In today’s briefing:
- EB Event Trade Setup: HD KSOE Lining up a New Deal with HD Hyundai Heavy as the Underlying
- FWD IPO – Valuation Down but Its Difficult to Get Excited About It
- FWD Group (1828 HK) IPO: Valuation Insights
- FWD IPO Valuation: Intangible Assets Is the Key (Vs. Peers)
- Kalpataru Ltd IPO – Cemented by Debt Repayment
- Jefferson Capital Inc (JCAP): Value Investors Bid Up Insolvency Account Manager IPO
EB Event Trade Setup: HD KSOE Lining up a New Deal with HD Hyundai Heavy as the Underlying
- HD KSOE plans a second EB similar to earlier this year: a zero-coupon, 2% HD Hyundai Heavy stake with 13–15% premium, aiming to raise around ₩850 billion.
- With Korea’s Commercial Act revision expected by July 4, EB deals risk director liability; HD KSOE aims to raise cash now before stricter rules limit easy board-approved EB issuance.
- Targeting a short in HD Hyundai Heavy triggered by HD KSOE’s board approval before July 4; consider hedging with a long position in HD KSOE due to ongoing sector catalysts.
FWD IPO – Valuation Down but Its Difficult to Get Excited About It
- FWD Group, a pan-Asian life insurer founded by Richard Li, aims to raise around US$442m in its HK IPO.
- FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia.
- We looked at the company’s past performance in our previous notes. In this note we talk about the IPO pricing.
FWD Group (1828 HK) IPO: Valuation Insights
- FWD Group Holdings (1828 HK) has launched its IPO to raise US$442 million at HK$38.00 per share. The shares will be listed on 7 July.
- I previously discussed the IPO in FWD Group IPO: The Investment Case.
- The IPO price implies a discount to peers’ multiples. A discount is warranted as FWD is smaller than its peers. FWD is fairly valued at the IPO price.
FWD IPO Valuation: Intangible Assets Is the Key (Vs. Peers)
- Based on HKD 38 offer price per share, FWD has a market capitalization of USD 6.1 billion, assuming the overallotment option is not exercised.
- FWD’s P/FY’24 pro forma BV represents a significant discount to peers’ trading P/FY’24 BV since it has higher-than-peers intangible assets.
- P/EV might be a fairer approach as it excludes intangible assets. On this basis, FWD valuation almost has no discount.
Kalpataru Ltd IPO – Cemented by Debt Repayment
- Kalpataru Limited (KTARU IN) is looking to raise about US$184m in its upcoming India IPO.
- Kalpataru (KL) is an integrated real estate developer involved in identification and acquisition of land, planning, designing, execution, sales, and marketing of its projects.
- In this note, we take a quick look at the company’s past performance and the IPO valuations.
Jefferson Capital Inc (JCAP): Value Investors Bid Up Insolvency Account Manager IPO
- Jefferson Capital priced a full-size deal of 10.0mm shares at $15.00 (low-end of the range) and opened at $19.00 for a gain of 26.7% at open.
- The IPO was marketed at just 5x 2026 earnings projections, which is extraordinarily cheap to current public competitors.
- We feel that the “interest” in this IPO may tail off and the stock’s price will be performance driven based upon subsequent earnings reports.
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