ECM Daily Briefs | Page 124 of 161

By Shifara Samsudeen, ACMA, CGMA

In today’s briefing:

Huitongda IPO – Valuation
MicroPort NeuroTech IPO: Impressive Product Portfolio Offsets Profitability Concerns

Huitongda IPO – Valuation

By Oshadhi Kumarasiri

With churn rates as high as 50% and wholesale customers declining by 27.7% in 9M21, we are not particularly interested in Huitongda (9878 HK) over long term.
The valuation looks cheap compared to peers on the surface, but when compared after considering Huitongda’s 1P exposure its at a significant premium to peers.
Given that the market takes time to pick up similar mispricing situations, we think its advisable to wait and see where Huitongda opens, before arranging a short position.

MicroPort NeuroTech IPO: Impressive Product Portfolio Offsets Profitability Concerns

MicroPort is the largest Chinese neuro-interventional medical device company and has filed for an IPO on the Hong Kong Stock Exchange. Its Portfolio consists of 30 commercialised products and candidates.
Although struggling with margins, the company has an impressive product portfolio with a majority of them having strong competitive advantages.
As most of the products are poised for growth, we are largely positive on the company.

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Feb 06

Equity Capital Markets: Meihua International Medical Technologies and more

In today’s briefing:

Meihua International Medical Technologies Pre-IPO: Risks Overshadow Cheap Valuation

Meihua International Medical Technologies Pre-IPO: Risks Overshadow Cheap Valuation

By Tina Banerjee

China-Based medical devices company, Meihua International Medical Technologies intends to raise $50 million from its U.S. IPO by offering 5 million shares at price between $9 and $11 per share.
Upon the completion of this offering, the company will have 25 million shares outstanding. At the midpoint of offer price, Meihua will command a market capitalization of $250 million.
Despite attractive valuation, investors can avoid the IPO due to its unimpressive financial performance and concerns over Chinese companies listing in the U.S. market.

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Feb 04

Equity Capital Markets: Turo and more

In today’s briefing:

Turo IPO Preview: The Largest Car Sharing Marketplace in the World

Turo IPO Preview: The Largest Car Sharing Marketplace in the World

By Douglas Kim

Established in 2010, Turo has become the largest car sharing marketplace in the world. It is attempting to complete its IPO in a turbulent IPO market.
Turo’s sales and profit growth skyrocketed in 2021. Its sales jumped by 206.5 YoY to reach $330.5 million in 1Q-3Q 2021.
Since the company’s inception, hosts have earned more than $1.1 billion in aggregate on its platform.

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Feb 02

Equity Capital Markets: Huitongda, Enovix Corp, Vedant Fashions, HeMo Bioengineering and more

In today’s briefing:

Huitongda (汇通达) IPO – Not the Right Price
Enovix (ENVX) Is a Speculative Company with a Big Amount of Stock that Recently Unlocked.
Vedant Fashions IPO – Dominant Position in a Small Niche but Appears Pricey
Pre-IPO HeMo Bioengineering – Insights on Industry, Business and Concerns

Huitongda (汇通达) IPO – Not the Right Price

By Clarence Chu

Huitongda (9878 HK) is looking to raise up to US$318m in its Hong Kong IPO.
Huitongda (HTD) is a leading commerce and service platform serving businesses in the lower-tier retail markets of China.
In this note, we will look at deal dynamics, assumptions, and share our thoughts on valuation.

Enovix (ENVX) Is a Speculative Company with a Big Amount of Stock that Recently Unlocked.

By Robert C Prather Jr

There is lots of competition for Li-Ion batteries and also for silicon anode Li-Ion batteries
Enovix is a going concern and has a material internal control weakness
With facilities that need to be built, lacking firm contracts with customers/suppliers, and unfinished products, lots of things need to go perfectly.

Vedant Fashions IPO – Dominant Position in a Small Niche but Appears Pricey

By Sumeet Singh

Vedant Fashions is looking to raise up to US$420m in its India IPO.
It is a fashionwear company targeting the Indian wedding and celebration wear segment. According to CRISIL, it was the largest company in India in the men’s Indian wedding wear segment.
In this note, we will run the deal through our ECM framework and talk about the deal background.

Pre-IPO HeMo Bioengineering – Insights on Industry, Business and Concerns

By Xinyao (Criss) Wang

It is worth rejoicing that HeMo Bioengineering (HMB HK) has entered commercialization stage, but some of the key products are in-licensed from other companies, not self-developed.
In front of fierce competition and policy impact, how to establish its high moat in R&D, innovation and commercialization capability would be the key factors to support long-term development.
Our view is that opportunities coexist with challenges, and investors should also pay attention to the market sentiment towards new IPOs at that time.

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Feb 01

Equity Capital Markets: Vedant Fashions, Shanghai NewMed Medical and more

In today’s briefing:

Vedant Fashions IPO: Regal Ware Deserves a Premium. India’s Leading Men’s Ethnic Apparel Brand Play.
Pre-IPO Shanghai NewMed Medical – Concerns on Fierce Competition and Future Commercialization

Vedant Fashions IPO: Regal Ware Deserves a Premium. India’s Leading Men’s Ethnic Apparel Brand Play.

By Devi Subhakesan

Vedant Fashions, owner of India’s leading homegrown brand for premium ethnic wear for men – Manyavar, will launch its IPO on Feb 4th at a price range of Rs824-866/share.
The USD420 mn IPO suggests an equity valuation of USD2.8 bn implying forward P/E of around 70X at a premium to apparel peers but in line with consumer good companies.
The rapid growth in demand for premium ethnic-branded-wear for men have helped Vedant Fashions emerge as a segment leader with a pan India presence and attractive growth outlook.

Pre-IPO Shanghai NewMed Medical – Concerns on Fierce Competition and Future Commercialization

By Xinyao (Criss) Wang

From Shanghai NewMed Medical (NMM HK)’s pipeline, it can be seen that almost all the candidates do not have obvious advantages in development progress in front of the competing products.
NewMed has little experience in launching and commercializing product candidates, especially as a late-comer. So, the actual commercialization performance could be lower than expected.
Since there are so many uncertainties as well as the poor market sentiment for new IPOs in HKEX, we are conservative about the outlook of NewMed at the current stage.

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Jan 31

Equity Capital Markets: Recruit Holdings, Samsung Biologics Co., and more

By Shifara Samsudeen, ACMA, CGMA

In today’s briefing:

Recruit Buyback: An Attempt to Rescue Falling Share Price; Seems Like a Good Short
Samsung Biologics Offering: Deal Summary & Trading Dynamics

Recruit Buyback: An Attempt to Rescue Falling Share Price; Seems Like a Good Short

Recruit has announced a share buy-back on Friday of 34.0m shares (2.06% of outstanding shares) for JPY155.8bn, implying JPY4,581 per share.
Recruit’s shares closed at JPY5,090 per share at the end of Thursday’s close, and following the announcement, shares moved up to JPY5,305 a piece, gaining 4.2%.
We think Recruit’s shares will be a good Short over the next few days.

Samsung Biologics Offering: Deal Summary & Trading Dynamics

Samsung Biologics announced that it would purchase all 10,341,852 shares of Samsung Bioepis owned by Biogen for ₩2.77T. For this, it also announced a ₩3T new share issuance.
The discount rate is 15%, tighter than the usual 20%. Despite that, this offering still deserves attention from an arb perspective as we may see more forfeited shares than expected.
Entry timing? I’ll aim at the rights trading window. As a short hedge, I will look at C&T, which is expected to have a higher price synch rate with Biologics.

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Jan 28

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

In today’s briefing:

LG Energy: MSCI & FTSE Fast Entry Results & Passive Flows Schedule Update
Aquila Acquisition Corporation Tear Sheet – Aiming to Be Hong Kong’s First SPAC Listing

LG Energy: MSCI & FTSE Fast Entry Results & Passive Flows Schedule Update

MSCI announced LG Energy’s Fast Entry. The effective date is February 15. As a result, rebalancing trading will take place on February 14.
FTSE Fast Entry failed. As a result, LG Energy will be included in the FTSE AW in June, the first index review after the 3-month minimum listing period.
LG Energy’s share price fluctuations are highly likely to occur in multiple phases until the inclusion of the KOSPI 200 on March 10.

Aquila Acquisition Corporation Tear Sheet – Aiming to Be Hong Kong’s First SPAC Listing

By Sumeet Singh

Aquila Acquisition Corporation (AAC) aims to raise around US$300m via Hong Kong’s first SPAC listing.
AAC is promoted by CMB International Asset Management Limited (CMBIAM) and AAC Mgmt Holding Ltd (AACMH).
In this tear sheet, we will talk about the deal background and structure.

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Jan 25

Equity Capital Markets: LG Energy Solution, Citicore Energy REIT, Huitongda, Voronoi, OrbusNeich Medical Group, Beijing Yuanxin Technology Group Co Ltd, MicroPort NeuroTech and more

In today’s briefing:

LG Energy IPO – What to Watch Leading Into Listing Day
LG Energy Post-Listing Flow Tracking by Date: Passive Inflows & Lockup Release Outflows
Citicore Energy REIT IPO – Stable Dividend Generation but Needs to Come at a Wider Discount to Peers
Huitongda IPO: Huge Churn Rate Indicates That Things Could Go Bad Very Quickly
Voronoi IPO Preview
Pre-IPO OrbusNeich Medical Group: A Scale Player, With Comprehensive Portfolio in PCI Balloon Market
Beijing Yuanxin (北京圆心) Pre-IPO – Growing at the Expense of Margins
Microport NeuroTech (微创脑科学) Pre-IPO: Decent Name for Neuro-Interventional Devices

LG Energy IPO – What to Watch Leading Into Listing Day

By Mio Kato

LG Energy Solutions priced its IPO at the top of the range amid massive oversubscription numbers.
If anything it was slightly surprising that pricing was not raised above the range.
Nevertheless, we feel prospects here are mixed even if slightly tilted positive.

LG Energy Post-Listing Flow Tracking by Date: Passive Inflows & Lockup Release Outflows

The KOSPI inclusion will be officially implemented on January 28. As a result, local active funds benchmarking the KOSPI will compete to buy LG Energy on the listing date.
Passive Inflow appears one week after listing, particularly MSCI and KODEX/TIGER battery ETFs. The KODEX/TIGER rebalancing effective date is virtually confirmed on February 10, meaning rebalancing trading on February 9.
Another two weeks later, the KOSPI 200 and KRX BBIG rebalancing await us. Combined with KRX BBIG, there will be a passive inflow of about 0.5% of SO.

Citicore Energy REIT IPO – Stable Dividend Generation but Needs to Come at a Wider Discount to Peers

By Clarence Chu

Citicore Energy REIT (CREIT PM) is looking to raise around US$170m in its Philippines IPO.
The initial portfolio will consist of the Clark Solar Power Plant, Armenia Property, Toledo Property, Silay Property, and the Dalayap Property, which had a total appraised valuation of PHP10.9bn (US$214.3m).
In this note, we will look at peer comparison and share our thoughts on valuation.

Huitongda IPO: Huge Churn Rate Indicates That Things Could Go Bad Very Quickly

By Oshadhi Kumarasiri

Alibaba Group (9988 HK) backed B2B e-commerce business, Huitongda (1566215D CH) is looking to go public to raise $500m to save the business.
With churn rates as high as 50%, things could get ugly rather quickly if customer acquisition falls below sub optimal levels.
We fear this is an attempt to save a failing business that could be worthless in few years.

Voronoi IPO Preview

By Douglas Kim

Voronoi (VOR KS) is getting ready to complete its IPO in Korea in March. The IPO offering base deal size is from $84 million to $109 million.
The company has developed a genotype-directed therapy that is effective for tumors caused by mutations in kinases, and has successfully conducted global technology transfers.
The total amount of accumulated milestones for three global technology exports of Voronoi is $1.79 billion (about 2.1 trillion won) which is very impressive.

Pre-IPO OrbusNeich Medical Group: A Scale Player, With Comprehensive Portfolio in PCI Balloon Market

By Tina Banerjee

OrbusNeich Medical Group focuses on coronary and peripheral interventional instruments, such as balloons and stents used in PCI (coronary)/PTA (peripheral) procedures.
Comprehensive and innovative product portfolio for endovascular interventional procedures, established global sales network, and robust pipeline are the major strength of OrbusNeich.
Fierce competition, commoditized nature of the offering, centralized procurement leading to substantial price drop are some of the concerns for the company.

Beijing Yuanxin (北京圆心) Pre-IPO – Growing at the Expense of Margins

By Sumeet Singh

Beijing Yuanxin Tech (BYT) is looking to raise US$500m in its upcoming Hong Kong IPO.
As per F&S, the firm is the No. 1 integrated healthcare fulfilment platform in China focusing on prescription drugs
In this note, we look at the company’s fundamentals and operations and share our thoughts about the IPO.

Microport NeuroTech (微创脑科学) Pre-IPO: Decent Name for Neuro-Interventional Devices

By Ke Yan, CFA, FRM

Microport NeuroTech is a leading neuro-interventional device company in China. The company is looking to raise up to USD 300m via a Hong Kong listing.
We look at the company’s key segments and products. We like the company’s comprehensive coverage of neuro-interventional devices.
Its management team has decent experience as it is a spin-off from Microport. We also highlight the risk of the stock.

Before it’s here, it’s on Smartkarma

Jan 24

Equity Capital Markets: Adani Wilmar, Remegen Co Ltd and more

In today’s briefing:

Adani Wilmar IPO Initiation: Cooking up a Business
Pre-IPO Remegen Co Ltd – Some Points Worth the Attention

Adani Wilmar IPO Initiation: Cooking up a Business

By Arun George

Adani Wilmar (6596700Z IN) is a leading FMCG food company in India. It is set to launch an IPO to raise Rs36,000 million ($483 million) at a price of Rs218-230.
The business is navigating the high commodity prices by delivering high growth (price increases) and creditable margin performance in face of higher raw material costs.
Overall, this IPO is worth a closer look. The offer period is from 27 to 31 January. The shares will be listed on 8 February.

Pre-IPO Remegen Co Ltd – Some Points Worth the Attention

By Xinyao (Criss) Wang

RC48’s commercialization performance in China market could be lower than expected. The breakthrough point is whether the deal with Seagen can bring any surprise in the global markets.
Due to large R&D and selling expenses, Remegen Co Ltd (9995 HK) is facing cash flow pressure, indicating that this IPO in SSE STAR market is very important for the Company.
Let’s see if RemeGen would in-license some unique late-stage candidates or reach new blockbuster license-out deals that surprise us again, both of which would help turn things around.

Before it’s here, it’s on Smartkarma

Jan 22

Equity Capital Markets: LG Energy Solution, Luckin Coffee, Hyundai Engineering Co Ltd and more

In today’s briefing:

LG Energy Allocation Results: Immediate Float Confirmed at 8.8%
LG Energy Solution: Confirmed Allocations, Float, & Lock-Up Periods
Luckin Coffee Relisting: Could Be Another Attempt to Deceive Investors
Hyundai Eng Listing Date Confirmed as Feb 15: Passive Flow Schedule, Incl. Local Sector ETFs

LG Energy Allocation Results: Immediate Float Confirmed at 8.8%

Foreign institutions received 60% of the total institutional allocation. They only accounted for 0.58% of the orders applied. Many of these are large foreign institutions with long-term holding tendencies.
The fact that they rarely make lockup pledges due to internal policies is in line with LG Energy’s need for an immediate float rate of 10% while having long-term investors.
As a result, the nominal float rate is 8.85%. quite exquisite results as it is just enough to satisfy KOSPI 200’s 10% minimum float rate rule.

LG Energy Solution: Confirmed Allocations, Float, & Lock-Up Periods

By Douglas Kim

LG Energy Solution provided the confirmed IPO allocations and lock-up periods for institutional investors today.
The final tally for the locked-up shares is 13.6 million shares, representing 58.3% of total shares allocated for the institutional investors.
The immediate free float on the first day of trading will be 20.7 million shares (8.9% of total outstanding shares).

Luckin Coffee Relisting: Could Be Another Attempt to Deceive Investors

By Oshadhi Kumarasiri

Following an improvement in the financial performance, The FT reported that Luckin Coffee (LKNCY US) is plotting to relist its shares in the US sometime this year.
Although financials have improved, relisting seems a bit premature, especially since Luckin is still not a completely clean house.
This relisting feels a bit like another attempt by the ex-chairman to deceive minority investors to get the best possible exit price.

Hyundai Eng Listing Date Confirmed as Feb 15: Passive Flow Schedule, Incl. Local Sector ETFs

The listing date of Hyundai Engineering has been confirmed as February 15 (Tuesday).
As a result, we can expect the passive flow schedule as specified in the below DETAIL section.
The indexes creating a significant level of passive flow for Hyundai Engineering are as follows: KOSPI 200, MSCI Standard, FTSE AW, KRX Construction, KOSPI 200 Construction, and FnGuide Hydrogen Economy.

Before it’s here, it’s on Smartkarma