moon IPO Initiation: Laundry List</a>, we stated that on balance we think the positives (market-leading brand, strong margin progression, solid cash generation) outweigh the negatives (declining revenue growth and short-term COVID-19 impact). The 1H20 results disclosed in the PHIP show that the Blue Moon has creditably navigated the adverse revenue decline on its core business due to the COVID-19 outbreak by improving margin and cash generation. With the impact of the COVID-19 outbreak gradually receding in China, Blue Moon has strong fundamentals to ride a recovery in demand for its core fabric care products. Overall, we continue to believe that Blue Moon’s fundamentals are attractive.</p></div>

Blue Moon Group Holdings (BMG HK) is a leading consumer household care company in China. In 2019, Blue Moon ranked first in China’s liquid laundry detergent market, concentrated liquid laundry detergent market and liquid soap market as measured by retail sales value, with a market share of 24.4%, 27.9% and 17.4%, respectively, according to Frost &amp; Sullivan. Blue Moon has filed its PHIP and is pre-marketing for a Hong Kong IPO to raise $1 billion, according to press reports.In Blue Moon IPO Initiation: Laundry List, we stated that on balance we think the positives (market-leading brand, strong margin progression, solid cash generation) outweigh the negatives (declining revenue growth and short-term COVID-19 impact). The 1H20 results disclosed in the PHIP show that the Blue Moon has creditably navigated the adverse revenue decline on its core business due to the COVID-19 outbreak by improving margin and cash generation. With the impact of the COVID-19 outbreak gradually receding in China, Blue Moon has strong fundamentals to ride a recovery in demand for its core fabric care products. Overall, we continue to believe that Blue Moon’s fundamentals are attractive.

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Nasdaq-100 Stock Index / Technical Analysis

<p>In today’s report we outline  our belief that the combination of extreme oversold conditions and several key sectors/industries holding above major long-term support lead us to believe an important bottom has been established. We also highlight attractive Groups and stocks within Staples, Financials, and Health Care: Large- &amp; Small-Cap Soft Drinks &amp; Bottlers, Electronic Exchanges/Markets, and Large- and Mid-Cap Biotech.</p>

In today’s report we outline  our belief that the combination of extreme oversold conditions and several key sectors/industries holding above major long-term support lead us to believe an important bottom has been established. We also highlight attractive Groups and stocks within Staples, Financials, and Health Care: Large- &amp; Small-Cap Soft Drinks &amp; Bottlers, Electronic Exchanges/Markets, and Large- and Mid-Cap Biotech.

A Bottom Has Been Established; Possible Retest?

United States

Coty Inc. manufactures and distributes beauty products. The Company offers fragrances, color cosmetics, hygiene, sun care, and skin treatment products. Coty supplies its products to department stores, specialty retailers, mass-market retailers, and duty free shops in airports worldwide.

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Coty Inc Cl A (COTY US)

Blue Moon IPO: Trading Debut

Blue Moon priced its IPO at HK$13.16 and opened 14% higher at HK$15.00 in the grey market. Our DCF sensitivity analysis shows that the IPO price...

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Blue Moon IPO: Valuation Insights

Blue Moon has launched its HK IPO to raise net proceeds of $1.1 billion, at the mid-point of the HK$10.20-13.16 price range. Overall, we think that...

Arun George

Blue Moon IPO: Valuation First Look

Blue Moon aims to kick-off its $1 billion IPO as soon as this week and one of the underwriters (UBS) has valued Blue Moon at HK$78.0-93.6 billion....

Arun George

Blue Moon IPO: Doing the Wash

Blue Moon is pre-marketing for an HK IPO to raise $1 billion. With the impact of the COVID-19 outbreak receding, Blue Moon has strong fundamentals...

Arun George

A Bottom Has Been Established; Possible Retest?

In today’s report we outline our belief that the combination of extreme oversold conditions and several key sectors/industries holding above major...

Vermilion Research

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