In today’s briefing:
- Leapmotor IPO – Peers Recent Down Move Won’t Help
- Leapmotor IPO: Valuation Insights
- WCP IPO: Order Table, Revised Terms, & Passive Flow Schedule
- Leapmotor IPO: Stuck in the Middle
- Socionext Pre-IPO Peer Comparison – Margins Have Been Weaker than Peers, but Gap Has Been Closing
- Onewo Space-Tech IPO Valuation Analysis
- CALB IPO: What’s It Worth?
- Mankind Pharma Pre-IPO Tearsheet
- Tencent Music – Earnings Show Recovery but Do Not Rush to Make an Entry
- GoDaddy Inc: Initiation of Coverage – Business Strategy
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.
WCP IPO: Order Table, Revised Terms, & Passive Flow Schedule
- WCP’s institutional subscription rate was 33.28 to 1, one of the lowest for an IPO this size. And nearly all orders sit below the lower end.
- WCP set the price at ₩60,000, even lower than the floor, at an implied market cap of ₩2T. And the issuer also reduced the offering volume from 9M to 7.2M.
- Passive flows equivalent to about 3% of SO will likely flow into WCP by March next year. It is substantial enough to consider designing a flow trade setup.
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.
Socionext Pre-IPO Peer Comparison – Margins Have Been Weaker than Peers, but Gap Has Been Closing
- Socionext (6526 JP) is looking to raise up to US$285m in its Japan IPO.
- Socionext is a fabless semiconductor provider which commenced operations after integrating the system on a chip (SoC) businesses of Fujitsu Semiconductor Limited and Panasonic Holding Corporation.
- In this note, we undertake a peer comparison with its international peers, which have a similar fabless business model-type to that of Socionext’s
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.
Mankind Pharma Pre-IPO Tearsheet
- Mankind Pharma Ltd (6596876Z IN) is looking to raise about US$1bn in its upcoming India IPO. The deal will be run by Kotak, Axis Capital, IIFL Securities, Jefferies and JPM.
- Mankind Pharma (MK) is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various therapeutic areas, as well as several consumer healthcare products.
- It is mainly focused on the domestic market. 18 of its brands were among the 300 highest selling brands in the Indian Pharmaceutical Market (IPM), according to IQVIA.
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.
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.
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