Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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<p><a href="https://www.smartkarma.com/entities/sino-ocean-service" target="_blank" data-smartkarma-citation="entities:31037:1" rel="noopener">Sino-Ocean Service (6677 HK)</a> ("SOS") joins the ever-expanding ranks of property management service companies seeking a listing. The Offer Price is expected to be announced on the 16 December, with the commencement of trading in the shares on the 17 December.</p>
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<p>SOS is the spin-off of <a href="https://www.smartkarma.com/entities/sino-ocean-land-holdings" target="_blank" data-smartkarma-citation="entities:8898:1" rel="noopener">Sino Ocean Land (3377 HK)</a>, which will own 67.57% in <strong>SOS</strong> after the IPO, down from 90.1% currently, before over-allotment.</p>
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<p>SOS intends to raise HK$1.8bn (US$0.23bn) if using HK$6.10/share, the mid-point of the indicative Offer Price range.</p>
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<p>On an FY20E PER metric, SOS is pitched in line with its peer basket. </p>
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<p>More below the fold. </p>
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Sino-Ocean Service (6677 HK) ("SOS") joins the ever-expanding ranks of property management service companies seeking a listing. The Offer Price is expected to be announced on the 16 December, with the commencement of trading in the shares on the 17 December.


SOS is the spin-off of Sino Ocean Land (3377 HK), which will own 67.57% in SOS after the IPO, down from 90.1% currently, before over-allotment.


SOS intends to raise HK$1.8bn (US$0.23bn) if using HK$6.10/share, the mid-point of the indicative Offer Price range.


On an FY20E PER metric, SOS is pitched in line with its peer basket. 


More below the fold. 


Sino Ocean Services (6677 HK): Bang In Line

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

Evergrande Property Services Group / Equity Capital Markets

Evergrande Property Services Group (6666 HK)

<p><a href="https://www.smartkarma.com/entities/evergrande-property-services" target="_blank" data-smartkarma-citation="entities:30921:1" rel="noopener">Evergrande Property Services (6666 HK)</a> raised US$1.8bn in its Hong Kong IPO, priced at HK$8.80 per share, towards the low-end of the initial price range.</p><p>Evergrande Services (EGS) is the property management arm of <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande Real Estate Group (3333 HK)</a>. The company has presence in 280 cities across 22 provinces in China with a total GFA under management of about 25m sqm and contracted GFA of 513m sqm as of 30th June, 2020.</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><p>We have previously covered the IPO in:</p><ul>
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<a href="https://www.smartkarma.com/insights/evergrande-services-pre-ipo-bad-parenting" target="_blank" data-smartkarma-citation="insights:45461" rel="noopener">Evergrande Services (恒大物业) Pre-IPO - Bad Parenting</a> </li>
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<a href="https://www.smartkarma.com/insights/evergrande-services-ipo-overhang-issues" target="_blank" data-smartkarma-citation="insights:45607" rel="noopener">Evergrande Services (恒大物业) IPO - Overhang Issues</a> </li>
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Evergrande Property Services (6666 HK) raised US$1.8bn in its Hong Kong IPO, priced at HK$8.80 per share, towards the low-end of the initial price range.Evergrande Services (EGS) is the property management arm of Evergrande Real Estate Group (3333 HK). The company has presence in 280 cities across 22 provinces in China with a total GFA under management of about 25m sqm and contracted GFA of 513m sqm as of 30th June, 2020.In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.We have previously covered the IPO in:

Evergrande Services (恒大物业) Pre-IPO - Bad Parenting 

Evergrande Services (恒大物业) IPO - Overhang Issues 


Evergrande Services (恒大物业) IPO Trading - Slightly Weaker Demand

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.

China Resources Mixc Lifestyle Services / Equity Capital Markets

China Resources Mixc Lifestyle Services (1209 HK)

<div><p><a href="https://www.smartkarma.com/entities/china-resources-mixc-lifestyle-services" target="_blank" data-smartkarma-citation="entities:29285:1" rel="noopener">China Resources Mixc Lifestyle Services (1209 HK)</a>/CR Mixc is a Chinese property management and commercial operational service provider. CR Mixc was the fifth-largest Chinese property management companies as measured by property management service revenue in 2019, according to Frost &amp; Sullivan. The controlling shareholder is <a href="https://www.smartkarma.com/entities/china-resources-land-ltd" target="_blank" data-smartkarma-citation="entities:418:1" rel="noopener">China Resources Land (1109 HK)</a>. </p></div><div><p>At the proposed IPO price range of HK$18.60-22.30 per share, CR Mixc will have a market cap of HK$40,920-49,060 million ($5.3-6.3 billion). At the mid-point of the IPO price range, the total proceeds are HK$11,004.7 million ($1.4 billion). </p></div><div><p>Seven cornerstone investors will subscribe for $650 million worth of the offer shares (44.8% of the offer shares at the IPO mid-point). The cornerstone investors are GIC, Hillhouse Capital, <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>,  Cephei Capital, Matthews Funds, China Structural Reform Fund and GLP. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/china-resources-mixc-lifestyle-ipo-initiation-the-paradox-of-plenty" target="_blank" data-smartkarma-citation="insights:45244" rel="noopener">China Resources Mixc Lifestyle IPO Initiation: The Paradox of Plenty</a>, we stated that CR Mixc’s fundamentals are mixed, in our view. We label this insight bearish as our valuation analysis suggests that we would participate at most at the low-end of the IPO price range. </p></div></div></div>

China Resources Mixc Lifestyle Services (1209 HK)/CR Mixc is a Chinese property management and commercial operational service provider. CR Mixc was the fifth-largest Chinese property management companies as measured by property management service revenue in 2019, according to Frost &amp; Sullivan. The controlling shareholder is China Resources Land (1109 HK). At the proposed IPO price range of HK$18.60-22.30 per share, CR Mixc will have a market cap of HK$40,920-49,060 million ($5.3-6.3 billion). At the mid-point of the IPO price range, the total proceeds are HK$11,004.7 million ($1.4 billion). Seven cornerstone investors will subscribe for $650 million worth of the offer shares (44.8% of the offer shares at the IPO mid-point). The cornerstone investors are GIC, Hillhouse Capital, Ping An Insurance (H) (2318 HK),  Cephei Capital, Matthews Funds, China Structural Reform Fund and GLP. In China Resources Mixc Lifestyle IPO Initiation: The Paradox of Plenty, we stated that CR Mixc’s fundamentals are mixed, in our view. We label this insight bearish as our valuation analysis suggests that we would participate at most at the low-end of the IPO price range. 

China Resources Mixc Lifestyle IPO: Valuation Insights

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<p><a href="https://www.smartkarma.com/entities/china-resources-mixc-lifestyle-services" target="_blank" data-smartkarma-citation="entities:29285:1" rel="noopener">China Resources Mixc Lifestyle Services (1209 HK)</a> ("CRM") is the latest property management service company to seek a listing. The Offer Price is expected to be announced on the 8 December, with the commencement of trading in the shares on the 9 December.</p>
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<p>CRM is the spin-off of <a href="https://www.smartkarma.com/entities/china-resources-land-ltd" target="_blank" data-smartkarma-citation="entities:418:1" rel="noopener">China Resources Land (1109 HK)</a>, which will own 75% in CRM after the IPO, down from 100% currently, before over-allotment.</p>
<p>CRM intends to raise HK$11.2bn (US$1.4bn) if using HK$20.45/share, the mid-point of the indicative Offer Price range.</p>
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<p>Even at the bottom end of its IPO range, CRM's FY20(L) PER surpasses all peers. It also has below-average revenue growth and gross margins. </p>
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<p>For CR Land, it is trading marginally above its P/B premium to peers from a historical standpoint, and its implied stub P/B is an outlier compared to other parents of property management spin-offs. </p>
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<p>More below the fold. </p>
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China Resources Mixc Lifestyle Services (1209 HK) ("CRM") is the latest property management service company to seek a listing. The Offer Price is expected to be announced on the 8 December, with the commencement of trading in the shares on the 9 December.


CRM is the spin-off of China Resources Land (1109 HK), which will own 75% in CRM after the IPO, down from 100% currently, before over-allotment.
CRM intends to raise HK$11.2bn (US$1.4bn) if using HK$20.45/share, the mid-point of the indicative Offer Price range.


Even at the bottom end of its IPO range, CRM's FY20(L) PER surpasses all peers. It also has below-average revenue growth and gross margins. 


For CR Land, it is trading marginally above its P/B premium to peers from a historical standpoint, and its implied stub P/B is an outlier compared to other parents of property management spin-offs. 


More below the fold. 


China Resources Mixc (1209 HK): This Is An Avoid

Evergrande Property Services Group / Event-Driven

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<p>The IPO for <a href="https://www.smartkarma.com/entities/evergrande-property-services" target="_blank" data-smartkarma-citation="entities:30921:1" rel="noopener">Evergrande Property Services (6666 HK)</a> ("EPS"), joins the ever-expanding listing of property management service company to seek a listing. The Offer Price is expected to be announced on the 1 December, with the commencement of trading in the shares on the 2 December.</p>
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<p>EPS is the spin-off of <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande Real Estate Group (3333 HK)</a>, which will own 59.04% in EPS after the IPO, down from 71.939% currently, before over-allotment. Both EPS and Evergrande will raise $7.4bn if using HK$9.13/share, the mid-point of the indicative Offer Price range.</p>
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<p>As with the recent listing 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>, <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>, and <a href="https://www.smartkarma.com/entities/sunac-services-holdings" target="_blank" data-smartkarma-citation="entities:29239:1" rel="noopener">Sunac Services (1516 HK)</a>, EPS is targeting a high-end PER, backed by recent strong earnings growth and expanding gross/profit margins. At the high-end of the IPO range, only <a href="https://www.smartkarma.com/entities/sunac-services-holdings" target="_blank" data-smartkarma-citation="entities:29239:1" rel="noopener">Sunac Services (1516 HK)</a> and <a href="https://www.smartkarma.com/entities/ever-sunshine-lifestyle-services-group-limited" target="_blank" data-smartkarma-citation="entities:28932:1" rel="noopener">Ever Sunshine Lifestyle Services (1995 HK)</a>'s FY20(L) PER surpass EPS'.</p>
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<p>For Evergrande, its recent capital actions (share issuance and market buybacks) appear unrelated to fundamental value creation for its shareholders. </p>
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<p>More below the fold. </p>
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The IPO for Evergrande Property Services (6666 HK) ("EPS"), joins the ever-expanding listing of property management service company to seek a listing. The Offer Price is expected to be announced on the 1 December, with the commencement of trading in the shares on the 2 December.


EPS is the spin-off of Evergrande Real Estate Group (3333 HK), which will own 59.04% in EPS after the IPO, down from 71.939% currently, before over-allotment. Both EPS and Evergrande will raise $7.4bn if using HK$9.13/share, the mid-point of the indicative Offer Price range.


As with the recent listing of KWG Living Group (3913 HK), Shimao Services Holdings (873 HK), and Sunac Services (1516 HK), EPS is targeting a high-end PER, backed by recent strong earnings growth and expanding gross/profit margins. At the high-end of the IPO range, only Sunac Services (1516 HK) and Ever Sunshine Lifestyle Services (1995 HK)'s FY20(L) PER surpass EPS'.


For Evergrande, its recent capital actions (share issuance and market buybacks) appear unrelated to fundamental value creation for its shareholders. 


More below the fold. 


Evergrande Services (6666 HK): Evergrande Needs This More Than You

China

Sunac Services Holdings Ltd. is an investment holding company primarily engaged in providing property management, operational, and community living services. It offers a diverse range of services for residential, commercial, and urban properties, including security, cleaning, and facility maintenance. The company was founded in 2004 and is headquartered in Beijing, China.

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Sunac Services (1516 HK)

Sino Ocean Services (6677 HK): Bang In Line

Sino Ocean Services is priced with some semblance of reality yet ~26x FY20E remains a punchy valuation for a company with as yet unproven growth...

David Blennerhassett

Evergrande Services (恒大物业) IPO Trading - Slightly Weaker Demand

Evergrande Property Services (6666 HK) raised US$1.8bn in its Hong Kong IPO, priced at HK$8.80 per share, towards the low-end of the initial price...

Zhen Zhou, Toh

China Resources Mixc Lifestyle IPO: Valuation Insights

At the mid-point of the IPO price range, CR Mixc will raise net proceeds of $1.4 billion. We label this insight bearish as we would participate at...

Arun George

China Resources Mixc (1209 HK): This Is An Avoid

I'm also not a buyer of CRM. It is not cheap, even more expensive than some recent property management IPO's I have written about, ones I found...

David Blennerhassett

Evergrande Services (6666 HK): Evergrande Needs This More Than You

I find Evegrande to be effectively un-investable. I'm also not a buyer of Evergradne Services. The significant improvement in fundamentals in 2020...

David Blennerhassett

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