Daily BriefsECM

Equity Capital Markets: Carsales.Com Ltd, Soosan Industries, Sungeel Hitech and more

In today’s briefing:

  • Carsales Entitlement Offer – Well Flagged Deal for a Well Know Asset, but Last Deal Didn’t Do Well
  • Soosan Industries IPO Valuation Analysis
  • Sungeel HiTech IPO Valuation Analysis

Carsales Entitlement Offer – Well Flagged Deal for a Well Know Asset, but Last Deal Didn’t Do Well

By Sumeet Singh

  • Carsales aims to raise around US$835m (A$1.2bn) via a non-renounceable entitlement offer to part fund the purchase of remaining 51% of trader Interactive.
  • While the acquisition is probably well flagged and will be earnings accretive, the last entitlement offering didn’t do well in the near term.
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Soosan Industries IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of Soosan Industries is target price of 56,383 won, which is 31% higher than the high end of the IPO price range of 43,100 won. 
  • Our valuation is based on 14.1x P/E (20% premium to KEPCO KPS) using our estimated net profit of 57.1 billion won in 2023. 
  • Soosan Industries provides comprehensive maintenance services for major nuclear, thermal, and renewable power plants in Korea. Soosan Industries is the only private maintenance company for main nuclear power plant equipment. 

Sungeel HiTech IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of Sungeel HiTech is target price of 70,992 won per share (49% higher than the high end of the IPO price).  
  • Our valuation is based on 15.9x P/E (50% discount to comps’ average multiple) using our estimated net profit of 54.9 billion won in 2023. 
  • Given the excellent upside, we have a Positive view of the Sungeel HiTech,  which is a leading recycling specialist in Korea that extracts valuable metals from lithium-ion secondary batteries.

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