Daily BriefsECM

Daily Brief ECM: Leapmotor IPO – Peers Recent Down Move Won’t Help and more

In today’s briefing:

  • Leapmotor IPO – Peers Recent Down Move Won’t Help
  • Leapmotor IPO: Valuation Insights
  • WCP IPO: Order Table, Revised Terms, & Passive Flow Schedule
  • Leapmotor IPO: Stuck in the Middle
  • Socionext Pre-IPO Peer Comparison – Margins Have Been Weaker than Peers, but Gap Has Been Closing
  • Onewo Space-Tech IPO Valuation Analysis
  • CALB IPO: What’s It Worth?
  • Mankind Pharma Pre-IPO Tearsheet
  • Tencent Music – Earnings Show Recovery but Do Not Rush to Make an Entry
  • GoDaddy Inc: Initiation of Coverage – Business Strategy

Leapmotor IPO – Peers Recent Down Move Won’t Help

By Sumeet Singh

  • Leapmotor (LM) aims to raise around US$1.0bn 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 run the deal through our ECM framework and talk about valuations.

Leapmotor IPO: Valuation Insights

By Arun George


WCP IPO: Order Table, Revised Terms, & Passive Flow Schedule

By Sanghyun Park

  • WCP’s institutional subscription rate was 33.28 to 1, one of the lowest for an IPO this size. And nearly all orders sit below the lower end.
  • WCP set the price at ₩60,000, even lower than the floor, at an implied market cap of ₩2T. And the issuer also reduced the offering volume from 9M to 7.2M. 
  • Passive flows equivalent to about 3% of SO will likely flow into WCP by March next year. It is substantial enough to consider designing a flow trade setup.

Leapmotor IPO: Stuck in the Middle

By Shifara Samsudeen, ACMA, CGMA

  • Leapmotor (2007699D HK) is a leading smart EV company in China that designs and builds EVs. The company develops key hardware, software and all electronic components of the vehicles internally.
  • The company has filed for an IPO on the HKEx and plans to raise about US$1bn through the IPO.
  • In this insight, we analyse the company’s financials to understand the key reason behind the absence of gross profit margins compared to other players in the market.

Socionext Pre-IPO Peer Comparison – Margins Have Been Weaker than Peers, but Gap Has Been Closing

By Clarence Chu

  • Socionext (6526 JP) is looking to raise up to US$285m in its Japan IPO.  
  • Socionext is a fabless semiconductor provider which commenced operations after integrating the system on a chip (SoC) businesses of Fujitsu Semiconductor Limited and Panasonic Holding Corporation.
  • In this note, we undertake a peer comparison with its international peers, which have a similar fabless business model-type to that of Socionext’s

Onewo Space-Tech IPO Valuation Analysis

By Douglas Kim

  • Onewo Space-Tech (ONEWO HK) has provided its IPO price range of HK$47.1 to HK$52.7 a piece in the IPO offering of 116.74 million shares, representing 10% of its outstanding shares.
  • Our base case valuation of Onewo Spacetech is HKD27.7 per share, which represents 41% lower than the low end of the IPO price of HKD47.1 per share. 
  • Our valuation analysis suggests a range of HKD25 per share to HKD33.5 per share. We would AVOID this deal due to the much lower target price relative to IPO price.

CALB IPO: What’s It Worth?

By Arun George


Mankind Pharma Pre-IPO Tearsheet

By Ethan Aw

  • Mankind Pharma Ltd (6596876Z IN) is looking to raise about US$1bn in its upcoming India IPO. The deal will be run by Kotak, Axis Capital, IIFL Securities, Jefferies and JPM. 
  • Mankind Pharma (MK) is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various therapeutic areas, as well as several consumer healthcare products. 
  • It is mainly focused on the domestic market. 18 of its brands were among the 300 highest selling brands in the Indian Pharmaceutical Market (IPM), according to IQVIA.

Tencent Music – Earnings Show Recovery but Do Not Rush to Make an Entry

By Shifara Samsudeen, ACMA, CGMA

  • TME’s shares are due to start trading on HKEx tomorrow once it carries out a secondary listing by introduction. The company neither issues new shares nor raise any proceeds.
  • The company’s earnings growth has started decelerating with having to end exclusive music licensing agreements with WMG, UMG and Sony Music a year ago as part of a SAMR probe.
  • TME’s 2Q2022 results show recovery in its earnings, however, we would recommend waiting until regulatory crackdown on tech platforms eases off.

GoDaddy Inc: Initiation of Coverage – Business Strategy

By Baptista Research

  • This is our first report on cloud-based solutions provider, GoDaddy.
  • The company is one of the largest players in the domains, hosting and other related cloud-based solutions space across the globe.
  • This quarter, the company launched its beta WooSaas solution, allowing it to reach larger customers.

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