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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/liontown-resources-ltd" target="_blank" data-smartkarma-citation="entities:20488:1" rel="noopener">Liontown Resources (LTR AU)</a> has rejected an unsolicited non-binding privatisation proposal from <a href="https://www.smartkarma.com/entities/albemarle-corp" target="_blank" data-smartkarma-citation="entities:7678:1" rel="noopener">Albemarle Corp (ALB US)</a> at A$2.50 per share, which is a 63.9% premium to the undisturbed price (27 March).</li>
<li>The offer is attractive in comparison to peer multiples and historical share prices. Liontown suggests that the offer does not appropriately value the Kathleen Valley Lithium Project.</li>
<li>A bump to the Board’s desired A$3.00 offer is justifiable based on the Kathleen Valley NPV sensitivity analysis related to spodumene prices. Albemarle remains willing to engage. </li>
</ul>



Liontown Resources (LTR AU) has rejected an unsolicited non-binding privatisation proposal from Albemarle Corp (ALB US) at A$2.50 per share, which is a 63.9% premium to the undisturbed price (27 March).
The offer is attractive in comparison to peer multiples and historical share prices. Liontown suggests that the offer does not appropriately value the Kathleen Valley Lithium Project.
A bump to the Board’s desired A$3.00 offer is justifiable based on the Kathleen Valley NPV sensitivity analysis related to spodumene prices. Albemarle remains willing to engage. 


Liontown Resources (LTR AU): A Bump to Albermale’s A$2.50 Offer Is Justifiable

<ul>
<li>
<a href="https://www.smartkarma.com/entities/essential-metals-ltd" target="_blank" data-smartkarma-citation="entities:9645:1" rel="noopener">Essential Metals (ESS AU)</a> has entered a SID with a <a href="https://www.smartkarma.com/entities/sichuan-tianqi-lithium-industries-inc" target="_blank" data-smartkarma-citation="entities:5698:1" rel="noopener">Tianqi Lithium (002466 CH)</a>/<a href="https://www.smartkarma.com/entities/igo-ltd" target="_blank" data-smartkarma-citation="entities:462:1" rel="noopener">IGO Ltd (IGO AU)</a> JV at A$0.50, a 44.9% premium to the undisturbed price (6 January).</li>
<li>The scheme is subject to shareholder and FIRB approval. The FIRB should approve a 49% Aussie-owned offeror for a project to be processed in Australia.</li>
<li>There is a possibility of a competing bid as the offer is far from a knockout bid and ESS lacks substantial shareholders. The scheme meeting is in April. </li>
</ul>



Essential Metals (ESS AU) has entered a SID with a Tianqi Lithium (002466 CH)/IGO Ltd (IGO AU) JV at A$0.50, a 44.9% premium to the undisturbed price (6 January).
The scheme is subject to shareholder and FIRB approval. The FIRB should approve a 49% Aussie-owned offeror for a project to be processed in Australia.
There is a possibility of a competing bid as the offer is far from a knockout bid and ESS lacks substantial shareholders. The scheme meeting is in April. 


Essential Metals (ESS AU)’s Enters a SID at A$0.50 with a Tianqi/IGO JV

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>As expected, there are no adds or deletes for the MVIS Global Rare Earth/Strategic Metals Index at the December rebalance.</li>
<li>There are free float and capping changes that will be implemented at the close on 16 December.</li>
<li>One way turnover is estimated at 4.26% and will result in a one-way trade of US$31.5m.</li>
</ul>


As expected, there are no adds or deletes for the MVIS Global Rare Earth/Strategic Metals Index at the December rebalance.
There are free float and capping changes that will be implemented at the close on 16 December.
One way turnover is estimated at 4.26% and will result in a one-way trade of US$31.5m.


MVIS Global Rare Earth/​​Strategic Metals Index Rebalance: Float & Capping Changes

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sichuan-tianqi-lithium-industries-inc" target="_blank" data-smartkarma-citation="entities:5698:1" rel="noopener">Tianqi Lithium (002466 CH)</a> priced its H Share at HK$82.00 per share to raise net proceeds of HK$13,062 million (US$1.7 billion). The H Share will start trading tomorrow.</li>
<li>The H Share listing (HK$82.00) and <a href="https://inews.hket.com/article/3300412/%E3%80%90%E6%96%B0%E8%82%A1IPO%E3%80%91%E5%9B%9B%E6%96%B0%E8%82%A1%E6%9A%97%E7%9B%A4%E9%BD%8A%E8%B7%8C%E3%80%80%E5%A4%A9%E9%BD%8A%E9%8B%B0%E6%A5%AD9696%E4%B8%80%E6%89%8B%E6%9A%AB%E8%9D%951100%E5%85%83?mtc=40001&amp;srkw=IPO%E6%9C%80%E5%BF%AB%E6%9C%80%E9%BD%8A" target="_blank" rel="noopener">grey market price</a> (HK$76.50) imply an AH discount of 45% and 49%, respectively. This compares to <a href="https://www.smartkarma.com/entities/ganfeng-lithium-co-ltd" target="_blank" data-smartkarma-citation="entities:26795:1" rel="noopener">Ganfeng Lithium (1772 HK)</a>’s current 35.3% AH discount.</li>
<li>The relative valuation is attractive. At the H Share listing price, <a href="https://www.smartkarma.com/entities/tianqi-lithium-corporation" target="_blank" data-smartkarma-citation="entities:27789:1" rel="noopener">Tianqi Lithium (9696 HK)</a>’s H Share trades at a -6% discount to the median peers’ CY2022 P/B multiple.</li>
</ul>



Tianqi Lithium (002466 CH) priced its H Share at HK$82.00 per share to raise net proceeds of HK$13,062 million (US$1.7 billion). The H Share will start trading tomorrow.
The H Share listing (HK$82.00) and grey market price (HK$76.50) imply an AH discount of 45% and 49%, respectively. This compares to Ganfeng Lithium (1772 HK)’s current 35.3% AH discount.
The relative valuation is attractive. At the H Share listing price, Tianqi Lithium (9696 HK)’s H Share trades at a -6% discount to the median peers’ CY2022 P/B multiple.


Tianqi Lithium H Share Listing: Trading Debut

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tianqi-lithium-corporation" target="_blank" data-smartkarma-citation="entities:27789:1" rel="noopener">Tianqi Lithium (9696 HK)</a> has launched its H Share listing at an indicative price range of HK$69.00-82.00 per share. Pricing is on 6 July and listing on 13 July.</li>
<li>
<a href="https://www.smartkarma.com/entities/sichuan-tianqi-lithium-industries-inc" target="_blank" data-smartkarma-citation="entities:5698:1" rel="noopener">Tianqi Lithium (002466 CH)</a>'s AH discount range of 52.9%-44.0% is reasonable in the context of <a href="https://www.smartkarma.com/entities/ganfeng-lithium-co-ltd" target="_blank" data-smartkarma-citation="entities:26795:1" rel="noopener">Ganfeng Lithium (1772 HK)</a>’s average AH discount is 38.5% since its H Share listing.</li>
<li>Our relative valuation analysis suggests that Tianqi's H Share valuation is attractive in comparison to median peers' multiples. </li>
</ul>



Tianqi Lithium (9696 HK) has launched its H Share listing at an indicative price range of HK$69.00-82.00 per share. Pricing is on 6 July and listing on 13 July.

Tianqi Lithium (002466 CH)'s AH discount range of 52.9%-44.0% is reasonable in the context of Ganfeng Lithium (1772 HK)’s average AH discount is 38.5% since its H Share listing.
Our relative valuation analysis suggests that Tianqi's H Share valuation is attractive in comparison to median peers' multiples. 


Tianqi Lithium H Share Listing: Valuation Insights

United States

Livent Corporation produces and distributes lithium chemicals. The Company offers lithium chemicals for applications in batteries, agrochemicals, aerospace alloys, greases, pharmaceuticals, polymers, and various industrial applications.

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Livent (LTHM US)

Liontown Resources (LTR AU): A Bump to Albermale’s A$2.50 Offer Is Justifiable

A bump to the Board’s desired A$3.00 offer is justifiable based on the Kathleen Valley NPV sensitivity analysis related to spodumene prices....

Arun George

Essential Metals (ESS AU)’s Enters a SID at A$0.50 with a Tianqi/IGO JV

FIRB approval is a risk. The offer is far from a knockout bid which raises the possibility of a competing bid. At the last close and for a May end...

Arun George

MVIS Global Rare Earth/Strategic Metals Index Rebalance: Float & Capping Changes

No adds/deletes for REMX in December. Free float and capping changes will be implemented at the close on 16 December resulting in one-way turnover...

Brian Freitas

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52-week Range

Market Cap (USDm)

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Liontown Resources (LTR AU): A Bump to Albermale’s A$2.50 Offer Is Justifiable

A bump to the Board’s desired A$3.00 offer is justifiable based on the Kathleen Valley NPV sensitivity analysis related to spodumene prices....

Arun George

Essential Metals (ESS AU)’s Enters a SID at A$0.50 with a Tianqi/IGO JV

FIRB approval is a risk. The offer is far from a knockout bid which raises the possibility of a competing bid. At the last close and for a May end...

Arun George

MVIS Global Rare Earth/​​Strategic Metals Index Rebalance: Float & Capping Changes

No adds/deletes for REMX in December. Free float and capping changes will be implemented at the close on 16 December resulting in one-way turnover...

Brian Freitas

Tianqi Lithium H Share Listing: Trading Debut

The H Share opened at 6.7% lower in the Futu grey market. The AH discount and relative valuation suggest that the H Share listing price remains...

Arun George

Tianqi Lithium H Share Listing: Valuation Insights

Tianqi's AH discount range is reasonable. The H Share valuation is attractive in comparison to median peers' multiples. Participate in the H Share...

Arun George

MVIS Global Rare Earth/Strategic Metals Index Rebalance: Float & Capping Changes