In today’s briefing:
- Trading LG Chem’s Large-Scale EB Issuance Backed by LG Energy Shares
- Initial Thoughts on the Sono International IPO
- Pre-IPO LXJ International Holdings – The Pain Points and the Outlook
- Hi-Think Technology Pre-IPO – Steady Outlook Amid FX Pressures
- Waaree Energies IPO Lockup – Lots of Individual Shareholders Own over US$2bn Worth of Stock
Trading LG Chem’s Large-Scale EB Issuance Backed by LG Energy Shares
- With a $2B deal expected, LG Chem will likely issue before end June as the 2023 EB’s put date nears and redemption pressure builds amid strained financials.
- Two years ago, hedge shorting spiked post-issuance and post-exchange start, but price impact was mild—only 3% and 6% drops—likely due to strong sector sentiment then.
- Sector sentiment’s turned sharply, so more aggressive price action is likely post-EB announcement. Timing is tricky, but the setup’s worth watching closely.
Initial Thoughts on the Sono International IPO
- Sono International, the largest resort operator in Korea, is getting ready to complete its IPO in 3Q 2025.
- Company is aiming for valuation of about 3 trillion won. Treasury shares accounted for 35.93% of total outstanding shares at the end of 2024.
- One of the noticeable aspects of the company’s income statement is that although the company’s sales growth was modest from 2019 to 2024, its operating margin growth has been spectacular.
Pre-IPO LXJ International Holdings – The Pain Points and the Outlook
- LXJ’s revenue/net profit showed an upward trend from 2022 to 24Q1-Q3, but growth momentum was decreasing. The same store sales growth dropped significantly. Profit margin is also lower than peers.
- There’re significant differences in dietary habits and tastes across China, making it difficult for LXJ to expand nationwide. So, the future growth potential may not be as good as expected.
- In December 2021, valuation of LXJ had reached RMB18 billion. Since LXJ’s revenue growth/profit margin are inferior to Xiaocaiyuan, we think the valuation of LXJ should be lower than Xiaocaiyuan.
Hi-Think Technology Pre-IPO – Steady Outlook Amid FX Pressures
- Hi-Think Technology International (HT) is looking to raise at least US$150m in its upcoming Hong Kong IPO.
- HT is a leading Chinese provider of digital intelligence software technology services and solutions, focusing on serving integration customers in Japan, particularly customers in the civil and financial sectors.
- Due to significant depreciation of the JPY against the RMB, HT’s 9M24 sales growth and margins were negatively impacted.
Waaree Energies IPO Lockup – Lots of Individual Shareholders Own over US$2bn Worth of Stock
- Waaree Energies (WAAREEEN IN) raised around US$514m in its India IPO in October 2024. The lockup on its pre-IPO investors is set to expire soon.
- Waaree Energies is a solar PV module manufacturer in India with an aggregate installed capacity of 12 GW, as of Jun 2024.
- In this note, we will talk about the lockup dynamics and possible placement.
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