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

Chervon Holdings / Equity Capital Markets

<ul>
<li>Chervon Holdings (CHL HK) is a leading global provider of power tools and outdoor power equipment. It has launched an HKEx IPO to raise up to HK$3.13 billion (US$402 million).</li>
<li>In <a href="https://www.smartkarma.com/insights/chervon-holdings-ipo-initiation-not-quite-right" target="_blank" data-smartkarma-citation="insights:62550" rel="noopener">Chervon Holdings IPO Initiation: Not Quite Right</a>, we noted a tepid 3Q21 performance and the vanishing of the former largest customer is a worry.   </li>
<li>Our valuation analysis suggests that the price range fairly values Chervon. However, due to our lingering concerns, we err on the side of caution and pass on the IPO.</li>
</ul>


Chervon Holdings (CHL HK) is a leading global provider of power tools and outdoor power equipment. It has launched an HKEx IPO to raise up to HK$3.13 billion (US$402 million).
In Chervon Holdings IPO Initiation: Not Quite Right, we noted a tepid 3Q21 performance and the vanishing of the former largest customer is a worry.   
Our valuation analysis suggests that the price range fairly values Chervon. However, due to our lingering concerns, we err on the side of caution and pass on the IPO.


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.

<ul>
<li>Chervon Holdings Limited (CHL) plans to raise around US$500m in its Hong Kong IPO.</li>
<li>CHL is the largest China-based global provider of power tools and outdoor power equipment (OPE). </li>
<li>In this note, we will talk about the not so positive aspects of the deal.</li>
</ul>


Chervon Holdings Limited (CHL) plans to raise around US$500m in its Hong Kong IPO.
CHL is the largest China-based global provider of power tools and outdoor power equipment (OPE). 
In this note, we will talk about the not so positive aspects of the deal.


Chervon Holdings Pre-IPO - The Negatives - Patchy Disclosures Including About Its Largest Customers

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chervon-holdings-limited" target="_blank" data-smartkarma-citation="entities:35309:1" rel="noopener">Chervon Holdings (CHL HK)</a> is a leading global provider of power tools and outdoor power equipment. It will launch an HKEx IPO to raise US$400m-450 million, according to press reports.</li>
<li>At first glance, the fundamentals look attractive with strong revenue growth, operating leverage and cash generation. </li>
<li>However, a tepid 3Q21 performance and the vanishing of the former largest customer is a worry. We take a safety-first approach in the current environment and pass on this IPO.  </li>
</ul>



Chervon Holdings (CHL HK) is a leading global provider of power tools and outdoor power equipment. It will launch an HKEx IPO to raise US$400m-450 million, according to press reports.
At first glance, the fundamentals look attractive with strong revenue growth, operating leverage and cash generation. 
However, a tepid 3Q21 performance and the vanishing of the former largest customer is a worry. We take a safety-first approach in the current environment and pass on this IPO.  


Chervon Holdings IPO Initiation: Not Quite Right

<ul>
<li>Chervon Holdings Limited (CHL) plans to raise around US$500m in its Hong Kong IPO.</li>
<li>CHL is the largest China-based global provider of power tools and outdoor power equipment (OPE). </li>
<li>In this note, we will talk about the positive aspects of the deal.</li>
</ul>


Chervon Holdings Limited (CHL) plans to raise around US$500m in its Hong Kong IPO.
CHL is the largest China-based global provider of power tools and outdoor power equipment (OPE). 
In this note, we will talk about the positive aspects of the deal.


Chervon Holdings Pre-IPO - The Positives - Fast Growth, Good Reviews

Managing Director

Elan Gore

TMI Data Science

TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade & traditional media.  Our proprietary software, TMI Machine, is a text-mining platform designed with the buy-side & capital markets professional in mind, text-mining the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income & individual equities.  TMI provides custom leading indicators and systematic trading strategies, operating at the nexus of linguistics & statistics drawing on vast experience in investment banking and hedge fund settings in senior quantitative and fundamental roles.  

TMI Data Science was founded by Elan Gore, an award-winning Senior Global Basic Materials Equity Analyst & China Economist with 15 years of experience in North American hedge funds & institutional managers; and Alessandro Porrino, Ph.D., an Algorithmic Trading Analyst and Programmer with 10 years of front-office experience ranging from complex FX option pricing to auto-hedging strategies at Bank of America Merrill Lynch and Standard Chartered.  Mr. Gore holds an MBA in Finance from New York University Stern School of Business, and Mr. Porrino holds a Ph.D. in Systems Engineering from Brunel University London.

Macroeconomics

<ul>
<li>This year's narrative from US treasuries suggests a short-lived inflation/overheating scare in Q1, which coincided with Winter Storm Uri and the Texas power crisis, along with an initial phase of tapering talk from regional Fed presidents which subsequently faded; since the March peak, 10yr yields are down -45bps or a whopping -26%, representing the view that inflationary pressures have been entirely transitory</li>
<li>The picture from 5yr TIPS breakevens and the 5yr5yr has been more closely attuned to commodities:  In the past 6 months, 5yr TIPS breakevens and 5yr5yr have been 74% and 70% correlated with copper prices vs. the 10yr yield's 46%, though correlations with oil have been low; breakevens peaked with copper in May and bottomed in June-July</li>
<li>While 10yr yields continued to grind lower in July, our text mining is picking up a new surge in reports of supply constraints, which have been strongly correlated with breakevens and reflect corporate commentary in the current earnings season</li>
<li>The inflation narrative from treasuries appears to be asynchronous with the Q2 earnings season narrative from cyclical corporates, who are uniformly reporting worsening raw materials inflation expected in Q3 and lingering supply constraints</li>
<li>Nonetheless, our text mining acknowledges that talk of tightening financial conditions last spiked in March and has not resurfaced since, and expectations of a massive US infrastructure package have faded</li>
</ul><div class="content-highlight"><p>TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. </p></div>


This year's narrative from US treasuries suggests a short-lived inflation/overheating scare in Q1, which coincided with Winter Storm Uri and the Texas power crisis, along with an initial phase of tapering talk from regional Fed presidents which subsequently faded; since the March peak, 10yr yields are down -45bps or a whopping -26%, representing the view that inflationary pressures have been entirely transitory
The picture from 5yr TIPS breakevens and the 5yr5yr has been more closely attuned to commodities:  In the past 6 months, 5yr TIPS breakevens and 5yr5yr have been 74% and 70% correlated with copper prices vs. the 10yr yield's 46%, though correlations with oil have been low; breakevens peaked with copper in May and bottomed in June-July
While 10yr yields continued to grind lower in July, our text mining is picking up a new surge in reports of supply constraints, which have been strongly correlated with breakevens and reflect corporate commentary in the current earnings season
The inflation narrative from treasuries appears to be asynchronous with the Q2 earnings season narrative from cyclical corporates, who are uniformly reporting worsening raw materials inflation expected in Q3 and lingering supply constraints
Nonetheless, our text mining acknowledges that talk of tightening financial conditions last spiked in March and has not resurfaced since, and expectations of a massive US infrastructure package have faded
TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. 

TMI Snapshot:  Asynchronous Inflation Narratives

United States

Stanley Black & Decker Inc. is a diversified global provider of hand tools, power tools and related accessories, mechanical access and electronic security solutions, healthcare solutions, engineered fastening systems, and more.

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Stanley Black & Decker (SWK US)

Chervon Holdings IPO: Valuation Insights

Our valuation analysis suggests that the price range fairly values Chervon. However, due to our lingering concerns, we err on the side of caution...

Arun George

Chervon Holdings Pre-IPO - The Negatives - Patchy Disclosures Including About Its Largest Customers

Chervon Holdings Limited (CHL) plans to raise around US$500m in its Hong Kong IPO. In this note, we look at the not so pleasant aspects.

Sumeet Singh

Chervon Holdings IPO Initiation: Not Quite Right

Chervon is set to launch an HKEx IPO to raise US$400m-450m, according to press reports. The fundamentals are far from perfect and we are inclined...

Arun George

Chervon Holdings Pre-IPO - The Positives - Fast Growth, Good Reviews

Chervon Holdings Limited (CHL) plans to raise around US$500m in its Hong Kong IPO. The company is the largest China based provider of power and OPE...

Sumeet Singh

TMI Snapshot: Asynchronous Inflation Narratives

While the bond market continues to dismiss inflationary pressures, our text mining picked up a recent spike in mentions of supply constraints as...

Elan Gore

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