In today’s briefing:
- LG Electronics India IPO: The Bear Case
- Chagee IPO: Is It Worth the Risks? Peer Comparison and Valuation Analysis.
- Lotte Global Logistics IPO – Thoughts on Peer Comp and Valuation
- Pre-IPO BenQ BM Holding (PHIP Updates) – Some Points Worth the Attention
LG Electronics India IPO: The Bear Case
- LG Electronics India (123D IN)/LGEIL, a subsidiary of LG Electronics (066570 KS), aims to raise up to US$1.5 billion through a secondary offering (15% of outstanding shares).
- In LG Electronics India IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The bear case rests on bottom-quartile revenue growth, revenue decline in the largest product category, dividends to the parent far exceeding FCF and significant share overhang.
Chagee IPO: Is It Worth the Risks? Peer Comparison and Valuation Analysis.
- Chagee Holdings (CHA US) ‘s IPO valuation discount to its peers, including HK-listed tea-beverage players as well as US-listed China-based coffee-beverage player, suggest a strong potential upside on listing.
- US Investor concern over impact of tariffs and caution due to lingering memories of the Luckin Coffee scandal could translate to higher risk premium for the stock.
- Expect Chagee to trade at a discount to budget beverage peers like Mixue Group (2097 HK) given its limited room for network expansion within China and likely slower overseas growth.
Lotte Global Logistics IPO – Thoughts on Peer Comp and Valuation
- Lotte Global Logistics (LGG KS) aims to raise around US$140m in its Korea IPO via selling a mix of primary and secondary shares.
- Lotte Global Logistics is a logistics and shipping company engaged in a comprehensive logistics service business including courier service, land transportation, 3PL, port loading and unloading, and international logistics.
- In our previous note, we looked at the firm’s past performance. In this note, we talk about the IPO valuations.
Pre-IPO BenQ BM Holding (PHIP Updates) – Some Points Worth the Attention
- The expansion space of BenQ is severely limited as the market has been saturated in Jiangsu Province. Due to DRG, future revenue/net profit growth would continue to be under pressure.
- Low profit margin of general hospitals is a common problem in this industry due to pain points of business model.It’s difficult to achieve improvement.Investors need to be aware of this.
- BenQ’s valuation should be lower than Hygeia due to weaker profitability, smaller revenue scale, lower growth outlook.Post-money valuation before IPO of US$375 million (or about RMB2.7 billion) is already expensive
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