In today’s briefing:
- Shinhan Financial Group Placement – Clean-Up Trade but Stock Is at All Time-Highs
- Kitazato IPO Trading – Demand Was Strong
- HDB Financial IPO: Valuation Insights
- DH Shipbuilding IPO Preview
- Cao Cao IPO Trading: Weak Institutional Demand; Clawback Triggered
- Samyang Comtech IPO Valuation Analysis
- Kent R O Systems Ltd IPO- Purity at a Price
- Unisound AI IPO (9678.HK): Premium Multiple Is Not Justified, Small Scale and High Cash Burn
- Leads Biolabs (维立志生物) Pre-IPO: PHIP Updates and Negative Read Through
- Pre-IPO Cloudbreak Pharma (PHIP Updates) – Some Points Worth the Attention
Shinhan Financial Group Placement – Clean-Up Trade but Stock Is at All Time-Highs
- Affinity Equity Partners is looking to raise around US$425m via selling 1.9% of its stake in Shinhan Financial (055550 KS).
- Affinity had sold half of its stake earlier in 2024, when the company witnessed a number of selldowns in 1H24.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Kitazato IPO Trading – Demand Was Strong
- Kitazato (368A JP) manufactures and sells medical devices and products for fertility treatment. It raised around US$130m in its Japan IPO.
- Kitazato specializes in artificial insemination, in vitro fertilization, cell cryopreservation and reproductive engineering technologies in regenerative medicine
- In our previous note, we looked at its past performance and the deal dynamics. In this note, look at the trading dynamics.
HDB Financial IPO: Valuation Insights
- HDB Financial Services Ltd (0117739D IN) is India’s seventh-largest non-banking financial company (NBFC). It is seeking to raise Rs125 billion (US$1.4 billion).
- I discussed the fundamentals in HDB Financial IPO: The Investment Case. The shares will be listed on 2 July.
- My valuation analysis suggests the HDB is fully priced at the IPO price range of Rs 700- 740 per share. I would avoid the IPO.
DH Shipbuilding IPO Preview
- DH Shipbuilding is getting ready to complete its IPO in KOSPI in August. DH Shipbuilding would be the second largest IPO in Korea after LG CNS so far this year.
- The IPO price range is 42,000 won to 50,000 won per share. At the high end of the IPO price range, it could raise as much as 500 billion won.
- The bankers used four companies including HD Hyundai Heavy Industries, Hanwha Ocean, Samsung Heavy Industries, and HD Hyundai Mipo as comps for DH Shipbuilding.
Cao Cao IPO Trading: Weak Institutional Demand; Clawback Triggered
- Cao Cao is a ride hailing platform in China that raised US$236m in its Hong Kong IPO.
- As of 2024, it held a 5.4% market share as per Frost & Sullivan.
- We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.
Samyang Comtech IPO Valuation Analysis
- Our comparable companies valuation analysis suggests implied market cap of 557 billion won or target price of 13,187 won per share.
- This represents a 71% upside from the high end of the IPO price range (7,700 won per share). Given the excellent upside, we have a Positive view of this IPO.
- One could argue that valuation discount on Samyang Comtech may be too conservative mainly due to higher sales growth, ROE, and operating margins of Samyang Comtech relative to the comps.
Kent R O Systems Ltd IPO- Purity at a Price
- Kent R O Systems (6592700Z IN) Kent R O Systems Ltd plans to come up with its IPO
- The company is the second largest player in the Indian water purifier market with a market share of about 20%, behind Eureka Forbes.
- We are concerned with the related party transactions of the company, especially with the promoters. The lease rental policy, coupled with some impairments, and trademark infringement matter also attracts attention.
Unisound AI IPO (9678.HK): Premium Multiple Is Not Justified, Small Scale and High Cash Burn
- Unisound AI Technology, a Beijing-based AI solution provider with focus on conversational AI products, healthcare and daily life related application scenarios, is expected to IPO next week.
- The offering is expected to be between HK$165.00 and HK$205.00, implying a market cap of ~HK$13B or ~$1.7B at the midpoint of price range.
- Unisound AI Technology IPO valuation implies a premium relative to SenseTime, iFlytek and 4Paradigm. I would consider becoming more constructive on the name if its valuation came down.
Leads Biolabs (维立志生物) Pre-IPO: PHIP Updates and Negative Read Through
- Leads Biolabs, a China-based clinical-stage biotech, is looking to raise at least USD 100 million via a Hong Kong listing. The joint book runners are MS and CITIC.
- In our previous insight, we looked at the company’s core products and its management team, as well as investor backing.
- In this insight, we look at the updates of the prospectus spanning six months’ time. We have also read through from the competing products’ disclosures.
Pre-IPO Cloudbreak Pharma (PHIP Updates) – Some Points Worth the Attention
- Since diagnosis/treatment rate of pterygium is low, it’s uncertain how many patients will be willing to pay high price for CBT-001. CBT-009 may lose first-mover advantage in front of Ryjunea.
- Due to pressure on cash flow, the development progress of CBT-006 and CBT-004 could be slower-than-expected. CBT-004’s sales may be squeezed due to the off-label use of anti VEGF drugs.
- Valuation could be lower than peers considering that CLOUDBREAK has out-licensed commercialization rights of core product and has to face fierce competition and uncertain market demand after the product launch.
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