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

Weilong Delicious Global Holdi / Equity Capital Markets

<ul>
<li>In <a href="https://www.smartkarma.com/insights/weilong-delicious-ipo-initiation-tasty-bite" target="_blank" data-smartkarma-citation="insights:60830" rel="noopener">Weilong Delicious IPO Initiation: Tasty Bite</a>, we stated that Weilong offers an appealing mix of robust top-line growth, high margins and strong cash generation.</li>
<li>However, the 1H21 update is mixed. The top-line growth remains strong but at the cost of margins. Margin headwinds are likely to persist in the short term. </li>
<li>In a weak HKEx IPO market, we think that Weilong’s mixed fundamentals will likely struggle to gain investor enthusiasm.   </li>
</ul>


In Weilong Delicious IPO Initiation: Tasty Bite, we stated that Weilong offers an appealing mix of robust top-line growth, high margins and strong cash generation.
However, the 1H21 update is mixed. The top-line growth remains strong but at the cost of margins. Margin headwinds are likely to persist in the short term. 
In a weak HKEx IPO market, we think that Weilong’s mixed fundamentals will likely struggle to gain investor enthusiasm.   


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>Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO.</li>
<li>According to F&amp;S, WDG ranked first among spicy snack food enterprises in China, with a market share of 5.7%, and in the seasoned flour product and spicy vegetable snacks categories.</li>
<li>In this note, we will look at the updates from its recently filed PHIP.</li>
</ul>


Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO.
According to F&amp;S, WDG ranked first among spicy snack food enterprises in China, with a market share of 5.7%, and in the seasoned flour product and spicy vegetable snacks categories.
In this note, we will look at the updates from its recently filed PHIP.


Weilong Delicious Global Pre-IPO - PHIP Updates - Mixed Bag 1H21 Performance

<p><a href="https://www.smartkarma.com/entities/weilong-delicious-global-holdings-ltd" target="_blank" data-smartkarma-citation="entities:33378:1" rel="noopener">Weilong Delicious Global (WDG HK)</a> is a leading spicy snack food company in China. It is one of the fastest-growing and most profitable companies in the snack food industry in China, according to Frost &amp; Sullivan.  </p><p>Weilong is seeking approval for an HKEx IPO to raise up to $1 billion, according to press reports. Weilong’s shareholders include CPE, Hillhouse, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, Yunfeng Capital and Sequoia Capital China. </p><p>Generation Z and the millennials are the primary consumers in the snack food industry in China, as they account for 38.2% of China’s population but 69.2% of snack food consumption, according to Frost &amp; Sullivan. The retail sales value of China’s spicy snack food industry is forecasted to grow at a CAGR of 10.4% from 2020 to 2025 and reach RMB257.0 billion by 2025, according to Frost &amp; Sullivan. As the leading snack food brand as measured by brand awareness among those at or under the age of 25, Weilong is well-placed to tap this market opportunity. </p><div class="content-highlight"><p>Weilong offers an appealing mix of robust top-line growth, high margins and strong cash generation. Weilong is also relatively unscathed from the spate of recent regulations that have decimated other sectors, such as the technology and education sector. On balance, we think that Weilong’s fundamentals are attractive.</p></div>

Weilong Delicious Global (WDG HK) is a leading spicy snack food company in China. It is one of the fastest-growing and most profitable companies in the snack food industry in China, according to Frost &amp; Sullivan.  Weilong is seeking approval for an HKEx IPO to raise up to $1 billion, according to press reports. Weilong’s shareholders include CPE, Hillhouse, Tencent (700 HK), Yunfeng Capital and Sequoia Capital China. Generation Z and the millennials are the primary consumers in the snack food industry in China, as they account for 38.2% of China’s population but 69.2% of snack food consumption, according to Frost &amp; Sullivan. The retail sales value of China’s spicy snack food industry is forecasted to grow at a CAGR of 10.4% from 2020 to 2025 and reach RMB257.0 billion by 2025, according to Frost &amp; Sullivan. As the leading snack food brand as measured by brand awareness among those at or under the age of 25, Weilong is well-placed to tap this market opportunity. Weilong offers an appealing mix of robust top-line growth, high margins and strong cash generation. Weilong is also relatively unscathed from the spate of recent regulations that have decimated other sectors, such as the technology and education sector. On balance, we think that Weilong’s fundamentals are attractive.

Weilong Delicious IPO Initiation: Tasty Bite

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<p>There are many reasons to like <a href="https://www.smartkarma.com/entities/vitasoy-intl-holdings-ltd" target="_blank" data-smartkarma-citation="entities:2807:1" rel="noopener">Vitasoy Intl Holdings (345 HK)</a> as the go-to consumer stock in Hong Kong with a China expansion as the growth catalyst, healthy product that caters to plenty of Asians particularly those who are lactose intolerant.</p><p>Like a lot of Hong Kong-originated companies, <a href="https://www.smartkarma.com/entities/vitasoy-intl-holdings-ltd" target="_blank" data-smartkarma-citation="entities:2807:1" rel="noopener">Vitasoy Intl Holdings (345 HK)</a> has been expanding its presence in Mainland China due to the sheer population size and Vitasoy has conquered the Hong Kong market. The question is in which market segment they are trying to compete - the plant-based drink or the dairy milk market? Both are filled with innovative competitors and customers who understand that dairy milk has a higher protein and calcium content. As China makes up more than 60% of the business, the performance in China matters more than the stable business in HK. I am less positive about this and there are more downside rather than upside for the time being. </p>

There are many reasons to like Vitasoy Intl Holdings (345 HK) as the go-to consumer stock in Hong Kong with a China expansion as the growth catalyst, healthy product that caters to plenty of Asians particularly those who are lactose intolerant.Like a lot of Hong Kong-originated companies, Vitasoy Intl Holdings (345 HK) has been expanding its presence in Mainland China due to the sheer population size and Vitasoy has conquered the Hong Kong market. The question is in which market segment they are trying to compete - the plant-based drink or the dairy milk market? Both are filled with innovative competitors and customers who understand that dairy milk has a higher protein and calcium content. As China makes up more than 60% of the business, the performance in China matters more than the stable business in HK. I am less positive about this and there are more downside rather than upside for the time being. 

Vitasoy (345): Does the Chinese like Soymilk?

Del Monte Philippines / Equity Capital Markets

<div>
<p><a href="https://www.smartkarma.com/entities/del-monte-philippines-inc" target="_blank" data-smartkarma-citation="entities:26988:1" rel="noopener">Del Monte Philippines (1575316D PM)</a>/DMPI is a leading producer, distributor and marketer of premium quality, healthy food and beverage products. It is a market leader in the packaged pineapple and mixed fruit, ready-to-drink juices (excluding stand-up-pouches), tomato sauce and spaghetti sauce categories in the Philippines. DMPI has the rights to the <em>Del Monte</em> trademark for the Philippines for processed products and also sells products under the brands of <em>S&amp;W, Contadina</em> and <em>Today’s</em>.</p>
<p>The parent company is <a href="https://www.smartkarma.com/entities/del-monte-pacific-ltd-5951cd46-129c-41bb-8eb2-58654da08425" target="_blank" data-smartkarma-citation="entities:22651:1" rel="noopener">Del Monte Pacific (DELM PM)</a> which holds 87.0% of outstanding shares. Del Monte Pacific had previously tried to list DMPI on the PSE in 2018 by selling a 20% stake to raise up to $324 million at the maximum offer price of PHP29.88 per share but deferred the IPO due to market volatility.</p>
</div><div><p>Currently, DMPI is pre-marketing for an IPO to raise up to PHP44 billion ($0.9 billion) at the maximum offer price of PHP54.80. The IPO price range, which is generally lower than the maximum IPO price, will be set during the book building process. The pricing date is 12 August and the offer period runs from 16 to 20 August. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/del-monte-philippines-ipo-initiation-tempting-fruit" target="_blank" data-smartkarma-citation="insights:54769" rel="noopener">Del Monte Philippines IPO Initiation: Tempting Fruit</a>, we opined that DMPI is a play on the healthy packaged and convenient packaged food and beverage categories that benefit from long-term secular tailwinds in the Philippines. DMPI’s financial track record shows it has been able to leverage its market-leading position to combine solid top-line growth with improving margins and cash generation. We concluded that DMPI’s fundamentals are attractive. In this note, we present our forecasts and take the first look at DMPI's potential valuation. </p></div></div></div>


Del Monte Philippines (1575316D PM)/DMPI is a leading producer, distributor and marketer of premium quality, healthy food and beverage products. It is a market leader in the packaged pineapple and mixed fruit, ready-to-drink juices (excluding stand-up-pouches), tomato sauce and spaghetti sauce categories in the Philippines. DMPI has the rights to the Del Monte trademark for the Philippines for processed products and also sells products under the brands of S&amp;W, Contadina and Today’s.
The parent company is Del Monte Pacific (DELM PM) which holds 87.0% of outstanding shares. Del Monte Pacific had previously tried to list DMPI on the PSE in 2018 by selling a 20% stake to raise up to $324 million at the maximum offer price of PHP29.88 per share but deferred the IPO due to market volatility.
Currently, DMPI is pre-marketing for an IPO to raise up to PHP44 billion ($0.9 billion) at the maximum offer price of PHP54.80. The IPO price range, which is generally lower than the maximum IPO price, will be set during the book building process. The pricing date is 12 August and the offer period runs from 16 to 20 August. In Del Monte Philippines IPO Initiation: Tempting Fruit, we opined that DMPI is a play on the healthy packaged and convenient packaged food and beverage categories that benefit from long-term secular tailwinds in the Philippines. DMPI’s financial track record shows it has been able to leverage its market-leading position to combine solid top-line growth with improving margins and cash generation. We concluded that DMPI’s fundamentals are attractive. In this note, we present our forecasts and take the first look at DMPI's potential valuation. 

Del Monte Philippines IPO: Valuation First-Look

China

Tingyi (Cayman Islands) Holding Corporation, through its subsidiaries, manufactures and sells instant noodles, baked goods, and beverages in China.

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Tingyi Holding (322 HK)

Weilong Delicious IPO: Mixed Update

Weilong is pre-marketing for an HKEx IPO to raise up to $1 billion. The PHIP discloses a mixed 1H21 update as strong top-line growth came at the...

Arun George

Weilong Delicious Global Pre-IPO - PHIP Updates - Mixed Bag 1H21 Performance

Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO. In this note we talk about...

Sumeet Singh

Weilong Delicious IPO Initiation: Tasty Bite

Weilong is seeking approval for an HKEx IPO to raise up to $1 billion. Weilong offers an appealing mix of robust top-line growth, high margins and...

Arun George

Vitasoy (345): Does the Chinese like Soymilk?

The question is in which market segment they are trying to compete - the plant-based drink or the dairy milk market. Vitasoy may want to be clearer...

Henry Soediarko

Del Monte Philippines IPO: Valuation First-Look

DMPI is pre-marketing for an IPO to raise up to $0.9 billion at the maximum offer price of PHP54.80. In this note, we present our forecasts and...

Arun George

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