In today’s briefing:
- Leapmotor IPO – Peers Recent Down Move Won’t Help
- Leapmotor IPO: Valuation Insights
- Leapmotor IPO: Stuck in the Middle
- Fengxiang’s Judicial Auction Set for 10 October, Potential MGO
- Onewo Space-Tech IPO Valuation Analysis
- CALB IPO: What’s It Worth?
- Tencent Music – Earnings Show Recovery but Do Not Rush to Make an Entry
- Remegen Co Ltd (9995.HK) 22H1 – Mr. Market’s “Misjudgment” Brings Opportunities to Make Money
- GoDaddy Inc: Initiation of Coverage – Business Strategy
- Jenscare (宁波健世科技) Pre-IPO: Massive Delays After Missing the Boat
Leapmotor IPO – Peers Recent Down Move Won’t Help
- Leapmotor (LM) aims to raise around US$1.0bn in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.
- As of end Jun 22, it had delivered a total of 104,829 cars with most of its sales coming from its mini units, T03.
- In this note, we will run the deal through our ECM framework and talk about valuations.
Leapmotor IPO: Valuation Insights
- Leapmotor (2007699D HK) has launched its HKEx listing at HK$48.00-62.00 per share to raise up to US$1.0 billion. Books are open from 20 to 23 September.
- We previously discussed the IPO in Leapmotor IPO: The Bull Case, Leapmotor IPO: The Bear Case, Leapmotor IPO: Look Before You Leap, Leapmotor IPO: Valuation First-Look.
- Leapmotor, at best, should trade in line with median peer multiples. Leapmotor is fairly valued at the low end of the IPO price range. We pass on the IPO.
Leapmotor IPO: Stuck in the Middle
- Leapmotor (2007699D HK) is a leading smart EV company in China that designs and builds EVs. The company develops key hardware, software and all electronic components of the vehicles internally.
- The company has filed for an IPO on the HKEx and plans to raise about US$1bn through the IPO.
- In this insight, we analyse the company’s financials to understand the key reason behind the absence of gross profit margins compared to other players in the market.
Fengxiang’s Judicial Auction Set for 10 October, Potential MGO
- On 16 September, the administrator published the details for the auction of Shandong Fengxiang Co Ltd-H (9977 HK) controlling shareholder’s 70.92% stake in Alibaba Judicial Auction.
- If the auction is successful and results in any person and a group of persons acting in concert holding 30%+ of the voting rights, it will result in an MGO.
- The base bid implies an MGO price of HK$1.563 per H Share, a 103.0% premium to the last close. The auction will be held from 10 October to 11 October.
Onewo Space-Tech IPO Valuation Analysis
- Onewo Space-Tech (ONEWO HK) has provided its IPO price range of HK$47.1 to HK$52.7 a piece in the IPO offering of 116.74 million shares, representing 10% of its outstanding shares.
- Our base case valuation of Onewo Spacetech is HKD27.7 per share, which represents 41% lower than the low end of the IPO price of HKD47.1 per share.
- Our valuation analysis suggests a range of HKD25 per share to HKD33.5 per share. We would AVOID this deal due to the much lower target price relative to IPO price.
CALB IPO: What’s It Worth?
- CALB (CALBLZ CH), a leading EV battery manufacturer, is seeking to raise US$2.0 billion through an HKEx IPO, according to press reports.
- We previously discussed the IPO in CALB IPO: The Bull Case, CALB IPO: The Bear Case and CALB IPO: Updates Support the Bull Case.
- In this note, we present our forecasts and take the first look at CALB’s potential valuation range.
Tencent Music – Earnings Show Recovery but Do Not Rush to Make an Entry
- TME’s shares are due to start trading on HKEx tomorrow once it carries out a secondary listing by introduction. The company neither issues new shares nor raise any proceeds.
- The company’s earnings growth has started decelerating with having to end exclusive music licensing agreements with WMG, UMG and Sony Music a year ago as part of a SAMR probe.
- TME’s 2Q2022 results show recovery in its earnings, however, we would recommend waiting until regulatory crackdown on tech platforms eases off.
Remegen Co Ltd (9995.HK) 22H1 – Mr. Market’s “Misjudgment” Brings Opportunities to Make Money
- For RC18, it depends on whether RemeGen can seize this short period of strategic opportunities to further establish its leading position. The situation faced by RC48 is much more complex.
- From the current situation, it’s very challenging for RemeGen to evolve into biopharma.That is to say, RemeGen’s future positioning is still likely to remain a biotech, which limits valuation expansion.
- Even based on conservative forecast, there’s still decent upside potential. We’re bullish on RemeGen. Due to unfriendly macro, investors may need to consider the potential downside risks when going long.
GoDaddy Inc: Initiation of Coverage – Business Strategy
- This is our first report on cloud-based solutions provider, GoDaddy.
- The company is one of the largest players in the domains, hosting and other related cloud-based solutions space across the globe.
- This quarter, the company launched its beta WooSaas solution, allowing it to reach larger customers.
Jenscare (宁波健世科技) Pre-IPO: Massive Delays After Missing the Boat
- Jenscare, a China based structural heart disease focused medical device company, plans to raise up to USD 30m via a Hong Kong listing.
- In our previous insight, we discussed that there have been many TAVR companies listed in Hong Kong but we think Jenscare has a differentiated portfolio.
- In this note, we will look at updates in its latest filing and highlight massive delays in its product candidates. We also provide a quick thought on its valuation.
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