APAC IPOs & Placements

Zhen Zhou, Toh

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

Shimao Services Holdings Limited / Equity Capital Markets

<p><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) raised about US$1.3bn by pricing its IPO at HK$16.60 per share, the upper end of the price range.</p>
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<p>SSH is the property management unit of Shimao Group Holdings (813 HK) and was recently backed by Sequoia and Tencent. It provides property management community living services and, as of 31 December, 2019, has an aggregated GFA under management and contracted GFA of 68.2m sqm and 100.9m sqm, respectively.</p>
<p>In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.</p>
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<p>Our previous coverage of the IPO:</p>
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<ul style="list-style-type: disc;">
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<a href="https://www.smartkarma.com/insights/shimao-services-pre-ipo-phip-updates-impressive-6m-2020-results" target="_blank" data-smartkarma-citation="insights:44166" rel="noopener">Shimao Services (世茂服务) Pre-IPO - PHIP Updates - Impressive 6M 2020 Results</a> </li>
<li><a href="https://www.smartkarma.com/insights/shimao-services-pre-ipo-community-vas-segment-is-the-star" target="_blank" rel="noopener">Shimao Services (世茂服务) Pre-IPO - Community VAS segment is the star </a></li>
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<a href="https://www.smartkarma.com/insights/shimao-services-ipo-paying-for-growth" target="_blank" data-smartkarma-citation="insights:44306" rel="noopener">Shimao Services (世茂服务) IPO - Paying for Growth</a> </li>
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Shimao Services Holdings (873 HK) (SSH) raised about US$1.3bn by pricing its IPO at HK$16.60 per share, the upper end of the price range.

SSH is the property management unit of Shimao Group Holdings (813 HK) and was recently backed by Sequoia and Tencent. It provides property management community living services and, as of 31 December, 2019, has an aggregated GFA under management and contracted GFA of 68.2m sqm and 100.9m sqm, respectively.
In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.


Our previous coverage of the IPO:




Shimao Services (世茂服务) Pre-IPO - PHIP Updates - Impressive 6M 2020 Results 
Shimao Services (世茂服务) Pre-IPO - Community VAS segment is the star 

Shimao Services (世茂服务) IPO - Paying for Growth 



Shimao Services (世茂服务) IPO Trading - Limited Upside from Here

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Shimao Property Holdings / 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

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.

<div><p><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> is a Chinese property management company which is a subsidiary 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> and backed by Sequoia China and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>. At the proposed IPO price range of HK$14.80-17.20 per share, Shimao will have a market cap of HK$34,823.5-40,470.6 million ($4.5-5.2 billion). At the mid-point of the IPO price range, Shimao will raise net proceeds of HK$5,449.9 million ($703 million). Unlike most of the property management IPOs, Shimao's IPO has no cornerstone support. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/shimao-services-ipo-initiation-at-your-service" target="_blank" rel="noopener">our initiation note</a>, we highlighted that Shimao’s fundamentals over the track record period are attractive. Our valuation analysis suggests that the valuation implied by the IPO price range is reasonable for the growth. </p></div></div></div>

Shimao Services Holdings (873 HK) is a Chinese property management company which is a subsidiary of Shimao Property Holdings (813 HK) and backed by Sequoia China and Tencent Holdings (700 HK). At the proposed IPO price range of HK$14.80-17.20 per share, Shimao will have a market cap of HK$34,823.5-40,470.6 million ($4.5-5.2 billion). At the mid-point of the IPO price range, Shimao will raise net proceeds of HK$5,449.9 million ($703 million). Unlike most of the property management IPOs, Shimao's IPO has no cornerstone support. In our initiation note, we highlighted that Shimao’s fundamentals over the track record period are attractive. Our valuation analysis suggests that the valuation implied by the IPO price range is reasonable for the growth. 

<p><a href="https://www.smartkarma.com/entities/shimao-services-holdings-limited" target="_blank" data-smartkarma-citation="entities:29199:1" rel="noopener">Shimao Services Holdings (SSH HK)</a> is a Chinese property management company which is a subsidiary 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> and backed by Sequoia China and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>. Shimao ranked third among the Top 20 Property Management Companies in China as measured by the revenue growth rate in 2019, according to China Index Academy. Shimao Group, the parent, will shortly launch the spin-off and Hong Kong IPO of Shimao to raise up to $1 billion, according to press reports. </p><div class="content-highlight"><p>Property management IPOs are popular due to the strong post-IPO share price performance of recent listings. The property management sector has a long-term recurring business model and is capital-light. Overall, Shimao’s fundamentals over the track record period are attractive, in our view.</p></div>

Shimao Services Holdings (SSH HK) is a Chinese property management company which is a subsidiary of Shimao Property Holdings (813 HK) and backed by Sequoia China and Tencent Holdings (700 HK). Shimao ranked third among the Top 20 Property Management Companies in China as measured by the revenue growth rate in 2019, according to China Index Academy. Shimao Group, the parent, will shortly launch the spin-off and Hong Kong IPO of Shimao to raise up to $1 billion, according to press reports. Property management IPOs are popular due to the strong post-IPO share price performance of recent listings. The property management sector has a long-term recurring business model and is capital-light. Overall, Shimao’s fundamentals over the track record period are attractive, in our view.

Shimao Services IPO Initiation: At Your Service

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

<p><a href="https://www.smartkarma.com/entities/evergrande-real-estate-group-limited" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande Real Estate Group (3333 HK)</a> plans to raise upto US$1bn via a top-up placement.  </p><p>The stock has been in the news over the past month for not exactly the right reasons. Given its debt woes, the current capital raising is unlikely to do much on a fundamental level. While the discount being offered looks tempting, especially versus the dilution, all of the past deals in the name haven't done well. </p>

Evergrande Real Estate Group (3333 HK) plans to raise upto US$1bn via a top-up placement.  The stock has been in the news over the past month for not exactly the right reasons. Given its debt woes, the current capital raising is unlikely to do much on a fundamental level. While the discount being offered looks tempting, especially versus the dilution, all of the past deals in the name haven't done well. 

China Evergrande Placement - Looks Tempting but It's a Drop in the Ocean of Debt, During a Typhoon

Hong Kong

Shimao Property Holdings Limited develops real estate projects in China.

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Shimao Property Holdings (813 HK)

Shimao Services (世茂服务) IPO Trading - Limited Upside from Here

SSH is the property management unit of Shimao Group (813 HK) and was recently backed by Sequoia and Tencent. IPO demand was decent despite having...

Zhen Zhou, Toh

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

Shimao Services IPO: Valuation Insights

At the proposed IPO price range of HK$14.80-17.20 per share, Shimao will have a market cap of $4.5-5.2 billion. Our valuation analysis suggests...

Arun George

Shimao Services IPO Initiation: At Your Service

Property management IPOs are popular due to the strong post-IPO share price performance of recent listings. Overall, Shimao’s fundamentals over the...

Arun George

China Evergrande Placement - Looks Tempting but It's a Drop in the Ocean of Debt, During a Typhoon

Evergrande plans to raise upto US$1bn via a top-up placement. The stock has been in the news over the past month for not exactly the right reasons.

Sumeet Singh

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