Daily BriefsIPOs and Placements

Equity Capital Markets: PT Avia Avian, Weilong Delicious Global, Biocytogen Pharmaceuticals (Beijing), Shinhan Seobu T&D REIT, Huayuan Medical Group Holding and more

In today’s briefing:

  • Avia Avian IPO Initiation: Painting by Numbers
  • Weilong Delicious IPO: Mixed Update
  • Weilong Delicious Global Pre-IPO – PHIP Updates – Mixed Bag 1H21 Performance
  • Biocytogen (百奥赛图) Pre-IPO: Peer Comparison and Prelim Valuation for Animal CRO
  • Shinhan Seobu T&D REIT IPO Preview
  • Pre-IPO Huayuan Medical Group Holding – How to Tell a Good Story After the COVID-19 Magic Disappear?

Avia Avian IPO Initiation: Painting by Numbers

By Arun George

  • PT Avia Avian (AVIA IJ) is a market leader in the decorative paints and coatings industry in Indonesia, with around a 20% market share based on sales revenue in 2020. 
  • Avia is seeking to raise up to $405 million at an IPO price range of IDR780-930. Selling shareholders will also raise up to $364 million through a private placement.
  • The fundamentals are attractive as Avia is delivering strong growth in both its segments, rising group margins and strong cash generation. Overall, we believe that Avia is worth a look.

Weilong Delicious IPO: Mixed Update

By Arun George

  • In Weilong Delicious IPO Initiation: Tasty Bite, we stated that Weilong offers an appealing mix of robust top-line growth, high margins and strong cash generation.
  • However, the 1H21 update is mixed. The top-line growth remains strong but at the cost of margins. Margin headwinds are likely to persist in the short term. 
  • In a weak HKEx IPO market, we think that Weilong’s mixed fundamentals will likely struggle to gain investor enthusiasm.   

Weilong Delicious Global Pre-IPO – PHIP Updates – Mixed Bag 1H21 Performance

By Sumeet Singh

  • Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO.
  • According to F&S, WDG ranked first among spicy snack food enterprises in China, with a market share of 5.7%, and in the seasoned flour product and spicy vegetable snacks categories.
  • In this note, we will look at the updates from its recently filed PHIP.

Biocytogen (百奥赛图) Pre-IPO: Peer Comparison and Prelim Valuation for Animal CRO

By Ke Yan, CFA, FRM

  • Biocytogen, a China-based pre-clinical research and biopharmaceutical company, plans to raise up to USD 300m via a Hong Kong listing.
  • We compared the company’s key metrics with its close peer in the animal CRO segment.
  • We provide a preliminary thought on the valuation for its animal CRO.

Shinhan Seobu T&D REIT IPO Preview

By Douglas Kim

  • Shinhan Seobu T&D REIT (404990 KS) IPO is expected to be completed in early December. The IPO deal size is about $114 million. 
  • The estimated annual dividend yield of this REIT is 6.25% for five years (2022-2026). 
  • The company’s main properties include Incheon Square One Shopping Mall and Yongsan SDC Grand Mercure Residence Hotel.

Pre-IPO Huayuan Medical Group Holding – How to Tell a Good Story After the COVID-19 Magic Disappear?

By Xinyao (Criss) Wang

  • Huayuan Medical Group Holding (HUMG HK) is a manufacturer and supplier of disposable non-latex gloves based in China.
  • Huayuan’s market position is out of the first echelon. Thanks to COVID-19, its downward trend in performance had been reversed by the pandemic, but such “magic” would not last forever. 
  • Together with other concerns analyzed in the article, we are conservative about the Company’s outlook.

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