Daily BriefsIPOs and Placements

Equity Capital Markets: Big Hit Entertainment, Lufax Holdings, MINISO Group Holdings, Nippon Building Fund, Palantir Technologies Inc and more

In today’s briefing:

  • Big Hit IPO: Immediate Real-World Float & Index Float (For KOSPI 200)
  • BTS’ Political Remarks Anger Thousands of Chinese Fans
  • Lufax IPO Initiation: Lost in Transition
  • MINISO Valuation: Valued Like MINISO Merchandise – Bang for the Buck
  • Nippon Building Fund Placement – Needs to Correct Some More Given the Weak Sentiment
  • Lufax Pre-IPO – The Positives – Able to Grow Despite the Headwinds
  • Palantir – Settling in for the Long Term

Big Hit IPO: Immediate Real-World Float & Index Float (For KOSPI 200)

By Sanghyun Park

Big Hit released a regulatory filing about the final allocation and lock-up data at DART.

There was a little shortage in the ESOP subscription. As a result, the institutional allocation got bumped up slightly.

Allocation by type (₩B) Qty. – initial % – initial Qty. – final % – final
Institutional 4,278,000 60.00% 4,282,309 60.06%
– Local (est.) 3,150,695 44.19%
– Overseas (est.) 1,131,614 15.87%
Retail 1,426,000 20.00% 1,426,000 20.00%
ESOP 1,426,000 20.00% 1,421,691 19.94%
Total 7,130,000 100.00% 7,130,000 100.00%
Source: DART
Allocation by banker (₩B) Qty. Value % Note
NH 2,495,500 336.9 35.00% Local
KIS 2,139,000 288.8 30.00% Local
JP Morgan 1,639,900 221.4 23.00% Overseas
Mirae Asset 713,000 96.3 10.00% Local
Kiwoom 142,600 19.3 2.00% Local
Source: DART

About 80% of the institutional allocation carries a lock-up. But only half is 3 months or longer. The other half expires within a month.

Allocation by lock-up Qty. % of allocation % of SO
6 months 1,063,100 24.83% 3.14%
3 months 765,179 17.87% 2.26%
1 month 1,322,416 30.88% 3.91%
15 days 205,463 4.80% 0.61%
No lock-up 926,151 21.63% 2.74%
Total 4,282,309 12.65%
Source: DART

As a result, the immediate real-world float becomes 19.8%, rising to 24.3% after one month.

Immediate real-world float Qty. %
1 year 1,421,691 4.20%
6 months 21,006,701 62.07%
3 months 3,189,195 9.42%
1 month 1,322,416 3.91%
15 days 205,463 0.61%
– Total 27,145,467 80.20%
Immediate real-world float 6,700,726 19.80%
Source: DART
Shareholding Post-IPO Lock-up
Bang Si-hyuk 36.57% 6 months
Minority shareholders (lock-up) 1.41% 6 months
Netmarble Corp 20.94% 6 months
STIC Investments 7.16% 3 months
ESOP (through IPO) 4.21% 1 year
Minority shareholders (no lock-up) 12.85%
IPO 16.85%
Total 100.00%
Source: DART

BTS’ Political Remarks Anger Thousands of Chinese Fans

By Douglas Kim

The Big Hit Entertainment IPO starts trading this week on 15 October. It was reported today in numerous media that Samsung has removed BTS related products from its official stores on Chinese e-commerce platforms. Well, apparently this news is really getting out of hand. All the major local media outlets in Korea including YTN, Chosun, and Joongang have reported on this news. 


Lufax IPO Initiation: Lost in Transition

By Arun George

Lufax Holdings (LU US) is a leading personal financial services platform in China with a focus on retail borrowing and wealth management. In retail credit, Lufax is the second-largest non-traditional financial service providers in China as measured by outstanding balances of retail credit facilitated, according to Oliver Wyman. Lufax has filed for an NYSE IPO to raise an estimated $3 billion, according to press reports. 

The Chinese consumer finance sector has gone through a corona-induced extreme stress test in 1H20. The sector has proved to be more often than not value destructive for public market investors and continues to remain hostage to regulatory change. While Lufax has several attractive attributes, it is a business in transition which magnifies the risk profile.  


MINISO Valuation: Valued Like MINISO Merchandise – Bang for the Buck

By Oshadhi Kumarasiri

MINISO Group Holdings (MNSO US) is the leading variety retailer of lifestyle products globally with an aggregate GMV of RMB 19.0 billion (US$2.7 billion) and revenue of RMB 9.0 billion (US$1.3 billion).

Last week, the company filed an updated prospectus with the SEC announcing the price range for the NYSE IPO. The price range was set at $16.50-$18.50 per ADS, which translates to $4.125-$4.625 per share.

MINISO plans to raise $502m-$562m via issuing 16.5m new ADS (122m-140m new shares). An overallotment option, if exercised, could increase the IPO by $75m-$84m (4.6m new ADS).

Previously, we discussed MINISO’s business model and financials in MINISO IPO: Long Term Growth Prospects Secured By a Sustainable Competitive Advantage and MINISO IPO: As Appealing As MINISO Products.

This insight will focus on valuation and assess if it is worthwhile subscribing to the IPO.


Nippon Building Fund Placement – Needs to Correct Some More Given the Weak Sentiment

By Sumeet Singh

Nippon Building Fund (8951 JP) aims to raise around US$1.2bn (JPY127bn) in order to part fund its purchase of two assets.

This will be one of the largest JREIT placement that we have seen over the past few years. In addition, the stock hasn’t been doing too well this year.

In this insight, I’ll talk about the deal dynamics and run the deal through our ECM framework.


Lufax Pre-IPO – The Positives – Able to Grow Despite the Headwinds

By Sumeet Singh

Lufax Holdings (LU US) (Lufax) aims to raise around US$3bn via its US listing. The company is backed by Ping An Insurance (H) (2318 HK) (Ping An).

Lufax is a technology-empowered personal financial services platform in China. The company aims to address the demand for personal lending among small business owners, as well as salaried workers in China. It also provides wealth management solutions to China’s middle class and affluent population.

Despite having to change its funding model and loan mix over the past few years, the company has still managed to grow its loan book and revenue. 

In this insight, I’ll talk about the positive aspects of the deal.


Palantir – Settling in for the Long Term

By Mio Kato

As expected, Palantir’s listing has not generated the fireworks of better hyped names such as Snowflake. The stock remains around the $10 mark which is lower than some of the private market trades just prior to listing. We remain highly positive on the stock and expect the name to pick up momentum relative to peers as earnings results begin to show through.


Before it’s here, it’s on Smartkarma