Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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

China Resources Beverage / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-resources-beverage" target="_blank" data-smartkarma-citation="entities:41984:1" rel="noopener">China Resources Beverage (2460 HK)</a> raised around US$750m in its Hong Kong IPO, after pricing at the top-end.</li>
<li>China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.</li>
<li>We have looked at the company’s past performance and valuations in our previous notes. In this note, we will talk about the trading dynamics.</li>
</ul>



China Resources Beverage (2460 HK) raised around US$750m in its Hong Kong IPO, after pricing at the top-end.
China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
We have looked at the company’s past performance and valuations in our previous notes. In this note, we will talk about the trading dynamics.


China Resources Beverage IPO Trading - Still a Bit of Fizz Left

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-resources-beverage" target="_blank" data-smartkarma-citation="entities:41984:1" rel="noopener">China Resources Beverage (2460 HK)</a> priced its IPO at HK$14.50 per share to raise the gross proceeds of US$649 million. The shares will start trading on 23 October.</li>
<li>The IPO was discussed in <strong><em><a href="https://www.smartkarma.com/insights/cr-beverage-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:157572" rel="noopener">CR Beverage IPO: The Bull Case</a>, <a href="https://www.smartkarma.com/insights/cr-beverage-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:158613" rel="noopener">CR Beverage IPO: The Bear Case</a>, <a href="https://www.smartkarma.com/insights/cr-beverage-ipo-the-investment-case" target="_blank" data-smartkarma-citation="insights:161273" rel="noopener">CR Beverage IPO: The Investment Case</a>, <a href="https://www.smartkarma.com/insights/cr-beverage-2460-hk-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:162418" rel="noopener">CR Beverage (2460 HK) IPO: Valuation Insights</a></em></strong>. </li>
<li>The market sentiment of the peers has remained unchanged since the IPO launch. CR Beverage is fairly valued at the IPO price.</li>
</ul>



China Resources Beverage (2460 HK) priced its IPO at HK$14.50 per share to raise the gross proceeds of US$649 million. The shares will start trading on 23 October.
The IPO was discussed in CR Beverage IPO: The Bull Case, CR Beverage IPO: The Bear Case, CR Beverage IPO: The Investment Case, CR Beverage (2460 HK) IPO: Valuation Insights. 
The market sentiment of the peers has remained unchanged since the IPO launch. CR Beverage is fairly valued at the IPO price.


HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>The whole industry has entered a medium to low-speed growth stage, and the industry's future growth rate will remain single-digit growth. So, CR Beverage's future performance decline is inevitable.</li>
<li>Due to serious homogenization/competition of packaged drinking water market, there’s not much room for innovation/iteration. CR Beverage's sales-driven model is hard to bring “new story” to break through the dilemma. </li>
<li>CR Beverage is clearly inferior to Nongfu Spring. Its valuation should be lower than Nongfu Spring. We think reasonable valuation of CR Beverage is about US$4 billion (or lower).</li>
</ul>


The whole industry has entered a medium to low-speed growth stage, and the industry's future growth rate will remain single-digit growth. So, CR Beverage's future performance decline is inevitable.
Due to serious homogenization/competition of packaged drinking water market, there’s not much room for innovation/iteration. CR Beverage's sales-driven model is hard to bring “new story” to break through the dilemma. 
CR Beverage is clearly inferior to Nongfu Spring. Its valuation should be lower than Nongfu Spring. We think reasonable valuation of CR Beverage is about US$4 billion (or lower).


Pre-IPO China Resources Beverage - Due to the Pain Points, High Valuation Is Not Justified

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-resources-beverage" target="_blank" data-smartkarma-citation="entities:41984:1" rel="noopener">China Resources Beverage (2460 HK)</a>  plans to raise  US$650m at the upper end of the indicative IPO price range at a market capitalisation and EV of HK$34bn and HK$27bn respectively.</li>
<li>Though the company has a strong business model and fundamentals, the packaged drinking water market is intensely competitive creating a price war and dragging down growth rates.</li>
<li>CR Beverage is less diversified and has inferior margins compared to <a href="https://www.smartkarma.com/entities/nongfu-spring-co-ltd" target="_blank" data-smartkarma-citation="entities:28955:1" rel="noopener">Nongfu Spring (9633 HK)</a> , hence priced at a deep discount to its peer, making the IPO pricing attractive.</li>
</ul>



China Resources Beverage (2460 HK)  plans to raise  US$650m at the upper end of the indicative IPO price range at a market capitalisation and EV of HK$34bn and HK$27bn respectively.
Though the company has a strong business model and fundamentals, the packaged drinking water market is intensely competitive creating a price war and dragging down growth rates.
CR Beverage is less diversified and has inferior margins compared to Nongfu Spring (9633 HK) , hence priced at a deep discount to its peer, making the IPO pricing attractive.


Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

<ul>
<li>CR Beverage, a pioneer in China's packaged drinking water industry with a forty years history, sets terms for upcoming IPO in Hong Kong.</li>
<li>The IPO is expected to be between HK$13.50 and HK$14.50. At the midpoint of the range, CR Beverage would command a market value of ~HK$33B or ~$4.2B.</li>
<li>I view IPO valuation as attractive vs. domestic peers as profitability and gross profit margins improved. UBS, BOCI, CITIC Securities and Bank of America are leading the offering.</li>
</ul>


CR Beverage, a pioneer in China's packaged drinking water industry with a forty years history, sets terms for upcoming IPO in Hong Kong.
The IPO is expected to be between HK$13.50 and HK$14.50. At the midpoint of the range, CR Beverage would command a market value of ~HK$33B or ~$4.2B.
I view IPO valuation as attractive vs. domestic peers as profitability and gross profit margins improved. UBS, BOCI, CITIC Securities and Bank of America are leading the offering.


CR Beverage IPO Preview and Valuation Analysis: Strong Profitability Growth, IPO Valuation Is Cheap

China

Nongfu Spring Co. Ltd. supplies soft drinks. The Company develops, produces, and sells bottled mineral water, fruit juice, sports drinks, and tea drinks. Nongfu Spring also offers barreled mineral water door-to-door services.

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Nongfu Spring (9633 HK)

China Resources Beverage IPO Trading - Still a Bit of Fizz Left

China Resources Beverage (2460 HK) raised around US$750m in its Hong Kong IPO, after pricing at the top-end. In this note, we talk about the...

Sumeet Singh

CR Beverage (2460 HK) IPO: Trading Debut

The market sentiment of the peers has remained unchanged since the IPO launch. CR Beverage is fairly valued at the IPO price.

Arun George

Pre-IPO China Resources Beverage - Due to the Pain Points, High Valuation Is Not Justified

CR Beverage's future performance decline is inevitable due to growth stagnation and inability to innovate.The lack of flexibility/risk resistance...

Xinyao (Criss) Wang

CR Beverage IPO: Forecasts and Valuation

CR Beverage plans to raise around US$650m through its HKEx IPO. Though the company has a strong business model and fundamentals, the packaged...

Shifara Samsudeen, FCMA, CGMA

CR Beverage IPO Preview and Valuation Analysis: Strong Profitability Growth, IPO Valuation Is Cheap

CR Beverage, a leading producer and seller of packaged drinking water in China, sets terms for long-awaited IPO in Hong Kong with ~$650M target.

Andrei Zakharov

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52-week Range

Market Cap (USDm)

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China Resources Beverage IPO Trading - Still a Bit of Fizz Left

China Resources Beverage (2460 HK) raised around US$750m in its Hong Kong IPO, after pricing at the top-end. In this note, we talk about the...

Sumeet Singh

CR Beverage (2460 HK) IPO: Trading Debut

The market sentiment of the peers has remained unchanged since the IPO launch. CR Beverage is fairly valued at the IPO price.

Arun George

Pre-IPO China Resources Beverage - Due to the Pain Points, High Valuation Is Not Justified

​CR Beverage's future performance decline is inevitable due to growth stagnation and inability to innovate.The lack of flexibility/risk resistance...

Xinyao (Criss) Wang

CR Beverage IPO: Forecasts and Valuation

CR Beverage plans to raise around US$650m through its HKEx IPO. Though the company has a strong business model and fundamentals, the packaged...

Shifara Samsudeen, FCMA, CGMA

CR Beverage IPO Preview and Valuation Analysis: Strong Profitability Growth, IPO Valuation Is Cheap

CR Beverage, a leading producer and seller of packaged drinking water in China, sets terms for long-awaited IPO in Hong Kong with ~$650M target.

Andrei Zakharov

CR Beverage's future performance decline is inevitable due to growth stagnation and inability to innovate.The lack of flexibility/risk resistance...