Daily BriefsIPOs and Placements

Equity Capital Markets: Waterdrop Inc, JD Logistics, SK IE Technology and more

In today’s briefing:

  • Waterdrop IPO: Valuation Insights
  • ECM Weekly (2nd May 2021) – JD Logistics, Powergrid InvIT, Shanghai Hanyu, Monde Nissin, Hello Inc
  • JD Logistics IPO: Prioritizing Market Share Gains over Margins
  • JD Logistics IPO – Looking to Raise $4 Billion but Valuation Pulled Down by SF Holding
  • SK IE Technology: Immediate Float 15.04% & KOSPI 200 Index Float 21.80%
  • JD Logistics: Investment for Growth to Hurt Margins in the Medium-Term but Key to Long-Term Profits

Waterdrop IPO: Valuation Insights

By Arun George

Waterdrop Inc (WDH US) is the largest independent third-party insurance platform in China as measured by life and health insurance first-year premiums (FYP) distributed in 2020, according to iResearch. Waterdrop is backed by Tencent Holdings (700 HK)Swiss Re AG (SREN SW) and Meituan (3690 HK).

At the mid-point of the proposed IPO price range of $10.00-12.00 per ADS, Waterdrop will have a market cap of $4.3 billion. At the mid-point of the IPO price range, the net proceeds are $301.6 million. New and existing shareholders have indicated on $210 million of the IPO, including Boyu Capital ($100 million), HOPU Investments (at least $80 million), and Kevin Sunny Holding ($30 million). The indications of interest represent 63.6% of the ADSs on offer at the mid-point of the IPO price range.

In Waterdrop IPO Initiation: Going for Brokers, we opined that as a leading online third-party insurance broker, Waterdrop is well-positioned to benefit from favourable industry trends. The key unknown is whether the changing regulations will throw a spanner in the works. Notwithstanding the regulatory overhang, we concluded that Waterdrop is worth a look. Our analysis suggests that the IPO price range is full at the high-end but has some upside at the low-end. 

ECM Weekly (2nd May 2021) – JD Logistics, Powergrid InvIT, Shanghai Hanyu, Monde Nissin, Hello Inc

By Zhen Zhou, Toh

Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs.

Asia IPO pipeline continues to build up with multiple new filings. Zomato filed its draft prospectus in India and Del Monte Philippines in the Philippines, looking to raise US$1bn and US$790m, respectively. In the U.S, Hello Inc (last Friday), Ximalaya, Qiniu Cloud filed with the SEC. The former two companies are looking to raise about US$1bn each while Qiniu Cloud is likely targeting a US$500m IPO. Hong Kong had a number of filings with R&F Property Services being the notable one, looking to raise US$700m.

JD Logistics, SF REIT, Edding Group, and New Hope Service have won approval for their Hong Kong listings. JD Logistics was aiming to raise US$4bn and should start premarketing this coming week. SF REIT got its approval last week and filed its PHIP last Sunday. It is looking to raise US$300m and will likely launch its bookbuild next week. The latter two are expected to raise up to US$300m and US$150m, respectively. 

Hong Kong placement deal flow slowed (naturally) from a record last week. Wuxi Biologics Holdings came back to the market to sell another block ahead of its stipulated lock-up from January this year. The selldown was largely expected. Other placements in Hong Kong included Tsingtao Brewery Co Ltd H (168 HK) and Fuyao Glass Industry Group (3606 HK).  In the Philippines, AC Energy Corp (ACEN PM)‘s re-IPO was priced close to the low-end. The deal will trade on 14th May.

In Hong Kong, we wrote on Shanghai Hanyu Medical Technology (SHM HK), a leading player in the mitral valve devices market. While the company has a huge market potential, it had a weak investor line-up and lack of management experience .

Zhaoke Ophthalmology Pharmaceutical (6622 HK) debuted below its IPO price on Thursday despite having a decent cornerstone line-up. It closed 25% below IPO price on Friday.

For China ADRs, we initiated on Hello Inc (1883864D US). The company operates a mobile app, Hello, which provides local services that includes two-wheeler services and a carpooling market place.

In India, Powergrid Infrastructure Investment Trust (1883964D IN) launched its IPO bookbuild on Thursday. Books will close on Monday and shares will trade on 17th May.

In the Philippines, Monde Nissin Corp’s (0191881D PM) has started premarketing. We compared its meat alternative business with global competitors and shared our thoughts on valuation. 

Credits to Clarence Chu for helping out with the note.

Accuracy Rate:

Our overall accuracy rate is 74.1% for IPOs and 67.3% for Placements 

(Performance measurement criteria is explained at the end of the note)

New IPO filings this week

  • R&F Property Services (Hong Kong, US$700m)
  • Readboy Education Holding Company Limited (Hong Kong, >US$100m)
  • Lepu Biopharma (Hong Kong, >US$100m)
  • Hangzhou Xpower Technology (Hong Kong, >US$100m)
  • Ximalaya (China ADR, US$1bn)
  • Hello Inc (China ADR, US$1bn)
  • Qiniu Ltd. (China ADR, US$500m)
  • Zomato Limited (India, US$1bn)
  • Del Monte Philippines (Philippines, US$790m)

News on Upcoming IPOs

Hong Kong/China

US/China ADRs



Analysis on Upcoming IPOs

Hong Kong
Betta Pharma

Betta Pharma (贝达医药) A+H: Tier 2 Player Struggled to Break Out 


ByteDance (字节跳动) IPO: How Jinri Toutiao Paves The Way for a Bigger Empire (Part 1)


ByteDance (字节跳动) Pre-IPO: Why Facebook Should Worry About TikTok 


ByteDance (字节跳动) IPO: Tiktok the No.1 Short Video App for a Good Reason (Part 2)


ByteDance (字节跳动) Pre-IPO: How Has It Done in 1H? 


ByteDance: The Unlisted Company’s Video Apps Leading the Market and Threatening Internet Giants 


ByteDance (字节跳动) Pre-IPO: Why Facebook Should Worry About TikTok 


ByteDance (字节跳动) Pre-IPO – Globally the Most Downloaded App for Jan 2020 Driven by India 


ByteDance (字节跳动) Pre-IPO: Global Ambition Meets Regulatory Challenges 


Chaoju Eye Care (朝聚眼科) Pre-IPO: Growth Prospect Far from Being Impressive 


Dida Pre-IPO – Making Hay While Big Brother Retreats 


Dida Pre-IPO – Earnings Forecast and First Stab at Valuation 


Dida Pre-IPO – Peer Comparison – Lagging in Scale, Leading in Profitability 

Edding Grp

Edding Group (亿腾医药) Pre-IPO: Notes from Latest Financials and Its Related Party 

Edding Grp

Edding Group (亿腾医药) Pre-IPO: Notes from Latest Financials and Its Related Party 


Shanghai Hanyu (捍宇医疗) Pre-IPO: Not a Straight-A but Listing at Right Time 

Intco Med

Intco Medical (英科医疗) A+H: From China No.1 to Global No. 1 


Kilcoy Global Foods Pre-IPO – Rapid Earnings Growth on the Back of Margin Improvement 

JD Logistics

JD Logistics (京东物流) Pre-IPO – Tethered to JD Group and Looking Beyond 

JD Logistics

JD Logistics (京东物流) Pre-IPO – Thoughts on Valuation 

JD Logistics

JD Logistics (京东物流) Pre-IPO – Peer Comparison – Shielded from Price War 


Kilcoy Global Foods Pre-IPO – A Lot of Things Still Remain Unexplained 


Kindstar (康圣环球) Pre-IPO: Issues with Scalability 


Kindstar (康圣环球) Pre-IPO: Is It Worth the Premium? 

RemeGen RemeGen (荣昌生物) Pre-IPO: Thoughts on Valuation of RC18 and RC48 
Bio-heart Shanghai Bio-Heart (上海百心安) Pre-IPO: Needs a Long Runway 
Toplist Toplist China Pre-IPO – Overwhelmingly More Negatives than Positives 
Tasly Tasly Biopharm (天士力生物) IPO: Visible Growth from Approved Drug but Lacks Blockbusters 
WeDoctor WeDoctor (微医) Pre-IPO -App Walk Through – The Online Medical Directory and More 
WeDoctor WeDoctor (微医) Pre-IPO – A More Focused Online Medical Svc Provider than Ping An Good Doctor 
WeDoctor We Doctor (微医) Pre-IPO – Peer Comparison – Picking Its Battles Wisely 
WeDoctor We Doctor (微医) Pre-IPO – Forecasts, Early Thoughts on Valuation, and Acquisition Gripes 
Youran Dairy China Youran Dairy(悠然牧业) Pre-IPO – A Leader Pulling Ahead in a Fragmented Market 
Aadhar Housing Aadhar Housing Finance Pre-IPO – Decent past Growth but Comes with Weird Disclosures 
ASK ASK Investment Managers Pre-IPO – Riding on a Wave of Wealth 
Anmol IndAnmol Industries Pre-IPO Quick Take – No Growth, Generous Payments to Founders
Bharat Hotel

Bharat Hotels Pre-IPO – Catching up with Peers 

Bajaj En

Bajaj Energy Pre-IPO – Supposed to Deliver Steady Performance if Only Its Sole Client Would Let It 

CMS InfoCMS Info Systems Pre-IPO – When a PE Sells to Another PE… Only One Gets the Timing Right
Crystal CropCrystal Crop Protection Pre-IPO – DRHP Raises More Questions than in Answers
ESAF SFB ESAF Small Finance Bank Pre-IPO – Growing Fast but Remains Highly Dependant on a Related Party 
Flemingo Flemingo Travel Retail Pre-IPO – Its a Different Business in Every Country
Emami Cem Emami Cement Pre-IPO – Still in Ramp Up Phase but Shares Pledge Might Lead to an Early IPO 
NSENSE IPO Preview- Not Only Fast..its Risky and Expensive
NSENational Stock Exchange Pre-IPO Review – Bigger, Better, Stronger but a Little Too Fast for Some


Life Insurance Corporation of India Pre-IPO – Early Take on India’s Largest IPO 
Penna Cem Penna Cement – Aggressive Expansion Plans Even Though Past Performance Has Been Tepid 
PNB MetPNB Metlife Pre-IPO Quick Take – Doesn’t Stack up Well Versus Its Larger Peers
Samhi Hotels Samhi Hotels Pre-IPO – Assets and Borrowings Are Growing, but Earnings Haven’t Kept Pace 
Sona Comstar Sona Comstar Pre-IPO – Inconsistent Growth, Patchy Disclosures 
QSRQSR Brands Pre-IPO – As Healthy as Fast Food
The U.S.
Hello Inc Hello Inc (哈罗出行) Pre-IPO – Nowhere near Being Sustainable 

JD Logistics IPO: Prioritizing Market Share Gains over Margins

By Arun George

JD Logistics (JDL HK) is the largest player in China’s integrated supply chain logistics services market, with a 2.7% revenue market share in 2020, according to CIC. JD Logistics was founded with the formation of JD.com Inc (ADR) (JD US)’s in-house logistics department in 2007. JD Group is the controlling shareholder with a 79.12% stake. JD Logistics has won approval for an HKEx IPO to raise $3-4 billion, according to press reports. 

In JD Logistics IPO Initiation: The Flow of Things, we stated that JD Logistics is an indirect play on the shift of some customer behaviour permanently to online shopping, particularly in fast-moving consumer goods. We concluded that JD Logistics fundamentals are attractive and it remains well-placed to address consumers demand for faster and more flexible supply chain logistics services. 

In this note, we look at the PHIP which discloses the 2020 results and recent developments. The results underscore the positives which are strong growth, rising margin and cash generation. However, the outlook is mixed as JD Logistics cautions that it will pursue market share gains at the cost of profitability over the medium term. 

The Chinese logistics market is highly price-competitive, and scale is crucial to sustained profitable growth. In a consolidating market, the eventual winners will be companies that can invest in infrastructure and capacity to gain market share and economies of scale benefits. We think that JD Logistics has the right ingredients to ride out the industry’s current price-competitive dynamics and deliver good shareholder returns over the medium term. 

JD Logistics IPO – Looking to Raise $4 Billion but Valuation Pulled Down by SF Holding

By Douglas Kim

Last week, JD Logistics (JDL HK) received the regulatory approval for an IPO on the Hong Kong stock exchange that could raise up to $4 billion. According to Nikkei Asia, JD Logistics is seeking a valuation of about $40 billion. This valuation level is the same as the level the company was seeking in late 2020.

Although the valuation level that JD Logistics is seeking through this IPO has not changed, what has changed so much in the past 10 weeks is the valuation of S.F. Holding (002352 CH) in this period. SF Holding is one of the key comparable companies for JD Logistics in China. SF Holdings’ share price has crashed by 45% from 18 February to 2 May 2021. 

Our base case valuation of JD Logistics is EV of 289 billion RMB and implied market cap of 314 billion RMB (US$48.6 billion). At an implied market cap of $48.6 billion, this represents a 21% higher level than the recent valuation of $40 billion that the company is seeking. Despite this solid upside, this base case valuation is 15% lower than our previous base case valuation. This is mainly due to the much lower price of its comp SF Holding and the greater competitive pressures in the local logistics and parcel delivery services in China. 

SK IE Technology: Immediate Float 15.04% & KOSPI 200 Index Float 21.80%

By Sanghyun Park

SK IET’s institutional lockup results are out. The final percentage of the locked shares allocated to the institutional investors is 66.68% of the institutional allocation. 

Institutional investors pledging lockups
6 months3,020,98825.68%
3 months2,087,67217.75%
1 month2,700,26422.95%
15 days36,1720.31%
– Total7,845,09666.68%
Source: SED

So, the immediate float shares come down to 10.72M shares, including the ones owned by the major shareholder, representing 15.04% of the post-IPO total shares.

Immediate float shares
1 year2,823,956
6 months52,928,580
3 months2,087,672
1 month2,700,264
15 days36,172
Immediate float shares10,720,948
– % of post-IPO total shares15.04%
Source: SED

The ESOP spit out substantial forfeited shares, representing 2.04% of the post-IPO total shares. These forfeited shares went to the local retail subscribers, bringing up the final allocation to 9.54%, while the institutional allocation remains at 16.50%.

ShareholderSharesShareholding %Lockup period
Post-IPO total shares71,297,592100.00%
SK Innovation43,633,43261.20%6 months
Premier Superior Ltd.6,274,1608.80%6 months
ESOP2,823,9563.96%1 year
– Institutional11,764,50016.50%
– Retail6,801,5449.54%
Source: DART

JD Logistics: Investment for Growth to Hurt Margins in the Medium-Term but Key to Long-Term Profits

By Shifara Samsudeen, ACMA, CGMA

JD Logistics (JDL HK) , the delivery arm of China’s second largest e-commerce platform JD.com has filed for an IPO to list its shares on the Hong Kong Stock Exchange. According to news media outlets, JD Logistics is looking to raise about US$3-4bn through the IPO.

The company has won the approval for its HKEX listing and released its post-hearing information pack (PHIP) on Sunday (02nd May) and this insight focuses on the company’s new data points from the PHIP.

In our previous two insights on JD logistics’ IPO, we examined the company’s business model, revenue and margins. Read our previous insights:

JD Logistics IPO: Expanding External Customer Base Supports Top Line Growth and GPM Expansion 

JD Logistics IPO: Margin Improvement Likely with Expanding External Revenues and Falling Costs 

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