Daily BriefsECM

Daily Brief ECM: JD Industrials IPO: The Bear Case and more

In today’s briefing:

  • JD Industrials IPO: The Bear Case
  • Changjiu Digital Technology Pre-IPO Tearsheet
  • Almac IPO Valuation Analysis
  • JD Industrials Pre-IPO – Initial Thoughts on Valuation
  • Growatt IPO: Peer Comparison and Thoughts on Valuation
  • Interactive Strength Inc. – Investment Thesis
  • Lear Corporation: The I.G. Bauerhin Acquisition Upside & Other Drivers

JD Industrials IPO: The Bear Case

By Arun George

  • JD Industrials (2231713D CH)/JDI, a leading industrial supply chain technology and service provider in China, has filed for a US$1bn IPO. JD.com Inc (ADR) (JD US) owns a 77.95% stake.
  • In JD Industrials IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
  • The key elements of the bear case rest on slowing SME growth, declining key accounts take rate and gross margin, unnecessary factoring and transfer of most cash for treasury management.

Changjiu Digital Technology Pre-IPO Tearsheet

By Ethan Aw

  • Changjiu Digital Technology (CDT CH) is looking to raise about US$150m in its upcoming HK IPO. The deal will be run by Citic Securities and ICBC.
  • Changjiu Digital Technology (CDT) provides comprehensive automobile digital risk management services and automobile dealership operation management services in China. 
  • According to CIC, it was the largest digital risk management service provider in China’s automobile sales and distribution industry in terms of revenue as of FY21 (31st Dec 2021).

Almac IPO Valuation Analysis

By Douglas Kim

  • Our target price of Almac is 58,573 won per share, which is 30% higher than the high end of the IPO price range of 45,000 won. 
  • Our target price is based on 14.8x P/E using our estimated net profit of 25.4 billion won in 2024. 
  • Almac ranks first in domestic market share (Korea) in the aluminum extruded module cases that protect batteries from external shocks.

JD Industrials Pre-IPO – Initial Thoughts on Valuation

By Sumeet Singh

  • JD Industrials  is looking to raise about US$1bn in its upcoming HK IPO. 
  • JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
  • We have looked at the company background and undertaken a peer comparison in our previous notes. In this note, we will talk about valuations.

Growatt IPO: Peer Comparison and Thoughts on Valuation

By Shifara Samsudeen, ACMA, CGMA

  • Growatt Technology (1833969D CH) has downsized it HKEx IPO to about US$400m and in this insight, we have compared the company’s financials against other listed PV inverter players.
  • Our peer analysis reveals that Growatt’s top line has grown at much higher rates compared to No. 1 player Sungrow whose margins were well below the company.
  • By looking at valuation multiples of listed peers, it seems that the company could easily command a valuation of more than US$5bn if it is valued in line with peers.

Interactive Strength Inc. – Investment Thesis

By Baptista Research

  • This is our first report on Forme and we look to provide a detailed account of the various drivers that will be responsible for the company’s growth in the coming years.
  • Its top-line revenue has increased from a low starting point, while operating losses, operating cash flows, and EBITDA loss have all decreased.
  • This is unlike many large incumbents like Peloton who have struggled with a high cash burn for many years.

Lear Corporation: The I.G. Bauerhin Acquisition Upside & Other Drivers

By Baptista Research

  • Lear had a solid start to the year, with an all-around beat in the recent quarterly result.
  • The management intends to start making full seats with essential thermal components for these vehicles.
  • Besides, the company acquired IGB, which will be essential to growing its Thermal Comfort Systems business and boosting its market share and profits in the seating industry.

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