Category

ECM

Daily Brief ECM: Skymark IPO – Valuation and more

By | Daily Briefs, ECM

In today’s briefing:

  • Skymark IPO – Valuation
  • Pre-IPO MedSci Healthcare Holdings – The Investment Logic, the Business Analysis and the Risks
  • Analog Devices Inc: New SPoE PESE & PD Solutions & Other Drivers
  • Gap Inc: Gap Store On Amazon & Other Developments
  • Ross Stores: Store Additions & Other Drivers

Skymark IPO – Valuation

By Mio Kato

  • Skymark is a little difficult to value given wide dispersions in peer multiples and earnings recovery trajectories. 
  • However, on balance we believe the issue looks to be on the cheap side. 
  • In addition, there are several quirks to the balance sheet, not all of which are negative.

Pre-IPO MedSci Healthcare Holdings – The Investment Logic, the Business Analysis and the Risks

By Xinyao (Criss) Wang

  • The large physician network is actually the cornerstone for MedSci Healthcare (MHH HK)’s precision omni-channel marketing solutions and RWS solutions, and also the key to support the overall investment logic.
  • In fierce competition, how to retain physician network for a long time, convert them into business value continuously and achieve the high growth trend expected by the market is challenging.
  • In terms of valuation, MedSci’s valuation could be higher than Medlive due to its stronger physician platform solutions business and medical professional network, but could be lower than HUAYIWANG. 

Analog Devices Inc: New SPoE PESE & PD Solutions & Other Drivers

By Baptista Research

  • Analog Devices delivered another all-around beat in the recent quarterly result.
  • In Communications, Analog Devices expanded its 5G radio systems leadership with its transceiver portfolio, winning some additional share at key suppliers.
  • We provide the stock of Analog Devices with a ‘Hold’ rating with a revision in the target price.

Gap Inc: Gap Store On Amazon & Other Developments

By Baptista Research

  • Gap delivered a strong set of results in the quarter surpassing Wall Street expectations in terms of revenues as well as earnings.
  • The company has taken steps to maximize profitability and cash flow while rebalancing and lowering inventory to drive short-term and long-term improvements across its entire business.
  • However, the company is proving strength in lifestyle segments, which are growing at an accelerated rate in the current market.

Ross Stores: Store Additions & Other Drivers

By Baptista Research

  • Ross Stores’ results were well above market expectations in terms of revenues as well as earnings as it increased storewide values.
  • On the other hand, given their third-quarter sales growth and enhanced holiday assortments, they face their easiest sales and earnings comparisons in the fourth quarter.
  • We maintain our ‘Hold’ rating on Ross Stores with a revised target price.

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Daily Brief ECM: Lygend Resources & Technology IPO: Trading Debut and more

By | Daily Briefs, ECM

In today’s briefing:

  • Lygend Resources & Technology IPO: Trading Debut
  • Sunshine Insurance Group IPO: Valuation Insights
  • Lava International IPO: Forensic Analysis
  • Esco Lifesciences Pre-IPO Tearsheet
  • Lygend Resources & Technology IPO Trading – Tepid Subscription but Potential Upside Remains
  • Marketingforce Management Pre-IPO Tearsheet
  • Weilong Delicious Global Pre-IPO – Updated Peer Comp and Valuation

Lygend Resources & Technology IPO: Trading Debut

By Arun George


Sunshine Insurance Group IPO: Valuation Insights

By Arun George


Lava International IPO: Forensic Analysis

By Nitin Mangal

  • Lava International (9263793Z IN)  is one of the leading end-to-end focused mobile handset and mobile handset Solutions Company based in India, with operations in a number of countries.
  • Major business risk arises from external environment, as Lava is one of the prominent leaders in feature phone segment, where the market is dying. 
  • Key forensic takeaways pertain to ECL provisioning and some absurd trend in line items. There are several discomforts on the governance end as well which must not be ignored.

Esco Lifesciences Pre-IPO Tearsheet

By Ethan Aw

  • Esco Lifesciences Group (1891571D SP) is looking to raise about US$300m in its upcoming HK IPO. The deal will be run by JP Morgan, BofA and Jefferies.
  • Esco Lifesciences (EL) is a global provider of life sciences, pharmaceutical and bioprocessing tools, with an aim to develop, discover and commercialize technology-driven life sciences, pharmaceutical and bioprocessing tools. 
  • According to CIC, it is the second largest supplier of biosafety cabinets and the third largest supplier of time-lapse incubators globally as measured by revenue in 2021.

Lygend Resources & Technology IPO Trading – Tepid Subscription but Potential Upside Remains

By Clarence Chu

  • Lygend Resources & Technology (2245 HK) raised US$470m in its Hong Kong IPO.
  • Lygend Resources & Technology (Lygend) is a nickel trading and production firm with a portfolio covering multiple areas across the nickel industry value chain.
  • In this note we will talk about the trading dynamics.

Marketingforce Management Pre-IPO Tearsheet

By Ethan Aw

  • Marketingforce Management (MFM HK) is looking to raise about US$100m in its upcoming HK IPO. The deal will be run by CICC and CCB International. 
  • Marketingforce Management (MFM) is a domestic marketing and sales SaaS solution provider in China and considered the largest in terms of revenue in 2021, according to Frost & Sullivan. 
  • Through its Marketingforce platform, MFM delivers integrated cloud-based solutions that cover the entire marketing and sales management process of enterprises, from content and experience to strategy and management, amongst others. 

Weilong Delicious Global Pre-IPO – Updated Peer Comp and Valuation

By Sumeet Singh

  • Weilong Delicious Global (WDG HK), a spicy snack food company in China, aims to raise around US$200m in its Hong Kong IPO.
  • According to F&S, WDG ranked first among spicy snack food enterprises in China, with a market share of 6.2%, and in the seasoned flour product and spicy vegetable snacks categories.
  • In this note, we provide an update to our earlier peer comparison and valuations.

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Daily Brief ECM: Doosan Bobcat Placement – Momentum Is Strong but past Deals Have Been a Mixed Bag and more

By | Daily Briefs, ECM

In today’s briefing:

  • Doosan Bobcat Placement – Momentum Is Strong but past Deals Have Been a Mixed Bag
  • Sunshine Insurance Group Pre-IPO – Peer Comparison – Fastest in One Segment, Slowest in the Other
  • Fangzhou Group Pre-IPO Tearsheet
  • Sunshine Insurance Group IPO: The Bear Case
  • Sunshine Insurance Group IPO – Needs to Correct by Only 50%

Doosan Bobcat Placement – Momentum Is Strong but past Deals Have Been a Mixed Bag

By Ethan Aw

  • Doosan Bobcat Inc (241560 KS) aims to sell a US$145m block. Its recent price momentum is strong but past deals have shown mixed results. 
  • The deal doesn’t appear to be well flagged and is a relatively large one to digest, representing 20.9 days of its three month ADV.  
  • In this note, we will run the deal through our ECM framework and comment on other deal dynamics.

Sunshine Insurance Group Pre-IPO – Peer Comparison – Fastest in One Segment, Slowest in the Other

By Sumeet Singh

  • Sunshine Insurance Group (SIG), a life, health and P&C insurance company, aims to raise up to US$1bn in its HK IPO.
  • SIG is an integrated insurance provider which offers both life and health (L&H) and property and casualty (P&C) insurance in China.
  • We have looked at the company’s past performance in our previous notes. In this note, we will undertake a peer comparison.

Fangzhou Group Pre-IPO Tearsheet

By Ethan Aw

  • Fangzhou Group (FANGZHOU HK) is looking to raise about US$300m in its upcoming HK IPO. The deal will be run by Citibank, UBS and ABC International. 
  • Fangzhou Group is an online chronic disease management platform in China, considered the largest in terms of average MAU in 2021, according to CIC.
  • It focuses on common and chronic diseases such as hypertension, cardiovascular and respiratory chronic diseases, providing tailored medical care and precision medicine covering the full disease cycle for patients.

Sunshine Insurance Group IPO: The Bear Case

By Arun George

  • Sunshine Insurance (SUN HK), a Chinese life and P&C insurance company, is pre-marketing a US$1.0 billion HKEx IPO, according to press reports.
  • In Sunshine Insurance Group 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 Sunshine Life’s VNB margin decline and agent channel pressure; Sunshine P&C’s regulatory pressure on premiums and the group’s declining investment yield.

Sunshine Insurance Group IPO – Needs to Correct by Only 50%

By Sumeet Singh

  • Sunshine Insurance Group (SIG), a life, health and P&C insurance company, aims to raise around US$950m in its HK IPO.
  • SIG is an integrated insurance provider which offers both life and health (L&H) and property and casualty (P&C) insurance in China.
  • We have looked at the company’s past performance and undertaken a peer comparison in our previous notes. In this note, we will talk about valuations.

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Daily Brief ECM: Skymark Airlines IPO – Peer Comparison & Valuation – Asking Too Much for Clipped Wings and more

By | Daily Briefs, ECM

In today’s briefing:

  • Skymark Airlines IPO – Peer Comparison & Valuation – Asking Too Much for Clipped Wings
  • Nexus Select Trust Pre-IPO Tearsheet
  • Sunshine Insurance Group IPO: The Bull Case
  • Daiei Kankyo IPO – Final Thoughts on Valuation

Skymark Airlines IPO – Peer Comparison & Valuation – Asking Too Much for Clipped Wings

By Ethan Aw

  • Skymark Airlines (9204 JP) is looking to raise approximately US$235m in its Japan IPO.
  • Skymark Airlines (SA) is a Japanese low-cost airline, being the third largest domestic airline  according to the company. Unlike major airlines and other low-cost carriers, Skymark operates only domestic flights.
  • In our previous notes, we looked at the company’s past performance. In this note, we talk about peer comparison and valuations.

Nexus Select Trust Pre-IPO Tearsheet

By Clarence Chu

  • Nexus Select Trust (NST IN) is looking to raise up to US$500m in its upcoming India IPO. 
  • The bookrunners on the deal are Axis, BofA, Citi, HSBC, IIFL, JM Fin, JPM, Kotak, MS and SBI Cap.
  • Nexus Select Trust (NST) is a REIT with a portfolio of 17 Grade A urban consumption centers.

Sunshine Insurance Group IPO: The Bull Case

By Arun George

  • Sunshine Insurance (SUN HK), a Chinese life and P&C insurance company, is pre-marketing a US$1.0 billion HKEx IPO, according to press reports.
  • In 2020, Sunshine P&C ranked seventh and Sunshine Life ranked 12th as measured by original premiums income market share, according to the CBIRC and the Insurance Association of China.
  • The key elements of the bull case rest on Sunshine Life’s robust premium growth and high persistency ratio; Sunshine P&C’s underwriting profits in 9M22 and its high group solvency ratio.

Daiei Kankyo IPO – Final Thoughts on Valuation

By Sumeet Singh

  • Daiei Kankyo (9336 JP)  (DK), a waste management company, aims to raise around US$314m in its Japan IPO.
  • Daiei Kankyo is involved in the waste management and related businesses in Japan. The core of its operations consists of its waste management and recycling business.
  • In our previous notes, we looked at the company’s past performance and undertook a peer comparison. In this note, we talk about final valuations.

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Daily Brief ECM: Nomura Research Institute (4307) Large Secondary Offering – Demand Profile and Index Implications and more

By | Daily Briefs, ECM

In today’s briefing:

  • Nomura Research Institute (4307) Large Secondary Offering – Demand Profile and Index Implications
  • Growatt Technology IPO: Valuation First Look
  • Nomura Research Placement – Somewhat Well Flagged, past Deals Have Done Well but Momentum Is Weak

Nomura Research Institute (4307) Large Secondary Offering – Demand Profile and Index Implications

By Travis Lundy

  • On Friday, Nomura Research Institute Ltd (4307 JP) announced that Jafco Co Ltd (8595 JP) and Nomura Holdings (8604 JP) would each sell NRI shares in a Secondary Offering.
  • JAFCO is selling to fund a giant buyback. Nomura is selling to round out the offering size. The total is 37mm shares plus greenshoe of 5.5mm shares. 
  • At Friday’s price that is ~¥140bn (including greenshoe), 7% of shares out, 10% of float, and about 25% of Real World Float. There are index implications.

Growatt Technology IPO: Valuation First Look

By Arun George


Nomura Research Placement – Somewhat Well Flagged, past Deals Have Done Well but Momentum Is Weak

By Sumeet Singh


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Daily Brief ECM: ECM Weekly (27th Nov 2022) – Growatt and more

By | Daily Briefs, ECM

In today’s briefing:

  • ECM Weekly (27th Nov 2022) – Growatt, Lygend, Sunshine Ins, Weilong, DPC, Daiei, Skymark, GoTo

ECM Weekly (27th Nov 2022) – Growatt, Lygend, Sunshine Ins, Weilong, DPC, Daiei, Skymark, GoTo

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.
  • On the IPO front, things are picking up again going into the year end.
  • There were no large placement or blocks this week, although prior lockup linked blocks kept flowing through.

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Daily Brief ECM: Growatt Technology Pre-IPO – Still Looks Good and more

By | Daily Briefs, ECM

In today’s briefing:

  • Growatt Technology Pre-IPO – Still Looks Good, Updated Thoughts on Valuation
  • TS Group (Global) Pre-IPO Tearsheet

Growatt Technology Pre-IPO – Still Looks Good, Updated Thoughts on Valuation

By Ethan Aw

  • Growatt Technology (1833969D CH) is looking to raise about US$1bn in its upcoming Hong Kong IPO. 
  • Growatt Technology is a global distributed energy solution provider, specializing in sustainable energy generation, storage and consumption, as well as energy digitalization. 
  • In our previous notes, we looked at various aspects of the company’s performance. In this note, we’ll provide our updated thoughts on the company’s valuation. 

TS Group (Global) Pre-IPO Tearsheet

By Clarence Chu

  • TS Group (Global) (TS HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The bookrunners are JPM, and China Merchant Securities. 
  • TS Group (Global) is a container shipping firm primarily focusing on the Asia region, which as  per the Drewry report, is the largest and one of the fastest growing regions.
  • As of Jun 2022, it had a total of 52 vessels, consisting of 26 owned vessels and 26 chartered-in vessels, with a total capacity of 107,907 total equivalent units (TEU).

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Daily Brief ECM: Australia REITs:  Asset Deflation Bear Market and more

By | Daily Briefs, ECM

In today’s briefing:

  • Australia REITs:  Asset Deflation Bear Market
  • Skymark IPO – Ready For Takeoff
  • Weilong Delicious Global Pre-IPO – Latest PHIP Updates – No Growth
  • Growatt Technology Pre-IPO – PHIP Updates – Profitability Still Accelerating
  • Weilong Delicious IPO: Remains in a Pickle
  • Weilong Delicious IPO (PHIP): Covid Outbreak Is Not The Sole Reason for 1H2022 Decline
  • Navi Technologies- Forensic Analysis

Australia REITs:  Asset Deflation Bear Market

By David Blennerhassett

  • The S&P/ASX A-REIT 200 Index has returned -22% in FY22, underperforming the ASX 200 Index by ~17% basis points.
  • REIT performance is typically negatively correlated with bond yield movements, however, long-dated government bond yields may be approaching their peak.
  • The asset deflation bear market in FY22 has improved the REIT valuation. A basket of REITs is currently at 0.8x, versus the five-year average of 1.05x, and 1.1x pre-Covid. 

Skymark IPO – Ready For Takeoff

By Mio Kato

  • Skymark will be re-listing following a successful turnaround under the guidance of ANA and Integral. 
  • Listing proceeds will mainly be directed towards improving the fuel efficiency of its fleet. 
  • Skymark offers an attractive play on reopening in Japan as it is geared into the simpler domestic market where elevated cargo rates and revenue per passenger are not downside risks.

Weilong Delicious Global Pre-IPO – Latest PHIP Updates – No Growth

By Sumeet Singh

  • Weilong Delicious Global (WDG HK), a spicy snack food company in China, aims to raise around US$200m in its Hong Kong IPO.
  • According to F&S, WDG ranked first among spicy snack food enterprises in China, with a market share of 6.2%, and in the seasoned flour product and spicy vegetable snacks categories.
  • In this note, we will talk about the updates from the recently re-refiled PHIP.

Growatt Technology Pre-IPO – PHIP Updates – Profitability Still Accelerating

By Ethan Aw

  • Growatt Technology (1833969D CH) is looking to raise about US$1bn in its upcoming Hong Kong IPO. 
  • Growatt Technology is a global distributed energy solution provider, specializing in sustainable energy generation, storage and consumption, as well as energy digitalization.
  • In our previous notes, we looked at the company’s past performance, peer comparison and our thoughts on valuation. In this note, we will talk about the updates from its PHIP.

Weilong Delicious IPO: Remains in a Pickle

By Arun George


Weilong Delicious IPO (PHIP): Covid Outbreak Is Not The Sole Reason for 1H2022 Decline

By Shifara Samsudeen, ACMA, CGMA

  • Weilong Delicious is a leading spicy snack food company in China with a market share of 6.2%. The company plans to raise proceeds of about US$500m through a HKEx IPO.
  • This insight focuses on the new data points from the company’s latest PHIP release (dated 23rd Nov) which includes the company’s 1H2022 results.
  • Weilong Delicious Global (WDG HK)’s top line growth has slowed down during 1H2022 and margins have come under pressure due to increased S&M spending and lower utilisation.

Navi Technologies- Forensic Analysis

By Nitin Mangal

  • Navi (NAVI IN) is a tech-driven financial products and services company in India, with an end-to-end digital system, focusing on three key offerings i.e. lending, insurance and asset management.
  • Company has taken a major write offs in 9MF22 which may have glorified the NPA ratios. Moreover, there is an element of opaqueness on the equity issuance transaction in F20.
  • Other key forensic takeaways include high cash balances in current account, quality of goodwill, etc.

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Daily Brief ECM: DPC Dash Pre-IPO – The Negatives – Lags the Leader and more

By | Daily Briefs, ECM

In today’s briefing:

  • DPC Dash Pre-IPO – The Negatives – Lags the Leader, Remains Loss Making
  • Sunshine Insurance Group Pre-IPO – PHIP Updates – Mixed Bag
  • Growatt Technology IPO: Growing Watts

DPC Dash Pre-IPO – The Negatives – Lags the Leader, Remains Loss Making

By Sumeet Singh

  • DPC Dash aims to raise around US$100m in its Hong Kong IPO. 
  • The company is the exclusive master franchisee for Domino’s Pizza in China, HK and Macau. DPC operated 562 stores across 13 cities, as of Nov 2022.
  • In this note, we will talk about the not-so-positive aspects of the deal.

Sunshine Insurance Group Pre-IPO – PHIP Updates – Mixed Bag

By Sumeet Singh

  • Sunshine Insurance Group (SIG), a life, health and P&C insurance company, aims to raise up to US$1bn in its HK IPO.
  • SIG is an integrated insurance provider which offers both life and health (L&H) and property and casualty (P&C) insurance in China.
  • We have looked at the company’s past performance in our previous notes. In this note, we will talk about the updates from its latest filings.

Growatt Technology IPO: Growing Watts

By Arun George


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Daily Brief ECM: Skymark Airlines Pre-IPO – Highly Leveraged with a History of Bankruptcy and more

By | Daily Briefs, ECM

In today’s briefing:

  • Skymark Airlines Pre-IPO – Highly Leveraged with a History of Bankruptcy
  • 2023 High Conviction: Chindata’s Track Record & Rating Makes It a Takeover Target
  • DPC Dash Pre-IPO – The Positives – On a Rapid Expansion Spree

Skymark Airlines Pre-IPO – Highly Leveraged with a History of Bankruptcy

By Ethan Aw

  • Skymark Airlines (9204 JP) is looking to raise approximately US$218m in its upcoming Japan IPO.  
  • Skymark Airlines (SA) is a Japanese low-cost airline, being the third largest domestic airline  according to the company. Unlike major airlines and other low-cost carriers, Skymark operates only domestic flights.
  • In this note, we talk about the company’s past performance.

2023 High Conviction: Chindata’s Track Record & Rating Makes It a Takeover Target

By Arun George

  • Chindata Group (CD US)’s 3Q22 results beat both revenue and adjusted EBITDA consensus estimates. Chindata raised its full-year guidance for the second time this year.
  • Chindata continues to attract rumours of takeover interest, most recently from China Merchants. Its track record of beating guidance, modest leverage and beaten-down rating make it a target. 
  • A forward EV/EBITDA multiple of 10.8x, in line with 21Vianet Group (VNET US)’s multiple implied by its founder’s offer (at US$8.20), would imply Chindata’s price of US$8 per ADS.  

DPC Dash Pre-IPO – The Positives – On a Rapid Expansion Spree

By Sumeet Singh

  • DPC Dash aims to raise around US$100m in its Hong Kong IPO. 
  • The company is the exclusive master franchisee for Domino’s Pizza in China, HK and Macau. DPC operated 562 stores across 13 cities, as of Nov 2022.
  • In this note, we will talk about the positive aspects of the deal.

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