In today’s briefing:
- Leapmotor IPO – Weak Demand but Concentrated Allocation
- Leapmotor IPO: Trading Debut
- Lawson Confirms Seijo Ishii IPO
- Oravel Stays (Oyo) Pre-IPO – Addendum Updates – Don’t Let the +ve EBITDA Mask Its Underlying Issues
- TIGER (FnGuide) Top 10 ETF Rebalancing: Noteworthy Changes Emerging
- Leapmotor IPO: Thoughts on First Day Trading
- Selamat Sempurna (SMSM IJ) – Filter Me Please
- Ad-Based Streaming: Are We Sure This Is Netflix’s Panacea (Or Disney?)
- BorgWarner Inc: The Rhombus Energy Acquisition & Other Drivers
Leapmotor IPO – Weak Demand but Concentrated Allocation
- Leapmotor (9863 HK) raised around US$800m in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.
- As of end Jun 22, it had delivered a total of 104,829 cars with most of its sales coming from its mini units, T03.
- In this note, we will talk about the demand for the deal and other trading dynamics.
Leapmotor IPO: Trading Debut
- Leapmotor (9863 HK) priced its H Share at HK$48.00 per share to raise net proceeds of HK$6,057.4 million (US$772 million). The H Share will start trading tomorrow.
- The H Shares of peers posted no first-day gains and are currently below the listing prices. Market sentiment on peers has remained weak since the release of the prospectus.
- Leapmotor, at best, should trade in line with median peer multiples. Leapmotor is fairly valued at the IPO price. We continue to remain on the sidelines.
Lawson Confirms Seijo Ishii IPO
- Lawson Inc (2651 JP) has confirmed it will list its upscale supermarket subsidiary, Seijo Ishii early next year.
- Seijo leads in premium supermarket retailing and is growing as fast as the wealth market does, with plenty of room left to expand.
- Seijo Ishii is now building its own production and import capabilities to increase originality and could begin to challenge even some of their larger rivals.
Oravel Stays (Oyo) Pre-IPO – Addendum Updates – Don’t Let the +ve EBITDA Mask Its Underlying Issues
- Oyo (1698548D IN) is looking to raise around US$700m in its upcoming India IPO. The IPO will consist of both a primary and secondary portion.
- Oyo runs a digital platform that serves as a hotel and home aggregator between patrons, which include owners and lessors, and customers, such as travelers and guests booking for accommodation.
- Since our last notes, Oravel Stays (Oyo) had filed its addendum, containing both its full-year performance for FY22, and its most recent 1Q23 performance (period ending Jun 2022).
TIGER (FnGuide) Top 10 ETF Rebalancing: Noteworthy Changes Emerging
- There was a substantial increase in the AUM even in the current market condition. More funds must have sought blue chip stocks as relatively safe assets in this volatile market.
- Celltrion and LG Energy Solution will likely replace KB Financial and Shinhan Financial. On the other hand, POSCO is out of the race even with a +5%p float rate change.
- LG Energy also has an up-weight event of the KOSPI 200. Since these passive flow events have an interval of only one day, we expect a fairly concentrated passive impact.
Leapmotor IPO: Thoughts on First Day Trading
- Leapmotor (9863 HK) has priced its IPO at HK$48 per share, at the lower end of the indicative IPO price range of HK$48-62 per share.
- At the above price, the company raised net proceeds of approx. HK$6,057.4m at a market capitalisation of HK$54.9bn and a post-money EV of HK$45.9bn.
- The HK offering was undersubscribed while the international offering was initially oversubscribed by 2.33x and the unsubscribed portion of the HK offering was later reallocated to international offering.
Selamat Sempurna (SMSM IJ) – Filter Me Please
- Selamat Sempurna (SMSM IJ) is one of the most interesting industrial companies in Indonesia but also the largest filter manufacturer in South-East Asia for heavy equipment and autos.
- The company mainly produces filters for the replacement market under its Sakura brand, with Indonesia being the major growth driver along with the US but it exports to 120 countries.
- The company has an almost second-to-none track record for growth in both profits and dividends, with current valuations looking attractive.
Ad-Based Streaming: Are We Sure This Is Netflix’s Panacea (Or Disney?)
- Netflix has had a slew of upgrades recently on bullish estimates for its coming advertising supported tier…with the upgrades buying into Netflix’s exorbitant CPM demands.
- We think advertising supported is revenue accretive for the US and Canada, but question how this works out internationally.
- Disney is far better positioned for AVOD. It has a developed ad infrastructure, owns all its content, and has better brands to sell advertising against.
BorgWarner Inc: The Rhombus Energy Acquisition & Other Drivers
- BorgWarner’s second quarter performance was strong and it delivered an all-around beat despite a slight decline in global output.
- The company outperformed in North America and Europe and had sales of nearly $3.8 billion, an increase of around 7%.
- The first line of the company’s heavy-duty electric trucks, which is anticipated to be announced in 2024, will use this battery system.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
