Category

IPOs and Placements

Equity Capital Markets: LG Energy Solution, Aquila Acquisition Corporation, Delhivery, KakaoBank and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • LG Energy Solution IPO: Record Retail Demand Amount
  • Aquila Acquisition Corporation: Hong Kong’s CMB-Backed SPAC
  • Delhivery IPO Initiation: Can It Deliver?
  • Kakao Bank Six-Month Lock-Up – Over US$2.5bn Stock Release Will Only Add to the Recent Rout

LG Energy Solution IPO: Record Retail Demand Amount

By Douglas Kim

  • LG Energy Solution completed its two days retail subscription demand on 18-19 January. 
  • LG Energy Solution raised 114 trillion won in IPO subscription margin and achieved a new record in the Korean IPO market. The retail demand ratio was 69.3 to 1. 
  • In this insight, we provide a detailed retail demand analysis of the LG Energy Solution IPO, which is getting ready to start trading on 27 January.

Aquila Acquisition Corporation: Hong Kong’s CMB-Backed SPAC

By David Blennerhassett

  • Aquila Acquisition Corporation (AAC HK), a SPAC backed by China Merchants Bank, has applied for listing in Hong Kong.
  • Aquila is the first SPAC company to seek listing since new rules allowing such listings came into effect on the 1 January 2022. 
  • Aquila is targeting technology-enabled companies in “new economy” sectors (such as green energy, life sciences, advanced technology and manufacturing) in Asia, with a focus on China.

Delhivery IPO Initiation: Can It Deliver?

By Arun George

  • Delhivery (1058656D IN) is the largest and fastest-growing 3PL express parcel delivery player in India by revenue in FY21. It has won SEBI approval to raise up to $1 billion.  
  • The fundamentals are mixed as it has been unable to leverage its leading position and strong growth to deliver profits or cash generation.  
  • Based on the draft red herring prospectus, we are cautious about this potential IPO as the negatives outweigh the positives.  

Kakao Bank Six-Month Lock-Up – Over US$2.5bn Stock Release Will Only Add to the Recent Rout

By Sumeet Singh

  • Kakao Bank’s six month IPO lock-up will end on 6th Feb 2022. 
  • It will result in freeing up another US$2.5bn+ worth of shares held by a number of pre-IPO and local IPO investors.
  • In this note, we will talk about the upcoming lock-up expiry.

Before it’s here, it’s on Smartkarma

Equity Capital Markets: Qingdao Ainnovation Technology Group Co Ltd, Hyundai Engineering Co Ltd, Wanda Commercial Management Group and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Qingdao AInnovation Technology Group IPO – Fairly Valued with Mediocre Cornerstones
  • Hyundai Engineering IPO: Valuation Insights
  • AInnovation Technology IPO: Valuation Insights
  • Wanda Commercial Management Group Pre-IPO – The Positives – Aiming for One of HK’s Largest 2022 IPOs

Qingdao AInnovation Technology Group IPO – Fairly Valued with Mediocre Cornerstones

By Clarence Chu

  • Qingdao Ainnovation Technology Group Co Ltd (1853807D CH) is looking to raise up to US$157m in its Hong Kong IPO.
  • Qingdao AInnovation Technology Group is an AI solutions provider offering full-stack AI-based products and solutions. 
  • While we don’t have a fundamental issue with the listing, at asking valuations, the firm appears to be fairly valued with limited upside on its FY23 numbers. 

Hyundai Engineering IPO: Valuation Insights

By Arun George

  • Hyundai Engineering Co Ltd (HEC KS) has launched its IPO to raise US$0.8-1.0 billion at the price range of KRW57,900-75,700 per share.
  • In Hyundai Engineering IPO Initiation: Building on Good Foundations, we stated that HEC has attractive fundamentals with a strong backlog, healthy book-to-bill, improving 3Q21 revenue growth and improving margins. 
  • In this note, we look at the syndicate’s valuation methodology and present our valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive. 

AInnovation Technology IPO: Valuation Insights

By Arun George

  • AInnovation Technology (AIT HK) is a fast-growing enterprise AI solutions provider in China. It has launched an HKEx IPO to raise up to US$157 million. 
  • In AInnovation Technology IPO Initiation: Code Amber, we stated that the negatives outweigh the positives and we would give the IPO a pass.
  • Our valuation analysis suggests that the IPO price is fair. Due to our concerns about the fundamentals, we remain on the sidelines. Pricing is 20 January, listing on 27 January.

Wanda Commercial Management Group Pre-IPO – The Positives – Aiming for One of HK’s Largest 2022 IPOs

By Sumeet Singh

  • Wanda Commercial Management Group (WCMG) is looking to raise up to US$4bn in its upcoming Hong Kong IPO.
  • WCMG is a commercial operation service provider. As of Oct 2021, the firm managed 398 malls with total gross floor area (GFA) under management of 56.5m sqm.
  • In this note, we will talk about the positive aspects of the deal.

Before it’s here, it’s on Smartkarma

Equity Capital Markets: Qingdao Ainnovation Technology Group Co Ltd and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • AInnovation Technology IPO Initiation: Code Amber

AInnovation Technology IPO Initiation: Code Amber

By Arun George

  • AInnovation Technology (AIT HK) is a fast-growing enterprise AI solutions provider in China. It is set to launch an HKEx IPO to raise up to US$157 million.  
  • The fundamentals are mixed as diverging growth profiles of key segments, low market share and cash burn are accompanied by a narrowing loss margin. 
  • Overall, we believe the negatives outweigh the positives and we would give the IPO a pass. 

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Equity Capital Markets: LG Energy Solution and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • ECM Weekly (16th Jan 2022) – LG Energy, Hyundai Engineering, Nippon Paint, Sunac, JL Mag, JREITs

ECM Weekly (16th Jan 2022) – LG Energy, Hyundai Engineering, Nippon Paint, Sunac, JL Mag, JREITs

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.
  • LG Energy Solution (373220 KS) saw very strong demand for its mega US$10bn+ IPO.
  • While other IPO markets were in torpor, a number of placements continued to flow in.

Before it’s here, it’s on Smartkarma

Equity Capital Markets: LG Energy Solution and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • LG Energy Bookbuilding: Detailed Results

LG Energy Bookbuilding: Detailed Results

By Sanghyun Park

  • This IPO led to unusually high interest from local active funds. This is evidenced by the order volume
  • Nevertheless, many local institutions must have felt burdened with LG Energy’s valuation, so they wanted to avoid setting the offering price above the upper end.
  • As for the relatively poor lockup result, the issuer’s refusal to incentivize lockup to set the float rate to around 10% may also have played a part.

Before it’s here, it’s on Smartkarma

Equity Capital Markets: Hyundai Engineering Co Ltd, CTOS Digital Bhd, Huitongda and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Hyundai Engineering IPO Initiation: Building on Good Foundations
  • CTOS Digital Lock-Up Expiry:High Chance of Slow Motion Creador Exit but There Should Be Ample Buyers
  • Huitongda (汇通达) Pre-IPO – PHIP Updates and Competitive Landscape

Hyundai Engineering IPO Initiation: Building on Good Foundations

By Arun George

  • Hyundai Engineering Co Ltd (HEC KS)/HEC is a leading global EPC (Engineering, Procurement and Construction) contractor. It is seeking to raise up to $1 billion.  
  • HEC is offering 16.0 million shares with a primary/secondary split of 25/75 at an indicative price range of KRW57,900-66,800 per share.
  • HEG has attractive fundamentals with a strong backlog, healthy book-to-bill, improving 3Q21 revenue growth and improving margins. 

CTOS Digital Lock-Up Expiry:High Chance of Slow Motion Creador Exit but There Should Be Ample Buyers

By Sumeet Singh

  • CTOS Digital (CTOS) raised around US$291m in its Malaysian IPO in Jul 2021. It is majority owned by Creador, a PE firm.
  • The stock has done well since listing and is now trading 72% above its IPO price. 
  • In this note, we talk about the updates since listing and the upcoming lock-up expiry.

Huitongda (汇通达) Pre-IPO – PHIP Updates and Competitive Landscape

By Clarence Chu

  • Huitongda (1566215D CH) is looking to raise up to US$500m in its upcoming Hong Kong IPO.
  • While the numbers from the growth of member stores look promising, it did not translate to stronger revenue from member stores and HTD did not give a clear explanation.
  • In this note, we look at PHIP updates and competitive landscape.

Before it’s here, it’s on Smartkarma

Equity Capital Markets: Nippon Paint Holdings and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Nippon Paint Holdings Placement – Nothing Particularly Exciting, Needs to Correct

Nippon Paint Holdings Placement – Nothing Particularly Exciting, Needs to Correct

By Sumeet Singh

  • A group of shareholders of Nippon Paint Holdings, plan to raise around US$1.4bn via selling nearly 6% of the stock.
  • The shares haven’t done much this year and despite having corrected by around 40% since the start of 2021, they are trading just about inline with analyst average target price.
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Before it’s here, it’s on Smartkarma

Equity Capital Markets: LG Energy Solution and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Local Battery ETFs Fast Entry Rule Changes: Official Regulatory Filings
  • ECM Weekly (9th Jan 2022) – LG Energy, Hyundai Engineering, JL Mag, 2022 Pipeline, 2021 Performance

Local Battery ETFs Fast Entry Rule Changes: Official Regulatory Filings

By Sanghyun Park

  • The two largest battery-themed ETFs in Korea, TIGER (305540) and KODEX (305720), have confirmed the Fast Entry rules for IPO stocks AND spin-off companies due to equity carve-out (ECO).
  • The official application date for these rule changes is January 26th for KODEX and January 28th for TIGER. LG Energy will be subject to the new Fast Entry rules.
  • For LG Energy, 0.32% of SO will flow through KODEX, and TIGER will be 0.2%. LG Chem will experience a combined passive outflow of 1.8x ADTV for one day.

ECM Weekly (9th Jan 2022) – LG Energy, Hyundai Engineering, JL Mag, 2022 Pipeline, 2021 Performance

By Sumeet Singh


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Equity Capital Markets: LG Energy Solution, SKonec Entertainment, JL Mag Rare-Earth Co Ltd and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • LG Energy Passive Flow from Overseas ETFs: Global X Lithium & Battery (LIT)
  • LG Energy IPO – Valuation
  • Skonec Entertainment IPO Preview
  • JL Mag Rare-Earth H-Share Listing: Valuation Insights

LG Energy Passive Flow from Overseas ETFs: Global X Lithium & Battery (LIT)

By Sanghyun Park

  • Given the AUM of the Global X Lithium Battery ETF (ticker: LIT), the potential passive impact on LG Energy and LG Chem should be worthy of our careful attention.
  • If LIT revises its methodology, the timing to include LG Energy is expected to be the April rebalancing.
  • LG Energy will have a 2-3% index weight, welcoming a passive inflow of ₩130-200B (0.2-0.3% of SO). In contrast, ₩232.1B from LIT will likely escape LG Chem, 0.5% of SO.

LG Energy IPO – Valuation

By Mio Kato

  • LG Energy is being benchmarked against CATL for its IPO valuation and we believe this is incorrect.
  • CATL’s position within China’s supply chain and LFP technology should drive a significant premium against other North Asian peers in our view. 
  • If LG Energy were to simply be benchmarked against Samsung SDI it starts to look expensive and while a premium may be reasonable we do not consider it a given.

Skonec Entertainment IPO Preview

By Douglas Kim

  • SKonec Entertainment (276040 KS), which specializes in VR based metaverse technologies, is getting ready to complete an IPO in the Korean stock market in the next several weeks.
  • Currently, Skonec Entertainment has a gray market value of 34,000 won, which is 183% higher than the high end of the IPO price range of 12,000 won. 
  • The company has been one of the first game companies to develop VR based gun shooting games in Korea.

JL Mag Rare-Earth H-Share Listing: Valuation Insights

By Arun George

  • JL Mag Rare-Earth Co Ltd (300748 CH) is a leading producer of high-performance rare earth permanent magnets. It has launched an H-Share listing to raise $570 million at the mid-point. 
  • In JL Mag Rare-Earth Secondary Listing: Magnetic Moments, we stated that it has attractive fundamentals and the secondary listing is worth a closer look. 
  • Our valuation analysis suggests that the H-Share price range is fair. Pricing is expected on 17 January with an H-Share listing on 14 January.

Before it’s here, it’s on Smartkarma

Equity Capital Markets: LG Energy Solution and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • LG Energy IPO – The Financials

LG Energy IPO – The Financials

By Mio Kato

  • LG Energy has demonstrated the ability to rapidly grow revenue and a $27.5bn revenue target for FY24 looks reasonable enough based on current conditions. 
  • However, that growth has come with numerous issues such as recalls due to battery fires and questionable strategic positioning for the future. 
  • In addition, overall profitability metrics look challenging relative to peers such as CATL.

Before it’s here, it’s on Smartkarma