In today’s briefing:
- ZJLD Group IPO Trading – Subscription Rates Better than Recent Large HK Deals
- ZJLD Group IPO: Trading Debut
- JD Industrials Pre-IPO – The Negatives – Hasn’t Provided a Whole Lot of Details
- Kenvue (KVUE US) Pre-IPO: Marquee Brands to Drive Profitable Growth
- Horizon Construction Development IPO: The Bear Case
- AppLovin Corporation: Is AXON 2 The New Secret Weapon For Growth? – Key Drivers
- M&T Bank Corporation: Initiation of Coverage – Playing The Rate Hike Well And Creating An Investor Safe Haven – Key Drivers
- Nutanix Inc: The Next Amazon Of Hybrid Multi-Cloud Computing? – Key Drivers
- Teleflex Incorporated: Revolutionizing Gastric Sleeve Surgery with the Titan Stapler – Key Drivers
- FLEETCOR Technologies Inc.: A Hidden Gem In Payment Solutions? – Key Drivers
ZJLD Group IPO Trading – Subscription Rates Better than Recent Large HK Deals
- ZJLD Group (ZJLD HK) raised around US$676m in its Hong Kong IPO.
- ZJLD Group (ZJLD) is a Chinese liquor company primarily producing baijiu.
- In this note, we will talk about the trading dynamics and valuation.
ZJLD Group IPO: Trading Debut
- ZJLD Group (ZJLD HK) priced its IPO at HK$10.82 per share to raise net proceeds of HK$5.0 billion (US$636 million). The shares will start trading tomorrow.
- We previously discussed the IPO in ZJLD Group IPO: The Bull Case, ZJLD Group IPO: The Bear Case and ZJLD Group IPO: Valuation Insights.
- We expect a muted debut as A Share baijiu peers have derated since the release of the prospectus. The shares remain attractive at the IPO price.
JD Industrials Pre-IPO – The Negatives – Hasn’t Provided a Whole Lot of Details
- JD Industrials is looking to raise about US$1bn in its upcoming HK IPO.
- JD Industrials (JDI) is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
- In this note, we talk about the not-so-positive aspects of the deal.
Kenvue (KVUE US) Pre-IPO: Marquee Brands to Drive Profitable Growth
- Kenvue (KVUE US), a wholly owned subsidiary of Johnson & Johnson (JNJ US), is preparing for an IPO of 151M shares. The IPO price is expected to be $20–23/share.
- Goldman Sachs, J.P. Morgan, and BofA Securities are acting as joint lead bookrunning managers for the IPO. J&J will still own more than 90% of Kenvue’s shares after the IPO.
- In 1Q23, Kenvue’s revenue increased 7% YoY to $3.9B, driven by a 12% YoY revenue growth in self-care OTC products. Adjusted net income increased 3% YoY to $630M.
Horizon Construction Development IPO: The Bear Case
- Horizon Construction Development (1887128D HK)/HCD, a subsidiary of Far East Horizon (3360 HK), is pre-marketing an HKEx IPO to raise US$200-250 million, according to press reports.
- In Horizon Construction Development IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The key elements of the bear case rest on core business margin decline, unexplained headcount reduction, cash burn, long receivable days and stretched balance sheet.
AppLovin Corporation: Is AXON 2 The New Secret Weapon For Growth? – Key Drivers
- AppLovin Corporation had a disappointing quarter as it delivered significantly wider-than-expected losses and a negative bottom-line even though its revenues were above Wall Street expectations.
- Its results in the quarter included the performance of the software platform, which increased 24% year over year.
- For the first quarter of the upcoming year, they anticipate total revenue and EBITDA to be roughly flat compared to the fourth quarter which implies another possible loss-making quarter.
M&T Bank Corporation: Initiation of Coverage – Playing The Rate Hike Well And Creating An Investor Safe Haven – Key Drivers
- This is our first report on a regional lender that played the rate hike well with its high-quality deposit base – M&T Bank Corporation.
- Their interest-bearing bank deposits decreased from $41.9 billion to under $25 billion due to their repositioning the balance sheet to use surplus cash.
- We initiate coverage on the stock of M&T Bank Corporation with a ‘Buy’ rating.
Nutanix Inc: The Next Amazon Of Hybrid Multi-Cloud Computing? – Key Drivers
- Nutanix delivered a strong first quarter with an all-around beat.
- The company’s renewals continue to be strong, exceeding its projected metrics.
- Nutanix managed to deliver a successful quarter with efficient growth in the number of customers as well as in revenue and ACV billings.
Teleflex Incorporated: Revolutionizing Gastric Sleeve Surgery with the Titan Stapler – Key Drivers
- Teleflex had a mixed quarter with revenues of $758 million that was below Wall Street expectations given a year-over-year fall of 0.5%.
- Despite an unanticipated subcomponent supply chain issue in their Surgical business, their fourth quarter constant currency revenue growth remained steady.
- Teleflex’s Interventional, Surgical, and OEM product categories produced double-digit constant currency year-over-year revenue increase.
FLEETCOR Technologies Inc.: A Hidden Gem In Payment Solutions? – Key Drivers
- Fleetcor Technologies’ Q4 results were stronger than anticipated, surpassing Wall Street expectations in terms of revenues as well as earnings and also surpassing the upper limit of the management’s guidance in terms of revenues.
- The company’s organic revenue increase was 7%.
- Its total sales increased by 19%, retention remained constant at 92%, and same-store results were up 2% for the quarter.
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