In today’s briefing:
- Cao Cao Pre-IPO: Grossly Overvalued
- CaoCao IPO (2643 HK): Valuation Insights
- MakeMyTrip Placement – Basically a Selldown by Trip.com
- Foshan Haitian: Upsized at Top Price. Near Term Upside, Long Term Value Play.
- Foshan Haitian Flavouring & Food Company Hong Kong IPO Valuation Analysis
- CaoCao IPO: Improving Financials but In Need of Cash
- Loob Berhad Pre-IPO Tearsheet
- Pre-IPO Anjoy Foods Group (PHIP Updates) – Thoughts on Performance Forecast and IPO Valuation
- Sany Heavy Industries A/H Listing – Has Suffered Recently, Showing Signs of Stabilizing
Cao Cao Pre-IPO: Grossly Overvalued
- CaoCao (2643 HK) is looking to raise up to $236m in its upcoming Hong Kong IPO.
- It is a ride hailing platform in China originally incubated by Geely Group connecting passengers and drivers to deliver consistent and high-quality ride experiences.
- In this note, we examine the IPO dynamics, and look at the firm’s valuation.
CaoCao IPO (2643 HK): Valuation Insights
- CaoCao (2643 HK) has launched its IPO to raise US$236 million at HK$41.94 per share. The shares will be listed on 25 June.
- I previously discussed the IPO in CaoCao IPO: The Bull Case and CaoCao IPO: The Bear Case.
- In this note, I present my forecasts and discuss valuation. My analysis suggests that CaoCao is at best fairly valued at the offer price. Therefore, avoid the IPO.
MakeMyTrip Placement – Basically a Selldown by Trip.com
- Makemytrip Ltd (MMYT US) is looking to raise upto US$2.66bn via an equity combo of a 14m share selldown, which could raise around US$1.41bn and US$1.25bn five-year put-three convertible bonds.
- The company plans to use the proceeds to buy back Class B shares from Trip.com to lower Trip.com’s voting power in MakeMyTrip to 19.99%.
- In this note, we run the deal through our ECM framework and comment on deal dynamics.
Foshan Haitian: Upsized at Top Price. Near Term Upside, Long Term Value Play.
- Foshan Haitian has priced its Hong Kong offer at the top end (HKD36.3/share) and upsized it to 279 million shares, raising a strong HKD10.1 billion (USD1.3 billion).
- With a massive 696x oversubscription and nearly half the deal secured by cornerstone investors, the stock could see a lively debut when it lists on June 19th.
- We believe Foshan Haitian Flavouring (3288 HK) lacks a clear catalyst for growth and hence the growth expectations built into its Hong Kong pricing may prove difficult to materialise.
Foshan Haitian Flavouring & Food Company Hong Kong IPO Valuation Analysis
- On 17 June, Bloomberg reported that Foshan Haitian Flavouring & Food Company has raised HK$10.1 billion after a strong remand for its shares to be listed in Hong Kong.
- We estimate the company to generate revenue of 29.4 billion RMB (up 9.2% YoY) and net profit of 6.8 billion RMB (up 7.1% YoY) in 2025.
- Our valuation analysis suggests that Foshan Haitian is undervalued. Our base case valuation suggests implied market cap of 286 billion CNY, which represents 25% higher than current levels.
CaoCao IPO: Improving Financials but In Need of Cash
- Backed by Geely Auto (175 HK) , CaoCao (2643 HK) is a ride-hailing platform operating in China and has filed for an IPO on the HKEx to raise around US$237m.
- The company’s revenues have seen significant growth with expanding into new cities, while it has managed to generated gross margins and reduce operating losses.
- However, CaoCao’s balance sheet is highly leveraged with borrowings accounting for 1.77x of total assets and in dire need of cash to grow its business and repay debt.
Loob Berhad Pre-IPO Tearsheet
- Loob Berhad (LB) is looking to raise about US$150m in its upcoming Malaysia IPO. The deal will be run by Maybank and AmInvestment bank.
- It’s the largest brand owner by number of stores in the F&B industry in Malaysia, as per the IMR Report. LB has two core brands, namely Tealive and Bask Bear.
- Mainly operates directly-owned stores, with 979 Tealive stores (547 corporate stores, 400 franchised stores, and 5 licensed stores) and 135 Bask Bear stores (129 corporate stores and 6 licensed stores).
Pre-IPO Anjoy Foods Group (PHIP Updates) – Thoughts on Performance Forecast and IPO Valuation
- With the outbreak of the Middle East war, Anjoy would face rising costs due to hyperinflation. Together with the sluggish consumption, 2025 performance growth of Anjoy would be under pressure.
- The price war caused by overcapacity and increasing competition in the industry has forced companies to increase their promotional efforts, resulting in downward pressure on profit margin.
- We shared our forecast for next three years. Valuation of Anjoy could be lower than Yihai (1579 HK) and Qianweiyangchu Food (001215 CH), but could be higher than the industry average.
Sany Heavy Industries A/H Listing – Has Suffered Recently, Showing Signs of Stabilizing
- Sany Heavy Industry (600031 CH), aims to raise around US$1.5bn in its H-share listing.
- Sany Heavy Industry was the world’s third largest and China’s largest construction machinery company in terms of construction machinery’s cumulative revenue from 2020 to 2024, according to Frost & Sullivan.
- In this note, we look at its past performance and other deal dynamics that might impact the listing.
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