Daily BriefsIPOs and Placements

Equity Capital Markets: Chongqing Hongjiu Fruit, Thai Life Insurance and more

In today’s briefing:

  • Chongqing Hongjiu Fruit Pre-IPO – Lack of Moat Despite Long Operating History and Growth In Scale
  • Thai Life Insurance IPO: The Bear Case

Chongqing Hongjiu Fruit Pre-IPO – Lack of Moat Despite Long Operating History and Growth In Scale

By Ethan Aw

  • Chongqing Hongjiu Fruit (CHF HK) is looking to raise up to US$100m in its upcoming Hong Kong IPO. 
  • Chongqing Hongjiu Fruit (CHJF) is a multi-brand fresh fruit distributor in China with an end-to-end supply chain. They have 1.0% market share as China’s second largest fruit distributor.
  • While CHJF is already profitable, its long cash conversion cycle has been straining its balance sheet as the company tries to scale up.

Thai Life Insurance IPO: The Bear Case

By Arun George

  • Thai Life Insurance (124744Z TB) has started to meet investors ahead of its $1 billion IPO. The roadshow will run till early July with a listing targeted later in July.
  • In Thai Life Insurance IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case. 
  • The key elements of the bear case rest on market share pressure, tepid total premium performance, a checkered record in sales channel diversification, stagnating agent growth and inconsistent agent productivity.

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