Equity Capital Markets

This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

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1. GMO Internet (4784) DropDown Holdco Gone Ballistic – Squeezed on Truly Tiny Float

Gmo Ad Partners (4784 JP) has become GMO Internet as of 1 January 2025. On that day, it merged with the “internet infrastructure business” of GMO Internet (9449 JP).
It was a kind of reverse takeover – a backdoor listing – and it on 24-Dec-2024, it was announced GMO Internet would move from TSE Standard to TSE Prime end-Jan2025.
The stock is +300% since then. Why? A squeeze. Share count increase? 15x. Float share increase? Zero. Resulting Real World Float? 1.24% of shares out and about to shrink.

2. Trading LG Chem’s Large-Scale EB Issuance Backed by LG Energy Shares

With a $2B deal expected, LG Chem will likely issue before end June as the 2023 EB’s put date nears and redemption pressure builds amid strained financials.
Two years ago, hedge shorting spiked post-issuance and post-exchange start, but price impact was mild—only 3% and 6% drops—likely due to strong sector sentiment then.
Sector sentiment’s turned sharply, so more aggressive price action is likely post-EB announcement. Timing is tricky, but the setup’s worth watching closely.

3. DN Solutions IPO – Tariffs, Peer Correction Don’t Help

DN Solutions (298440 KS) (DNS) aims to raise around US$1.1bn in its Korea IPO via selling a mix of primary and secondary shares.
DNS is engaged in the manufacture and sale of machine tools and the business of automation solutions and services related thereto.
In our previous note, we looked at the company’s past performance and valuations. In this note, we talk about the updates since then.

4. Kakao Corp Placement – Momentum Isn’t Great but It Is a Small Deal

SK Telecom (017670 KS) plans to raise around US$280m via selling its 2%+ stake in Kakao Corp (035720 KS).
Kakao’s recent performance hasn’t been particularly great and the stock has been suffering even since the Kakao Pay management scandal in 2021.
In this note, we will run the deal through our ECM framework and talk about the recent updates.

5. Initial Thoughts on the Sono International IPO

Sono International, the largest resort operator in Korea, is getting ready to complete its IPO in 3Q 2025.
Company is aiming for valuation of about 3 trillion won. Treasury shares accounted for 35.93% of total outstanding shares at the end of 2024.
One of the noticeable aspects of the company’s income statement is that although the company’s sales growth was modest from 2019 to 2024, its operating margin growth has been spectacular.

6. ECM Weekly (22 Apr 2025) – Suzuki, Zenergy, Chagee, Duality, Manycore, Horizon, Giant Bio, TV Asahi

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, Duality Biotherapeutics delivered a strong listing, while Jiangsu Zenergy Battery Technologies was still holding on to its deal price.
On the placements front, we looked at number of upcoming lockup expiries.

7. Waaree Energies IPO Lockup – Lots of Individual Shareholders Own over US$2bn Worth of Stock

Waaree Energies (WAAREEEN IN) raised around US$514m in its India IPO in October 2024. The lockup on its pre-IPO investors is set to expire soon.
Waaree Energies is a solar PV module manufacturer in India with an aggregate installed capacity of 12 GW, as of Jun 2024.
In this note, we will talk about the lockup dynamics and possible placement.

8. Chagee Holdings – Thoughts on the IPO Debut and the Valuation Outlook

Chagee may think that US IPO will help it gain greater imagination space/higher valuation. Although the tariff war is “a big surprise”, conservative IPO pricing still secure a good debut.
If Chagee can successfully achieve internationalization and reverse the trend of declining performance, its market value could reach US$10.9 billion. However, Chinese concept stocks would still face valuation discounts.
If same store GMV fails to stabilize, or overseas market penetration is lower-than-expected, or conflict between China and the US escalates, share price would face correction, with valuation falling below Starbucks.

9. Ather Energy IPO – Still Not Cheap Enough

By Akshat Shah, Aequitas Research

Ather Energy is now looking to raise about US$350m in its upcoming India IPO.
Ather is a pure play electric vehicle company in India designing and developing E2Ws, battery packs, charging infrastructure, associated software and accessories, also manufacturing battery packs and assembling E2Ws in-house.
In our previous note, we looked at the company’s past performance. In this note, we talk about the updates since then and valuations.

10. Wistron GDR Early Look – Riding the AI Server Boom Amid Macroeconomic Headwinds

Wistron Corp (3231 TT) is looking to raise up to US$760m in its upcoming global depository receipts (GDRs) offering.
On 2nd Apr 2025, Wistron announced that it had received its board’s approval to sell up to 250m common shares via a GDR offering.
Similar to previous GDR listings, the deal is a long drawn out process with the firm required to jump through a number of board/shareholder/regulatory approval loops.

Apr 20

Weekly Top Ten Equity Capital Markets – Apr 20, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

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1. Chagee Holdings Limited (CHA): International Investors to Dominate the IPO Order Book

Chagee’s order book is heavily influenced from Asian Investors as the deal is considered multiple-times oversubscribed.
The underwriters and company came to market with a manageable size transaction and an attractive valuation.
The geopolitical headwinds, specifically between China and the United States, is forcing many traditional IPO investors to stay on the sidelines.

2. Chagee Holdings (CHA US) IPO: Valuation Insights

Chagee Holdings (CHA US), a leading premium tea drinks brand, is seeking to raise US$382-411 million through a Nasdaq IPO.
We previously discussed the IPO in Chagee Holdings (CHA US) IPO: The Bull Case and Chagee Holdings (CHA US) IPO: The Bear Case.
There are four cornerstone investors. Our valuation analysis suggests Chagee is attractively valued at the IPO price range. Therefore, we would participate in the IPO.

3. Chagee IPO: Is It Worth the Risks? Peer Comparison and Valuation Analysis.

By Devi Subhakesan, Investory

Chagee Holdings (CHA US) ‘s IPO valuation discount to its peers, including HK-listed tea-beverage players as well as US-listed China-based coffee-beverage player, suggest a strong potential upside on listing.
US Investor concern over impact of tariffs and caution due to lingering memories of the Luckin Coffee scandal could translate to higher risk premium for the stock.
Expect Chagee to trade at a discount to budget beverage peers like Mixue Group (2097 HK) given its limited room for network expansion within China and likely slower overseas growth.

4. Chagee IPO: Luckin X Starbucks of Tea. Pricing, Valuation, Key Facts & Financials

By Devi Subhakesan, Investory

Chagee Holdings (CHA US) is offering 14.68 million shares for USD26 to USD28 each to raise upto USD411 million in its initial public offering in the US.
Chagee’s premium branded teahouses blend traditional tea culture with modern, tech-driven service, distinctly setting itself apart from bubble tea kiosks.
Chagee’s IPO is priced at a discount to forward valuations of recently listed (in HK) China-based freshly brewed drinks players and leading Cafe companies.

5. Giant Biogene Placement – Great Track Record but Previous Deal Didn’t Do Well

Giant Biogene (2367 HK) aims to raise up to US$250m via a top-up placement.
We have followed the company since listing and its recent performance has been great. Although it doesn’t seem to need the cash and the previous deal didn’t go well.
In this note, we will run the deal through our ECM framework and talk about the recent updates.

6. China Resources Beverage IPO Lockup- Cornerstones Coming Out of Lockup Ahead of the Large PE Release

China Resources Beverage (2460 HK) raised around US$750m in its Hong Kong IPO in October 2024. The lockup on its cornerstone investors is set to expire soon.
China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China and is one of the largest players in its categories.
In this note, we will talk about the lockup dynamics and possible placement.

7. Pre-IPO Chagee Holdings – IPO Pricing Is Attractive, But Share Price May Underperform

Chagee is seeking up to US$411 million by offering nearly 14.7 million ADS priced between US$26 and US$28 each, with market value to reach about US$4.8-US$5.1 billion.
Chagee is facing performance headwinds. Whether the current high growth of Chagee is sustainable in the future is uncertain. This makes us tend to be conservative in Chagee’s valuation expectations
Based on our forecast, P/E is about 11.5-12.3x if based on 2025 net profit. Such valuation is attractive, but “valuation discount” may occur due to market turmoil and geopolitical conflicts.

8. Rigaku IPO Lockup – Large PE Investors Can Still Break Even

Rigaku Holdings (268A JP) raised around US$750m in its Japan IPO in October 2024. The lockup on its pre-IPO investors is set to expire soon.
Rigaku engages in developing, manufacturing, sales and servicing scientific instruments specializing in X-ray technologies.
In this note, we will talk about the lockup dynamics and possible placement.

9. ECM Weekly (14 Apr 2025) – Suzuki, EBOS, Hengrui Pharma, Zenergy, Chagee, LG India, Huge Dental

By Ke Yan, CFA, FRM, Aequitas Research

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, we looked at the possible A/H premium for Jiangsu Hengrui Medicine (600276 CH), along with two live deals in Hong Kong .
On the placements front, only Suzuki Motor (7269 JP)‘s shareholders were brave enough to launch a placement in the turbulent markets.

10. Duality Biotherapeutics (映恩生物) Trading Update

Duality Biotherapeutics raised HKD 1,512m (USD 194m) from its global offering and will list on the Hong Kong Stock Exchange on Tuesday, April 14th.
In our previous note, we looked at the company’s business lines of ADC products and analyzed its valuation.
In this note, we provide an update for the IPO before trading debut.

Apr 13

Weekly Top Ten Equity Capital Markets – Apr 13, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

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1. Suzuki Motor Placement – Not the Best Time for a US$1.15bn Deal. It Will Be a Long Week.

Tokio Marine Holdings (8766 JP) and Sompo Holdings (8630 JP) aim to raise around US1.15bn (including over-allotment) via selling around 5% of Suzuki Motor (7269 JP).
While Suzuki doesn’t have much direct exposure to the US markets, its shares have still corrected in line with other auto players.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

2. Suzuki Motor (7269 JP): A US$1.1 Billion Secondary Offering

Suzuki Motor (7269 JP) has announced a secondary offering of up to 95.7 million shares (110.1 million including overallotment), worth around US$1.1 billion (US$1.3 billion including overallotment).
Suzuki’s goal with the secondary offering is (i) to reduce cross-shareholdings and (ii) to expand and diversify the shareholder base, which should further enhance liquidity.
Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 21 and 23 April (likely 21 April).

3. Chagee IPO: Peer Comp and Thoughts on Valuation

Chagee Holdings (CHA US) is planning to raise up to US$500m through its upcoming US IPO.
It is a leading premium tea drinks brand, serving healthy and delicious freshly-made tea drinks.
We have looked at the company’s past performance in our earlier notes. In this note, we discuss latest industry dynamics, conduct a quick peer comparison and discuss the company’s valuation.

4. Chagee Holdings (CHA US) IPO: The Bear Case

Chagee Holdings (CHA US), a leading premium tea drinks brand, is seeking to raise US$400-500 million through a Nasdaq IPO.
In Chagee Holdings (CHA US) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on unsustainable growth rates, pressure on KPIs, signs of margin pressure, increasing S&M expenses and weakening forward growth indicators.

5. Key Takeaways from the Updated Filing on Hanwha Aero’s Rights Offering

Hanwha shot down any merger talks between Hanwha Corp and Hanwha Energy, saying they’re just going to funnel Energy’s cash straight into Hanwha Aero via a third-party allotment.
These confirm no price manipulation for Hanwha Corp; Hanwha Energy will inject cash into Aero at market value, likely driving bullish short-term price action for both Hanwha Corp and Aero.
Despite tighter arb opportunities, doubts remain whether Hanwha Aero can raise the remaining KRW 1.6 trillion given a volatile market and the tight timeline.

6. Samsung SDI: Rights Offering Capital Raise Amount Lowered by 14% to 1.7 Trillion Won

Samsung SDI (006400 KS) has lowered the rights offering capital raise amount by 14% to 1.7 trillion won, mainly due to the recent carnage in the global equity markets.
The expected rights offering price has been lowered to 146,200 won, which is 14.9% lower than current price.
We remain negative on Samsung SDI’s rights offering capital raise mainly due to shares dilution risk. We also remain concerned that the weak demand for EVs globally could last longer.

7. Hanwha Aerospace – Lowers Rights Offering Capital Raise Amount To 2.3 Trillion Won

On 8 April, Hanwha Aerospace (012450 KS) announced that it plans to lower its rights offering capital raise amount from 3.6 trillion won to 2.3 trillion won (US$1.6 billion).
The remaining 1.3 trillion won will be secured through a third-party allocation paid-in capital increase targeting three companies, including Hanwha Energy, Hanwha Impact Partners, and Hanwha Energy Singapore.
Hanwha Aerospace disclosed today that it expects sales of 30 trillion won (58% higher than consensus) and operating profit of 3 trillion won (20% higher than consensus) in 2025.

8. Chagee Holdings IPO Valuation Analysis

By Ke Yan, CFA, FRM, Aequitas Research

Our base case valuation of Chagee Holdings is target price of $46.7 per share, representing 67% higher than the high end of the IPO price range ($28 per share).
Our base case valuation is based on a P/E of 21.4x on our estimated net profit of 2.9 billion RMB in 2025.
We used a very conservative valuation multiple, mainly due to the extremely high macro risks related to the ongoing tariff dispute between China and the United States.

9. Duality Biotherapeutics (映恩生物) IPO: Valuation Upside at Risk

Duality, a China-based clinical-stage biotechnology company, launched its IPO to raise up to US$200m via a Hong Kong listing.
We look at the deal dynamics and latest developments in the biotech sector.
The deal initially presented upside for investors but there’s a portion of its valuation now at risk due to the latest development.

10. Suzuki Motor (7269 JP): The Current Playbook

Since the announcement of the US$1.1 billion secondary offering, Suzuki Motor (7269 JP)’s shares have remained broadly unchanged at the undisturbed price of JPY1570.5 per share (7 April).
It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Suzuki’s share performance is the joint best among recent large placements.
However, the shares have underperformed the Nikkei 225 index (up 7.9%). The offering will likely be priced on 14 April. The average large Japanese placement tends to generate positive returns.

Apr 06

Weekly Top Ten Equity Capital Markets – Apr 6, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

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1. CATL A/H Listing – Thoughts on A/H Premium

Contemporary Amperex Technology (CATL) (300750 CH), one of the world’s largest battery solutions providers, aims to raise at least US$5bn in its H-share listing.
CATL is the global leader in new energy vehicle battery solutions, in China and globally, as per SNE Research. Its A-shares have been listed since 2018.
We have looked at the company’s past performance in our earlier notes. In this note, we talk about its recent updates and provide our thoughts on valuations.

2. ECM Weekly (31st Mar 2025) – Xiaomi, NIO, FCT, Gigabyte, DN Sol, Nanshan Al, Zenergy, LXJ, Veeda

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, DN Solutions (298440 KS)‘s range looks a little pricey, while Eco-Shop Marketing (ECO MY) could trade ahead of its listed peers, in our view.
On the placements front, Xiaomi Corp (1810 HK) matched BYD (1211 HK) in size, but couldn’t do so in returns.

3. Chagee Holdings (CHA US) IPO: The Bull Case

Chagee Holdings (CHA US), a leading premium tea drinks brand, is seeking to raise US$400-500 million through a Nasdaq IPO.
According to iResearch, as of December 31, 2024, Chagee was the largest premium freshly made tea drink brand in China by the number of stores.
The bull case rests on a strong brand, leading market share, peer-leading revenue growth, top-tier profitability and cash generation.

4. Wuxi XDC Placement – Following Biologics Playbook, past Deals Have Been Mixed

WuXi AppTec (2359 HK) aims to raise around US$250m via selling around 3.5% stake in WuXi XDC Cayman (2268 HK).
WuXi XDC Cayman (WXDC) is a contract research, development, and manufacturing organization (CRDMO) focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
In this note, we will talk about the placement and run the deal through our ECM framework.

5. Chagee Holdings Limited (CHA): Peeking at the IPO Prospectus of China’s Premium Tea Brand

By Ke Yan, CFA, FRM, Aequitas Research

As of December 31, 2024, their network comprised 6,440 teahouses, including 6,284 located in China.
Their net revenues increased by 844% to RMB4,640.2 million in 2023 from RMB491.7 million in 2022.
We anticipate this company to set terms (share size, price range) and debut in the second half of April.

6. Duality Biotherapeutics (映恩生物) Pre-IPO: Valuation and the Trap

Duality Biotherapeutics, a China-based clinical-stage biotechnology company, plans to raise up to US$250m via a Hong Kong listing.
We look at the company’s valuation based on its core products, namely DB-1303, DB-1311, and DB-1305.
We highlight key differences between our valuation and the broker valuation guidance.

7. Clearing up FSS Review of Samsung SDI & Hanwha Aerospace: Watch for Ramped-Up Recall Pressure

Samsung SDI’s rights offering is locked in and even accelerated. Hanwha Aerospace awaits FSS approval, but a pullback is unlikely, with no major red flags seen by regulators.
With a four-week gap, supply pressure eases, reducing overhang concerns. This shift in dynamics impacts stock rights pricing and is key for any arb setup.
The wider schedule gap between deals boosts lenders’ flexibility, increasing the likelihood of a stronger share recall. This makes for a solid trade setup, targeting recall-driven price action.

8. Chagee Pre-IPO – Market Leading Growth but Showing Signs of Fatigue

Chagee Holdings (CHA US) is planning to raise up to US$500m through its upcoming US IPO.
Chagee is a leading premium tea drinks brand, serving healthy and delicious freshly-made tea drinks.
In this note, we look at the firm’s past performance.

9. SmartStop Self Storage (SMA): IPO for Yield Chasers, Traditional Players on the Sidelines

According to our sources, the deal is multiple-times oversubscribed — our sources stated around 5x.
Self-Storage was Monday’s second best performing sub-sector (+1.8%) as the overall REIT sector (+0.7%) slightly outperformed the broader market.
While the “typical” IPO investor may not be “enthused”, the timing for this type of deal “may” be ideal for yield-chasers.

10. Maynilad Water Services Pre-IPO – The Positives – Key Infrastructure Provider

Maynilad Water Services (MYNLD PH) (MWS) is looking to raise at least US$633m in its upcoming Philippines IPO.
MWS is a leading global water utility player operating the largest concession by population served within a single concession area in the Philippines and Southeast Asia (SEA), as per GlobalData.
In this note, we talk about the positive aspects of the deal.

Mar 30

Weekly Top Ten Equity Capital Markets – Mar 30, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

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1. NIO HK Placement – Lots of Reasons to Avoid and Only One to Invest

NIO (9866 HK) is looking to raise around US$450m via a primary placement in Hong Kong.
The shares haven’t done much this year or ever since they were listed.
In this note, we will talk about the placement and run the deal through our ECM framework.

2. The Hidden Play in Hanwha’s Noisy Stake Reshuffling: Hanwha Corp’s Rights Issue

Hanwha Corp’s chances of raising 1T KRW without a capital call are slim, likely channeling Hanwha Energy’s 1.3T KRW into Hanwha Corp intead of Hanwha Aero.
A shareholder-allotted rights issue from Hanwha Corp looks likely, and with short-selling resumption, it sets up a clean arbitrage play with low risk before the official announcement.
Timing is key—Hanwha’s using debt for now, but likely won’t delay long. Expect Hanwha Corp’s rights issue to follow Hanwha Aero’s, probably between June and July.

3. Revisiting Korea’s Local Rights Issue Arb Setup

Korea’s rights issues offer a clean arb setup—track stock rights vs. spot price, with first price as a cap, and lock in predictable entry vs. exit costs.
Aggressive locals skip hedging, betting the discount holds between final pricing and listing. History backs it, but it’s a case-by-case call—not a blanket recommendation.
Samsung SDI and Hanwha Aerospace’s KRW 5.5T raise is massive, likely flooding stock rights into the market—prime setup for arb plays.

4. Xiaomi US$5.3bn Placement – Relatively Small, Strong Momentum but Is Expensive

Xiaomi Corp (1810 HK) is looking to raise around US$5.3bn via selling 3% additional shares.
The shares have done exceedingly well this year and are now trading at their all time highs.
In this note, we will talk about the placement and run the deal through our ECM framework.

5. Ecopro Materials: Announces A Capital Raise Worth 389 Billion Won

EcoPro Materials announced a capital raise worth 389 billion won. The company plans to issue 5.12 million new shares, representing 7.3% of its current outstanding shares (69.74 million).
This capital raise is in the form of redeemable convertible preferred shares (RCPS). Conversion price of this RCPS is 75,974 won which is 9.9% higher than current price.
Ecopro Materials’ share price is down 27% from 27 February 2025. We continue to remain negative on Ecopro Materials.

6. LG Electronics India IPO: It’s A Big Deal. Potential Pricing and Valuation Preview

By Devi Subhakesan, Investory

LG Electronics India has secured regulatory approval for its IPO, expected to raise between USD 1 to 1.5 billion.
However, it remains unclear whether the company will delay the launch until market sentiment shows further improvement.
LG Electronics India (123D IN) IPO is a 100% offer for sale by parent and hence the entire proceeds from the IPO will accrue to LG Electronics (066570 KS).

7. A/H Premiums and past A/H Listings Performance Data – Mixed Results but Size Matters

By Akshat Shah, Aequitas Research

Given the slew of A/H offerings in the Hong Kong IPO pipeline, in this note, we talk about the overall A/H premiums currently.
We also had a quick look at the past A/H listing performance, including subscription rates and A/H premiums at the time of listing.
Overall, most of the A/H listings haven’t done much in the near term, with a few exceptions.

8. Gigabyte GDR Early Look – Benefitting from the AI Server Wave, Further Scale-Up Underway

Gigabyte Technology (2376 TT) is looking to raise up to US$395m in its upcoming global depository receipts (GDRs) offering.
On 14th Mar 2025, Gigabyte announced that it received its board’s approval to sell upto 50m common shares via a GDR offering. The proceeds will be used for business development.
Similar to previous GDR listings, the deal is a long drawn out process with the firm required to jump through a number of board/shareholder/regulatory approval loops.

9. Lotte Global Logistics IPO Preview

Lotte Global Logistics is getting ready to complete its IPO in KOSPI in May 2025. IPO price range is from 11,500 won and 13,500 won.
At the high end of the IPO price range, the expected public offering amount is 202 billion won.
According to the bankers’ valuation, the expected market cap after the IPO is 479 billion won to 562 billion won.

10. DN Solutions IPO: Valuation Insights

DN Solutions (298440 KS), the third-largest machining centre/turning centre machine tool manufacturer, seeks to raise US$1.1 billion in a KRX IPO.
We previously discussed the IPO in DN Solutions IPO: The Bull Case and DN Solutions IPO: The Bear Case.
I examine the syndicate’s valuation methodology. My analysis suggests that DN Solutions is palatable in the low end of the IPO price range.

Mar 23

Weekly Top Ten Equity Capital Markets – Mar 23, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

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1. Hanwha Aerospace’s Monster Raise: Checking Key Angles

Market sees this as an M&A play, not just de-leveraging. Sentiment’s split, and despite a tight discount, uncertainty on take-up could spark major dislocations in stock and rights.
Hanwha’s ₩3.6T raise drops just a week after Samsung SDI’s ₩2T—₩5.5T back-to-back. Absorption looks brutal, setting up serious volatility and prime trading opps if liquidity tightens.
The FSC fast-tracked this, flagging it instantly but also hinting approval. With regulator risk off, any cash market snapback tomorrow should stay in check.

2. JX Advance Metals IPO Trading – Demand Wasn’t Great

JX Advanced Metals (5016 JP)’s parent, ENEOS Holdings (5020 JP), raised around US$2.5bn via selling more than half of its stake in JXAM in its Japan IPO.
JXAM engages in business activities primarily focused on the development, manufacture and sale of materials made from copper and rare metals, which are used in the semiconductor and ICT fields.
We have covered various aspects of the deal in our previous notes. In this note, we will talk about the trading dynamics.

3. Hanwha Aerospace: Rights Offering of 3.6 Trillion Won (Negative on Entire Korean Defense Sector)

Hanwha Aerospace (012450 KS) announced a rights offering capital raise of 3.6 trillion won (US$2.5 billion), which is the largest ever rights offering capital raise in Korea.
We believe this capital raise is likely to result in higher concerns about shares dilution at Hanwha Aerospace and negatively impact its share price.
It is also likely to have a significant negative impact on the entire Korean defense stocks, as it signals a top on this sector.

4. JX Advanced Metals (5016 JP) IPO: Trading Debut

JX Advanced Metals (5016 JP) priced its IPO at JPY820 per share to raise gross proceeds of US$2.5 billion. The shares will start trading on 19 March.
Relevant notes: JX Advanced Metals (5016 JP) IPO: The Bull Case, JX Advanced Metals (5016 JP) IPO: The Bear Case, JX Advanced Metals (5016 JP) IPO: Price Range Is Fair.
Since the price range was announced, the peers have modestly re-rated. My SoTP valuation of JPY859 is slightly above the IPO price, suggesting the price is fair.

5. JX Advanced Metals IPO Trading

JX Advanced Metals raised 438.6 billion yen (US$3 billion) on its IPO offering after pricing the IPO at 820 yen per share, valuing the company at 761.3 billion yen.
Our base case valuation of JX Advanced Metals is price per share of 863 yen, based on P/E of 9.9x using our estimated net profit of 81 billion yen (2026E).
Therefore, we would sell into strength if the share price of JX Advanced Metals rises to the 863 yen to 1,044 yen per share.

6. CoreWeave (CRWV): Valuation, Cash Raise Lighter than Expected as Company Pushes Ahead with IPO

CoreWeave (CRWV US) officially set terms for an IPO on Thursday morning coming in with a valuation and cash raise that was much lower than previously reported.
Furthermore, the underwriters placed a wider-than-normal spread on the range, $47-$55. This insinuates a negotiation process between the buy-side.
The valuation coming in lower than anticipated will allow investors to put money to work at a more attractive risk-reward profile.

7. DN Solutions IPO: OC’s Out, but the Hit-And-Run Setup Post-Listing Is Still in Play

Wild card here is the FSS—they’re eyeing a shadow listing risk for DN Automotive (007340 KS). If they push for a revision, a 2-week delay busts the 135-day limit.
14x PE looks cheap, but comps are shaky—LS Electric’s AI play, Fanuc’s scale advantage, and DMG MORI’s automation pivot all make direct comparisons a stretch.
DN Solutions is a pure-play machine tool name, making comps shaky. This IPO’s shaping up like an LG CNS rerun—solid numbers, fair valuation, but a weak growth story.

8. Judo Capital Placement – Clean up but past Deal Didn’t Do Well

Bain and GIC looking to raise US$130m by selling their remaining stake in Judo Capital (JDO AU).
The deal will be a large one to digest at 30.8 days of the stock’s three month ADV, representing 9.2% of its shares outstanding.
In this note, we will talk about the placement and run the deal through our ECM framework.

9. DN Solutions Pre-IPO – The Positives – Growing Market Share

DN Solutions (298440 KS) (DNS) aims to raise around US$1.1bn in its Korea IPO via selling a mix of primary and secondary shares.
DNS is engaged in the manufacture and sale of machine tools and the business of automation solutions and services related thereto.
In this note, we talk about the company’s past performance.

10. Nanshan Aluminium IPO: Orphaned Security with Margin Risk

Nanshan Aluminium International Holdings (NAI HK) is looking to raise up to US$358m in its upcoming Hong Kong IPO.
NA is a leading high-quality alumina manufacturer in Southeast Asia. The firm sources bauxite domestically in Indonesia and utilizes low-temperature Bayer process.
We have looked at the company’s past performance in our earlier notes. In this note, we discuss latest industry dynamics, conduct a quick peer comparison and discuss the company’s valuation.

Mar 16

Weekly Top Ten Equity Capital Markets – Mar 16, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

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1. Samsung SDI Capital Raise: A Mega Deal Rarely Seen in the Local Market

The discount’s tight, but this near-2-trillion-won raise is a rare mega-deal in Korea, despite the issuance ratio below 20%.
Samsung Electronics is in for 150 billion won, but plenty of supply remains. A smooth clearance? Unlikely. This could drive stock rights costs lower as price discovery unfolds.
The optimal approach is to wait for a decline in rights prices and assess hedge costs through single stock futures (or TRS, if doable), given the shorting restrictions.

2. ECM Weekly (10th Mar 2025) – BYD, Japan Post, Mixue, Sanhua, Chifeng, Nanshan, Goertek, Travel Food

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, Mixue Group (2097 HK) provided some much needed relief to the HK tea chains, Seoul Guarantee Insurance (031210 KS) might not do the same this week.
On the placements front, BYD (1211 HK)‘s jumbo offering has been doing well, while Japan Post Bank (7182 JP) hasn’t been correcting much.

3. Recruit Holdings Placement – Relatively Small US$520m Deal but Momentum Is Weak

An undisclosed seller is looking to raise around US$520m via selling 0.5% of its stake in Recruit Holdings (6098 JP) .
We have covered a number of placements in the stock over the past few years, most of which have ended up doing well.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

4. MIXUE Group (2097.HK) – Updates on Performance Forecast and Valuation Outlook

MIXUE’s IPO debut was stellar. the IPO pricing of HK$202.5/share was indeed conservative. MIXUE is able to obtain more valuation premium space after IPO from a relatively low IPO pricing.
However, concerns on future performance growth remains. Investors need to pay attention to the performance verification. Market sentiment is becoming “overheated”, and the pressure for short-term stock price corrections increases.
We updated our forecast for 2025-2027. If based on P/E of 20-25x, market value is HK$109.4-136.8 billion, HK$122.5-153.2 billion, HK$134.8-168.5 billion based on 2025, 2026 and 2027 net profit, respectively.

5. Initial Thoughts on the Hanwha Energy IPO

Hanwha Energy, which is 100% owned by the Hanwha Group owner family members, has started the process of going public. Hanwha Energy could complete its IPO in 2025/2026.
One of the scenarios involving Hanwa Energy is that once it completes its IPO, it could merge with Hanwha Corporation (000880 KS).
Hanwha Energy generated revenue of 4.7 trillion won (up 20% YoY) and operating profit of 215 billion won (up 306.5% YoY).

6. AvePoint SGX Secondary Listing – Strong Growth and Large Client Base but Unclear Metrics

AvePoint (AVPT US) , a global provider of data security, governance, and resilience, aims to raise around US$300m in its Singapore secondary listing.
As of FY24, AP had over 25,000 customers who rely on its Confidence Platform to prepare, secure, and optimize their critical data across environments.
In this note, we look at its past performance and other deal dynamics that might impact the listing.

7. Chifeng Jilong A/H Trading – Weak Institutional Demand and Probably Close to Fair Value

Chifeng Jilong Gold Mining (600988 CH) , a gold mining company in China, raised around US$363m in its H-share listing in Hong Kong.
It operates six gold mines in Asia and Africa and has been listed on the Shenzhen Stock Exchange since 2004.
We have covered the company and deal background in our previous notes. In this note, we talk about the trading dynamics.

8. Austal Placement: Thematically Hot, Relatively Low Valuation

Austal Ltd (ASB AU) is looking to raise US$157m, with US$125m from a primary placement and the remainder, a secondary placement contingent on the primary being fully subscribed.
The deal will be a large one to digest at 58 days of the stock’s three month ADV, representing 15.3% of its shares outstanding.
In this note, we will talk about the placement and run the deal through our ECM framework.

9. Anjoy Foods Group A/H Listing – A Leader in a Fragmented Industry

Anjoy Foods Group (603345 CH), a quick-frozen food company in China, aims to raise around US$300m in its H-share listing.
AFG was the largest quick-frozen food company in China in terms of revenue in 2023, with a market share of 6.2%, according to the Frost & Sullivan report.
In this note, we look at its past performance and other deal dynamics that might impact the listing.

10. DN Solutions IPO Preview

DN Solutions is getting ready to complete its IPO in Korea in May 2025. The IPO price range is from 65,000 won to 89,700 won.
The book building for the institutional investors will last from 22 to 28 April. The expected IPO offering amount is from 1.14 trillion won to 1.57 trillion won.
The IPO price range is based on DN Solutions’ net profit of 317.4 billion won, P/E of 25.2x, and IPO discount rates of 29.1% to 48.6%.

Mar 09

Weekly Top Ten Equity Capital Markets – Mar 9, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

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1. BYD US$5.2bn Placement – Large Only in Absolute Size, past Deals Have Done Well

BYD (1211 HK) is looking to raise around US$5.2bn via selling 4% additional shares.
The company has undertaken a few deals before and they have ended up performing well.
In this note, we will talk about the placement and run the deal through our ECM framework.

2. Local Brokers Sound Off on 40% IPO Lock-Up—A Major Setup for Offshore Traders

This 40% rule will distort bookbuilding, force down-pricing, choke float post-listing, and amplify volatility.
Offshore investors like us benefit most—cheap IPO pricing with no lock-up. Local brokers see this as a giveaway to foreign funds and pushed back hard last Friday.
FSS won’t budge—40% lock-up is happening. If issues arise post-implementation, they might adjust later.

3. Japan Post Bank US$4bn Deal Updates – Needs to Correct More. Discount Vs Deal Performance Analysis

Japan Post Holdings (6178 JP) (JPH) aims to sell around US$4bn worth of Japan Post Bank (7182 JP) (JPB), trimming its stake to below 50%.
JPH had last sold around US$9bn worth of JPB shares in Mar 2023. That deal had a similar structure and it didn’t end up performing well.
We have looked at the deal dynamics in our previous notes. In this note, we talk about updates and look at discounts vs performance for past secondary deals.

4. JX Advance Metals IPO – Digestable, but Not Really Attractive

JX Advanced Metals (5016 JP)’s parent, ENEOS Holdings (5020 JP), is looking to raise around US$2.5bn via selling more than half of its stake in JXAM in its Japan IPO.
JXAM engages in business activities primarily focused on the development, manufacture and sale of materials made from copper and rare metals, which are used in the semiconductor and ICT fields.
We have covered various aspects of the deal in our previous notes. In this note, we will talk about the IPO pricing.

5. JX Advanced Metals IPO Preview

JX Advanced Metals (5016 JP) is seeking to raise about ¥460 billion in the upcoming IPO on the Tokyo Stock Exchange. The indicative IPO price is ¥862 per share.
The final IPO pricing will be on 10 March. JX Advanced Metals will be listed on 19 March. Eneos is selling as many as 534.9 million shares in the IPO.
The company has a strong customer base. It is a key supplier to TSMC, Samsung, Intel, SK Hynix, and Micron for sputtering targets and high-purity metals.

6. Japan Post Bank (7182 JP) – Not Cheap Enough Vs Others, or Holdings

The Offering of Japan Post Bank (7182 JP) is not taking place the way “the right pattern” would suggest, but last time was kind of special. This time is different.
Last time was a “second IPO” and coincided with a US regional bank crisis. This time the offering is smaller outright, and much smaller as a portion of float.
Pricing is Monday. It hasn’t moved much vs JPH. It needs to move more to be attractive. And there is still a bit of overhang to come.

7. Japan Post Bank (7182 JP): The Current Playbook

Since the offer announcement, Japan Post Bank (7182 JP)/JPB’s shares have declined by 2.5%. On 3 March, JPB completed the ToSTNeT-3 buyback by acquiring 13.3 million shares for JPY20 billion.
To understand JPB’s trading pattern, it is instructive to examine its 2023 offering, Japan Post Insurance (7181 JP)/JPI’s 2019 offering, and Japan Post Holdings (6178 JP)/ JPH’s 2021 offering.
JPB’s shares follow the trading pattern playbook of its 2023 and JPH’s 2021 offerings, in which investors buying the offer were rewarded with positive returns at the payment date.

8. Chifeng Jilong A/H Listing: Why Not Own International Peers Instead?

Chifeng Jilong Gold Mining (600988 CH) , a gold mining company in China, is now looking to raise up to US$419m in its H-share listing in Hong Kong.
It operates six gold mines in Asia and Africa and has been listed on the Shenzhen Stock Exchange since 2004.
We have covered the company and deal background in our previous notes. In this note, we talk about the IPO pricing.

9. JX Advanced Metals IPO Valuation Analysis

On 3 March, JX Advanced Metals (5016 JP) announced that the IPO will be offered at ¥810 to ¥820 per share (down from the initial indicative price of ¥862 per share).
Our base case valuation per share is ¥863 which is 5.8% higher than the mid-point of the expected IPO price range of ¥810 to ¥820 per share.
Given the lack of upside, we have a Negative view of this JX Advanced Metal IPO.

10. JX Advanced Metals (5016 JP) IPO: Price Range Is Fair

JX Advanced Metals (5016 JP) has announced an IPO price range of JPY810-820 per share, which is 6.0%-4.9% below the IPO reference price range of JPY862.
Relevant notes – JX Advanced Metals (5016 JP) IPO: The Bull Case, JX Advanced Metals (5016 JP) IPO: The Bear Case and JX Advanced Metals (5016 JP) IPO: Valuation Insights.
My SoTP valuation of JPY860 is modestly above the IPO price range, suggesting that the price range is fair.

Mar 02

Weekly Top Ten Equity Capital Markets – Mar 2, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

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1. Japan Post Bank (7182) – Report of ¥600bn Offer Would Lead to Index Flows, and a New Future

On 22-February-2023 a Reuters suggested JPH (6178) had “started talks” to sell a big stake in JP Bank (7182). Five days later they announced a complicated deal discussed here.
Today, an article suggests Japan Post Holdings (6178 JP) will sell ¥600bn in Japan Post Bank (7182 JP) to get ownership below 50% (as with JPI). A buyback might appear.
JPB has issued a “there’s smoke” release. Like last time. Expected unwind of known overhang means minimal surprise here. The question is whether they could surprise (big buyback? capital plan?).

2. Japan Post Bank (7182) – Missed Opportunity Leaves Likely Shadow Overhang

The Offering comes in lighter than expected. The buyback is smaller than expected. The resultant overhang is larger than expected.
The index flows around the delivery date are well-understood. They are what they are.
Shareholder structure is such that this is not quite a new IPO but needs a lot of new shareholders. BUT… there is one redeeming feature one should not ignore.

3. Japan Post Bank (7182 JP): A US$4.2 Billion Secondary Offering

Japan Post Bank (7182 JP) has announced a secondary offering of up to 416.1 million shares (including overallotment), worth around US$4.2 billion.
The offering includes a ToSTNeT-3 and an on-market buyback. Including the overallotment, Japan Post Holdings (6178 JP) will reduce its stake from 61.50% to 50.00% of voting rights.
Understanding the potential offer price requires looking at JPH’s past sales and recent large Japanese placements. The pricing date is likely 10 March.

4. We Doctor Holdings IPO Preview: Explosive Growth and Narrowing Losses, The Right Time for an IPO

By Andrei Zakharov

We Doctor Holdings, a top-tier provider of AI-enabled medical services and digital platform which connects hospitals, doctors, and pharmacies, plans to go public in Hong Kong.
We Doctor Holdings has raised ~$1.5B to date from investors, including Tencent, 5Y Capital, Goldman Sachs, Hillhouse Capital, AIA, and Qiming Venture Partners, among others.
The Hangzhou-based healthtech company has delivered explosive revenue growth of 107% y/y for the six months ended Jun-24.

5. Japan Post Bank US$4bn Placement – Smaller Deal, Similar Structure, Might Yield Similar Results

Japan Post Holdings (6178 JP) (JPH) aims to sell around US$4bn worth of Japan Post Bank (7182 JP) (JPB), trimming its stake to below 50%.
JPH had last sold around US$9bn worth of JPB shares in Mar 2023. That deal had a similar structure and it didn’t end up performing well.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.

6. Japan Post Bank (7182 JP): Japan Post Holding (6178 JP)’s Rumoured Offering

Reuters reports that Japan Post Holdings (6178 JP) (JPH) is planning to sell shares in Japan Post Bank (7182 JP) (JPB), which could total some JPY600 billion (US$4.0 billion).
The potential offering would align with JPH’s stated goal of reducing its equity interest in JPB to 50% or less by FY 2025.
The potential offering is relatively smaller than JPB’s 2023 offering. Compared to its peers, JPB’s valuation remains undemanding.

7. Korea FSS Shakes Up Rights Offerings – Special Review Rule Now Live

By Shifara Samsudeen, ACMA, CGMA, LightStream Research

With this new rule, the FSS is flagging shaky rights offerings early, signaling a likely correction request—and often, the first step toward the deal getting axed.
Spot the red flags early and use the window before the FSS drops the hammer to position for a reversal play.
The FSS’s early notice makes a reversal likely as traders bet on the deal getting nuked after the initial disclosure drop.

8. JX Advance Metals IPO: Business Transformation Underway

JX Advance Metals, a unit of Japanese oil giant ENEOS plans to list on the Tokyo Stock Exchange. ENEOS will sell down a part of its stake and raise US$3.0bn.
Having split from the parent ENEOS, JX Advanced Metals (5016 JP) is still on a business transformation and the company’s earnings show cyclicality.
The company’s earnings declined in FY03/2024, however, 9MFY03/2025 results show that earnings are on a recovery driven by improving demand coupled with structural reforms undertaken by the company.

9. Premier Energies US$825m IPO Lockup – The Largest Seller in the IPO Is Sitting on 48x Gains

Premier Energies raised around US$337m after pricing the deal at the top end of the range in Sep 2024. Its IPO linked lockup is set to expire soon.
Premier Energies is a manufacturer of solar photovoltaic (PV) cells, and solar modules. It also executes engineering, procurement, and construction (EPC) projects and provides follow-up operation and maintenance (O&M) services
In this note, we will talk about the lockup dynamics and possible placement.

10. Pre-IPO MIXUE Group (2097.HK) – The IPO Is Attractively Priced

MIXUE’s valuation should be higher than peers such as Guming and Baicha Baidao Industrial. A comfortable valuation range is 18-20 P/E, higher than peers. So, the IPO pricing is attractive.
2024 full-year net profit is HK$4.8 billion.Net profit could reach HK$5.7 billion (up 19% YoY), HK$6.6 billion (up 16% YoY), HK$7.6 billion (up 15% YoY) in 2025, 2026, 2027, respectively.
Since Nongfu Spring’s revenue scale/net profit margin is higher than MIXUE, MIXUE’s valuation should be lower than Nongfu Spring. Investors need to be alert to the post-IPO performance growth pressure.

Feb 23

Weekly Top Ten Equity Capital Markets – Feb 23, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

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1. Goodman Group (GMG AU) – Big Placement, Big Index Flow But…

After a minor “disaster” in a secondary placement in December, this morning industrial/infrastructure (including data centres) REIT/etc Goodman Group (GMG AU) announced results and an A$4bn primary offering.
The large offering comes at a 6.9% discount, and For a combination of reasons, there is a LOT of buying to do with index tracking over the next short while.
But that too has complications. Some is immediate. Some a little delayed. A bunch may be supplied by short sellers. There is one easy trade. A few more complicated.

2. Sony To Sell Down SRE Holdings (2980 JP) Block – AI-Related Growth Stock Should See Support

SRE Holdings Corp (2980 JP) does a business in AI Cloud&Consulting for the real estate, finance, and Life & Healthcare business. Sony Corp (6758 JP) is selling a stake.
The offering is for about US$50mm assuming a 10% discount today’s close. It is not clear how much this was expected but there is a decent-sized short position.
The stock has its ups and downs, and recently decided it liked Q3 earnings and guidance. That bodes well for the offering.

3. JX Advance Metals Pre-IPO – The Positives – Transforming

JX Advance Metal’s (JXAM) parent, ENEOS Holdings (5020 JP), is looking to raise around US$2.6bn via selling more than half of its stake in JXAM in its Japan IPO.
JXAM engages in business activities primarily focused on the development, manufacture and sale of materials made from copper and rare metals, which are used in the semiconductor and ICT fields.
In this note, we talk about the positive aspects of the deal.

4. Goodman Group Placement – Large Deal, Doesn’t Seem Well Flagged, Not Particularly Exciting

Goodman Group (GMG AU) is looking to raise around US$2.5bn to partly fund its data centre expansion plans.
Goodman’s shares have performed exceptionally well over the past year, driven by its pivot towards data centers.
In this note, we will talk about the placement and run the deal through our ECM framework.

5. JX Advance Metals Pre-IPO – The Negatives – Isn’t There Yet

JX Advance Metal’s (JXAM) parent, ENEOS Holdings (5020 JP), is looking to raise around US$2.6bn via selling more than half of its stake in JXAM in its Japan IPO.
JXAM engages in business activities primarily focused on the development, manufacture and sale of materials made from copper and rare metals, which are used in the semiconductor and ICT fields.
In this note, we talk about the not-so-positive aspects of the deal.

6. JX Advanced Metals (5016 JP) IPO: The Bull Case

JX Advanced Metals (5016 JP) is a global leader in the semiconductor and ICT materials sector. It is seeking to raise up to US$2.6 billion.
JXAM is a wholly owned subsidiary of ENEOS Holdings (5020 JP). After the listing, it is expected to become an equity-method affiliate of ENEOS.
The bull case rests on its leading market position, focus businesses’ improving performance, improving profitability, shift to cash generation, and low leverage.

7. MIXUE Group IPO: The Leading Player that Justifies a Premium

By Osbert Tang, CFA

Mixue Group (MIX HK) has a whopping market share of 32.7% in 2023, based on number of cups sold. It also has the highest profit in the sector.
With a strong profit record and net cash, it is a leader that captures industry growth. Its extensive network targets low-tier cities’ potential and the franchise model drives expansion.
It justifies trading on a premium to sector average PER of 19.6x for FY25. If aligning P/B with ROE on the best-fit line, it should be priced at 5.1x pre-money.

8. Sotetsu Holdings (9003) – Crossholders Sell Down – Big ADV Multiple, Low Earnings Multiple, Boring

Sotetsu Holdings (9003 JP) today announced a large-ish secondary equity offering – 10% of shares out and 20% of Max Real World Float.
This is crossholders selling down roughly 30% of what they own. Sotetsu announced a buyback for a quarter of the offering over the next six months.
The shareholder structure and distribution within Max Real World Float tells you all you need to know.

9. Tsumura (4540 JP) Equity Offering – Easy To Swallow, and Not Expensive

Tsumura & Co (4540 JP) shocked everyone a year ago when they announced an immediate large price hike across the board for its kampo medicines. The stock was +35% immediately.
It did not fall back. Now the stock is up 60% from a year ago and earnings are too. It’s still <10x PER. Now we get a ¥10bn secondary offering.
It’s 12 days of ADV but not super heavy, and there is a buyback on the back end.

10. Hexaware Technologies IPO Trading – Very Strong Anchor, Very Poor Overall