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.

Equity Capital Markets

<p>Kerry Express Thailand aims to raise around up to US$277m in its Thailand IPO. The company is a subsidiary of Hong Kong listed Kerry Logistics and also counts VGI as a major shareholder.</p><p>Kerry Express Thailand is Thailand's largest private express delivery company. As of FY19, it had over 16,000 service locations in all provinces in Thailand, with its next-day delivery service covering 99.9% of Thai population. It also offers same-day delivery service within the Bangkok Metropolitan, Greater Bangkok areas and certain upcountry areas. It delivers more than 1.1m parcels everyday.</p><p>Revenue tripled over FY17-19, while gross profit was up 2.22x, EBITDA was up 2.36x, and PATMI was up 10.2x. Although, 9M20 operations weren’t anything to write home about with revenue merely being flat YoY.</p><p>Apart from being a well known brand in Thailand, it presents one of the only ways to get exposure to the e-commerce market. If that wasn’t enough, its cornerstone book is one of the best that I’ve seen, of late.</p>

Kerry Express Thailand aims to raise around up to US$277m in its Thailand IPO. The company is a subsidiary of Hong Kong listed Kerry Logistics and also counts VGI as a major shareholder.Kerry Express Thailand is Thailand's largest private express delivery company. As of FY19, it had over 16,000 service locations in all provinces in Thailand, with its next-day delivery service covering 99.9% of Thai population. It also offers same-day delivery service within the Bangkok Metropolitan, Greater Bangkok areas and certain upcountry areas. It delivers more than 1.1m parcels everyday.Revenue tripled over FY17-19, while gross profit was up 2.22x, EBITDA was up 2.36x, and PATMI was up 10.2x. Although, 9M20 operations weren’t anything to write home about with revenue merely being flat YoY.Apart from being a well known brand in Thailand, it presents one of the only ways to get exposure to the e-commerce market. If that wasn’t enough, its cornerstone book is one of the best that I’ve seen, of late.

Kerry Express Thailand IPO - Time for Delivery

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<div>
<p>Back on the 18 March, <a href="https://www.smartkarma.com/entities/kerry-logistics-network-ltd" target="_blank" data-smartkarma-citation="entities:367:1" rel="noopener">Kerry Logistics Network (636 HK)</a> (KLN) <a href="http://www3.hkexnews.hk/listedco/listconews/SEHK/2019/0318/LTN20190318261.pdf" target="_blank" rel="noopener">announced</a> the possible spin-off and separate listing of 63%-held Kerry Express (Thailand) (KET) on the stock exchange of Thailand. KET is principally engaged in the business of express delivery business in Thailand. </p>
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<p>A strategic partnership was established with GI Global Media Public, a subsidiary of <a href="https://www.smartkarma.com/entities/15943" target="_blank" data-smartkarma-citation="entities:15943:1" rel="noopener">BTS Group Holdings (BTS TB)</a>, <a href="http://www3.hkexnews.hk/listedco/listconews/SEHK/2018/0424/LTN20180424095.pdf" target="_blank" rel="noopener">in July 2018</a>. GI Global paid THB5.9bn (HK$1.475bn) for 23% of KIT, implying a then market value of $6.4bn,  or ~HK$4bn for KLN's 63% stake.</p>
<p>Details of KET's December listing have now been issued - all <a href="https://market.sec.or.th/public/ipos/IPOSEQ01.aspx?TransID=305545" target="_blank" rel="noopener">relevant information</a> is in Thai. That stake in KET is now worth ~50% more, if using the mid-point of the IPO range. </p>
<p>More below the fold.</p>
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Back on the 18 March, Kerry Logistics Network (636 HK) (KLN) announced the possible spin-off and separate listing of 63%-held Kerry Express (Thailand) (KET) on the stock exchange of Thailand. KET is principally engaged in the business of express delivery business in Thailand. 


A strategic partnership was established with GI Global Media Public, a subsidiary of BTS Group Holdings (BTS TB), in July 2018. GI Global paid THB5.9bn (HK$1.475bn) for 23% of KIT, implying a then market value of $6.4bn,  or ~HK$4bn for KLN's 63% stake.
Details of KET's December listing have now been issued - all relevant information is in Thai. That stake in KET is now worth ~50% more, if using the mid-point of the IPO range. 
More below the fold.





Kerry Logistics (636 HK): Kerry Express' Spin-Off

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/kerry-express-thailand" target="_blank" data-smartkarma-citation="entities:29253:1" rel="noopener">Kerry Express Thailand (KEX TB)</a> is the leading express delivery company in Thailand. It is backed by <a href="https://www.smartkarma.com/entities/kerry-logistics-network-ltd" target="_blank" data-smartkarma-citation="entities:367:1" rel="noopener">Kerry Logistics Network (636 HK)</a> (63.0% shareholder) and <a href="https://www.smartkarma.com/entities/vgi-pcl" target="_blank" data-smartkarma-citation="entities:12409:1" rel="noopener">VGI PCL (VGI TB)</a> (23.0% shareholder).</p></div><div><p>Kerry Express has launched its IPO at a price range of THB25.00-28.00 per share to raise as much as THB8.4 billion ($278 million). Subscription will take place between 8-9 and 14 December for retail investors, and 16-18 December for institutional investors. The final price is expected to be announced on 15 December. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/kerry-express-ipo-initiation-a-recovery-play" target="_blank" data-smartkarma-citation="insights:45446" rel="noopener">Kerry Express IPO Initiation: A Recovery Play?</a>, we stated that while the 3Q20 results are not ideal, we think that revenue decline is a short-term market-specific issue, and Kerry Express remains well-placed to ride an eventual recovery in Thai consumer confidence. Overall, we think that a reasonable P/E valuation, a market-leading business and solid cornerstone support makes Kerry Express tempting at the proposed pricing range. </p></div></div></div>

Kerry Express Thailand (KEX TB) is the leading express delivery company in Thailand. It is backed by Kerry Logistics Network (636 HK) (63.0% shareholder) and VGI PCL (VGI TB) (23.0% shareholder).Kerry Express has launched its IPO at a price range of THB25.00-28.00 per share to raise as much as THB8.4 billion ($278 million). Subscription will take place between 8-9 and 14 December for retail investors, and 16-18 December for institutional investors. The final price is expected to be announced on 15 December. In Kerry Express IPO Initiation: A Recovery Play?, we stated that while the 3Q20 results are not ideal, we think that revenue decline is a short-term market-specific issue, and Kerry Express remains well-placed to ride an eventual recovery in Thai consumer confidence. Overall, we think that a reasonable P/E valuation, a market-leading business and solid cornerstone support makes Kerry Express tempting at the proposed pricing range. 

<p><a href="https://www.smartkarma.com/entities/kerry-express-thailand" target="_blank" data-smartkarma-citation="entities:29253:1" rel="noopener">Kerry Express Thailand (KEX TB)</a> is the leading express delivery company in Thailand. It is backed by <a href="https://www.smartkarma.com/entities/kerry-logistics-network-ltd" target="_blank" data-smartkarma-citation="entities:367:1" rel="noopener">Kerry Logistics Network (636 HK)</a> (63.0% shareholder) and <a href="https://www.smartkarma.com/entities/vgi-pcl" target="_blank" data-smartkarma-citation="entities:12409:1" rel="noopener">VGI PCL (VGI TB)</a> (23.0% shareholder). Kerry Express has kicked off pre-marketing for a Thai IPO to raise around $300 million, according to IFR.  </p><div class="content-highlight"><p>The timing of the IPO is not ideal as the weak consumer confidence in Thailand exacerbated by the lingering impact of the COVID-19 pandemic has wrecked Kerry Express’ topline in 3Q20. To its credit, Kerry Express has navigated poor market conditions by improving margin and remaining cash generative in 3Q20. Overall, while the 3Q20 results are not ideal, we think that revenue decline is a short-term market-specific issue, and Kerry Express remains well-placed to ride an eventual recovery in Thai consumer confidence. </p></div>

Kerry Express Thailand (KEX TB) is the leading express delivery company in Thailand. It is backed by Kerry Logistics Network (636 HK) (63.0% shareholder) and VGI PCL (VGI TB) (23.0% shareholder). Kerry Express has kicked off pre-marketing for a Thai IPO to raise around $300 million, according to IFR.  The timing of the IPO is not ideal as the weak consumer confidence in Thailand exacerbated by the lingering impact of the COVID-19 pandemic has wrecked Kerry Express’ topline in 3Q20. To its credit, Kerry Express has navigated poor market conditions by improving margin and remaining cash generative in 3Q20. Overall, while the 3Q20 results are not ideal, we think that revenue decline is a short-term market-specific issue, and Kerry Express remains well-placed to ride an eventual recovery in Thai consumer confidence. 

Kerry Express IPO Initiation: A Recovery Play?

APAC IPOs & Placements

Zhen Zhou, Toh


Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs.




Much has happened since Ant Group (6688 HK)'s IPO got pulled so this will be a lengthy weekly note.
Thanks to The Wall Street Journal (WSJ), we now know that Xi Jinping personally cancelled Ant's IPO due to Jack Ma's brazen comments a few weeks earlier. This doesn't look good, especially with news of China’s antitrust watchdogs publishing draft rules targeting monopolistic practices of digital platforms.
The draft rules aim to prevent anti-competitive behavior among online platforms, collaboration on customer data, eliminating smaller payers, and etc. It also mentioned greater regulatory oversight of VIE which will obviously impact upcoming China IPOs and listed companies alike since most of them are built upon VIE structure to raise capital from foreign investors. The Chinese government has not officially legalized such a structure and could use this chance to reign in their control over these companies.
Well, it's 2020, just when you think the bad news end here, there's more. 



Hong Kong's Securities and Futures Commission (SFC) was said to be planning new code of conduct for equity and debt deals. This may see the introduction of framework to calculate fees for bookrunners. Companies looking to list may also need to secure underwriting syndicates earlier to limit non-bookrunners from pitching shares to investors to show they have demand in a bid to secure the bookrunner role. There are also potential changes to allocation rules, specifically, regarding the cornerstone structure in HK IPOs where cornerstone investors can secure guaranteed (usually larger) allocation in an IPO in exchange for a six-month lock-up period. For now, nothing is set in stone and, to be fair, this isn't necessarily bad since the goal here is to tighten supervision. 
Aside from Ant's IPO "hiccup" earlier, Hong Kong IPO activity is still looking strong, for now. JD Health (JDH HK), Blue Moon Group Holdings (BMG HK), and Evergrande Services was said to have gotten their approval this week and will start premarketing in the coming week. Netjoy (NETJOY HK) was also said to be seeking approval this week but we have yet to get confirmation of its approval.


JD Health (京东健康) Pre-IPO - Peer Comparison - It's a Close Fight and Competition Is Intensifying 

JD Health (京东健康) Pre-IPO - Assumptions and Valuations 

Blue Moon Group Pre-IPO - Initial Thoughts on Valuation 
Blue Moon Group Pre-IPO - The Positives - Dominant Market Share, Strong Online Sales

Blue Moon Group Pre-IPO - The Negatives - Flagging Offline Sales, Not Really a Primary Raising   
Blue Moon: No. 1 But No Exclusive Advantage, Observation on the Ground

Blue Moon Group Pre-IPO - Online Reviews and Peer Comparison   

Netjoy (云想科技) Pre-IPO: Growth Stalled for the Short Video Marketer 

CR Mixc Lifestyle Services (华润万象生活) Pre-IPO - SOE-Linked Parentage Didn’t Help 

Antengene (6996 HK) launched its IPO this week and Ke Yan, CFA, FRM shared his thoughts on valuation.


Antengene (德琪医药) IPO: Buy the Team 

We also covered recently filed Beijing Kuaishou Technology Co Ltd (1496219D CH) which is expected to raise US$5bn.


Kuaishou Technology Pre-IPO - The Positives - Hot Segment, Fast Growth 

Kuaishou Technology Pre-IPO - The Negatives - Ample Doubts Remain 

In Australia, it's a rare treat to get two IPOs almost at the same time. Dalrymple Bay Infrastructure and Nuix have set their terms for IPO and will begin their bookbuild process soon.
There will also be a few trading debuts next week. Jinke Smart Services (9666 HK), Shinsun Holdings (2599 HK), and Sunac Services (1516 HK) will debut in Hong Kong on Tuesday, Wednesday, and Thursday, respectively, followed by Gland Pharma (7172753Z IN) on Friday in India. 
Last but not least, for placements, there were deals across different countries and they were mostly secondary share sale. There is Ascendas Real Estate Investment Trust (AREIT SP) private and preferential placement in Singapore to buy office properties and data centres, Japan Airlines (9201 JP) primary placement to shore up balance sheet, selldowns by shareholders in Jiumaojiu (9922 HK), Shenzhou Intl Group Holdings (2313 HK), BDO Unibank Inc (BDO PM) and VGI PCL (VGI TB).
Out of these, the one that stood out (which happened to be the only one we chose to avoid) was VGI's placement which closed higher the day after its done despite its massive deal size (relative to ADV) and deep discount (11%) to last close. The deal was said to be driven by reverse enquiries and was well covered by institutional investors.


Japan Airlines Placement - Given the Uncertain Outlook, Might Need Further Correction 

Ascendas REIT Placement - Multiple Acquisitions to Be Made, Starting From US Office Properties 

Shenzhou International Placement - Conditioned for Selldowns 

Jiumaojiu (九毛九) Placement - Founder and Employees Selling 

BDO Unibank Placement - Wide Discount to Account for the Large Deal Size 

VGI Global Placement - Biggest Block Ever by BTS 





Accuracy Rate:



Our overall accuracy rate is 73.4% for IPOs and 66.1% for Placements 


(Performance measurement criteria is explained at the end of the note)





New IPO filings this week  




New Horizon Health (Hong Kong, ~US$300m)
Central China Management (Hong Kong, &gt;US$100m)

Below is a snippet of our IPO tool showing upcoming events for the next week. The IPO tool is designed to provide readers with timely information on all IPO related events (Book open/closing, listing, initiation, lock-up expiry, etc) for all the deals that we have worked on. You can access the tool here or through the tools menu.





News on Upcoming IPOs  





Australian port IPO seeks at least $477 million in test of appetite for coal assets
Nuix seeks to raise $705m in year’s biggest Australian IPO
Brookfield pushing ahead with India Reit IPO by year-end
Warburg Pincus-backed ESR plans REIT IPO of South Korean assets to raise $321m




Analysis on Upcoming IPOs






Name
Insight


Hong Kong


Antengene

Antengene (德琪医药) Pre-IPO: Proven R&amp;D Track Record by Founder Matters 


Blue Moon

Blue Moon Group Pre-IPO - The Positives - Dominant Market Share, Strong Online Sales 



Blue Moon

Blue Moon Group Pre-IPO - The Negatives - Flagging Offline Sales, Not Really a Primary Raising 



Blue Moon

Blue Moon: No. 1 But No Exclusive Advantage, Observation on the Ground 



Blue Moon

Blue Moon Group Pre-IPO - Online Reviews and Peer Comparison 



ByteDance

ByteDance (字节跳动) IPO: How Jinri Toutiao Paves The Way for a Bigger Empire (Part 1)



ByteDance

ByteDance (字节跳动) Pre-IPO: Why Facebook Should Worry About TikTok 



ByteDance

ByteDance (字节跳动) IPO: Tiktok the No.1 Short Video App for a Good Reason (Part 2)



ByteDance

ByteDance (字节跳动) Pre-IPO: How Has It Done in 1H? 



ByteDance

ByteDance: The Unlisted Company’s Video Apps Leading the Market and Threatening Internet Giants 



ByteDance

ByteDance (字节跳动) Pre-IPO: Why Facebook Should Worry About TikTok 



ByteDance

ByteDance (字节跳动) Pre-IPO - Globally the Most Downloaded App for Jan 2020 Driven by India 



ByteDance

ByteDance (字节跳动) Pre-IPO: Global Ambition Meets Regulatory Challenges 



Dida

Dida Pre-IPO - Making Hay While Big Brother Retreats 



E-Star Comm

E-Star Commercial Management Pre-IPO - Better Disclosure in New Prospectus 



E-Star Comm

E-Star Commercial Management Pre-IPO - Still Largely Reliant on Galaxy, Poor Disclosure Doesn’t Help 



Jiayuan Svcs

Jiayuan Services (佳源服务) Pre-IPO - Another Small Property Management Company 



JD Health

JD Health (京东健康) Pre-IPO - Well-Positioned to Ride China’s Healthcare Digitalization 



JD Health

JD Health (京东健康) Pre-IPO - Peer Comparison - It's a Close Fight and Competition Is Intensifying 



JD Health

JD Health (京东健康) Pre-IPO - Assumptions and Valuations 



Kilcoy

Kilcoy Global Foods Pre-IPO - Rapid Earnings Growth on the Back of Margin Improvement 



Kilcoy

Kilcoy Global Foods Pre-IPO - A Lot of Things Still Remain Unexplained 



Kuaishou

Kuaishou Technology Pre-IPO - The Positives - Hot Segment, Fast Growth 



Kuaishou

Kuaishou Technology Pre-IPO - The Negatives - Ample Doubts Remain 



Megvii

Megvii (旷视) Pre-IPO - Remarkable Growth (Part 1) 


Megvii

Megvii (旷视) Pre-IPO - A Bet on the Future - Segments, Revenue Drivers and Growth Potential 


Megvii

Megvii (旷视) Pre-IPO - The Real Race Is in Research - Founders' Profile and Talent 


Megvii

Megvii (旷视) Pre-IPO - Competitive Landscape and Peer Analysis 


Megvii

Megvii (旷视) Pre-IPO -  Initial Thoughts on Valuation 


Ocumension

Ocumension (欧康维视) Pre-IPO: All Ready for a Great Listing Except a Block Buster 


Pop Mart

Pop Mart Pre-IPO - The Negatives - Is It a Brand Owner or Just a Retailer? 


Pop Mart

Pop Mart Pre-IPO - The Positives - Expanding Portfolio+Wider Distribution= Explosive Earnings Growth 


Pop Mart

Pop Mart Pre-IPO - Peer Set and Valuation 


Pop Mart

Pop Mart Pre-IPO Quick Note - On the Ground - Pop-Up Stores Are Effective 


RemeGen

RemeGen (荣昌生物) Pre-IPO: Thoughts on Valuation of RC18 and RC48 


Toplist

Toplist China Pre-IPO - Overwhelmingly More Negatives than Positives 


Tasly

Tasly Biopharm (天士力生物) IPO: Visible Growth from Approved Drug but Lacks Blockbusters 


WeDoctor

WeDoctor (微医) Pre-IPO -App Walk Through - The Online Medical Directory and More 


WeDoctor

WeDoctor (微医) Pre-IPO - A More Focused Online Medical Svc Provider than Ping An Good Doctor 


India


ASK

ASK Investment Managers Pre-IPO - Riding on a Wave of Wealth 


Anmol Ind
Anmol Industries Pre-IPO Quick Take - No Growth, Generous Payments to Founders


Bharat Hotel

Bharat Hotels Pre-IPO - Catching up with Peers 



Burger King

Burger King India Pre-IPO - Has Been Growing Fast and Plans to Grow Even Faster 



Burger King

Burger King India Pre-IPO - Peer Comparison Yields Interesting Nuggets on Profitability and Capex 



Bajaj En

Bajaj Energy Pre-IPO - Supposed to Deliver Steady Performance if Only Its Sole Client Would Let It 



CMS Info
CMS Info Systems Pre-IPO - When a PE Sells to Another PE... Only One Gets the Timing Right


Crystal Crop
Crystal Crop Protection Pre-IPO - DRHP Raises More Questions than in Answers


ESAF SFB

ESAF Small Finance Bank Pre-IPO - Growing Fast but Remains Highly Dependant on a Related Party 


Flemingo 
Flemingo Travel Retail Pre-IPO - Its a Different Business in Every Country


Emami Cem

Emami Cement Pre-IPO - Still in Ramp Up Phase but Shares Pledge Might Lead to an Early IPO 


IRFC

Indian Railway Finance Pre-IPO - Low Risk, Low Margin Business 


NSE
NSE IPO Preview- Not Only Fast..its Risky and Expensive


NSE
National Stock Exchange Pre-IPO Review - Bigger, Better, Stronger but a Little Too Fast for Some


Mrs. Bector
Mrs. Bectors Food Specialities Pre-IPO Quick Take - Sales for Its Main Segment Have Been Sta



LIC


Life Insurance Corporation of India Pre-IPO - Early Take on India's Largest IPO 



Lodha

Lodha Developers Pre-IPO - Second Time Lucky but Not Really that Much Affordable


Lodha
Lodha Developers IPO: Presence in Affordable Segment Saves Lodha the Blushes in a Sluggish Mkt


Penna Cem

Penna Cement - Aggressive Expansion Plans Even Though Past Performance Has Been Tepid 


PNB Met
PNB Metlife Pre-IPO Quick Take - Doesn't Stack up Well Versus Its Larger Peers


Samhi Hotels

Samhi Hotels Pre-IPO - Assets and Borrowings Are Growing, but Earnings Haven’t Kept Pace 


Malaysia


QSR
QSR Brands Pre-IPO - As Healthy as Fast Food


Thailand


PTTOR

PTT Oil and Retail IPO - F&amp;B Business Is the Profit Driver 


The U.S


CDP

CDP Holdings Pre-IPO Review - Highly Reliant on Best Inc. 


CloudMinds
CloudMinds Inc Early Thoughts - Still Nascent





ECM Weekly (15 November 2020) - JD Health, Kuaishou, CR Mixc Life, Antengene, and Placements!

Thailand

VGI Public Company Limited provides offline-to-online (O2O) marketing solutions, encompassing advertising, digital services, and distribution. Its advertising segment includes Out-of-Home (OOH) and online marketing services, with OOH advertising covering transit, office building, and billboard media. The company also offers digital lifestyle solutions such as cashless payment services and digital lending. VGI Public Company Limited was founded in 1995 and is headquartered in Bangkok, Thailand.

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VGI (VGI TB)

Kerry Express Thailand IPO - Time for Delivery

Kerry Express Thailand aims to raise around up to US$277m in its Thailand IPO. The company is a subsidiary of Hong Kong listed Kerry Logistics and...

Sumeet Singh

Kerry Logistics (636 HK): Kerry Express' Spin-Off

Expect strong retail and institutional interest in KET, as e-commerce fuels the strong growth in the logistics sector, as this is the final...

David Blennerhassett

Kerry Express IPO: Valuation Insights

Kerry Express has launched its IPO at a price range of THB25.00-28.00 per share to raise as much as THB8.4 billion ($278 million). Overall, we...

Arun George

Kerry Express IPO Initiation: A Recovery Play?

Kerry Express has kicked off pre-marketing to raise around $300 million. The 3Q20 revenue decline is a short-term market-specific issue, and Kerry...

Arun George

ECM Weekly (15 November 2020) - JD Health, Kuaishou, CR Mixc Life, Antengene, and Placements!

Much has happened since Ant's IPO got pulled. VIE structure may be at risk and HK ECM practices could get a squeeze from new code of conduct for...

Zhen Zhou, Toh

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