Daily BriefsIPOs and Placements

Equity Capital Markets: Tsingtao Brewery Co Ltd H, Powergrid Infrastructure Investment Trust, Waterdrop Inc, Hello Inc and more

In today’s briefing:

  • Tsingtao Brewery Placement – Fosun Is Back Again, Settling into a Pattern
  • POWERGRID InvIT IPO – Assets Are Fine, Declining Yield Is Not
  • Waterdrop Inc: Can the Water Keep Flowing After Its IPO?
  • Hello IPO: Huge Fixed Cost for Bike Sharing Eating into Margins (Quantamental)

Tsingtao Brewery Placement – Fosun Is Back Again, Settling into a Pattern

By Sumeet Singh

Fosun International (656 HK) aims to raise around US$300m via selling 1.8% of Tsingtao Brewery Co Ltd H (168 HK).

This is not the first selldown by Fosun, we covered the Dec 2020 selldown in Tsingtao Brewery Placement – Friday Evening Is Always a Good Time for a Beer, Maybe Not This One.

This will be the third selldown by Fosun in a little over six months, therefore, its hard to say that it will come as a surprise to the market.


POWERGRID InvIT IPO – Assets Are Fine, Declining Yield Is Not

By Sumeet Singh

POWERGRID Infrastructure Investment Trust (PGIT) aims to raise around US$1bn in its India IPO. PGIT is an investment trust setup to own transmission assets of its sponsor Power Grid Corporation of India Limited (PGCIL). PGCIL is a central public sector enterprise which has been listed since 2007. 

PGIT will initially own five assets with a total network of 11 power transmission lines of approximately 3,698.59 ckm and three substations having 6,630 Megavolt amperes (MVA) of aggregate transformation capacity, as of Sep 2020, across five states in India. The total valuation of the assets was INR105bn (US$1.4bn) as of Sep 2020. 

These assets were awarded to PGCIL on a  build-own-operate-maintain (BOOM) basis. Therefore, the assets are operated under a long 35 years service agreement with largely pre-fixed revenue based on availability. In that sense, they will provide stable returns. However, its revenue terms are structured in such a way that its yield will continue to decline, while its sponsor’s government ownership will mean that it’s unlikely to diversify away from transmission assets with declining yield.

Our previous coverage of the IPO:


Waterdrop Inc: Can the Water Keep Flowing After Its IPO?

By Alec Tseung

  1. Single monetization channel: as the company seeks further growth, can it really compete against the distribution channels of the tech and insurance giants in China?
  2. Insurance/product development potential: does the company have the expertise to develop its own products without just having to rely on the distribution channels?
  3. Valuation: if the investment thesis is to ride the growth of healthcare and medical insurance spending in China, isn’t it more direct to invest in an online (or even traditional) insurer, which is at a much lower valuation?

Hello IPO: Huge Fixed Cost for Bike Sharing Eating into Margins (Quantamental)

By Shifara Samsudeen, ACMA, CGMA

Hello Inc (1883864D US)  the largest shared two-wheeler service provider in China has filed for an IPO and has a placeholder indication to raise about US$100m. The company is a leading local service platform in China and offers a range of services that include shared two-wheeler service, a carpooling marketplace and other emerging services and products such as e-scooters, in-store services marketplace, hotel reservations and online advertising services.


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