Daily BriefsIPOs and Placements

Equity Capital Markets: Broncus, Demae-Can Co., Ltd., RL Commercial REIT, Kakao Pay, CE Info Systems (MapmyIndia) and more

In today’s briefing:

  • Broncus (堃博医疗) IPO: Long Term Faith Needed
  • Demae-Can Placement – Massive Dilution to Pursue Market Share
  • RL Commercial REIT IPO Trading – Adequately Priced
  • No More Activation of Volatility Mitigation Device (VI) In the First Day of Trading in Korean IPOs
  • CE Info Systems (MapmyIndia) Pre-IPO Tearsheet

Broncus (堃博医疗) IPO: Long Term Faith Needed

By Ke Yan, CFA, FRM

Broncus Holding is a leading interventional pulmonology company in China and globally. The company launched book building to raise up to USD 215m via a Hong Kong listing.

In our previous note, we discussed that the company’s core product, InterVapor, is a minimally invasive surgery that uses heated water vapor to treat the chronic obstructive pulmonary disease (COPD). In addition to the COPD indication, the company plans to further develop the product for the treatment of lung cancer. Another core product, RF-II uses radio frequency to treat lung cancer. Besides InterVapor and RF-II, the company also has a commercialized lung navigation system which has a leading market share in China. However, we believe the market for the lung navigation system is still in the early stage of development in China and hence the small market size.  We think the company has a strong pre-IPO investor line-up with backing from the founder of VenusMedtech and its management team is experienced. We also provided our thoughts on valuation of Broncus.

In this note, we provide an update for the book building. We will run the deal through our ECM framework and provide an update on the deal.


Demae-Can Placement – Massive Dilution to Pursue Market Share

By Zhen Zhou, Toh

Demae-Can Co., Ltd. (2484 JP)  is looking to raise up to a total of JPY80bn (US$730m) from a combination of overseas offering to investors and share sale to Z Holdings (4689 JP) and Naver Corp (035420 KS).

In this note, we will take a brief look at deal dynamics, fundamentals, and run the deal through our ECM framework.


RL Commercial REIT IPO Trading – Adequately Priced

By Sumeet Singh

RL Commercial REIT (RREIT), sponsored by Robinsons Land Corporation (RLC), raised around US$427m in its Philippines listing. 

RREIT is a commercial REIT and its initial portfolio will consist of 14 PEZA-accredited commercial real estate properties located in CBDs across Metro Manila and key cities outside Metro Manila, namely, Naga, Tarlac, Cebu and Davao. 

We have looked at various aspects of the REIT in our previous notes:


No More Activation of Volatility Mitigation Device (VI) In the First Day of Trading in Korean IPOs

By Douglas Kim

On 13 September, the Korea Exchange ruled that starting 1 October, VI (Volatility Mitigation Device) will not be activated for IPOs in Korea in the first day of trading. This has been changed in response to the concerns about the stock prices of IPOs not being able to find its fair value price due to the excessive activation of VI on the first day of listing. Previously listed stocks are not eligible under this ruling. Unlike circuit breakers which apply to the entire market, the volatility mitigation device VI applies for specific stocks. 

The most likely impact of what is likely to happen once the VI is removed the first day of trading in the Korean IPOs is that it will likely result in higher volatility as well as higher trading volumes in the first day of trading in the Korean IPOs. In addition, it has the potential to help the IPOs to reach their fair values at an accelerated pace as trading these IPOs on the first day no longer involves intermittent pauses of trading due to the activation of VI. 


CE Info Systems (MapmyIndia) Pre-IPO Tearsheet

By Clarence Chu

CE Info Systems (MapmyIndia) is looking to raise US$137m in its upcoming India IPO. The deal will be run by Axis Capital, JM Financial, Kotak and Dam Capital.

CE Info Systems is India’s leading provider of advanced digital maps, geospatial software and location-based IoT Technologies, as per Frost & Sullivan (F&S). As of 31 Mar 21, it’s digital maps cover 6.29m km of roads in India, and have serviced over 2,000 enterprise customers since its inception. Its services include digital maps as a service (MaaS), software as a service (SaaS) and platform as a service (PaaS). In FY21, it had over 500 customers on its MaaS, SaaS and PaaS platforms.


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