In today’s briefing:
- Toei Animation Placement: Expensive, but Owns Valuable IP
- [Japan ECM] Toei Animation (4816) Not as Interesting An Offering As It Could Have Been
- NIO (NIO US/9866 HK): An Opportunistically Timed US$1 Billion Raise
- NIO HK/ADS Placement – Slightly Better Placed, but Slightly Bigger Deal at US$1bn
- IPO Review: Urban Company – India’s Largest Marketplace for At-Home Services
- Zijin Gold Pre-IPO: Peer Comparison
- Legence Corp. (LGN): Strong Business Meets Debt Overhang Leaving IPO Investors Skeptical
- Chery Auto IPO PHIP Update & Review
- Chery Auto Pre-IPO: More Discounts Than Price War Starter
- Klarna IPO (KLAR US) – Premium Pricing Out of the Gate, Still a Threat to Affirm’s Current Valuation
Toei Animation Placement: Expensive, but Owns Valuable IP
- Toei Animation (4816 JP) ’s shareholder, Fuji Media, is looking to raise around US$210m from a secondary placement.
- The deal is a large one to digest, representing 41.7 days of the stock’s three month ADV and 4.9% of the shares outstanding.
- In this note, we will talk about the placement and run the deal through our ECM framework.
[Japan ECM] Toei Animation (4816) Not as Interesting An Offering As It Could Have Been
- In Feb 2024, I wrote Toei Animation (4816 JP) – This Offering Could Be Heavy; the NEXT Offering Is More Interesting.
- Today, the company announced another offering where Fuji Media Holdings (4676 JP) is selling 10.575mm shares in an overseas offering priced likely tomorrow.
- It is not as interesting as I had expected. But it means the NEXT offering could be more interesting. But there is index buying long-term anyway.
NIO (NIO US/9866 HK): An Opportunistically Timed US$1 Billion Raise
- NIO (NIO US), a Chinese premium electric vehicle manufacturer, has launched an equity offering to raise around US$1 billion.
- The raise is opportunistically timed to take advantage of the 83% QTD share price rally and comes hot on the heels of a US$513 million raise in April.
- While NIO continues to target a break-even in 4Q25 and reduce its cash burn, the valuation is stretched. A history of false dawns and intensifying competition warrants caution.
NIO HK/ADS Placement – Slightly Better Placed, but Slightly Bigger Deal at US$1bn
- NIO (NIO US) is looking to raise around US$1bn via a primary placement in Hong Kong and US.
- The company had last raised around US$450m in March 2025. The deal didn’t end up doing well.
- In this note, we will talk about the placement and run the deal through our ECM framework.
IPO Review: Urban Company – India’s Largest Marketplace for At-Home Services
- With rising affluence, India’s home services’ is fast evolving with a focus on enhancing the convenience and quality of life for households. Online home services to grow at 16–22% CAGR.
- Urban Company is the largest player (62% market share) with a recognised brand, ~50+k active professionals offering services across 17+ at-home service categories to 6+mn active customers
- IPO looks reasonably priced at 7-8x FY27 revenues, considering Indian tech peers trade between 6-10x. We estimate FY25-27 revenue CAGR at 22-25% vs 27% during FY22-25
Zijin Gold Pre-IPO: Peer Comparison
- Zijin Gold (2579355D HK) is looking to raise up to US$3.0bn in its upcoming Hong Kong IPO.
- It is a global leading gold mining company formed by combining all of the gold mines of Zijin Mining, located outside of China.
- We have looked at the company’s past performance in our previous note. In this note, we will undertake a peer comparison.
Legence Corp. (LGN): Strong Business Meets Debt Overhang Leaving IPO Investors Skeptical
- The wide $25-$29 range allows for valuation discussion amongst investors and the company.
- From 2021 to 2024, their revenues grew at a 39% CAGR and have a $2.8b backlog, however debt overhang remains a concern.
- We believe price sensitivity is likely to play a factor and a muted opening is potentially on deck.
Chery Auto IPO PHIP Update & Review
- Chery Auto is getting ready to complete its IPO in the next few weeks. It is expected that Chery Auto could raise about US$1.5 -2.0 billion in this IPO.
- ROE is super high at 70%+. Chery Auto has one of the highest ROEs among all the major auto companies globally.
- Chery Auto has one of the best records among all the major auto companies globally in the past three years in terms of sales and net profit growth.
Chery Auto Pre-IPO: More Discounts Than Price War Starter
- Chery positions itself in the economy and mainstream markets or accurately below RMB150,000.
- Chery provided more discounts than BYD, the price war launcher.
- Chery’s stores are far away from the city center in Shanghai.
Klarna IPO (KLAR US) – Premium Pricing Out of the Gate, Still a Threat to Affirm’s Current Valuation
- Klarna’s IPO issue price of USD40 implies a market capitalisation of USD15.1bn and, according to financial press reports, the IPO was twenty-five times over-subscribed
- The Klarna IPO valuation metrics, versus its peers, still serves to highlight Affirm’s very stretched valuation and we stand by our Affirm sell rating
- On the positive side, we highlight PayPal as also the best value play of the major BNPL participants; we also like PagSeguro and Nexi
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
