Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Capital Markets

<p>The IPO price for <a href="https://www.smartkarma.com/entities/shimao-services-holdings-limited" target="_blank" data-smartkarma-citation="entities:29199:1" rel="noopener">Shimao Services Holdings (873 HK)</a> (SSH), the latest in a long line of property management service companies to be listed, will be announced tomorrow. Shares will commence trading this Friday.</p>
<p>SSH is the spin-off of <a href="https://www.smartkarma.com/entities/shimao-property-holdings-limited" target="_blank" data-smartkarma-citation="entities:8375:1" rel="noopener">Shimao Property Holdings (813 HK)</a>, who will own 66.5% in SSH after the IPO, down from 90% currently.</p>
<p>Similar to <a href="https://www.smartkarma.com/entities/kwg-living-group" target="_blank" data-smartkarma-citation="entities:29231:1" rel="noopener">KWG Living Group (3913 HK)</a>, SSH's implied PER is in keeping with its generous growth the last two years, and arguably can be justified, to some degree, when comparing PER/Growth to peer comps.</p>
<p>However, Shimao Property looks expensive when de-consolidating out the implied market cap of SSH.</p>
<p>As always, more below the fold. </p>

The IPO price for Shimao Services Holdings (873 HK) (SSH), the latest in a long line of property management service companies to be listed, will be announced tomorrow. Shares will commence trading this Friday.
SSH is the spin-off of Shimao Property Holdings (813 HK), who will own 66.5% in SSH after the IPO, down from 90% currently.
Similar to KWG Living Group (3913 HK), SSH's implied PER is in keeping with its generous growth the last two years, and arguably can be justified, to some degree, when comparing PER/Growth to peer comps.
However, Shimao Property looks expensive when de-consolidating out the implied market cap of SSH.
As always, more below the fold. 

Shimao Services: KWG Living-Like Valuation; Parent Trading Rich

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<p>Lufax Holdings, a leading financial services firm in China has filed for an IPO in the US. The company has set an indicative IPO price range of US$11.5-13.5 per ADS, and at the midpoint of the IPO price of US$12.50, the company will raise net proceeds of US$2.1bn. The company expects to use the proceeds for general corporate purposes.</p><table class="table table-striped"><tbody>
<tr><td colspan="2" style="width: 237.0pt;"><p><strong>Lufax Holdings IPO Details</strong></p></td></tr>
<tr>
<td style="width: 147.0pt;"><p>No. of ADSs Issued</p></td>
<td style="width: 90.0pt;"><p style="text-align: right;">175,000,000</p></td>
</tr>
<tr>
<td style="width: 147.0pt;"><p>Ordinary Shares per ADS</p></td>
<td style="width: 90.0pt;"><p style="text-align: right;">0.5</p></td>
</tr>
<tr>
<td style="width: 147.0pt;"><p>Shares Outstanding Post IPO</p></td>
<td style="width: 90.0pt;"><p style="text-align: right;">1,219,678,331</p></td>
</tr>
<tr>
<td style="width: 147.0pt;"><p>Offer as a % of Outstanding Shares</p></td>
<td style="width: 90.0pt;"><p style="text-align: right;">7.17%</p></td>
</tr>
<tr>
<td style="width: 147.0pt;"><p>Price per ADS (US$)</p></td>
<td style="width: 90.0pt;"><p style="text-align: right;">11.50-13.50</p></td>
</tr>
<tr>
<td style="width: 147.0pt;"><p>Net Proceeds from IPO (US$m)</p></td>
<td style="width: 90.0pt;"><p style="text-align: right;">                                     2,109</p></td>
</tr>
<tr>
<td style="width: 147.0pt;"><p>Market Capitalisation (US$m)</p></td>
<td style="width: 90.0pt;"><p style="text-align: right;">                                  30,492</p></td>
</tr>
<tr>
<td style="width: 147.0pt;"><p>Enterprise Value (US$m)</p></td>
<td style="width: 90.0pt;"><p style="text-align: right;">                                  26,911</p></td>
</tr>
</tbody></table><div class="content-caption"><em>Source: Company Disclosures, LSR (net proceeds, market cap and EV are based on the midpoint of the IPO price range)</em></div><p>In our previous insights, we discussed about the company’s business model, its business segments and also a comparison with its key peers. We highlighted that the company shifting its business model from P2P products and services have impacted its top line growth and margins.</p><p>Read our previous insights:</p><p><a href="https://www.smartkarma.com/insights/lufax-ipo-unsecured-loans-drive-top-line-growth-but-risks-remain-despite-capital-light-model" target="_blank" data-smartkarma-citation="insights:44132" rel="noopener">Lufax IPO: Unsecured Loans Drive Top Line Growth but Risks Remain Despite Capital-Light Model</a> </p><p><a href="https://www.smartkarma.com/insights/lufax-ipo-shift-in-product-mix-and-higher-customer-acquisition-cost-eat-into-profits" target="_blank" data-smartkarma-citation="insights:44179" rel="noopener">Lufax IPO: Shift in Product Mix and Higher Customer Acquisition Cost Eat into Profits</a> </p><p><a href="https://www.smartkarma.com/insights/lufax-ipo-peer-comparison-reveals-change-in-strategy-weighs-heavy-on-company-performance" target="_blank" data-smartkarma-citation="insights:44303" rel="noopener">Lufax IPO: Peer Comparison Reveals Change in Strategy Weighs Heavy on Company Performance</a> </p>

Lufax Holdings, a leading financial services firm in China has filed for an IPO in the US. The company has set an indicative IPO price range of US$11.5-13.5 per ADS, and at the midpoint of the IPO price of US$12.50, the company will raise net proceeds of US$2.1bn. The company expects to use the proceeds for general corporate purposes.
Lufax Holdings IPO Details

No. of ADSs Issued
175,000,000


Ordinary Shares per ADS
0.5


Shares Outstanding Post IPO
1,219,678,331


Offer as a % of Outstanding Shares
7.17%


Price per ADS (US$)
11.50-13.50


Net Proceeds from IPO (US$m)
                                     2,109


Market Capitalisation (US$m)
                                  30,492


Enterprise Value (US$m)
                                  26,911

Source: Company Disclosures, LSR (net proceeds, market cap and EV are based on the midpoint of the IPO price range)In our previous insights, we discussed about the company’s business model, its business segments and also a comparison with its key peers. We highlighted that the company shifting its business model from P2P products and services have impacted its top line growth and margins.Read our previous insights:Lufax IPO: Unsecured Loans Drive Top Line Growth but Risks Remain Despite Capital-Light Model Lufax IPO: Shift in Product Mix and Higher Customer Acquisition Cost Eat into Profits Lufax IPO: Peer Comparison Reveals Change in Strategy Weighs Heavy on Company Performance 

Lufax IPO Valuation: The Risk-Reward Profile Does Not Justify the Premium

<p>Shimao Services, a leading comprehensive property management and community living services company has filed for an IPO to list its shares on the Hong Kong Stock Exchange. At the midpoint of the indicative IPO price of HK$16 per share, the company will raise net proceeds of HK$5.5bn (US$715m).</p><p>The listing constitutes a spin-off from Shimao Group, a residential and commercial property developer in China. In this insight, we examine the company’s business models, segments, financials, and valuation.</p>

Shimao Services, a leading comprehensive property management and community living services company has filed for an IPO to list its shares on the Hong Kong Stock Exchange. At the midpoint of the indicative IPO price of HK$16 per share, the company will raise net proceeds of HK$5.5bn (US$715m).The listing constitutes a spin-off from Shimao Group, a residential and commercial property developer in China. In this insight, we examine the company’s business models, segments, financials, and valuation.

Shimao Services IPO: Another Property Management Services Company with Good Potential

<div>
<p>This week in StubWorld ...</p>
</div>
<div>
<div class="content-highlight">
<a href="https://www.smartkarma.com/entities/kwg-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:12601:1" rel="noopener">Kwg Property Holding (1813 HK)</a> is trading rich to peers after the in-specie distribution of soon-to-be-listed <a href="https://www.smartkarma.com/entities/kwg-living-group" target="_blank" data-smartkarma-citation="entities:29231:1" rel="noopener">KWG Living Group (3913 HK)</a>. KWG Living itself will need to hit significant earnings growth targets to justify its implied market valuation.</div>
</div>
<p>Preceding my comments on KWG are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
<div>
<div>
<div class="content-remarks">
<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed as a % - of at least 20%.</p>
</div>
</div>
</div>


This week in StubWorld ...



Kwg Property Holding (1813 HK) is trading rich to peers after the in-specie distribution of soon-to-be-listed KWG Living Group (3913 HK). KWG Living itself will need to hit significant earnings growth targets to justify its implied market valuation.

Preceding my comments on KWG are the weekly setup/unwind tables for Asia-Pacific Holdcos.



These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed as a % - of at least 20%.




<p><a href="https://www.smartkarma.com/entities/kwg-living-group" target="_blank" data-smartkarma-citation="entities:29231:1" rel="noopener">KWG Living Group (3913 HK)</a>  offers comprehensive property management services for both residential properties and commercial properties in China. The company has filed for an IPO on the Hong Kong Stock Exchange to raise about US$402m through the issuance of 383m shares at an indicative IPO price of HK$8.13 per share.</p><p>The company has entered into cornerstone investment agreements with Hillhouse Funds, Orchid China and LMA SPC, Harvest Global Capital Investments, Snow Lake, Valliance, China Lesso, OP Capital and Aspex Master Fund. These cornerstone investors have agreed to subscribe for an aggregate amount of US$120m worth of shares.</p><p>In our previous insight on the company, we discussed the company’s business model, business segments and its financials. In this insight, we discuss the company’s valuation and key risks.</p><p>Read our previous insight:</p><p><a href="https://www.smartkarma.com/insights/kwg-living-ipo-expansion-in-community-value-added-services-drives-growth" target="_blank" data-smartkarma-citation="insights:44334" rel="noopener">KWG Living IPO: Expansion in Community Value-Added Services Drives Growth</a> </p>

KWG Living Group (3913 HK)  offers comprehensive property management services for both residential properties and commercial properties in China. The company has filed for an IPO on the Hong Kong Stock Exchange to raise about US$402m through the issuance of 383m shares at an indicative IPO price of HK$8.13 per share.The company has entered into cornerstone investment agreements with Hillhouse Funds, Orchid China and LMA SPC, Harvest Global Capital Investments, Snow Lake, Valliance, China Lesso, OP Capital and Aspex Master Fund. These cornerstone investors have agreed to subscribe for an aggregate amount of US$120m worth of shares.In our previous insight on the company, we discussed the company’s business model, business segments and its financials. In this insight, we discuss the company’s valuation and key risks.Read our previous insight:KWG Living IPO: Expansion in Community Value-Added Services Drives Growth 

KWG Living IPO: Strong Financials and Growth Prospects Justify a Premium

China

KWG Living Group Holdings Limited is an investment holding company that provides residential and non-residential property management services across the People's Republic of China. The company offers a range of services including commercial operational, real estate intermediary and consultant, advertising planning, intelligent engineering, business, and urban and rural environmental sanitation services. It manages various property types such as residential developments, commercial complexes, office buildings, schools, hospitals, hotels, and industrial parks. The company was founded in 2004 and is based in Wan Chai, Hong Kong.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

KWG Living (3913 HK)

Shimao Services: KWG Living-Like Valuation; Parent Trading Rich

Shimao Property's trades at a significant premium to the implied P/B for property developers, net of their management services investment holding.

David Blennerhassett

Lufax IPO Valuation: The Risk-Reward Profile Does Not Justify the Premium

In this insight, we evaluate the attractiveness of Lufax's IPO valuation compared to its peers. We believe the company shares are overvalued and...

Shifara Samsudeen, FCMA, CGMA

Shimao Services IPO: Another Property Management Services Company with Good Potential

We deep dive into Shimao Services' business model, financials and valuation to assess the attractiveness of its business and IPO.

Shifara Samsudeen, FCMA, CGMA

StubWorld: KWG Living - Crowded In Crowd

Kwg Prop (1813 HK) is trading rich to peers after the in-specie distribution of soon-to-be-listed KWG Living (3913 HK). KWGL will need to hit...

David Blennerhassett

KWG Living IPO: Strong Financials and Growth Prospects Justify a Premium

We compare the company's implied valuation matrices and KPIs with property management service peers in China. Though KWG Living's shares seem...

Shifara Samsudeen, FCMA, CGMA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)