In today’s briefing:
- Bloks Group (325 HK): Bumper Listing; Index Inclusion Timeline
- Seven & I Holdings (3382 JP): The MBO Is Still Alive and Kicking
- Coca-Cola Europacific Partners (CCEP LN): Halfway In F100
- Poor Performance Before UK Lawmakers Is SHEIN’s Latest Stumble on Journey To London (Or HK?) IPO
- ECM Weekly (13th Jan 2025) – LG CNS, Bloks, Guming, Crizac, Shift Up, Adani, Wuxi
- Smart Share Global (EM US)’s MBO NBIO
- “Danger Past, God Forgotten” How Long Will the Effect of TSE’s Request Last?
Bloks Group (325 HK): Bumper Listing; Index Inclusion Timeline
- Bloks Group (1850960D CH) was massively oversubscribed, traded 82% higher on Friday and closed its listing day 40% higher than the IPO price.
- Bloks Group (1850960D CH) now has a full market cap of US$2.7bn. However, lock-ups and cornerstone allocations result in a much lower free float.
- Index inclusions could take place in August and September, but the passive buying is a fraction of the number of shares that will come off lock-up expiry in early July.
Seven & I Holdings (3382 JP): The MBO Is Still Alive and Kicking
- On 10 January, Bloomberg reported that Apollo is considering an equity commitment of JPY1.5 trillion in the Seven & I Holdings (3382 JP) MBO.
- Securing financing is a key challenge for the MBO. Apollo’s involvement suggests a shift to a higher mix of equity vs debt, which should ease concerns about securing debt financing.
- The article suggests that the MBO valuation could be lower than previously reported. However, 7&i’s underlying value supports a JPY8 trillion MBO valuation (market cap).
Coca-Cola Europacific Partners (CCEP LN): Halfway In F100
- Coca-Cola Europacific Partners (CCEP LN) was transferred on 15 November 2024, to the index’s eligible FCA listing category under the new regime.
- The security needs to pass the liquidity test in both January and February 2025 to be assigned a UK nationality and become eligible for the March 2025 review.
- The security has already passed the liquidity threshold by ~20% in November and December thus it has a solid probability of being added to F100 at the March 2025 review.
Poor Performance Before UK Lawmakers Is SHEIN’s Latest Stumble on Journey To London (Or HK?) IPO
- SHEIN’s general counsel frustrated UK lawmakers by refusing to answer certain questions
- It’s the latest in a series of potential obstacles that could derail a planned London IPO
- Add growing concerns over cotton supply chain & new threat from Amazon to existing risks
ECM Weekly (13th Jan 2025) – LG CNS, Bloks, Guming, Crizac, Shift Up, Adani, Wuxi
- 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, Bloks Group picked up where Mao Geping Cosmetics had left off.
- On the placements front, there were selldowns in Adani Wilmar (AWLTD IN) and WuXi XDC Cayman (2268 HK). We also looked at Shift Up (462870 KS) lockup release.
Smart Share Global (EM US)’s MBO NBIO
- Back on the 6th January, Smart Share Global (EM US), the largest provider of mobile device charging services in China, announced a preliminary non-binding proposal.
- A consortium led by Mars Guangyuan Cai, Chairman and CEO, collectively holding 63.4% of the voting rights, have made an Offer at US$0.625/share (US$1.25/ADS), a 74.8% premium to last close.
- Should a definitive agreement be inked, this is done. The risk to the trade, as with many US-listed China plays, is one of timing. Trading at a 26.6% gross spread.
“Danger Past, God Forgotten” How Long Will the Effect of TSE’s Request Last?
- The improvement in ROA was not as large as that of ROE, which raises concerns that the improvement in profitability may be running out of steam.
- Improvements in corporate governance in 2024 were even lower than in 2023. The repetitive loss of enthusiasm after danger past is seen in % Independent Directors, Nomination/Compensation Committee, etc.
- The reason why stock valuations little increased despite Foreign Ownership’s 2024 increase might have to do with the fact that improvements in corporate governance have not spread to all companies.
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