Category

IPOs and Placements

Equity Capital Markets: Tianqi Lithium, China Tourism Group Duty Free Corp Ltd and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Weekly Deals Digest (03 Jul) – Tianqi Lithium, Thai Life, Li Auto, Link Admin, Tassal, DTAC/True
  • CTG Duty Free (601888 CH) Pre-IPO: Revival of H-Share IPO

Weekly Deals Digest (03 Jul) – Tianqi Lithium, Thai Life, Li Auto, Link Admin, Tassal, DTAC/True

By Arun George


CTG Duty Free (601888 CH) Pre-IPO: Revival of H-Share IPO

By Osbert Tang, CFA

  • China Tourism Group Duty Free Corp Ltd (601888 CH) has revived its H-share IPO plan by re-submitting the Application Proof to the Hong Kong Stock Exchange on 1 Jul. 
  • While there is no material changes in the Proof, weaker 1Q22 result, negative impact of pandemic and new agreements signed with Guangzhou Airport are recent developments that should be noted.
  • We think CDFC’s H-shares, based on similar valuation before cancellation of the previous IPO plan, look less attractive given the sharp pull back of its peers in Hong Kong. 

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Equity Capital Markets: Hyundai Oilbank Co Ltd, Tencent and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Korea IPOs for 2022: 1H Review & 2H Schedules for Flow Clash Risk
  • ECM Weekly (3rd Jul 2022) – Tianqi, Thai Life, Prosus/Naspers, Tencent, SEA, Soosan, SoCar, Carsales

Korea IPOs for 2022: 1H Review & 2H Schedules for Flow Clash Risk

By Sanghyun Park

  • Except for SOCAR, most major ones will be in the fourth quarter, so local IPO funds’ lock-up/pricing strategy should inevitably be intense to adjust the fund flow schedule.
  • Probably, local institutional investors’ SOCAR lock-up will be mostly one month. Or even we should expect some of them to skip SOCAR altogether to focus on Hyundai Oilbank.
  • Among those not yet applied for a preliminary review, the local street still expects Oasis Market, CJ Olive Young, and Kakao Mobility to complete their listing this year.

ECM Weekly (3rd Jul 2022) – Tianqi, Thai Life, Prosus/Naspers, Tencent, SEA, Soosan, SoCar, Carsales

By Sumeet Singh

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • There was a marked pickup in IPO activity with a number of smaller deals, along with two large deals being launched.
  • There were no major placements last week. In addition, Prosus single handedly took out two prospective large placements.

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Equity Capital Markets: Tianqi Lithium, SOCAR, Dental Doctor Medical Holding Group and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Tianqi Lithium A/H Listing – Large Deal but Its Been Priced to Go
  • Tianqi Lithium H Share Listing: Valuation Insights
  • SoCar Pre-IPO – Aiming to Become an All-In-One Mobility Solution Provider
  • Pre-IPO Dental Doctor Medical Holding Group – An Uncertain Outlook and Concerns About Profitability

Tianqi Lithium A/H Listing – Large Deal but Its Been Priced to Go

By Sumeet Singh

  • Tianqi Lithium (TL) is looking to raise up to US$1.7bn via its H-shares listing. It undertakes mining of lithium ore and manufacturing of lithium concentrate, lithium compounds and derivatives.
  • TL was the largest producer of mined lithium globally in terms of output in 2020 and ranked third in terms of revenue generated from lithium in 2020.
  • In this note, we take about the deal pricing and run the deal through our ECM framework.

Tianqi Lithium H Share Listing: Valuation Insights

By Arun George

  • Tianqi Lithium (9696 HK) has launched its H Share listing at an indicative price range of HK$69.00-82.00 per share. Pricing is on 6 July and listing on 13 July.
  • Tianqi Lithium (002466 CH)‘s AH discount range of 52.9%-44.0% is reasonable in the context of Ganfeng Lithium (1772 HK)’s average AH discount is 38.5% since its H Share listing.
  • Our relative valuation analysis suggests that Tianqi’s H Share valuation is attractive in comparison to median peers’ multiples. 

SoCar Pre-IPO – Aiming to Become an All-In-One Mobility Solution Provider

By Ethan Aw

  • SOCAR (403550 KS) is looking to raise up to US$159m in its upcoming Korea IPO.
  • SoCar is a Korean car sharing business which aims to become an all-in-one mobility solutions provider beyond car sharing, with approximately 80% domestic market share in the car sharing space.
  • As of May 2022, SoCar has over 8m subscribers and over 10m SoCar app downloads. However, the firm remains loss-making with no signs of being profitable in the near/medium term.

Pre-IPO Dental Doctor Medical Holding Group – An Uncertain Outlook and Concerns About Profitability

By Xinyao (Criss) Wang

  • Dental Doctor has not established core competitiveness and high moat, and has to invest more on marketing and promotion to attract customers and drive growth.
  • The lack of dentists, weak talent and training system as well as high dentist turnover rate would be big concerns for the Company’s long term development, especially for nationwide expansion.
  • This industry has not yet entered the profit mode. Most of chain dental services providers are still in the stage of cash-burning expansion. So, we are conservative about the Company’s outlook.

Before it’s here, it’s on Smartkarma

Equity Capital Markets: GOME Retail Holdings, Weilong Delicious Global, Soosan Industries, SOCAR, Rainmed Medical and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • GOME Retail Placement: The Crisis Persists
  • Weilong Delicious IPO: In a Pickle
  • Soosan Industries Pre-IPO – Improving Margins and Other Segments Could Lift the Coal Overhang
  • SOCAR IPO Post-Listing Flow: VC-Triggered Overhang Vs. Lotte’s Counter Move
  • Pre-IPO Rainmed Medical – The Industry, the Business and the Concerns

GOME Retail Placement: The Crisis Persists

By Oshadhi Kumarasiri

  • As the mismatch between short-term assets and liabilities expands, GOME is raising HK$776.5m at HK$0.40 per-share, which is a 12.1% discount to the closing price on 27th June 2022.
  • This is clearly insufficient to pay down GOME Retail Holdings (493 HK)‘s RMB 40.0bn short term debt and accounts payable obligations falling due in the next 12 months.
  • With the omni-channel transformation taking longer than expected to turn around performance, the company might find it difficult to refinance the debt and maintain the supply chain as usual.

Weilong Delicious IPO: In a Pickle

By Arun George


Soosan Industries Pre-IPO – Improving Margins and Other Segments Could Lift the Coal Overhang

By Clarence Chu

  • Soosan Industries (126720 KS) is looking to raise about US$189m in its upcoming Korean IPO.
  • Soosan Industries (SSI) is a private maintenance firm that provides general maintenance services for power plants in South Korea.
  • Given the downstream nature of where the firm sits, it is highly reliant on the underlying energy generation sector, which is subjected to government policies/regulations.

SOCAR IPO Post-Listing Flow: VC-Triggered Overhang Vs. Lotte’s Counter Move

By Sanghyun Park

  • In SOCAR’s IPO, the early investors’ post-listing flow direction draws the market’s attention as much as the valuation issue.
  • Even this pricing level is high enough to infer that these VCs will be tempted to consider exiting after listing. A significant level of short-term overhang risk is inevitable.
  • Then, we need to factor in the Lotte factor, which will likely expand its stake after listing to secure management rights for Socar.

Pre-IPO Rainmed Medical – The Industry, the Business and the Concerns

By Xinyao (Criss) Wang

  • The combination of FFR and IMR can provide a complete functional evaluation from epicardial arteries to myocardial microcirculation,pushing the precise diagnosis and treatment of coronary disease into a new era.
  • Rainmed’s caFFR System and caIMR System have obvious technical and first-mover advantages; The CE certificate also opens up the imagination space of product commercialization (such as developing markets).
  • However, the concerns on current sales model, market acceptance, medical insurance coverage, cash flow pressure and market sentiment when IPO should also not be neglected. 

Before it’s here, it’s on Smartkarma

Equity Capital Markets: Sichuan Tianqi Lithium Industries, Inc, Li Auto, Miniso, Thai Life Insurance, SOCAR and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Tianqi Lithium H Share Listing: AH Discount Views
  • Li Auto’s US$2 Billion ATM Offering
  • Miniso Dual Primary Listing: Positive on Momentum, Valuation and Acceleration of Global Expansion
  • Thai Life Insurance IPO – Can’t Pinpoint the Upside
  • Socar IPO Valuation Analysis

Tianqi Lithium H Share Listing: AH Discount Views

By Arun George


Li Auto’s US$2 Billion ATM Offering

By Arun George

  • Li Auto Inc. (LI US) has announced an ATM offering to sell US$2.0 billion of ADS. The offering appears to be timed to take advantage of the share price rally.
  • Li Auto (2015 HK)‘s strong balance sheet and cash generation do not necessitate the need for the offering. The impending launch of the Li L9 underpins its prospects. 
  • However, with the recent rally, the shares are at best fully valued at the last close. We prefer remaining on the sidelines for now. 

Miniso Dual Primary Listing: Positive on Momentum, Valuation and Acceleration of Global Expansion

By Oshadhi Kumarasiri

  • MINISO Group Holdings (MNSO US) rallied more than 70% this month before receiving approval for a $100m placement on the Hong Kong Stock Exchange yesterday (27th June 2022).
  • The company has no requirement for extra cash and this Hong Kong listing is mostly a precautionary measure against a potential delisting of Chinese companies from US markets.
  • Overall, we are positive about this placement on account of momentum, reasonableness of current valuation and positive reception of what we would regard as an intention to accelerate expansion.

Thai Life Insurance IPO – Can’t Pinpoint the Upside

By Sumeet Singh

  • Thai Life Insurance (TLI) is looking to raise up to US$975m in its upcoming Thailand IPO. Cornerstone investors including GIC have taken up around 54% of the deal.
  • Thai Life Insurance is one of the largest life insurance companies in Thailand, third by assets. As of Mar 2022, it had 64,000 insurance agents.
  • In this note we will talk about the deal dynamics and run the deal through our ECM framework.

Socar IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of Socar is target price of 27,967 won, which is 18% lower than the low end of the IPO price range of 34,000 won.
  • Given the lack of upside, we would Pass on this IPO. Our valuation is also 23% lower than the valuation that Lotte Rental paid for its 13.9% stake in Socar.
  • We estimate Socar to generate sales of 396.4 billion won (up 37.2% YoY) and EBITDA margins of 12.6% in 2022. 

Before it’s here, it’s on Smartkarma

Equity Capital Markets: Carsales.Com Ltd, Soosan Industries, Sungeel Hitech and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Carsales Entitlement Offer – Well Flagged Deal for a Well Know Asset, but Last Deal Didn’t Do Well
  • Soosan Industries IPO Valuation Analysis
  • Sungeel HiTech IPO Valuation Analysis

Carsales Entitlement Offer – Well Flagged Deal for a Well Know Asset, but Last Deal Didn’t Do Well

By Sumeet Singh

  • Carsales aims to raise around US$835m (A$1.2bn) via a non-renounceable entitlement offer to part fund the purchase of remaining 51% of trader Interactive.
  • While the acquisition is probably well flagged and will be earnings accretive, the last entitlement offering didn’t do well in the near term.
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Soosan Industries IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of Soosan Industries is target price of 56,383 won, which is 31% higher than the high end of the IPO price range of 43,100 won. 
  • Our valuation is based on 14.1x P/E (20% premium to KEPCO KPS) using our estimated net profit of 57.1 billion won in 2023. 
  • Soosan Industries provides comprehensive maintenance services for major nuclear, thermal, and renewable power plants in Korea. Soosan Industries is the only private maintenance company for main nuclear power plant equipment. 

Sungeel HiTech IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of Sungeel HiTech is target price of 70,992 won per share (49% higher than the high end of the IPO price).  
  • Our valuation is based on 15.9x P/E (50% discount to comps’ average multiple) using our estimated net profit of 54.9 billion won in 2023. 
  • Given the excellent upside, we have a Positive view of the Sungeel HiTech,  which is a leading recycling specialist in Korea that extracts valuable metals from lithium-ion secondary batteries.

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Equity Capital Markets: Thai Beverage, Thai Life Insurance and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Weekly Deals Digest (26 Jun) – ThaiBev’s BeerCo, Thai Life, Tianqi Lithium, Giordano, DTAC/True
  • Thai Life Insurance IPO: Valuation Insights

Weekly Deals Digest (26 Jun) – ThaiBev’s BeerCo, Thai Life, Tianqi Lithium, Giordano, DTAC/True

By Arun George


Thai Life Insurance IPO: Valuation Insights

By Arun George


Before it’s here, it’s on Smartkarma

Equity Capital Markets: SOCAR Inc, Thai Beverage and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • SOCAR IPO: Another Absurd Valuation
  • ECM Weekly (26th June 2022) – Tianqi, Thai Life, Thai Bev, ClouDr, ACommerce, SenseTime, SonaComstar

SOCAR IPO: Another Absurd Valuation

By Sanghyun Park

  • This IPO’s valuation is the trickiest among Korea’s recent IPOs. Whether all of these ten valuation peers have high enough business relevance to SOCAR is highly doubtful.
  • Whether SOCAR can evolve from a simple car sharing (or rental) operator to an in-vehicle software platform provider actually determines the success or failure of this IPO.
  • However, the IPO prospectus available to us lacks the evidence to favorably judge SOCAR’s growth potential. So, I will consider taking this IPO as conservatively as possible.

ECM Weekly (26th June 2022) – Tianqi, Thai Life, Thai Bev, ClouDr, ACommerce, SenseTime, SonaComstar

By Sumeet Singh

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • A few IPOs are lined up in Thailand and South Korea, in addition a number of deals are gearing up for launch.
  • There were no major placements last week. Although there are a few large lockup releases soon.

Before it’s here, it’s on Smartkarma

Equity Capital Markets: SOCAR Inc and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Socar IPO Preview

Socar IPO Preview

By Douglas Kim

  • Socar, the largest car sharing platform in Korea, is getting ready to complete its IPO in KOSPI. The IPO base case offering size is from $120 million to $159 million.
  • The IPO price range is from 34,000 won to 45,000 won. The expected market cap of the company is from 1.2 trillion won to 1.6 trillion won.
  • Book building for the institutional investors starts on 1 August. Mirae Asset Securities and Samsung Securities are the lead underwriters in this IPO. 

Before it’s here, it’s on Smartkarma

Equity Capital Markets: Sichuan Tianqi Lithium Industries, Inc, Soosan Industries and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Tianqi Lithium H Share Listing: Riding the Wave
  • Soosan Industries IPO Preview

Tianqi Lithium H Share Listing: Riding the Wave

By Arun George


Soosan Industries IPO Preview

By Douglas Kim

  • Soosan Industries is getting ready for an IPO in Korea at end of July. The IPO offering range is from $155 million to $191 million.
  • Soosan Industries provides comprehensive maintenance services for major nuclear, thermal, and renewable power plants in Korea. It is the only private maintenance company for main nuclear power plant equipment.
  • In our view, this is the third most interesting IPO opportunity in Korea this year so far, after LG Energy Solution (373220 KS) and HPSP.

Before it’s here, it’s on Smartkarma