Category

IPOs and Placements

Equity Capital Markets: Thai Beverage, ByteDance, Lodha Developers, Zhaoke Ophthalmology Pharmaceutical and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • ThaiBev BeerCo’s Deferred IPO -Beer Comparison – Sober Up
  • ECM Weekly (18th April 2021) – ByteDance Zhaoke, We Doctor, Medlive, Bio-Thera, Grab, Ngern Tid Lor
  • Macrotech (Lodha) Developers IPO Trading – Locals, Including Employees, Give It a Miss
  • Zhaoke Opthalmology IPO Valuation: Overpriced

ThaiBev BeerCo’s Deferred IPO -Beer Comparison – Sober Up

By Zhen Zhou, Toh

On 16th April, Thai Beverage (THBEV SP) announced it had decided to defer the Proposed Spin-off Listing of BeerCo, citing uncertain market conditions and volatile outlook.

We briefly looked at BeerCo’s valuation and ThaiBev’s holdco valuation in our previous note where we pointed out that management wanted an expensive valuation for BeerCo (~US$9bn) which we thought was hard to justify. 

In this note, we will compare BeerCo to its ASEAN and regional peers and discuss the reasons for the lukewarm demand from institutional investors.


ECM Weekly (18th April 2021) – ByteDance Zhaoke, We Doctor, Medlive, Bio-Thera, Grab, Ngern Tid Lor

By Zhen Zhou, Toh

Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs.

Asia ECM pipeline continued to build up this week. Grab announced the details of its SPAC listing with a target market value of about US$40bn. The company will raise more than US$4bn proceeds from a fully committed PIPE which include BlackRock, MSIM, T. Rowe Price, Fidelity, Janus Henderson, Mubadala, Nuveen, Permodalan Nasional Berhad and Temasek. We shared our initial thoughts in:

In Hong Kong, it was reported that ByteDance has kicked off IPO preparations for some of its main businesses, which includes Douyin. The company was still deliberating on the listing venue but it is likely that it will conduct a separate listing of its overseas assets.

Dida re-filed with HKEX after its initial application from October last year lapsed last week. The company is probably trying to get ahead of Didi Chuxing’s listing as the latter filed confidentially for a US listing last week. There were also news reports of SF REIT looking to pre-market this month and JD Logistics will be seeing listing approval at the end of this month.

Trip.com’s secondary listing in Hong Kong will debut on Monday and the company’s ADR corrected in line with our earlier expectation but the spread out allocation might weigh on near-term performance.

Our upcoming IPO coverage this week centered around Healthcare names. Zhaoke Ophthalmology Pharma (6622 HK) launched its bookbuild on Friday and it is expected to price this coming Wednesday. 

We also looked at We Doctor, Bio-Thera, Medlive, and Edding Group. :

In the US, Waterdrop Inc prospectus is publicly filed with the SEC. The online insurance technology company is looking to raise about US$500m but there had been news reports that the company was facing pushback from local regulators. 

Aside from Didi Chuxing, Ximalaya FM also filed confidentially for up to US$1bn IPO. Soulgate, a Chinese social networking app operator, and Keep, a Chinese fitness app are looking to file their prospectuses this month. 

This week we took a brief look at TuSimple, a pre-commercialization autonomous technology vendor for truck freights, before it debuted on Thursday.  

In Thailand, Ngern Tid Lor (NTL TB), launched its US$1bn bookbuild. Books will close on 27th April.

In the Philippines, we followed-up with a peer comparison of Monde Nissin against competitors. 

Singapore ECM suffered a setback this week.  ThaiBev announced on Friday that they have decided to defer the Proposed Spin-off listing of BeerCo citing uncertain market conditions and volatile outlook. We had discussed management’s valuation expectation of BeerCo vs. the likely valuation it can command in our earlier note. Core REIT has also shelved its IPO citing weak demand and volatile market conditions.

Placements were spread out over the past week, with Regis Resources (RRL AU) in Australia and Lasalle Logiport Reit (3466 JP) in Japan. Kakao Corp (035720 KS)’s founder  sold about US$450m worth of shares.

Credits to Clarence Chu for helping out with the Weekly Update.

Accuracy Rate:

Our overall accuracy rate is 73.9% for IPOs and 67.2% for Placements 

(Performance measurement criteria is explained at the end of the note)

New IPO filings this week

  • Dida (HK, US$500m, refiled)
  • Shanghai Hanyu Medical Technology Co., Ltd (HK, US$500m)
  • Waterdrop Inc (The U.S, US$500m)
  • Shriram Properties (India, US$100m)
  • G R Infraprojects (India, US$100m)

News on Upcoming IPOs

Hong Kong/China

U.S.

India

Others

Analysis on Upcoming IPOs

NameInsight
Hong Kong
Betta Pharma

Betta Pharma (贝达医药) A+H: Tier 2 Player Struggled to Break Out 

ByteDance

ByteDance (字节跳动) IPO: How Jinri Toutiao Paves The Way for a Bigger Empire (Part 1)

ByteDance

ByteDance (字节跳动) Pre-IPO: Why Facebook Should Worry About TikTok 

ByteDance

ByteDance (字节跳动) IPO: Tiktok the No.1 Short Video App for a Good Reason (Part 2)

ByteDance

ByteDance (字节跳动) Pre-IPO: How Has It Done in 1H? 

ByteDance

ByteDance: The Unlisted Company’s Video Apps Leading the Market and Threatening Internet Giants 

ByteDance

ByteDance (字节跳动) Pre-IPO: Why Facebook Should Worry About TikTok 

ByteDance

ByteDance (字节跳动) Pre-IPO – Globally the Most Downloaded App for Jan 2020 Driven by India 

ByteDance

ByteDance (字节跳动) Pre-IPO: Global Ambition Meets Regulatory Challenges 

Chaoju

Chaoju Eye Care (朝聚眼科) Pre-IPO: Growth Prospect Far from Being Impressive 

Dida

Dida Pre-IPO – Making Hay While Big Brother Retreats 

Dida

Dida Pre-IPO – Earnings Forecast and First Stab at Valuation 

Dida

Dida Pre-IPO – Peer Comparison – Lagging in Scale, Leading in Profitability 

Intco Med

Intco Medical (英科医疗) A+H: From China No.1 to Global No. 1 

Kilcoy

Kilcoy Global Foods Pre-IPO – Rapid Earnings Growth on the Back of Margin Improvement 

Kilcoy

Kilcoy Global Foods Pre-IPO – A Lot of Things Still Remain Unexplained 

Kindstar

Kindstar (康圣环球) Pre-IPO: Issues with Scalability 

Kindstar

Kindstar (康圣环球) Pre-IPO: Is It Worth the Premium? 

RemeGen RemeGen (荣昌生物) Pre-IPO: Thoughts on Valuation of RC18 and RC48 
Bio-heart Shanghai Bio-Heart (上海百心安) Pre-IPO: Needs a Long Runway 
Toplist Toplist China Pre-IPO – Overwhelmingly More Negatives than Positives 
Tasly Tasly Biopharm (天士力生物) IPO: Visible Growth from Approved Drug but Lacks Blockbusters 
WeDoctor WeDoctor (微医) Pre-IPO -App Walk Through – The Online Medical Directory and More 
WeDoctor WeDoctor (微医) Pre-IPO – A More Focused Online Medical Svc Provider than Ping An Good Doctor 
Youran Dairy China Youran Dairy(悠然牧业) Pre-IPO – A Leader Pulling Ahead in a Fragmented Market 
India
Aadhar Housing Aadhar Housing Finance Pre-IPO – Decent past Growth but Comes with Weird Disclosures 
ASK ASK Investment Managers Pre-IPO – Riding on a Wave of Wealth 
Anmol IndAnmol Industries Pre-IPO Quick Take – No Growth, Generous Payments to Founders
Bharat Hotel

Bharat Hotels Pre-IPO – Catching up with Peers 

Bajaj En

Bajaj Energy Pre-IPO – Supposed to Deliver Steady Performance if Only Its Sole Client Would Let It 

CMS InfoCMS Info Systems Pre-IPO – When a PE Sells to Another PE… Only One Gets the Timing Right
Crystal CropCrystal Crop Protection Pre-IPO – DRHP Raises More Questions than in Answers
ESAF SFB ESAF Small Finance Bank Pre-IPO – Growing Fast but Remains Highly Dependant on a Related Party 
Flemingo Flemingo Travel Retail Pre-IPO – Its a Different Business in Every Country
Emami Cem Emami Cement Pre-IPO – Still in Ramp Up Phase but Shares Pledge Might Lead to an Early IPO 
NSENSE IPO Preview- Not Only Fast..its Risky and Expensive
NSENational Stock Exchange Pre-IPO Review – Bigger, Better, Stronger but a Little Too Fast for Some

LIC

Life Insurance Corporation of India Pre-IPO – Early Take on India’s Largest IPO 
Penna Cem Penna Cement – Aggressive Expansion Plans Even Though Past Performance Has Been Tepid 
PNB MetPNB Metlife Pre-IPO Quick Take – Doesn’t Stack up Well Versus Its Larger Peers
Samhi Hotels Samhi Hotels Pre-IPO – Assets and Borrowings Are Growing, but Earnings Haven’t Kept Pace 
Malaysia
QSRQSR Brands Pre-IPO – As Healthy as Fast Food

Macrotech (Lodha) Developers IPO Trading – Locals, Including Employees, Give It a Miss

By Sumeet Singh

Macrotech Developers (Lodha) raised around US$345m in its India IPO and will start trading later today.

In this note, we’ll talk about deal updates.


Zhaoke Opthalmology IPO Valuation: Overpriced

By Shifara Samsudeen, ACMA, CGMA

The Chinese ophthalmic pharmaceutical company, Zhaoke Ophthalmology Pharmaceutical (6622 HK)  has set the terms for its HK IPO. The company plans to issue 123.6m shares at an indicative IPO price range of HK$15.38-16.8 per share and at the midpoint of the IPO price range of HK$16.09 per share, the company will receive net proceeds of HK$1,858m (US$239m).

Zhaoke Opthalmology IPO Details

No. of Shares Issued

                      123,567,500

IPO Price per Share (HK$)

15.38-16.80

Offer as a % of Outstanding Shares

23.09%

Total Shares Outstanding

535,155,500

Net Proceeds (HK$m)

1,857.80

Market Capitalisation (HK$m)

8,610.65

Enterprise Value (HK$m)

6,687.24

Source: Company disclosures, LSR (Net proceeds, market cap and EV are at the midpoint of the IPO price range, EV is after adjusting for net cash and net IPO proceeds)

The company also has entered into cornerstone investment agreements with CaaS Capital Master Fund, GIC Private Limited, Golden Valley Global and several other investors who have agreed to buy approx. 21.51% (at the midpoint) of the offer shares or approx. HK$427.8m of the offering.

Zhaoke plans to use approx. 32% of the net IPO proceeds for clinical development and commercialisation of its core products. Another 46% of the net proceeds will be used to fund the ongoing R&D activities and 7% of the IPO proceeds will be invested on expanding the production line of its Nansha Manufacturing facility in anticipation of upcoming product launches.


Before it’s here, it’s on Smartkarma

Equity Capital Markets: Trip.com, Ngern Tid Lor, SEMCNS Co Ltd and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Trip.com Secondary Trading Note – Delivered a Good Correction but Seems to Be Widely Distributed
  • Ngern Tid Lor IPO Initiation: Finance on Four Wheels
  • SEMCNS IPO Preview

Trip.com Secondary Trading Note – Delivered a Good Correction but Seems to Be Widely Distributed

By Sumeet Singh

Trip.com raised around US$1.2bn in its secondary listing in Hong Kong.

We have covered the background of the deal in our earlier notes:

In this note, we’ll talk about the updates since then.


Ngern Tid Lor IPO Initiation: Finance on Four Wheels

By Arun George

Ngern Tid Lor (NTL TB)/TIDLOR is the leading auto-for-cash loan provider in Thailand with a 16% market share as measured by the outstanding vehicle title loans in 2019, according to Oliver Wyman. It is also a non-life insurance broker with the biggest branch network in Thailand. TIDLOR is an affiliate of Bank Of Ayudhya (BAY TB) (Krungsri), which is a strategic member of Mitsubishi UFJ Financial (MUFG) (8306 JP)

TIDLOR has launched an IPO to raise up to THB33 billion ($1.1 billion). The offer comprises a primary/secondary spilt of 23:77. The selling shareholders are Krungsri and CVC Capital Partners. 

The timing of the IPO is not ideal as a new COVID-19 outbreak has swept through Thailand which has forced Thai Beverage (THBEV SP) to pull the plug on the listing of BeerCo. Despite the COVID-19 pandemic, TIDLOR delivered a creditable performance in 2020 underpinned by strong operations and asset quality. For investors willing to ride the current market uncertainty, we believe that TIDLOR is well placed to capture the long-term opportunity of Thailand’s vehicle title loan market.   


SEMCNS IPO Preview

By Douglas Kim

SEMCNS is the market leader in Korea in the ceramic STFs (space transformers) market, which is mainly used in the semiconductor sector. Ceramic STF is a core component of a probe card for evaluating the electrical performance of a wafer. It supports MEMS PIN and transmits an electrical signal to the test inspection equipment through a PCB. Its main competitors are based in Japan. Major customers of the company’s products include Samsung Electronics and SK Hynix.

SEMCNS Co Ltd (252990 KS) is getting ready to complete its IPO in Korea in May. The IPO price range is from 5,000 won to 5,700 won. The IPO base deal size is from $54 million to $61 million. According to the bankers’ valuation, the expected market cap after the IPO ranges from 251 billion won to 286 billion won. Of the 12 million shares slated for this IPO, 10 million are new shares and 2 million are old shares. The book building for the institutional investors starts on 3 March 2021.

The company plans to spend the bulk of its IPO proceeds to double its capacity of STF from 5,000 units per year to 10,000 units per year at its Osong facility. The company has excellent technology and competes in a high barriers to entry industry. 

Deal Specifics of the SEMCNS IPO:
 
Lead underwriters of the IPO: 
Daishin Secuities
Expected IPO price per share: 
5,000 won (low)/5,700 won (high)
Number of Shares for IPO:
12m shares (10m new shares; 2m old shares)
IPO base deal size: 
US$54m (low);  US$61m (high)
Expected common shares outstanding, fully diluted (post-IPO):  
50.2 m shares
Expected market cap after IPO:
251 billion won (low)/286 billion won (high)
Book open: 
03-May-21
Book closed:
04-May-21
Listing date: 
TBD
Source: Company data
 

Before it’s here, it’s on Smartkarma

Equity Capital Markets: Zhaoke Ophthalmology Pharmaceutical, UiPath Inc, Coocon Corp and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Zhaoke Ophthalmology IPO: Valuation Insights
  • Zhaoke Ophthalmic (兆科眼科) IPO: Rationalize the Valuation
  • UiPath IPO – Will There Be a UiPop?
  • COOCON Bookbuilding Results and Trading Strategy Post IPO

Zhaoke Ophthalmology IPO: Valuation Insights

By Arun George

Zhaoke Ophthalmology Pharmaceutical (6622 HK) is an ophthalmic pharma company that has an ophthalmic drug pipeline of 13 innovative drugs and 12 generic drugs. Zhaoke was founded by Lee’s Pharmaceutical (950 HK) which is the largest shareholder. 

Zhaoke has launched an HKEx IPO to raise net proceeds of HK$1,857.8 million ($239 million) at the mid-point of the IPO price range of HK$15.38-16.80 per share.

Eight cornerstone investors have agreed to invest about $55 million in the IPO (21.51% of the offer shares at the mid-point of the IPO price range). The cornerstone investors are CaaS Capital, GIC, Golden Valley, Jennison Associates, Mass Ave, Matthews Asia, OrbiMed Funds and VMS Investment.

In Zhaoke Ophthalmology IPO Initiation: The Eyes Have It, we stated that the prospects of Zhaoke’s drug assets are favourable. Overall, our valuation analysis suggests that the IPO price range is attractive. 


Zhaoke Ophthalmic (兆科眼科) IPO: Rationalize the Valuation

By Ke Yan, CFA, FRM

Founded by Lee’s Pharma, Zhaoke offers a comprehensive ophthalmic product pipeline. The company launched book building to raise up to USD 267m via a Hong Kong listing.

In our previous note, we looked at the company’s two products, namely CsA gel and ZKY001. We are of the view that CsA gel does provide advantage over Restasis, the top selling eye gel for the DED, but the forecast of market growth is too aggressive for the DED market. For another core product ZKY001, while there is no data on the efficacy from Phase I clinical trial, we do note that the licensing parnter’s product which uses the same technology but on a different indication, did not meet the primary end point in Phase III clinical trial according to a recent announcement, which raises our concern on the potential of the product candidate. In addition, the company also had a long list of generic referencing top selling glaucoma drugs. The company has an OK management team but strong backing of institutional investors.  

We think the valuation is rich at the high end and the cornerstone investors’ commitment left a large portion of the deal to be sold on debut. We also note that the market sentiment is not very positive on the ophthalmic deals.

Our previous coverage on Zhaoke Ophthalmic


UiPath IPO – Will There Be a UiPop?

By Mio Kato

UiPath has generated strong revenue growth and even turned profitable in its last reported quarter. With an attractive business model backing these strong financial metrics we consider what sort of valuation the company might command considering the premium multiples of many high growth software names.


COOCON Bookbuilding Results and Trading Strategy Post IPO

By Douglas Kim

Coocon Corp (294570 KS), the market leader in providing API based information services in Korea, announced excellent book building results. The IPO price of Coocon has been determined at 45,000 won, which is above the IPO price range of 31,000 won to 40,000 won. There were 1,578 institutions that participated in this IPO survey and the demand was extremely strong at 1,595 to 1.

Our base case valuation of Coocon is 66,104 won, which is 47% higher than the IPO price of 45,000 won. Despite the slowing momentum in the global IPO market, we think that Coocon’s IPO will stand out and be able to reach our target price in the first few days of trading. 

Coocon is engaged in the collection and connection of multitude of data involving API, which is essentially a contract between two or more software that results in a certain functionality if the user software provides an input in a pre-defined format. It collects and connects data from 500 domestic institutions such as finance, public, medical, logistics, distribution, and telecommunications, as well as more than 2,000 institutions in 40 countries abroad. 

Institutional Investors Demand Breakdown of Coocon IPO Bookbuilding Results
Domestic Investors
Asset mgmt companiesBrokeragesPension funds/insurance/banksOthers
No. of companies53837209478
Demand541 to 136 to 1206 to 1484 to 1
     
Overseas Investors  
(A)*(B)**  
No. of companies104212  
Demand105 to 1222 to 1  
     
Total (No. of companies)1,578   
Total Demand1,595 to 1   
Note: (A)* refers to overseas investment mgmt companies that have records of trading with the brokers involved in this deal.
(B)** refers to overseas investment mgmt companies that do not have records of trading with the brokers involved in this deal.
Source: Company data   

Before it’s here, it’s on Smartkarma

Equity Capital Markets: Kakao Corp, Zhaoke Ophthalmology Pharmaceutical, Ngern Tid Lor, Dida, UiPath Inc, Lasalle Logiport REIT and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Kakao Corp Placement – Selldown by Founder
  • Zhaoke Ophthalmic (兆科眼科) Pre-IPO: Beware of Aggressive “Guidance”
  • Ngern Tid Lor IPO – Not Really at a Large Discount but the Overall Sector Has Been Doing Very Well
  • Dida Pre-IPO: Shared Mobility
  • UiPath IPO Valuation Analysis
  • JREIT Offering: Lasalle Logiport REIT (3466 JP) – Take It (Vs Comps)

Kakao Corp Placement – Selldown by Founder

By Zhen Zhou, Toh

Kakao’s founder, Kim Beom-Su, is looking sell about US$450m worth of shares.

 In this note, we will share our thoughts and run the deal through our ECM framework.  

We have covered earlier placements in:


Zhaoke Ophthalmic (兆科眼科) Pre-IPO: Beware of Aggressive “Guidance”

By Ke Yan, CFA, FRM

Founded by Lee’s Pharma, Zhaoke offers a comprehensive ophthalmic product pipeline. The company is looking to raise up to USD 200m via a Hong Kong listing.

In our previous note, we looked at the company’s two products, namely CsA gel and ZKY001. We are of the view that CsA gel does provide advantage over Restasis, the top selling eye gel for the DED, but the forecast of market growth is too aggressive for the DED market. For another core product ZKY001, while there is no data on the efficacy from Phase I clinical trial, we do note that the licensing parnter’s product which uses the same technology but on a different indication, did not meet the primary end point in Phase III clinical trial according to a recent announcement, which raises our concern on the potential of the product candidate. In addition, the company also had a long list of generic referencing top selling glaucoma drugs. The company has an OK management team but strong backing of institutional investors.  We have also provided a preliminary valuation for its core products. 

We did research on its key competitor in the CsA segment, namely Sinqi, which is listed on the A-share market with a ticker 300573 CH. Sinqi has recently planned to place shares to fund the expansion of the manufacturing facility for the CsA product which was approved by the NMPA in June 2020. From its disclosure, we can see that the CsA market could be aggressively overstated by the third-party consultant Frost & Sullivan who provided the market forecast for the company’s prospectus.

Our previous coverage on Zhaoke Ophthalmic


Ngern Tid Lor IPO – Not Really at a Large Discount but the Overall Sector Has Been Doing Very Well

By Sumeet Singh

Ngern Tid Lor (NTL), a financial service provider based in Thailand, aims to raise around US$1bn via selling a mix of primary and secondary shares in its Thailand IPO. Prior to listing, it was jointly owned by Bank of Ayudhya and CVC Capital Partners. As per Oliver Wyman’s estimates, NTL had a 16% market share in the vehicle lending market in Thailand, as of 2019. 

NTL provides hire purchase loans for motorcycles and cars, along with new and used trucks. It also provides insurance brokerage services through its branches for non-life and life insurance. It offers motor insurance, compulsory motor insurance, personal accident insurance, cancer insurance, and loan insurance. As of Dec 2020, it had over 730,000 accounts with total outstanding loans of THB51.3bn. In 2020, it generated non-life insurance premium sales of THB4bn. 

Over 2016-20, NTL’s gross loans grew at 25.1% CAGR, averaging 25%+ per annum over 2017-19 before slowing down to 7% YoY growth in 2020. Its total income has grown at 22.5% CAGR, while PAT did better with a CAGR of 29.1% over 2016-20. Although, asset quality has taken a hit owing to COVID-19 and Bank of Thailand’s induced moratorium. 

We have covered various aspects of the deal in our earlier note, Ngern Tid Lor Pre-IPO – Pre-COVID growth track record has been very strong and Ngern Tid Lor Pre-IPO – Peer Comparison – Playing Catch up After Being Left Behind.

In this note we’ll talk about valuation and deal dynamics.


Dida Pre-IPO: Shared Mobility

By Shifara Samsudeen, ACMA, CGMA

Dida (DIDA HK)  operates the largest carpooling marketplace in China and according to Frost & Sullivan, the company had a market share of 66.5% in terms of the number of carpooling rides in 2019. The company has filed for an IPO to list its shares on the Hong Kong Stock Exchange.

The company generates a majority of its revenues from carpooling and has reported strong growth in revenue during 2017-2020. Despite decline in the number of carpooling rides in 2020 compared to 2019 due to safety concerns related to the Covid-19 outbreak, Dida’s carpooling marketplace revenues have continued to increase as a result of growth in service fee rates charged by the company. We expect Dida’s carpooling marketplace revenues to continue to expand though pandemic related safety concerns remain a short-term risk.

Dida launched online ride-hailing services in 2017 and began monetising the business in 2019. The company’s online taxi-hailing services currently accounts for only 5% of revenues and given the fierce competition in the ride-hailing market in China, we do not expect the segment to be a key driver of growth for Dida over the next few years.

The company’s gross profit margin has continued to expand driven by improvement in service fee rates, higher scale and drop in incentives and subsidies to the company’s users. Our adjusted operating profit calculation reveals that the company has been profitable at the operating profit line over the last two years.

It seems that the company’s strategy of focusing on carpooling is paying off and we remain positive on the company’s future growth prospects.


UiPath IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of UiPath is $60.7 per share, which represents a 21% upside from the high end of the IPO price range of $50 per share. Given the moderate upside in the share price using our base case valuation, we have a Positive view of the UiPath IPO. 
  • We forecast the company to generate sales of $982.5 million (up 61.7% YoY), gross profit of $877.8 million (up 62.0% YoY), and an operating loss of $71.2 million in FY ending Jan 2022. From FY ending Jan 2021 to FY ending Jan 2026, we estimate the company’s sales to increase by 37.9% CAGR.
  • UiPath is one of the global leaders in the RPA (robotic process automation) market. Robotic process automation is a form of business process automation technology based on software robots or on artificial intelligence. The company provides a comprehensive range of automation solutions via numerous interrelated software offerings. 


JREIT Offering: Lasalle Logiport REIT (3466 JP) – Take It (Vs Comps)

By Janaghan Jeyakumar, CFA

After market-close on 14th April, Logistics J-REIT Lasalle Logiport REIT (3466 JP) launched a follow-on equity offering to fund part of their recent property acquisition. 

The primary offer quantity is 140,000 units out of which 73,850 units are expected to be allocated to the domestic market and 66,150 units are expected to be allocated to foreign buyers. There is also an over-allotment quantity of 7,000 units. The total size of this offering could be around ¥25bn (~US$230mn). 

The Offer Price will be determined between 21st April and 26th April (typically it has been the first day of this window for most JREIT offerings) and the day following the offer price determination day (pricing date) will be the application date. 

More below the fold.


Before it’s here, it’s on Smartkarma

Equity Capital Markets: Grab, Coinbase, TuSimple Holdings Inc, Edding Group, Shanghai HeartCare Medical Technology, Lasalle Logiport REIT, Tess Holdings Co Ltd, YishengBio and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • SPAC Grab … At 2x Uber
  • Coinbase DPO – A Guide to Implied Prices Based on Bitcoin and Ethereum Prices
  • TuSimple IPO – Simply a Better Solution for the U.S Trucking Industry
  • Edding Group (亿腾医药) Pre-IPO: Notes from Latest Financials and Its Related Party
  • Shanghai HeartCare Medical IPO Initiation: Surviving Strokes
  • LaSalle Logiport REIT Placement – Well-Flagged Property with Upside Potential
  • Tess Holdings IPO – Valuation
  • Pre-IPO YishengBio Co., Ltd  – Here Are the Concerns Despite Solid Market Potential

SPAC Grab … At 2x Uber

By David Blennerhassett

Priced at ~2x Uber on a forward EV/Revenue metric.

That was my immediate takeaway from Grab (0967655D SP)‘s announcement it intends to go public in the U.S. in partnership with SPAC Altimeter Growth Corp (AGC US)

The proposed transaction represents an expected equity value of US$39.55bn and EV of US$30.36bn, with cash proceeds of US$4.54bn.

In past insights on SPACs, beginning with Virtual IPOs/Direct Listings: Uninhibited Price Discovery, one issue for SPACs is their overabundance in the market today, targeting popular private companies. As such, popular private companies can tee up “SPAC-offs,” where various SPACs pitch their deal, competing (mostly) on price.  The higher the acquisition price, the lower the future return for SPAC investors.

And Grab has competition. Its main rival is Indonesia’s Gojek (1379371D IJ), and the two courted each other around February last year before irreconcilable differences led to them parting ways in January this year.

There is talk Gojek will merge with e-commerce payer Tokopedia and similarly seek a US listing.

Mobile gaming and online shopping platform player Sea Ltd (SE US) is also in the mix, and currently boasts a non-insignificant market cap of US$125bn.

The merger is slated for closing in July this year.

More below the fold.


Coinbase DPO – A Guide to Implied Prices Based on Bitcoin and Ethereum Prices

By Mio Kato

We previously showed that Coinbase’s revenue was highly correlated with average bitcoin prices during the quarter in Coinbase IPO – Why You Can Justify a $100bn Valuation… If You Want | Smartkarma. We have now improved correlations further by incorporating Ethereum prices. Based on these correlations and the also tight correlations between revenue and OP we provide investors with some simple theoretical stock price calculations.


TuSimple IPO – Simply a Better Solution for the U.S Trucking Industry

By Mio Kato

TuSimple has partnered with a variety of leading truck manufacturers and aims to commercialise level 4 autonomous driving technology for freight trucking. While the business is still at a very early stage, the prospects for the company if its technology does what it claims, are very strong.


Edding Group (亿腾医药) Pre-IPO: Notes from Latest Financials and Its Related Party

By Ke Yan, CFA, FRM

Edding Group, a leading integrated pharmaceutical company in China, plans to raise up to USD 200m via a Hong Kong listing.

In our previous note, we discussed that the company is turning from a distributor of NMC drugs to a pharmaceutical company by acquiring product rights in the past two years. We are of the view that the Vancocin and Ceclor are the selling point of the company as they both have a dominant position in the respective segment and are in growing markets. The company’s Vascepa is an interesting CVD product but the competition is intense given that the statin is the main therapy to reduce CV risks and it has many varieties with a competitive market. However, we do not see Mulpleta and EPD 125 attractive. Sales of Mulpleta are very small in Japan and the EDP125 was suspended by Eli Lilly previously given that it failed to demonstrate superiority in Phase II/III clinical trials. We think the management does not possess impressive working experience, though investor backing is strong.

The strong line-up of pre-IPO investors prompted us to do further research in the company. In this note, we will be looking at the company’s financials. We highlight key points from its financials and the contractual arrangement. We also note issues with its related party.


Shanghai HeartCare Medical IPO Initiation: Surviving Strokes

By Arun George

Shanghai HeartCare Medical Technology (HMT HK) is a China-based neuro-interventional medical device manufacturer with a product portfolio that spans the treatment and prevention of ischemic stroke to the treatment of haemorrhagic stroke. HeartCare’s product portfolio consists of a total of 23 commercialised products and product candidates, including four ischemic stroke treatment devices with NMPA approval.

HearCare’s shareholders include Shanghai Fosun Pharmaceutical (Group) (2196 HK), Temasek, Lake Bleu Capital, China International Capital Corporation (3908 HK) and Canada Pension Plan Investment Board (through a special purpose vehicle). HeartCare is set to pre-market an HKEx IPO to raise $300 million this quarter, according to press reports. 

HeartCare only started to generate revenue in 1Q20 through the commercialisation of two products (SupSelek and ExtraFlex). Captor thrombectomy device, a core product, was commercialised in December 2020 and Fullblock balloon guiding catheter received NMPA approval in December 2020. HeartCare aims to commercialise nine currently late-stage product candidates in 2021 and ten currently earlier-stage product candidates between 2022 and 2025. With a strong near-term commercialisation pipeline, HeartCare has shifted from a concept to a revenue-generating stock. Overall, we believe that HeartCare’s product portfolio is attractive. 



Tess Holdings IPO – Valuation

By Mio Kato

Tess Holdings offers an interesting play on the developing solar and renewables theme in Japan which has done very well over the last twelve months. Prospects appear positive and the stock looks reasonable on a PE basis, so the question is how to interpret the high levels of leverage.


Pre-IPO YishengBio Co., Ltd  – Here Are the Concerns Despite Solid Market Potential

By Xinyao (Criss) Wang

On February 24th, 2021, YishengBio (1872307D HK) announced the completion of a Series B financing of over $130 million, led by Oceanpine and OrbiMed. Soon after, on March 8th, Yisheng filed its IPO prospectus with the HKEX. Since the Changchun Changsheng vaccine scandal in 2018, rabies vaccines have been in short supply in China. Therefore, vaccine companies hope to seize this opportunity and develop vigorously with the help of the capital market. For example, last year, Chengdu Kanghua Biological-A (300841 CH) was listed on the A-share market successfully. This year, Yisheng also plans to raise funds, expand the business and fund the future operation in the public capital market. 


Before it’s here, it’s on Smartkarma

Equity Capital Markets: Tess Holdings Co Ltd, Regis Resources, Monde Nissin Corp, WeDoctor Holdings, TuSimple Holdings Inc, Bio-Thera Solutions Ltd, Ngern Tid Lor, Hyundai Engineering Co Ltd, Zhaoke Ophthalmology Pharmaceutical and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Tess Holdings IPO – A Timely Renewables Play
  • Regis Resources Placement – A Big, Pricey Quality Purchase but Not Set in Stone
  • Monde Nissin Pre-IPO – Peer Comparison for Food Business
  • We Doctor Pre-IPO: Front-Runner in Digital Medical Services in China
  • Tusimple IPO: Buy the Autonomous Freight as a Service (AFaaS) Company Founded by Chinese Scholars
  • Bio-Thera Solutions (百奥泰) A+H: Recent Termination of Drug Candidates
  • Ngern Tid Lor Pre-IPO – Peer Comparison – Playing Catch up After Being Left Behind
  • Hyundai Engineering IPO Process Begins – A Key Catalyst for the Hyundai Motor Group Restructuring?
  • We Doctor (微医) Pre-IPO – Peer Comparison – Picking Its Battles Wisely
  • Zhaoke Opthalmology IPO: Promising Drug Candidates; but Commercialisation May Take Longer

Tess Holdings IPO – A Timely Renewables Play

By Mio Kato

Tess Holdings offers relatively pure play leverage into Japan’s developing cogeneration and especially solar energy markets at a time when there is increasing news flow in the area. With a business model covering the full chain from land procurement, regulatory approvals, construction, operation and maintenance and asset management, the company offers a one-stop-shop in the area. There are thus many positives, though the debt levels are a slight concern.


Regis Resources Placement – A Big, Pricey Quality Purchase but Not Set in Stone

By Zhen Zhou, Toh

Regis Resources (RRL AU) is looking to raise about A$651m (US$495m) in its equity raising to partially fund the acquisition of 30% stake in Tropicana gold mine from IGO Ltd (IGO AU).

Overall, the deal scored marginally positive on our framework owing to the undemanding valuation but dragged down by its large deal size and poor track record.


Monde Nissin Pre-IPO – Peer Comparison for Food Business

By Sumeet Singh

Monde Nissin (MNC), a food manufacturer in the Philippines, aims to raise around US$1bn in its Philippines IPO.

It has two main businesses: Asia-Pacific Branded Food and Beverage Business (BFB), which sells instant noodles, biscuits and other products, and meat alternative (MA) business which includes Quorn and Cauldron meat alternatives brands.

MNC has a high market share in the Philippines in the instant noodles and biscuits segment along with a few other categories as well. Quorn as well has a strong lead over its next largest peers in the Chicken alternative meat segment in the grocery channel. 

In this note, we’ll compare its BFB division’s performance with other listed regional peers.


We Doctor Pre-IPO: Front-Runner in Digital Medical Services in China

By Shifara Samsudeen, ACMA, CGMA

WeDoctor Holdings (1737089D HK) , the Chinese digital medical services platform has filed to list its shares on the Hong Kong Stock Exchange and plans to raise proceeds of approx. US$2bn through the IPO.

The company offers online medical appointment, diagnosis and treatment, consultation, medical bill settlement and prescription fulfilment. According to Frost & Sullivan, We Doctor was ranked the largest digital medical service platform in China in terms of both the number of internet hospitals (as of December 2020) and volume of digital medical consultations provided in 2019.

This is the First of a series of reports on We Doctor where we will be discussing the company’s business model, revenues, margins and peer comparison in detail. This insight will focus on the company’s business model and an analysis of its revenues.


Tusimple IPO: Buy the Autonomous Freight as a Service (AFaaS) Company Founded by Chinese Scholars

By Ke Yan, CFA, FRM

Tusimple, a US-based leading autonomous technology vendor in the global truck freight industry, is looking to raise USD 1.5bn.

We find the company very interesting for the following reasons: 1) the company is able to monetize the AI technology in a tangible manner in a captive market, 2) the company received investment from both financial investors and the partners in the supply chain, and 3) the company was founded by the Chinese scholars with entrepreneurship experience in the US. 

We think the deal will do well and will participate at strike. 


Bio-Thera Solutions (百奥泰) A+H: Recent Termination of Drug Candidates

By Ke Yan, CFA, FRM

Bio-Thera is a China-based biopharmaceutical company. The company plans to raise at least USD 500m to list in Hong Kong. 

In our past note, we discussed that although the company has already commercialized one product and has two under NDA reviews by the NMPA, we think its product line-up is not impressive with a lack of truly innovative products. We were of the view that the company’s HER2-ADC drug BAT8001 is interesting given it’s likely one of the first two domestically HER2-ADC to hit the market. 

In this note, we would like to bring to investors’ attention that the company has recently terminated three drug candidates, of which two were related to the ADC technology. As such we re-iterate that the quality of management and its R&D is not the top tier among Chinese biotech companies.


Ngern Tid Lor Pre-IPO – Peer Comparison – Playing Catch up After Being Left Behind

By Sumeet Singh

Ngern Tid Lor (NTL), a financial service provider based in Thailand, aims to raise around US$1bn via selling a mix of primary and secondary shares in its Thailand IPO. Prior to listing, it was jointly owned by Bank of Ayudhya and CVC Capital Partners. As per Oliver Wyman’s estimates, NTL had a 16% market share in the vehicle lending market in Thailand, as of 2019. 

NTL provides hire purchase loans for motorcycles and cars, along with new and used trucks. It also provides insurance brokerage services through its branches for non-life and life insurance. It offers motor insurance, compulsory motor insurance, personal accident insurance, cancer insurance, and loan insurance. As of Dec 2020, it had over 730,000 accounts with total outstanding loans of THB51.3bn. In 2020, it generated non-life insurance premium sales of THB4bn. 

Over 2016-20, NTL’s gross loans grew at 25.1% CAGR, averaging 25%+ per annum over 2017-19 before slowing down to 7% YoY growth in 2020. Its total income has grown at 22.5% CAGR, while PAT did better with a CAGR of 29.1% over 2016-20. Although, asset quality has taken a hit owing to COVID-19 and Bank of Thailand’s induced moratorium. 

We have covered various aspects of the deal in our earlier note, Ngern Tid Lor Pre-IPO – Pre-COVID growth track record has been very strong. In this note we’ll undertake a peer comparison.


Hyundai Engineering IPO Process Begins – A Key Catalyst for the Hyundai Motor Group Restructuring?

By Douglas Kim

Hyundai Engineering Co is starting its IPO process, which was noted by several local Korean media accounts today. The local media also has mentioned that the value of Hyundai Engineering Co (HEC) could be about 10 trillion won ($8.9 billion).

Hyundai Engineering Co Ltd (HEC KS) is expected to complete its IPO by the end of 2021. It was reported on 13 April by the local media that Hyundai Engineering Co sent request for proposals (RFP) for IPO to the major domestic investment banks (including Mirae Asset Securities, Korea Investment & Securities, NH Investment & Securities, and other foreign banks) on 9 April. 

A successful IPO of Hyundai Engineering Co could accelerate the restructuring of the entire Hyundai Motor Group. For example, given that the Hyundai Motor Group Chairman Chung Eui-Sun is the second largest shareholder of Hyundai Engineering Co, the IPO proceeds from this company could be used to further increase the ownership of Hyundai Mobis (012330 KS) in the future.

Note: Hyundai Engineering Co (HEC) is a different company than Hyundai Engineering & Const (000720 KS) (Hyundai E&C). In this insight, the former company is mentioned as either HEC or Hyundai Engineering Co. 


We Doctor (微医) Pre-IPO – Peer Comparison – Picking Its Battles Wisely

By Zhen Zhou, Toh

WeDoctor Holdings (1737089D HK) is looking to raise US$2bn in its upcoming Hong Kong IPO. 

We Doctor Holdings (WDH) is a digital medical service platform. As per Frost & Sullivan (F&S), WDH is the largest platform in China in terms of the number of Internet hospitals, as of December 31, 2020, and the volume of digital medical consultations provided in 2019. 

Prior to the filing, we had looked at the background of the company, did an app walkthrough, and brief comparison with other online medical providers like JD Health and Ping An Good Doctor

In this note, we will compare WDH to other listed China online healthcare tech companies.


Zhaoke Opthalmology IPO: Promising Drug Candidates; but Commercialisation May Take Longer

By Shifara Samsudeen, ACMA, CGMA

Zhaoke Ophthalmology Pharmaceutical (ZKO HK)  is an ophthalmic pharmaceutical company in China dedicated to the research and development and commercialisation of therapies. The company has an ophthalmic drug pipeline of 25 candidates that covers most major ocular indications that affect the front and the back of the eye either through in-house development or in-licensing. According to CIC, the company has one of the most comprehensive ophthalmic drug pipelines in China.

Zhaoke has filed for an IPO to list its shares on the Hong Kong Stock Exchange and plans to raise proceeds of about US$200m through the IPO.

The company currently does not have any products approved for commercial sale; hence the company does not generate any revenues from product sales. However, the company’s drug development pipeline includes a few late stage drug candidates that have the potential to become market-leading products.


Before it’s here, it’s on Smartkarma

Equity Capital Markets: Trip.com, Stella Pharma Corp, Zhaoke Ophthalmology Pharmaceutical, SK IE Technology, KE Holdings Inc, Medlive Technology, UiPath Inc and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Trip.com Secondary: Further Upside to SOTP Possible with Recovery in Travel and Hospitality Sector
  • Stella Pharma IPO – Potential Looks Underappreciated
  • Zhaoke Ophthalmology IPO Initiation: The Eyes Have It
  • SK IET BB: Pricing Discounts, Major Shareholder Selling, & K200 Entry
  • KE (BEKE): Pre-IPO Anjuke Asks Authorities to Fine KE Following Alibaba Case
  • Medlive (医脉通) Pre-IPO: Internet Hospital a Different Ball Game
  • UiPath IPO Preview

Trip.com Secondary: Further Upside to SOTP Possible with Recovery in Travel and Hospitality Sector

By Shifara Samsudeen, ACMA, CGMA

The leading Chinese travel platform Trip.com (TCOM US)  has set the terms for its IPO where it plans to issue 31.6m shares at a maximum indicative price of HK$333.00 per share. At the above price, Trip.com will raise net proceeds of HK$10.4bn (approx. US$1.4bn).

Each ADS represents one ordinary share of the company, and the maximum HK offer price implies approx. US$42.8 per ADS, about 10.3% premium to Trip.com’s last close price of US$38.81 per ADS prior to setting the terms. The Hong Kong offering of 31.6m shares will constitute approx. 5.0% of the extended share capital of the company.

Trip.com plans to use about 45% of the net proceeds on funding the expansion of the company’s one-stop travel offerings and improve user experiences while it plans to use another 45% of the net proceeds on investing in technology to bolster the company’s leading market position in products and services while also improving operating efficiency.

In this insight, we examine the company’s current valuation and our view on HKEX/ADR discount/premium.


Stella Pharma IPO – Potential Looks Underappreciated

By Mio Kato

This is the follow-up report on the financials and valuation aspects of Stella Pharma, after our previous report on its business model ad technology. Given the early stage of the business, firm conclusions are difficult here, but assessing potential prospects against the market sizes for cancer treatment, the niches the company is targeting and its particular technology, on balance we feel positioning is attractive.


Zhaoke Ophthalmology IPO Initiation: The Eyes Have It

By Arun George

Zhaoke Ophthalmology Pharmaceutical (ZKO HK) is an ophthalmic pharma company that has an ophthalmic drug pipeline of 13 innovative drugs and 12 generic drugs. Zhaoke has one of the most comprehensive ophthalmic drug pipelines in China, according to CIC. Zhaoke was founded by Lee’s Pharmaceutical (950 HK) which is the largest shareholder. Zhaoke’s other shareholders include GIC, Hillhouse, TPG, Loyal Valley Capital, Orbimed and Aier Eye Hospital. 

Zhaoke is pre-marketing an HKEx IPO to raise $200 million, according to press reports. The pipeline includes 8 drug candidates which have the potential to be market-leading products in China. The generic pipeline includes 6 potential first-to-market generics in China. Overall, we believe that Zhaoke’s drug assets are attractive. 


SK IET BB: Pricing Discounts, Major Shareholder Selling, & K200 Entry

By Sanghyun Park

SK IET book opens tomorrow.

This post has the checklist for the BB to help formulating BB strategies.

1. Pricing discounts

The IPO book EV/EBITDA multiple is 48.12x. The MTM EV/EBITDA rises to 54.03x.

EV/EBITDA, IPO book (₩B)Yunnan Energy New Material Co LtdEcopro BM Co LtdIljin Materials Co LtdPosco Chemical Co LtdChunbo Co Ltd
TickerSHE:002812247540020150003670278280
Ref MC16,579.13,298.32,881.98,959.21,576.0
Interest-bearing debt1,027.8197.049.8841.426.0
Cash & cash equivalents645.759.2150.8121.762.9
Net borrowings382.1137.8-101.0719.7-36.9
Non-controlling int85.723.7251.122.90.0
EV17,046.83,459.83,032.19,701.91,539.1
OP228.854.851.060.330.1
D&A97.736.934.264.411.2
EBITDA326.591.685.3124.741.3
EV/EBITDA (x)52.2037.8035.6077.8037.20
Average (x)48.12
Source: DART
EV/EBITDA, MTM (₩B)Yunnan Energy New Material Co LtdEcopro BM Co LtdIljin Materials Co LtdPosco Chemical Co LtdChunbo Co Ltd
TickerSHE:002812247540020150003670278280
Current MC17,156.13,796.83,550.510,307.01,730.0
Interest-bearing debt1,027.8197.049.8841.426.0
Cash & cash equivalents645.759.2150.8121.762.9
Net borrowings382.1137.8-101.0719.7-36.9
Non-controlling int85.723.7251.122.90.0
EV17,623.83,958.43,700.711,049.71,693.1
OP228.854.851.060.330.1
D&A97.736.934.264.411.2
EBITDA326.591.685.3124.741.3
EV/EBITDA (x)53.9743.1943.4088.6340.97
Average (x)54.03
Source: DART, KRX, & Bloomberg

At MTM, the discount range moves up from 19.59~40.27% to 28.52~46.90%.

Discount (₩B)LowerUpper
Price (₩)₩78,000₩105,000
Base deal size1,668.42,246.0
– Institutional allotment917.61,235.3
Implied MC5,561.27,486.2
EV/EBITDA, IPO book9,310.49,310.4
– Discount40.27%19.59%
EV/EBITDA, MTM10,472.610,472.6
– Discount46.90%28.52%
Source: DART

At MTM PER, the range falls to 13.78~35.95%, if excluding POSCO Chemical, whose 348.45x PER should make it an outlier.

Discount (₩B)LowerUpper
Price (₩)₩78,000₩105,000
Base deal size1,668.42,246.0
– Institutional allotment917.61,235.3
Implied MC5,561.27,486.2
PER, MTM8,682.88,682.8
– Discount35.95%13.78%
Source: DART
PER, MTM valuation (₩B)
SO71,297,592
Earnings88.2
EPS₩1,521
PER (x)80.07
MC8,682.8
Price per share₩121,782
Source: DART
PER, MTM (₩B)Yunnan Energy New Material Co LtdEcopro BM Co LtdIljin Materials Co LtdPosco Chemical Co LtdChunbo Co Ltd
TickerSHE:002812247540020150003670278280
Current MC17,156.53,796.83,550.510,307.01,730.0
SO887,721,96621,035,16646,110,83560,988,22010,000,000
Price per share₩19,326₩180,500₩77,000₩169,000₩173,000
Earnings191.742.744.229.627.4
EPS₩216₩2,065₩959₩485₩2,742
PER (x)89.4787.4180.29348.4563.09
Average (x) (excl. POSCO Chem)80.07
Source: DART, KRX, & Bloomberg

Compared with the more direct peers (Asahi Kasei and Toray Industries), SK IET’s indicative price band is at a 21.71~63.85% premium (PER) and a whopping 239.89~357.54% premium (EV/EBITDA).

The Asahi Kasei/Toray multiple raised a valuation concern earlier. But the current sentiment doesn’t seem to be taking it critically. The market seems to be paying more attention to the aspect that they aren’t a pure-play company as their LiBS portion is less than 30% of the total revenue.

Discount (₩B)LowerUpper
Price (₩)₩78,000₩105,000
Base deal size1,668.42,246.0
– Institutional allotment917.61,235.3
Implied MC5,561.27,486.2
EV/EBITDA, Asahi Kasei/Toray1,636.21,636.2
– Discount-239.89%-357.54%
PER, Asahi Kasei/Toray4,569.14,569.1
– Discount-21.71%-63.85%
Source: DART
Valuation (₩B)EV/EBITDA, Asahi Kasei/TorayPER, Asahi Kasei/Toray
MultipleEV/EBITDAPER
SO71,297,59271,297,592
EBITDA196.6
EV/EBITDA (x)9.08
EV1,784.9
Interest-bearing debt515.8
Cash & cash equivalents367.1
Net borrowings148.7
Earnings88.2
EPS₩1,521
PER (x)42.13
MC1,636.24,569.1
Price per share₩22,949₩64,084
Source: DART
EV/EBITDA, Asahi Kasei/Toray (₩B)Asahi KaseiToray Industries
TickerTYO:3407TYO:3402
Current MC17,491.111,317.8
EV22,738.420,063.3
EV/EBITDA (x)7.4610.70
Average (x)9.08
Source: DART, KRX, & Bloomberg
PER, Asahi Kasei/Toray (₩B)Asahi KaseiToray Industries
TickerTYO:3407TYO:3402
Current MC17,491.111,317.8
Earnings823.9179.5
PER (x)21.2363.04
Average (x)42.13
Source: DART, KRX, & Bloomberg

The 5-yr average pricing discount band of the KOSPI IPOs is 19.00~31.80%.

Even the MTM PER isn’t awfully skewed from the 5-yr average. 

NameTickerIPO dateLowerUpper
JS Corp1943702016-02-0447.40%36.40%
Daelim C&S2016-03-3028.00%15.10%
Haitai Confectionery and Foods Co Ltd1015302016-05-1128.10%11.80%
Yong Pyong Resort Corp0709602016-05-2726.30%16.20%
Haesung DS Co Ltd1958702016-06-2427.60%9.50%
Korea Asset In Trust Co Ltd1238902016-07-1323.90%13.80%
Dual Co Ltd0167402016-07-2925.50%10.60%
LS Cable & System Asia Ltd2296402016-09-2218.70%6.50%
Hwaseung Enterprise Co Ltd2415902016-10-0421.00%10.70%
JW Life Science Corp2340802016-10-2721.20%5.20%
Samsung Biologics Co Ltd2079402016-11-1032.20%18.40%
Doosan Bobcat Inc2415602016-11-1848.10%40.90%
Hands Corporation Ltd1432102016-12-0221.10%7.90%
Hojeon Ltd1111102017-02-0229.00%17.20%
Dentium Co Ltd1457202017-03-1539.10%32.30%
Orange Life Ins2017-05-1122.20%1.30%
Netmarble Corp2512702017-05-1239.00%20.90%
Tapex Inc0554902017-10-3127.20%17.80%
Samyang Packaging Corp2725502017-11-2928.20%17.20%
Jin Air Co Ltd2724502017-12-0820.00%5.10%
Dongyang Piston Co Ltd0927802017-12-0834.60%16.30%
Aekyung Industrial Co Ltd0182502018-03-2231.50%19.80%
Lotte Data Communication Co2869402018-07-2727.20%13.10%
T’way Air Co Ltd0918102018-08-0131.10%21.20%
Woojin I&S Co Ltd0104002018-09-1429.70%20.30%
Hana Pharm Co Ltd2934802018-10-0228.20%17.90%
Asiana IDT Inc2678502018-11-2345.50%32.00%
Air Busan Co Ltd2986902018-12-2738.40%31.50%
DreamTech Co Ltd1926502019-03-1436.30%24.70%
Hyundai Autoever Corp3079502019-03-2833.10%26.40%
Zinus Inc0138902019-10-3027.80%18.80%
Xi S&D Inc3174002019-11-0631.50%15.20%
Hanwha Systems Co Ltd2722102019-11-1335.70%26.50%
Hyundai Energy Solutions Co Ltd3220002019-11-1933.30%22.10%
CENTRAL MOTEK Co Ltd3081702019-11-2531.70%18.00%
SK Biopharmaceuticals Co Ltd3260302020-07-0239.80%18.00%
Big Hit Entertainment Co Ltd3528202020-10-1534.40%15.70%
Kyochon F&B Co Ltd3397702020-11-1231.20%20.10%
A Plus Asset Advisor Co Ltd2449202020-11-2045.10%35.70%
Myoung Shin Industrial Co Ltd0099002020-12-0727.60%14.30%
SoluM Co Ltd2480702021-02-0235.30%26.80%
Prestige Biopharma Ltd9502102021-02-0542.90%26.90%
SK Bioscience Co Ltd3024402021-03-1840.40%21.00%
Average31.80%19.00%
Source: DART

KE (BEKE): Pre-IPO Anjuke Asks Authorities to Fine KE Following Alibaba Case

By Ming Lu

  • The CEO of pre-IPO Anjuke (ANJ HK) said, authorities should fine KE RMB4 billion for its exclusive contracts.
  • Anjuke’s user base is larger than KE, but its revenue is lower than KE.
  • We believe KE’s database of real apartments for sale angers Mr. Yao.
  • We also believe there is no evidence that KE abuses market power.

Our previous coverage on KE (BEKE):

KE (BEKE): The Estate Agency Grew 53% and Housing Market Continues to Boom

KE (BEKE): Outperform Competitors in Booming Property Market 


Medlive (医脉通) Pre-IPO: Internet Hospital a Different Ball Game

By Ke Yan, CFA, FRM

Medlive, the largest medical content platform for physicians in China, plans to raise up to USD 500m via a Hong Kong listing.

We think the company has built a great user base of licensed physicians in China, which is rare among internet healthcare companies. Having said that, the monetization from its user base is low. 

While the near-term revenue growth will still come from healthcare marketing services, the company is expanding into the digital chronic disease management segment which is still an underpenetrated market but it is in an infant stage of development without much of a track record. 

The company has robust financials but the size is small compared to other internet healthcare players. The company’s management team is just OK. Given that it is profitable, there weren’t many rounds of capital raising and hence it lacks a long list of pre-IPO investors.


UiPath IPO Preview

By Douglas Kim

UiPath Inc (PATH US) plans to complete its IPO in the coming days. The IPO price range is between $43 to $50 per share. The company is offering 6.81 million Class A shares in the IPO. The existing shareholders are offering 14.47 million Class A shares. At the high end of the IPO price of $50 per share, the total amount from the IPO proceeds would be $1.06 billion. After the IPO, there will be a total of 516.55 million Class A and Class B shares outstanding.

At the high end of the IPO price range ($50 per share) the company could be valued at nearly $25.8 billion. This is below the company’s recent private market valuation of $35 billion in February 2021, which was more than three times the value of its previous financing round in July 2020. It appears that the recent tech IPO weakness has negatively impacted the pricing of UiPath’s IPO as the implied valuation of $25.8 billion represents nearly 26% haircut from its recent private market valuation of $35 billion.

The average % YoY change in sales in 2020 [A] for the major enterprise software/platform stocks was 46.8% in 2020 and UiPath’s sales growth was nearly double the comps’ average. The average operating margin [B] of the major enterprise software/platform stocks was -14.6% in 2020, which was slightly lower than UiPath’s operating margin of -18.2%. The combination of [A] and [B] for UiPath was 62.6%, which was nearly double the figure for average of the major enterprise software/platform stocks (32.2%). 


Before it’s here, it’s on Smartkarma

Equity Capital Markets: Tencent Holdings, Anjuke, LG Chem Ltd, WeDoctor Holdings and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • ECM Weekly (11th April 2021) – Tencent Block, WeDoctor, YiShengBio, Trip HK, Visional, Macrotech Dev
  • Anjuke IPO Initiation: Home Truths
  • LG Chem & SK Innovation Reach an Agreement Right Before SK IET IPO Book Opens
  • Pre-IPO We Doctor Holdings – Here Are the Concerns

ECM Weekly (11th April 2021) – Tencent Block, WeDoctor, YiShengBio, Trip HK, Visional, Macrotech Dev

By Zhen Zhou, Toh

Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs.

Despite a short week in Hong Kong, there were three new filings, Anjuke Group, Brii Biosciences, and Keymed Biosciences. Other notable filings include Harp Holdings in Malaysia, Onion Global in the US, and NHAI InvIT in India. 

But the talk of the town was the second biggest block globally to ever trade. Prosus NV (PROSY US) finally sold a 2% stake (US$14bn) in Tencent (700 HK). Despite the large deal size, it was done with relative ease and was said to be 4x covered, as per media reports. We have been covering the potential sell down leading up to lock-up expiry since February.

In Hong Kong, Linklogis (9959 HK) raised US$1bn at the mid-point of its price range. Linklogis struggled in the grey market but managed to close 9.9% higher on its Friday debut.

We continued our coverage of WeDoctor and shared our thoughts on the business. We had also covered the company’s background and app walkthrough earlier in:

We initiated coverage on YishengBio (1872307D HK). In our note, we covered their main product, the PIKA based rabies vaccine, and shared our thoughts on the management team. We also published a follow-up on Zhaoke Ophthalmic (ZKO HK) and discussed its valuation:

Trip.com’s Hong Kong secondary listing was approved and launched last week. We looked at the deal terms and shared our thoughts on deal dynamics.

In Japan, we looked at Visional Inc’s (4194 JP) IPO, which closed its books on Friday. We shared our thoughts on the business, our forecast and thoughts on valuation in:

In India, Macrotech developers (LODHA IN) closed its bookbuild on Friday with a 1.37x subscription rate. We shared our thoughts on valuation earlier this week.

In other parts of ASEAN, we covered Ngern Tid Lor and ThaiBev BeerCo’s upcoming IPO which are likely to come to market soon.

Credits to Clarence Chu for helping out with the Weekly Update.

Accuracy Rate:

Our overall accuracy rate is 73.9% for IPOs and 67.2% for Placements 

(Performance measurement criteria is explained at the end of the note)

New IPO filings this week

  • Anjuke Group Inc. (HK, US$1bn)
  • Brii Biosciences Limited (HK, US$400m)
  • Keymed Biosciences Inc. (HK, US$100m)
  • NHAI InvIt (India, US$600m)
  • Harp Holdings (Malaysia, US$300-500m)
  • Onion Global Ltd. (US, US$100m)

News on Upcoming IPOs

U.S. China ADRs

India

Others

Analysis on Upcoming IPOs

NameInsight
Hong Kong
Betta Pharma

Betta Pharma (贝达医药) A+H: Tier 2 Player Struggled to Break Out 

ByteDance

ByteDance (字节跳动) IPO: How Jinri Toutiao Paves The Way for a Bigger Empire (Part 1)

ByteDance

ByteDance (字节跳动) Pre-IPO: Why Facebook Should Worry About TikTok 

ByteDance

ByteDance (字节跳动) IPO: Tiktok the No.1 Short Video App for a Good Reason (Part 2)

ByteDance

ByteDance (字节跳动) Pre-IPO: How Has It Done in 1H? 

ByteDance

ByteDance: The Unlisted Company’s Video Apps Leading the Market and Threatening Internet Giants 

ByteDance

ByteDance (字节跳动) Pre-IPO: Why Facebook Should Worry About TikTok 

ByteDance

ByteDance (字节跳动) Pre-IPO – Globally the Most Downloaded App for Jan 2020 Driven by India 

ByteDance

ByteDance (字节跳动) Pre-IPO: Global Ambition Meets Regulatory Challenges 

Chaoju

Chaoju Eye Care (朝聚眼科) Pre-IPO: Growth Prospect Far from Being Impressive 

Dida

Dida Pre-IPO – Making Hay While Big Brother Retreats 

Dida

Dida Pre-IPO – Earnings Forecast and First Stab at Valuation 

Dida

Dida Pre-IPO – Peer Comparison – Lagging in Scale, Leading in Profitability 

Intco Med

Intco Medical (英科医疗) A+H: From China No.1 to Global No. 1 

Kilcoy

Kilcoy Global Foods Pre-IPO – Rapid Earnings Growth on the Back of Margin Improvement 

Kilcoy

Kilcoy Global Foods Pre-IPO – A Lot of Things Still Remain Unexplained 

Kindstar

Kindstar (康圣环球) Pre-IPO: Issues with Scalability 

Kindstar

Kindstar (康圣环球) Pre-IPO: Is It Worth the Premium? 

RemeGen RemeGen (荣昌生物) Pre-IPO: Thoughts on Valuation of RC18 and RC48 
Bio-heart Shanghai Bio-Heart (上海百心安) Pre-IPO: Needs a Long Runway 
Toplist Toplist China Pre-IPO – Overwhelmingly More Negatives than Positives 
Tasly Tasly Biopharm (天士力生物) IPO: Visible Growth from Approved Drug but Lacks Blockbusters 
WeDoctor WeDoctor (微医) Pre-IPO -App Walk Through – The Online Medical Directory and More 
WeDoctor WeDoctor (微医) Pre-IPO – A More Focused Online Medical Svc Provider than Ping An Good Doctor 
Youran Dairy China Youran Dairy(悠然牧业) Pre-IPO – A Leader Pulling Ahead in a Fragmented Market 
India
Aadhar Housing Aadhar Housing Finance Pre-IPO – Decent past Growth but Comes with Weird Disclosures 
ASK ASK Investment Managers Pre-IPO – Riding on a Wave of Wealth 
Anmol IndAnmol Industries Pre-IPO Quick Take – No Growth, Generous Payments to Founders
Bharat Hotel

Bharat Hotels Pre-IPO – Catching up with Peers 

Bajaj En

Bajaj Energy Pre-IPO – Supposed to Deliver Steady Performance if Only Its Sole Client Would Let It 

CMS InfoCMS Info Systems Pre-IPO – When a PE Sells to Another PE… Only One Gets the Timing Right
Crystal CropCrystal Crop Protection Pre-IPO – DRHP Raises More Questions than in Answers
ESAF SFB ESAF Small Finance Bank Pre-IPO – Growing Fast but Remains Highly Dependant on a Related Party 
Flemingo Flemingo Travel Retail Pre-IPO – Its a Different Business in Every Country
Emami Cem Emami Cement Pre-IPO – Still in Ramp Up Phase but Shares Pledge Might Lead to an Early IPO 
NSENSE IPO Preview- Not Only Fast..its Risky and Expensive
NSENational Stock Exchange Pre-IPO Review – Bigger, Better, Stronger but a Little Too Fast for Some

LIC

Life Insurance Corporation of India Pre-IPO – Early Take on India’s Largest IPO 
Penna Cem Penna Cement – Aggressive Expansion Plans Even Though Past Performance Has Been Tepid 
PNB MetPNB Metlife Pre-IPO Quick Take – Doesn’t Stack up Well Versus Its Larger Peers
Samhi Hotels Samhi Hotels Pre-IPO – Assets and Borrowings Are Growing, but Earnings Haven’t Kept Pace 
Malaysia
QSRQSR Brands Pre-IPO – As Healthy as Fast Food
Singapore
ThaiBev Beer ThaiBev BeerCo Pre-IPO – Declining Rev and Mkt Share Concerns but Good Cost Control 
ThaiBev Beer ThaiBev BeerCo Pre-IPO – Thoughts on BeerCo and ThaiBev HoldCo Valuation 

Anjuke IPO Initiation: Home Truths

By Arun George

Anjuke (ANJ HK) is the largest online marketing platform for new and existing properties by revenue in 2020, according to iResearch. Anjuke is a subsidiary of 58.com. Anjuke’s shareholders include Tencent Holdings (700 HK) (14.3% stake), General Atlantic (7.7%), Warburg Pincus (7.9%), Country Garden Holdings Co (2007 HK) and Agile Property Holdings (3383 HK). It is seeking to raise $1 billion through an HKEx IPO, according to press reports.

Anjuke is using its core online marketing services business, which is cash generative, to fund its foray into transaction services, a market where KE Holdings Inc (BEKE US) dominates. However, this growth is margin dilutive as transaction services is structurally a lower margin business. We think that the compromise is acceptable as investors continue to be willing to pay up for high-growth tech companies. 

The key negative is that Anjuke is saddled with debt related to the privatisation of 58.com in September 2020 – 58.com’s Privatisation Enters into Definitive Agreement. While the healthy cash generation should comfortably service the debt, potential IPO investors could be turned off by the view that the IPO is a way of the privatisation consortium (which arguably privatised 58.com to the detriment of minorities) to make a quick buck. Notwithstanding the optics of the privatisation and relisting trade which tend to enrich insiders at the expense of minorities, we believe that the Anjuke IPO is worth a close look.


LG Chem & SK Innovation Reach an Agreement Right Before SK IET IPO Book Opens

By Sanghyun Park

This morning, multiple local news outlets reported that LG Chem and SK Innovation had finally reached a full agreement in the electric vehicle battery dispute.

Official words will likely come out later today.

Here is the news link.

According to SED, multiple officials who are familiar with the issue confirmed in a call interview that the two companies had reached an agreement, including the amount of compensation, and are currently finalizing the announcement’s format.

Legal battle summary between LG Chem and SK Innovation:

LG Chem (now LG Energy Solutions) filed a full complaint with the US International Trade Commission (ITC) in April 2019, claiming SK Innovation had infringed on its business secrets.

In February this year, the US ITC imposed a 10-year import ban, claiming that SK had violated the LG ES business secrets.

US President Joe Biden could veto the ITC’s 10-year SK battery import ban, and the deadline is tomorrow.

Why now?

SK Innovation has reportedly concluded that President Biden wouldn’t exercise his veto on this case (10-year import ban).

SK is said to have even considered shutting down the US factory in Georgia after the end of next year. But given the importance of the US market and the US-based partners, it finally made a last-minute decision.


Pre-IPO We Doctor Holdings – Here Are the Concerns

By Xinyao (Criss) Wang

On April 1, WeDoctor Holdings (1737089D HK) filed its prospectus on the Hong Kong Stock Exchange. As one of the earliest digital medical service platform, We Doctor has been reported to be going public since 2018. Finally, the Company officially started the IPO process this time. Different from JD Health (6618 HK) and Alibaba Health Information Technology (241 HK) whose core business is online pharmacy business, We Doctor mainly focuses on digital medical and health maintenance service. So how about this business model? This insight mainly analyzed the concerns of the Company that deserve to be paid attention to.


Before it’s here, it’s on Smartkarma

Equity Capital Markets: Thai Beverage, Ngern Tid Lor and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • ThaiBev BeerCo Pre-IPO – Valuation Updates and Crystallizing Growth Potential for BeerCo
  • Ngern Tid Lor Pre-IPO – Pre-COVID Growth Track Record Has Been Very Strong

ThaiBev BeerCo Pre-IPO – Valuation Updates and Crystallizing Growth Potential for BeerCo

By Zhen Zhou, Toh

On 1st April, Thai Beverage (THBEV SP)  announced it had received its conditional eligibility-to-list (ETL) letter from SGX-ST for its Proposed Spin-off Listing.

Our updated valuation of BeerCo puts it at about SGD6.5bn. ThaiBev’s total listed company investments sum up to about SGD8.8bn with BeerCo making up for the bulk of it. Spirits accounted for the bulk of unlisted equity valuation with an EV of SGD23bn.

We would be buyers in ThaiBev leading up to the IPO of BeerCo. ThaiBev benefits from an expensive BeerCo IPO and, hence, should continue to trade up as we get closer. Even if we assume our SGD6.5bn valuation, one could still get a 16% upside based on our valuation estimates. 

In this note, we will look at the valuation of BeerCo and ThaiBev Holdco


Ngern Tid Lor Pre-IPO – Pre-COVID Growth Track Record Has Been Very Strong

By Sumeet Singh

Ngern Tid Lor (NTL), a financial service provider based in Thailand, aims to raise around US$750m via selling a mix of primary and secondary shares in its Thailand IPO. Prior to listing, it was jointly owned by Bank of Ayudhya and CVC Capital Partners. As per Oliver Wyman’s estimates, NTL had a 16% market share in the vehicle lending market in Thailand, as of 2019. 

NTL provides hire purchase loans for motorcycles and cars, along with new and used trucks. It also provides insurance brokerage services through its branches for non-life and life insurance. It offers motor insurance, compulsory motor insurance, personal accident insurance, cancer insurance, and loan insurance. As of Dec 2020,  it had over 730,000 accounts with total outstanding loans of THB51.3bn. In 2020, it generated non-life insurance premium sales of THB4bn. 

Over 2016-20, NTL’s gross loans grew at 25.1% CAGR, averaging 25%+ per annum over 2017-19 before slowing down to 7% YoY growth in 2020. Its total income has grown at 22.5% CAGR, while PAT did better with a CAGR of 29.1% over 2016-20.

Although, asset quality has taken a hit owing to COVID-19 and Bank of Thailand’s induced moratorium.


Before it’s here, it’s on Smartkarma

Equity Capital Markets: Linklogis, Trip.com, Visional Inc, Bairong, AppLovin Corp, SK IE Technology, Procore Technologies Inc and more

By | Daily Briefs, IPOs and Placements

In today’s briefing:

  • Linklogis IPO Trading – Decent but Not Hot Demand
  • Trip.com Secondary Listing Quick Take – Doing the Bare Minimum – Needs Some More Correction
  • Linklogis IPO: Trading Debut
  • Linklogis IPO: First Day Trading
  • Visional Inc IPO – Pricey Hire
  • Visional IPO – Can the Valuation Bizreach ¥8,000 a Share?
  • Bairong: Shares Slip Further on Regulatory Concerns; Current Multiples Attractive to Make an Entry
  • AppLovin IPO – Not Lovin This Whirlpool of a Rollup
  • SK IET Valuation Analysis
  • Procore Technologies IPO: Valuation Update. Shifting Focus to $2T Infrastructure Plan

Linklogis IPO Trading – Decent but Not Hot Demand

By Sumeet Singh

Linklogis, a technology solution provider for supply chain finance in China raised around US$1bn in its Hong Kong IPO. Its early investors include Tencent, GIC and Standard Chartered Bank.

We have covered various aspects of the deal in our earlier notes,

In this note, we will talk about deal dynamics and updates since our last note.


Trip.com Secondary Listing Quick Take – Doing the Bare Minimum – Needs Some More Correction

By Sumeet Singh

Trip.com plans to raise around US$1.2bn in its secondary listing in Hong Kong. We have looked at the background of the deal in our earlier note, Trip.com Secondary Listing – Probably Needs to Correct.

In this note, we’ll take a look at the final deal terms and talk about the impact of the raising.


Linklogis IPO: Trading Debut

By Arun George

Linklogis (9959 HK) is a leading technology solution provider for supply chain finance in China. Its solutions optimise the payment cycle of supply chain transactions and digitalize the entire workflow of supply chain finance. Linklogis will commence trading on Friday, 9 April. Linklogis priced its IPO at HK$17.58 and currently trading around 6% higher at HK$18.70 in the Futu securities grey market. The grey market performance is a welcome surprise in light of the choppy market conditions and declining market sentiment on Chinese tech names. The most recent HKEx tech IPO, Bairong (1569395D CH), closed -16% below its IPO price on the first day and has not yet recovered.    

In Linklogis IPO Initiation: ISupply, we stated that Linklogis is an attractive play on China’s supply chain finance market by combining a sensible monetisation model, high customer retention rate (good revenue visibility) and strong operating leverage. In Linklogis IPO: Every Little Helps, we noted that based on the PHIP which discloses the 2020 results and recent developments, we continue to believe that Linklogis’ fundamentals are attractive. In Linklogis IPO: Valuation Insights, we noted that the IPO price range is reasonable.

Updating for the final IPO net raise, our base-case DCF derived price target of HK$19.28 per share. Our DCF sensitivity analysis shows that the IPO price remains reasonable and the grey market factors in achievable market share and margin forecasts. We continue to think that the IPO price represents good value. 


Linklogis IPO: First Day Trading

By Oshadhi Kumarasiri

Linklogis (9959 HK) priced its IPO at HK$17.58 per share, 2% above the midpoint of the offer price range despite generating significant interest from both retail and institutional investors. The Hong Kong offer was oversubscribed 98.46x while the international offer was oversubscribed by 14.83x.

At 14.1x FY+2 EV/Sales with 35% revenue CAGR, Linklogis does not appear overly cheap compared peer multiples. However, the first day performance of recent SaaS IPOs like Ming Yuan Cloud Group (909 HK), Snowflake Inc (SNOW US) and Cloopen Group Holding Ltd (RAAS US) suggests that Linklogis could open reasonably strong on trading debut.


Visional Inc IPO – Pricey Hire

By Zhen Zhou, Toh

Visional Inc (4194 JP) is looking to raise up to US$609m in its Japan IPO.

Visional Inc. is a human resources (HR) technology company based in Japan. The company operates BizReach, an online recruiting platform that helps to connect professional job seekers to direct employers and third-party recruiters. It also offers HRMOS, which is a cloud-based human capital management (HCM) platform.

In this note, we share our thoughts on assumptions, valuation, and deal dynamics.


Visional IPO – Can the Valuation Bizreach ¥8,000 a Share?

By Mio Kato

Visional’s financials are a little difficult to unentangle as it combines Bizreach, which looks to be very profitable, with a number of growing and loss-making businesses, we believe that close scrutiny should reveal the excellent value on offer here.


Bairong: Shares Slip Further on Regulatory Concerns; Current Multiples Attractive to Make an Entry

By Shifara Samsudeen, ACMA, CGMA

The Chinese financial technology platform Bairong (1569395D CH)  started trading on the Hong Kong Stock Exchange on 31st March 2021. Bairong priced its IPO at HK$31.8 per share, at the upper end of the indicative IPO price range of HK$26.5-31.8 per share.

At the above price, Bairong raised net proceeds of HK$3.76bn (US$454.5m) at a market capitalisation of HK$15.8bn and an enterprise value of HK$11.8bn. Despite the company’s IPO being priced attractively, Bairong’s shares slumped at its HK debut, closing 16% lower than its final IPO price at HK$26.7 per share at the end of first-day trading.

As Beijing has tightened regulations on the country’s fintech sector, investors have become wary of these impacts on Bairong’s business. Bairong’s plans to use the IPO proceeds on funding its business expansion, R&D and other general corporate purposes.


AppLovin IPO – Not Lovin This Whirlpool of a Rollup

By Mio Kato

On the surface AppLovin looks like a company that grew revenue 106% in 2019 and 46% in 2020 with 4Q2020 revenue growth accelerating to 83%, partly on account of the release of its machine learning function AXON. Digging beneath the surface though reveals a lot of potentially questionable acquisitions, debt and very high marginal costs.


SK IET Valuation Analysis

By Douglas Kim

Our base case valuation of SK IET is 143,413 won, which represents a 37% upside from the high end of the IPO price range of 105,000 won. Our sensitivity analysis suggests a valuation range of 95,590 won to 201,864 won. To value SK IET, we used EV/EBITDA valuation method, using our base case 2021 EBITDA estimate of 242 billion won and applied a 39.1x EV/EBITDA multiple.

This valuation multiple is 20% premium to the the average EV/EBITDA multiple of the comps in 2021. We believe this 20% premium multiple to the peers is reasonable for SK IET mainly due to the company’s higher EBITDA margins and ROE than the comps. 

We forecast SK IE Technology (SKIET KS) to generate sales of 617.1 billion won (up 31.5% YoY) an operating profit of 163.6 billion won (up 30.7% YoY) in 2021. From 2020 to 2025, we estimate the company’s sales to increase at a CAGR of 28%.

The book building for the SK IET starts on 22 April and it will start trading on 11 May. 

Overall, we have a positive view of the SK IET IPO. However, we would caution investors on having too high of expectations for the IPO similar to SK Bioscience, Kakao Games, or SK Biopharm as we believe that the overall upside for the SK IET is likely to be much lower than these other major Korean IPOs in the past year. 


Procore Technologies IPO: Valuation Update. Shifting Focus to $2T Infrastructure Plan

By Andrei Zakharov

Procore Technologies Inc (PCOR US) , US construction project management software unicorn, has decided to tap capital markets with IPO again. In March, company filed updated S-1 registration document with the SEC but did not specify expected price range and how many shares it plans to sell to investors. We have favorable view on Procore Technologies IPO and believe that President Biden’s $2T infrastructure plan will have a positive impact on construction industry in the United States and especially on the business of Procore.  

Procore Technologies Inc (PCOR US)  has raised a total of ~$650 million in funding over 14 rounds, according to Crunchbase. Tech unicorn was backed by leading venture capital firms ICONIQ Strategic Partners, Bessemer Venture Partners, Tiger Global Management and D1 Capital Partners. We believe Procore will go public this month. Goldman Sachs, J.P. Morgan, Barclays and Jefferies are lead underwriters on the deal.   


Before it’s here, it’s on Smartkarma