APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Allied Blenders and Distillers / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/allied-blenders-distillers" target="_blank" data-smartkarma-citation="entities:36090:1" rel="noopener">Allied Blenders &amp; Distillers (ABD IN)</a> is looking to raise about US$250m in its upcoming India IPO. I-Sec, Axis Capital, JM Financial, Kotak and Equirus Capital will be the bookrunners.</li>
<li>ABD is the largest Indian-owned Indian-made foreign liquor (IMFL) company and the third largest IMFL company in India, in terms of annual sales volumes between FY14 and FY21.</li>
<li>ABD has grown its brand over time and managed to stay profitable, despite COVID-19. However, sales volume has yet to return to pre-COVID levels, along with its profitability. </li>
</ul>



Allied Blenders &amp; Distillers (ABD IN) is looking to raise about US$250m in its upcoming India IPO. I-Sec, Axis Capital, JM Financial, Kotak and Equirus Capital will be the bookrunners.
ABD is the largest Indian-owned Indian-made foreign liquor (IMFL) company and the third largest IMFL company in India, in terms of annual sales volumes between FY14 and FY21.
ABD has grown its brand over time and managed to stay profitable, despite COVID-19. However, sales volume has yet to return to pre-COVID levels, along with its profitability. 


Allied Blenders and Distillers Pre-IPO - Yet to Recover from COVID-19

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Belle International / Equity Capital Markets

<ul>
<li>Belle Fashion (BF) aims to raise around US$1bn in its Hong Kong listing, which would mark its return to the stock market after five years.</li>
<li>Belle Fashion is the largest China-based fashion footwear and apparel group based on 2020 retail sales value, according to Frost &amp; Sullivan (F&amp;S). </li>
<li>In this note, we'll talk about the not so positive aspects of the deal.</li>
</ul>


Belle Fashion (BF) aims to raise around US$1bn in its Hong Kong listing, which would mark its return to the stock market after five years.
Belle Fashion is the largest China-based fashion footwear and apparel group based on 2020 retail sales value, according to Frost &amp; Sullivan (F&amp;S). 
In this note, we'll talk about the not so positive aspects of the deal.


Belle Fashion Pre-IPO - The Negatives - You'll Stumble in My Footsteps

<ul>
<li>Belle Fashion (BF) aims to raise around US$1bn in its Hong Kong listing, which would mark its return to the stock market after five years.</li>
<li>Belle Fashion is the largest China-based fashion footwear and apparel group based on 2020 retail sales value, according to Frost &amp; Sullivan (F&amp;S). </li>
<li>In this note, we will talk about the positive aspects of the deal.</li>
</ul>


Belle Fashion (BF) aims to raise around US$1bn in its Hong Kong listing, which would mark its return to the stock market after five years.
Belle Fashion is the largest China-based fashion footwear and apparel group based on 2020 retail sales value, according to Frost &amp; Sullivan (F&amp;S). 
In this note, we will talk about the positive aspects of the deal.


Belle Fashion Pre-IPO - The Positives - Try Walking in My Shoes

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

LVMH Moet Hennessy Louis Vuitton SE / Technical Analysis

LVMH Moet Hennessy Louis Vuitton SE (MC FP)

<ul>
<li>Select regions such as the US, Europe, Japan, and India are bullish, while others are not -- namely Hong Kong and China.</li>
<li>Relative strength (RS) for MSCI ACWI Technology is breaking out to new highs while RS on the MSCI ACWI Discretionary Sector is on the cusp of a breakout. </li>
<li>We highlight several buy opportunities within global Technology and Consumer Discretionary.</li>
</ul>


Select regions such as the US, Europe, Japan, and India are bullish, while others are not -- namely Hong Kong and China.
Relative strength (RS) for MSCI ACWI Technology is breaking out to new highs while RS on the MSCI ACWI Discretionary Sector is on the cusp of a breakout. 
We highlight several buy opportunities within global Technology and Consumer Discretionary.


Add To Global Technology and Consumer Discretionary

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

On 22 April, after the market close, <a href="https://www.smartkarma.com/entities/tod-s-spa" target="_blank" data-smartkarma-citation="entities:21231:1" rel="noopener">Tod's SpA (TOD IM)</a> issued a press release which said that Delphine SAS, a subsidiary of <a href="https://www.smartkarma.com/entities/lvmh-moet-hennessy-louis-vui" target="_blank" data-smartkarma-citation="entities:21072:1" rel="noopener">Lvmh Moet Hennessy Louis Vuitton (MC FP)</a>, entered into an agreement to acquire an additional 6.8% stake in <a href="https://www.smartkarma.com/entities/tod-s-spa" target="_blank" data-smartkarma-citation="entities:21231:1" rel="noopener">Tod's SpA (TOD IM)</a> from Diego Della Valle &amp; C. S.A.P.A for a total consideration of €74.5 mn.
The 22 April agreement represented at the time 2.2x EV/Fwd Sales and 14.2x EV/Fwd EBITDA,an implied equity value of €1,095 mn and an implied EV of €1,625 mn, and a 11.2% premium to the 1-month WVAP.
On 19 May, Diego Della Valle said said that if he ever decided to sell his company it would be to LVMH's boss Bernard Arnault but he added that he had no current plans to do so. He added that LVMH's recent decision to raise its stake in Tod's was a message "that we like to stay together". He reiterated that if the right opportunity arose, the two groups might "do something together". The shares increased by 3.6% and closed at €48.56. I do not think the family will sell their company that easily when there is a recovery from the pandemic in sight and a new creative director.
Shares enjoyed good momentum after LVMH increased its shareholding in Tod's from 3.2% to 10%, on expectations of an offer by LVMH, but the market seems to have run ahead of itself and the trend may have reversed in the last trading sessions.
In the insight I present a bull (acquisition by LVMH) and a bear case (on valuation grounds, more realistic in my view) for Tod's.
As a standalone entity, Tod's lacks the economies of scale that LVMH enjoys. Without scale, there is a limit as to how much can Tod's shrink its cost structure (procurement of leather and other inputs, marketing and publicity budgets, training of artisans). A best-case scenario valuation would assume an offer from LVMH at an EV 2.0x pre-Covid sales, not expected until 2023e, at least, plus a 15% control premium and some synergies factored in, say 5%, and the valuation would be around €50/share.
At current market prices, Tod's market cap and revenue are respectively &lt;0.5% and 1.5% those of LVMH, hence I do not think that acquiring Tod's is a strategic priority for LVMH in the same way as Tiffany was, nor is it a game changer, no matter how much a successful turnaround of Tod's could achieve in the mid term.
On valuation grounds, Tod's shares do not seem such good value after the recent bull run. A blended average of DCF, WACC 7.8%, terminal growth 1.5%, and 6.8x terminal EBITDA multiple, FCF and EBITDA from capital IQ consensus) and 2.0x EV/22e Sales gives €35.26/share.
<div>
Bernard Arnault, in contrast to the products offered at his stores, likes to buy cheap. His reputation is at stake and the renegotiation of the price tag for Tiffany is a case in point. Tod's does not seem a bargain right now.
Recommendation is short Tod'sTP 35.26/share, a 24% discount to the closing price on 20 May.
</div>
Read across: <a href="https://www.smartkarma.com/entities/salvatore-ferragamo-spa" target="_blank" data-smartkarma-citation="entities:21220:1" rel="noopener">Salvatore Ferragamo (SFER IM)</a> is a similar situation to that of Tod's.

On 22 April, after the market close, Tod's SpA (TOD IM) issued a press release which said that Delphine SAS, a subsidiary of Lvmh Moet Hennessy Louis Vuitton (MC FP), entered into an agreement to acquire an additional 6.8% stake in Tod's SpA (TOD IM) from Diego Della Valle &amp; C. S.A.P.A for a total consideration of €74.5 mn.
The 22 April agreement represented at the time 2.2x EV/Fwd Sales and 14.2x EV/Fwd EBITDA,an implied equity value of €1,095 mn and an implied EV of €1,625 mn, and a 11.2% premium to the 1-month WVAP.
On 19 May, Diego Della Valle said said that if he ever decided to sell his company it would be to LVMH's boss Bernard Arnault but he added that he had no current plans to do so. He added that LVMH's recent decision to raise its stake in Tod's was a message "that we like to stay together". He reiterated that if the right opportunity arose, the two groups might "do something together". The shares increased by 3.6% and closed at €48.56. I do not think the family will sell their company that easily when there is a recovery from the pandemic in sight and a new creative director.
Shares enjoyed good momentum after LVMH increased its shareholding in Tod's from 3.2% to 10%, on expectations of an offer by LVMH, but the market seems to have run ahead of itself and the trend may have reversed in the last trading sessions.
In the insight I present a bull (acquisition by LVMH) and a bear case (on valuation grounds, more realistic in my view) for Tod's.
As a standalone entity, Tod's lacks the economies of scale that LVMH enjoys. Without scale, there is a limit as to how much can Tod's shrink its cost structure (procurement of leather and other inputs, marketing and publicity budgets, training of artisans). A best-case scenario valuation would assume an offer from LVMH at an EV 2.0x pre-Covid sales, not expected until 2023e, at least, plus a 15% control premium and some synergies factored in, say 5%, and the valuation would be around €50/share.
At current market prices, Tod's market cap and revenue are respectively &lt;0.5% and 1.5% those of LVMH, hence I do not think that acquiring Tod's is a strategic priority for LVMH in the same way as Tiffany was, nor is it a game changer, no matter how much a successful turnaround of Tod's could achieve in the mid term.
On valuation grounds, Tod's shares do not seem such good value after the recent bull run. A blended average of DCF, WACC 7.8%, terminal growth 1.5%, and 6.8x terminal EBITDA multiple, FCF and EBITDA from capital IQ consensus) and 2.0x EV/22e Sales gives €35.26/share.

Bernard Arnault, in contrast to the products offered at his stores, likes to buy cheap. His reputation is at stake and the renegotiation of the price tag for Tiffany is a case in point. Tod's does not seem a bargain right now.
Recommendation is short Tod'sTP 35.26/share, a 24% discount to the closing price on 20 May.

Read across: Salvatore Ferragamo (SFER IM) is a similar situation to that of Tod's.

France

LVMH Moet Hennessy Louis Vuitton SE is a diversified luxury goods group. The Company produces and sells wine, cognac, perfumes, cosmetics, luggage, and watches and jewelry.

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LVMH Moet Hennessy Louis Vuitton SE (MC FP)

Allied Blenders and Distillers Pre-IPO - Yet to Recover from COVID-19

Allied Blenders & Distillers (ABD IN) is looking to raise about US$250m in its upcoming India IPO. I-Sec, Axis Capital, JM Financial, Kotak and...

Ethan Aw

Belle Fashion Pre-IPO - The Negatives - You'll Stumble in My Footsteps

Belle Fashion aims to raise around US$1bn in its HK listing, which would mark its return to the stock market after five years. In this note, we...

Sumeet Singh

Belle Fashion Pre-IPO - The Positives - Try Walking in My Shoes

Belle Fashion (BF) aims to raise around US$1bn in its Hong Kong listing, which would mark its return to the stock market after five years.

Sumeet Singh

Add To Global Technology and Consumer Discretionary

Relative strength (RS) for MSCI ACWI Technology is breaking out to new highs while RS on the ACWI Discretionary Sector is on the cusp of a...

Vermilion Research

LVMH/Tod's: Unlikely Deal for Now

Bernard Arnault, in contrast to the products offered at his stores, likes to buy cheap.Tod's does not seem a bargain right now. SHORT Tod's TP...

Jesus Rodriguez Aguilar

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