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.

Equity Capital Markets

Jinke Smart Services / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/jinke-smart-services" target="_blank" data-smartkarma-citation="entities:29214:1" rel="noopener">Jinke Smart Services (9666 HK)</a> is a Chinese property management company which is a subsidiary of <a href="https://www.smartkarma.com/entities/jinke-property-group-co-ltd" target="_blank" data-smartkarma-citation="entities:13291:1" rel="noopener">Jinke Property Group (000656 CH)</a>. At the proposed IPO price range of HK$41.80-47.60 per share, Jinke will have a market cap of HK$26,455.7-30,126.6 million ($3.4-3.9 billion). At the mid-point of the IPO price range, Jinke will raise net proceeds of HK$5,738.1 million ($740 million). Ten cornerstone investors will subscribe for HK$2,673.7 million ($345 million) worth of the offer shares. The cornerstone investors include Taikang Life, Hillhouse Capital, Snow Lake Capital, CICC Capital, UBS Asset Management and Marshall Wace. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/jinke-smart-services-ipo-initiation-street-smart" target="_blank" rel="noopener">our initiation note</a>, we highlighted that on a fundamental view, we believe that Jinke is attractive. However, we also noted that the poor post-IPO performance of recent property management IPOs despite good fundamentals was likely due to investors unwilling to pay a growth premium compared to an ever-expanding selection of listed peers. Our valuation analysis suggests that Jinke is fully valued at the proposed IPO price range and we would be inclined to give the IPO a pass on valuation grounds. </p></div></div></div>

Jinke Smart Services (9666 HK) is a Chinese property management company which is a subsidiary of Jinke Property Group (000656 CH). At the proposed IPO price range of HK$41.80-47.60 per share, Jinke will have a market cap of HK$26,455.7-30,126.6 million ($3.4-3.9 billion). At the mid-point of the IPO price range, Jinke will raise net proceeds of HK$5,738.1 million ($740 million). Ten cornerstone investors will subscribe for HK$2,673.7 million ($345 million) worth of the offer shares. The cornerstone investors include Taikang Life, Hillhouse Capital, Snow Lake Capital, CICC Capital, UBS Asset Management and Marshall Wace. In our initiation note, we highlighted that on a fundamental view, we believe that Jinke is attractive. However, we also noted that the poor post-IPO performance of recent property management IPOs despite good fundamentals was likely due to investors unwilling to pay a growth premium compared to an ever-expanding selection of listed peers. Our valuation analysis suggests that Jinke is fully valued at the proposed IPO price range and we would be inclined to give the IPO a pass on valuation grounds. 

Jinke Smart Services IPO: Valuation Insights

Jinke Property Group / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/jinke-smart-services" target="_blank" data-smartkarma-citation="entities:29214:1" rel="noopener">Jinke Smart Services (9666 HK)</a> is a Chinese property management company which is a subsidiary of <a href="https://www.smartkarma.com/entities/jinke-property-group-co-ltd" target="_blank" data-smartkarma-citation="entities:13291:1" rel="noopener">Jinke Property Group (000656 CH)</a>. From 2015 to 2020, Jinke was ranked first among the Top 100 property management companies as measured by overall strengths in the Southwestern China Region, according to China Index Academy. Jinke has launched a Hong Kong IPO to raise net proceeds of HK$5,738.1 million ($740 million) at the mid-point of the IPO price range. </p><div class="content-highlight"><p>Property developers continue to spin-off their property management arms due to tight credit conditions. However, sentiment on property management IPOs seems to have turned as recent IPOs of <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> and <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> are trading 20% and 5% below their IPO prices, respectively. The poor post-IPO performance despite good fundamentals was likely due to investors unwilling to pay a growth premium compared to an ever-expanding selection of listed peers. Overall, on a fundamental view, we believe that Jinke is attractive.</p></div>

Jinke Smart Services (9666 HK) is a Chinese property management company which is a subsidiary of Jinke Property Group (000656 CH). From 2015 to 2020, Jinke was ranked first among the Top 100 property management companies as measured by overall strengths in the Southwestern China Region, according to China Index Academy. Jinke has launched a Hong Kong IPO to raise net proceeds of HK$5,738.1 million ($740 million) at the mid-point of the IPO price range. Property developers continue to spin-off their property management arms due to tight credit conditions. However, sentiment on property management IPOs seems to have turned as recent IPOs of KWG Living Group (3913 HK) and Shimao Services Holdings (873 HK) are trading 20% and 5% below their IPO prices, respectively. The poor post-IPO performance despite good fundamentals was likely due to investors unwilling to pay a growth premium compared to an ever-expanding selection of listed peers. Overall, on a fundamental view, we believe that Jinke is attractive.

Jinke Smart Services IPO Initiation: Street Smart

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><a href="https://www.smartkarma.com/entities/jinke-smart-services" target="_blank" data-smartkarma-citation="entities:29214:1" rel="noopener">Jinke Smart Services (9666 HK)</a>  is a comprehensive and smart property management services company that offers a wide range of property management services to residential and non-residential properties located across an extensive number of cities in China.</p><p>The company has set the terms for its IPO, and plans to issue 133m shares at an indicative IPO price of HK$41.8-47.6 per share, and will raise approximately HK$6.3bn (US$816m) at the upper end of the IPO Pricing.</p><p>The company also has entered into cornerstone investment agreements with a long list of investors including Taikang Life Insurance, Gaoling Fund LP and YHG Investment, Snow Lake China, etc. These cornerstone investors have agreed to subscribe for an aggregate amount of HK$2.7bn worth of shares.</p><p>In our previous insight on the company’s IPO <a href="https://www.smartkarma.com/insights/jinke-smart-services-ipo-maintenance-secured" target="_blank" data-smartkarma-citation="insights:44825" rel="noopener">Jinke Smart Services IPO: Maintenance Secured</a> , we discussed about the company’s business model, segments and financials. In this insight, we examine the company’s valuation and how it compares to property management service peers in China.</p>

Jinke Smart Services (9666 HK)  is a comprehensive and smart property management services company that offers a wide range of property management services to residential and non-residential properties located across an extensive number of cities in China.The company has set the terms for its IPO, and plans to issue 133m shares at an indicative IPO price of HK$41.8-47.6 per share, and will raise approximately HK$6.3bn (US$816m) at the upper end of the IPO Pricing.The company also has entered into cornerstone investment agreements with a long list of investors including Taikang Life Insurance, Gaoling Fund LP and YHG Investment, Snow Lake China, etc. These cornerstone investors have agreed to subscribe for an aggregate amount of HK$2.7bn worth of shares.In our previous insight on the company’s IPO Jinke Smart Services IPO: Maintenance Secured , we discussed about the company’s business model, segments and financials. In this insight, we examine the company’s valuation and how it compares to property management service peers in China.

Jinke Smart Services IPO: Appealing Valuation

<p><a href="https://www.smartkarma.com/entities/jinke-smart-services" target="_blank" data-smartkarma-citation="entities:29214:1" rel="noopener">Jinke Smart Services (JKS HK)</a> is a comprehensive and smart property management services company who offers a wide range of property management services to residential and non-residential properties located across an extensive number of cities across China.</p><p>The company has filed to list its shares on the Hong Kong Stock Exchange and plans to raise around US$700-800m through the IPO. The IPO constitutes a spin-off from Jinke Property Group, a leading real estate development company in China.</p><p>In this insight, we examine the company’s business model, business segments and its financials.</p>

Jinke Smart Services (JKS HK) is a comprehensive and smart property management services company who offers a wide range of property management services to residential and non-residential properties located across an extensive number of cities across China.The company has filed to list its shares on the Hong Kong Stock Exchange and plans to raise around US$700-800m through the IPO. The IPO constitutes a spin-off from Jinke Property Group, a leading real estate development company in China.In this insight, we examine the company’s business model, business segments and its financials.

Jinke Smart Services IPO: Maintenance Secured

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.

<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>
<div>
<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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<div>
<p>Our previous coverage of the IPO:</p>
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<div>
<ul style="list-style-type: disc;">
<li>
<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>
<li>
<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>
</ul>
</div>

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

China

Shimao Services Holdings Limited is a leading provider of integrated property management and community life services in China. The company offers property management, community value-added services (including smart solutions and elderly care), and city services such as sanitation and waste treatment. It was established in 2005 and is headquartered in Shanghai, China.

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Shimao Services (873 HK)

Jinke Smart Services IPO: Valuation Insights

Our valuation analysis suggests that Jinke is fully valued at the proposed IPO price range and we would be inclined to give the IPO a pass on...

Arun George

Jinke Smart Services IPO Initiation: Street Smart

Jinke has launched a Hong Kong IPO to raise net proceeds of HK$5,738.1 million ($740 million) at the mid-point of the IPO price range. On a...

Arun George

Jinke Smart Services IPO: Appealing Valuation

Jinke Smart Services has set the terms for its IPO, and plans to raise approximately HK$6.3bn (US$816m) at the upper end of the IPO Pricing. In...

Shifara Samsudeen, FCMA, CGMA

Jinke Smart Services IPO: Maintenance Secured

Jinke Smart Services has filed for an IPO. In this insight, we deep dive into the company's business model, its segments and financials.

Shifara Samsudeen, FCMA, CGMA

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

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