ECM Daily Briefs | Page 52 of 161

In today’s briefing:

Initial Thoughts on the Yanolja IPO

Initial Thoughts on the Yanolja IPO

Yanolja is getting ready to complete its IPO in the US in the next several months. Softbank invested about US$1.7 billion in Yanolja in 2021.
The valuation of Yanolja could be between US$7 billion to US$9 billion. The company could raise nearly US$400 million in this IPO.
Overall, we are concerned about the valuations of Yanolja if indeed the bankers push ahead with the IPO at the valuation range of US$7 billion to US$9 billion.

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Jun 07

Daily Brief ECM: What Did FSS Point Out to Shift Up? & What Impact Would It Have on Bookbuilding Sentiment? and more

In today’s briefing:

What Did FSS Point Out to Shift Up? & What Impact Would It Have on Bookbuilding Sentiment?
Guzman Y Gomez IPO – The Positives – Network Growing, Sales Have Outpaced Network Growth
QuantumPharm IPO – Most of the Potential Has Already Been Baked In
Guzman Y Gomez IPO – The Negatives – Lawsuits and Management Churn

What Did FSS Point Out to Shift Up? & What Impact Would It Have on Bookbuilding Sentiment?

By Sanghyun Park

FSS wants Nikke’s MAU data to address revenue concerns. They also seek April and May sales data for Stellar Blade to address valuation concerns despite its recent launch.
Shift Up updated the prospectus with Nikke’s increasing MAU data but didn’t include Stellar Blade sales data. FSS may request further revisions, possibly delaying the IPO again.
Nikke’s MAU has risen but plateaued versus the previous quarter, and uncertainty surrounds Stellar Blade’s April-May sales, potentially impacting IPO pricing.

Guzman Y Gomez IPO – The Positives – Network Growing, Sales Have Outpaced Network Growth

Guzman Y Gomez plans to raise around US$160m in its Australian IPO.
GYG is a quick service restaurant business with more than 200 restaurants globally. It mainly focuses on fresh, made-to-order, Mexican-inspired food.
In this note, we look at the company’s prior performance and future prospects.

QuantumPharm IPO – Most of the Potential Has Already Been Baked In

QuantumPharm (QUP HK) is looking to raise US$144m from its Hong Kong IPO.
QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
In our previous notes, we looked at the firm’s past performance and PHIP updates. In this note, we share our thoughts on valuations.

Guzman Y Gomez IPO – The Negatives – Lawsuits and Management Churn

Guzman Y Gomez plans to raise around US$160m in its Australian IPO.
GYG is a quick service restaurant business with more than 200 restaurants globally. It mainly focuses on fresh, made-to-order, Mexican-inspired food.
In this note, we talk about the not-so-positive aspects of the deal.

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Jun 06

Daily Brief ECM: Shift Up Delays the IPO and Stellar Blade Tops Number One Game in the US in April and more

In today’s briefing:

Shift Up Delays the IPO and Stellar Blade Tops Number One Game in the US in April
Sakura Internet Placement – Beneficiary of the AI-Wave Looking to Double Down
Webtoon Entertainment Pre-IPO – The Positives – Just Turned Profitable
Pre-IPO Midea Group H Share – Even in the Face of Challenges, There Is Still Investment Value
Webtoon Entertainment Pre-IPO – The Negatives – Korea Revenue Declined, JP Acquisition to the Rescue

Shift Up Delays the IPO and Stellar Blade Tops Number One Game in the US in April

On 5 June, Shift Up announced that it will be postponing its IPO to July. The original book building period for the institutional investors was from 3 to 13 June.
The final book building date has been postponed to 27 June. The subsequent public offering subscription for general investors was also postponed to 2 to 3 July.
A major investment positive of Shift Up is enormous initial success of Stellar Blade which was the best selling game in the U.S. and numerous other countries in April 2024.

Sakura Internet Placement – Beneficiary of the AI-Wave Looking to Double Down

Sakura internet (3778 JP) is looking to raise US$127m from its primary follow-on. Proceeds will be used towards purchasing GPU servers, and constructing new data center facilities.
While 11% of total shares outstanding are offered here, the deal would be easily digested by the market, representing just 0.8 days of its three month ADV.
In this note, we run the deal through our ECM framework and comment on deal dynamics.

Webtoon Entertainment Pre-IPO – The Positives – Just Turned Profitable

Webtoon Entertainment (WBTN US) is looking to raise up to US$500m in its US IPO.
Webtoon Entertainment is a global storytelling platform where a community of creators and users discover, create and share new content.
In this note, we talk about the positive aspects of the deal.

Pre-IPO Midea Group H Share – Even in the Face of Challenges, There Is Still Investment Value

Although Midea’s performance keeps growing, it is difficult for the home appliance industry to return to rapidly growing incremental market as it was during the robust development of real estate.
As Midea’s To C business encounters growth bottleneck, To B business has become new performance driver and second growth curve, but several new businesses are facing challenges in 24Q1.
For mature leading enterprises in home appliance industry, a valuation of 10-20x PE is reasonable, which means market value of RMB370-740 billion, assuming 2024 net profit would reach RMB37 billion.

Webtoon Entertainment Pre-IPO – The Negatives – Korea Revenue Declined, JP Acquisition to the Rescue

Webtoon Entertainment (WBTN US) is looking to raise up to US$500m in its US IPO.
Webtoon Entertainment is a global storytelling platform where a community of creators and users discover, create and share new content.
In this note, we talk about the not-so-positive aspects of the deal.

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Jun 05

Daily Brief ECM: MMG (1208 HK) – $1.1bn+ Rights Offering – Expect Regular Rights Trading Dynamics and more

In today’s briefing:

MMG (1208 HK) – $1.1bn+ Rights Offering – Expect Regular Rights Trading Dynamics
MMG (1208 HK): US$1.2bn Highly Dilutive Rights Issue
Raspberry Pi IPO Valuation Analysis

MMG (1208 HK) – $1.1bn+ Rights Offering – Expect Regular Rights Trading Dynamics

By Travis Lundy

Mmg Ltd (1208 HK) today announced a 2:5 Rights Offering to raise US$1.15bn at HK$2.62/share in order to pay down debt from their recent Botswanan copper mine acquisition.
It was a sizeable acquisition, and the near-term EV/EBITDA of the acquisition is 10x or above. The longer-term EV/EBITDA is in the 3s based on expansion later this decade.
The Rights Offering is underwritten, supported by its 67.5% owner. SOUTHBOUND holds 10+%. There are short dynamics, arb dynamics, “don’t wanna spend more” dynamics. There’s a path here.

MMG (1208 HK): US$1.2bn Highly Dilutive Rights Issue

By Arun George

Mmg Ltd (1208 HK) will raise HK$9.1bn (US$1.2bn) through 2 rights shares for every 5 existing shares rights offering. The rights price is HK$2.62, a 24.7% discount to the TERP.
The rights proceeds will be used to repay existing debt, which will allow it to use other funds to better support the ongoing development of the operating mines.
MMG shares should continue to decline heading into the ex-rights date. The shares go ex-rights on 11 June, and the rights start trading from 24 June to 2 July (inclusive).

Raspberry Pi IPO Valuation Analysis

Raspberry Pi is expected to raise about £157 million in this IPO. The conditional trading for this IPO is expected to be take place on 11 June.
We estimate Raspberry Pi to generate sales of US$342.1 million (up 28.7% YoY) and operating profit of US$48.5 million (up 29.3% YoY) in 2024.
Our base case valuation of Raspberry Pi is market cap of £772 million or £4 per share (43% higher than the high end of the initial IPO price range).

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Jun 04

Daily Brief ECM: Webtoon Entertainment IPO Preview and more

In today’s briefing:

Webtoon Entertainment IPO Preview
Yankuang Energy Placement – Doesn’t Appear Well Flagged Although Deal Size Is Large
Pre-IPO QuantumPharm (PHIP Updates) – Some Points Worth the Attention

Webtoon Entertainment IPO Preview

Webtoon Entertainment is getting ready to complete its IPO on the NASDAQ exchange in 2H 2024. Webtoon Entertainment is a subsidiary of Naver Corp (035420 KS).
Webtoon is seeking to raise as much of US$500 million at a valuation of US$3 billion to US$4 billion.
Webtoon Entertainment is one of the largest Korean company related IPOs in 2024.

Yankuang Energy Placement – Doesn’t Appear Well Flagged Although Deal Size Is Large

Yankuang Energy Group (1171 HK) is looking to raise up to US$608m through a primary follow-on, via selling 270m H-shares.
The deal is a somewhat large one to digest, at 10.6 days of three month ADV and 2.7% of current mcap.
In this note, we will talk about the placement and run the deal through our ECM framework.

Pre-IPO QuantumPharm (PHIP Updates) – Some Points Worth the Attention

We have always been concerned about QuantumPharm’s business model. It is relatively difficult for a service provider like QuantumPharm to scale up revenue by just relying on charging service fees.
For AI pharmaceutical companies, how to make money is a pain point for entire industry. Just focusing on preclinical stages would limit profitability.We haven’t seen any certainty of achieving breakeven.
Increasing competition would bring more challenges for QuantumPharm. Post-investment valuation in 2021 was too expensive.If its future performance falls short of expectations, then sooner or later the valuation will collapse.

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Jun 03

Daily Brief ECM: ECM Weekly (3rd June 2024) – Shift Up and more

In today’s briefing:

ECM Weekly (3rd June 2024) – Shift Up, QuantumPharm, Telix, Sompo, ASMedia, Exedy, Barito, Zomato

ECM Weekly (3rd June 2024) – Shift Up, QuantumPharm, Telix, Sompo, ASMedia, Exedy, Barito, Zomato

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
On the IPO front, we undertook a peer comparison and looked at valuations for Shift Up (462870 KS).
On the placement front, it was another busy week with a number of blocks in India along with Asmedia Technology (5269 TT)‘s GDR offering and Exedy Corp (7278 JP).

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Jun 01

Daily Brief ECM: Bloks Group Pre-IPO Tearsheet and more

In today’s briefing:

Bloks Group Pre-IPO Tearsheet
CaiNiao Q4FY Results: After IPO Withdrawn, Margins Fell | Retention Payments, or Something Else?
Jiangxi Rimag IPO (2522.HK): Global Offering and Valuation Update

Bloks Group Pre-IPO Tearsheet

Bloks Group (1850960D CH) is looking to raise US$300m in its upcoming Hong Kong IPO. The bookrunners on the deal are Goldman Sachs, and Huatai International.
Bloks Groups (Bloks) operates in the toy segment where it primarily assembles character toys. Its portfolio contains both self-developed and renowned licensed intellectual property (IPs).
According to F&S, Bloks was China’s largest player in the assembly character toy segment with an approximate gross merchandise value (GMV) of RMB1.8bn in 2023.

CaiNiao Q4FY Results: After IPO Withdrawn, Margins Fell | Retention Payments, or Something Else?

By Daniel Hellberg

After CaiNiao halted IPO in late March, company reported lower Q4 margins
What drove Q4 margin deterioration, retention payments or weaker X-border?
With IPO off the table, supporting AliExpress becomes CaiNiao’s main role

Jiangxi Rimag IPO (2522.HK): Global Offering and Valuation Update

By Andrei Zakharov

Jiangxi Rimag Group, a China-based medical imaging center operator and provider of Rimag cloud services, set terms for an IPO and plans to raise ~HK$280M (~$36M) in Hong Kong.
The IPO is expected to be between HK$14.60 and HK$16.80. At the midpoint of the range, Jiangxi Rimag will have a market value of ~HK$5.6B based on 356.3M outstanding shares.
CITIC Securities is leading the offering. CMB International and Huatai International act as joint global coordinators, joint bookrunners and joint lead managers.

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May 31

Daily Brief ECM: Shift Up IPO: Valuation Insights and more

In today’s briefing:

Shift Up IPO: Valuation Insights
AMMB Holdings Placement – Last Selldown Did Well, This One Will Remove the Overhang

Shift Up IPO: Valuation Insights

By Arun George

Shift Up (462870 KS) is Korea’s leading game development studio. It is seeking to raise up to US$320 million.
We previously discussed the IPO in Shift Up IPO: The Investment Case.
We examine the syndicate’s valuation methodology. Our analysis suggests that Shift Up is attractively valued in the IPO price range. We would participate in the IPO.

AMMB Holdings Placement – Last Selldown Did Well, This One Will Remove the Overhang

ANZ Funds is looking to raise around US$149m from selling its remaining stake in AMMB Holdings (AMM MK).
ANZ has sold the majority of its stake in AMMB earlier in Mar 2024. Coming to markets again to sell its remaining stake, the deal here should be well flagged.
In this note, we run the deal through our ECM framework and comment on deal dynamics.

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May 30

Daily Brief ECM: Quantgroup Technology Pre-IPO Tearsheet and more

In today’s briefing:

Quantgroup Technology Pre-IPO Tearsheet
QuantumPharm (Xtalpi) Pre-IPO – PHIP Updates – Strong Growth, Although Losses Continue to Pile Up
Pre-IPO Mokingran Jewellery Group – Disappointing Profit Margin and Potential Risk in Business Model
Waystar Holding: IPO Price (Midpoint): $21.50. PT: $17.50, ~19% Downside. Move To Sidelines

Quantgroup Technology Pre-IPO Tearsheet

Quantgroup Technology (1467534D CH) is looking to raise up to US$200m in its upcoming HK IPO. The deal will be run by CICC and CMB International.
Quantgroup Technology is a digitalization solutions provider in China. Its digitalization solutions primarily include digitalized marketing, including precision marketing for financial institutions and local merchants, and goods transaction facilitation.
The apps that Quantgroup operates can be largely categorized into two Quant-enabled proprietary apps, namely Yangxiaomie and Consumption Guide.

QuantumPharm (Xtalpi) Pre-IPO – PHIP Updates – Strong Growth, Although Losses Continue to Pile Up

QuantumPharm (QUP HK) (Xtalpi) is looking to raise US$200m in its upcoming Hong Kong IPO.
QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
In our previous note we looked at the company’s past performance. In this note, we discuss QuantumPharm’s PHIP updates.

Pre-IPO Mokingran Jewellery Group – Disappointing Profit Margin and Potential Risk in Business Model

MOKINGRAN’s revenue fluctuated in the past three years. Profit margin was much lower than that of peers/industry average, which may not necessarily have big improvement even with upward gold price.
MOKINGRAN once applied for IPO in A-share but failed. The concerns of SZSE included “unusual” gold trade-in business, large inventory balance and the risk of “false increase” in profits/revenues.
The gold boom should not mask the risks of MOKINGRAN. Even if MOKINGRAN successfully goes public, it still faces many challenges. Valuation of MOKINGRAN should be lower than peers.

Waystar Holding: IPO Price (Midpoint): $21.50. PT: $17.50, ~19% Downside. Move To Sidelines

By Andrei Zakharov

Waystar Holding, provider of mission-critical cloud software to healthcare organizations, set terms for an IPO and plans to raise ~$970M in the upcoming Nasdaq offering.
The initial public offering is expected to be between $20.00 and $23.00. At the midpoint, Waystar Holding has a market value of ~$3.7B based on 173.4M fully diluted shares.
In my insight, I discuss valuation framework for comparable company analysis and research multiples of M&A transactions, including Athenahealth, Cerner and Change Healthcare.

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May 29

Daily Brief ECM: ASMedia GDR Offering – Well Flagged and more

In today’s briefing:

ASMedia GDR Offering – Well Flagged, and Momentum Has Been Strong Leading into the Offering
Shift Up IPO: The Investment Case
Shift Up IPO – Thoughts on Valuations – Bear/Base/Bull
Pre-IPO Jiangxi Rimag Group (PHIP Updates) – Some Points Worth the Attention

ASMedia GDR Offering – Well Flagged, and Momentum Has Been Strong Leading into the Offering

Asmedia Technology (5269 TT) is looking to raise up to US$335m in its global depository receipts (GDRs) offering.
Overall, the deal would be a relatively small one for the stock to digest at just 5.6 days of its three month ADV.
In this note, we run the deal through our ECM framework and comment on deal dynamics.

Shift Up IPO: The Investment Case

By Arun George

Shift Up (462870 KS) is Korea’s leading game development studio. It is seeking to raise up to US$320 million.
Shift Up now focuses only on game development and has a policy of publishing games in cooperation with global partners such as Tencent (700 HK) and Sony Corp (6758 JP).
The investment case rests on a stellar game development track record, several growth drivers, high profitability and cash generation.

Shift Up IPO – Thoughts on Valuations – Bear/Base/Bull

Shift Up (462870 KS) plans to raise up to US$320m in its South Korean IPO.
Shift Up is a South Korean games developer, which as released three games so far for the global markets.
We have looked at the company’s performance in our past notes. In this note, we talk about valuations.

Pre-IPO Jiangxi Rimag Group (PHIP Updates) – Some Points Worth the Attention