In this briefing:
- CStone Pharma (基石药业) Post-IPO: Strong Debut but Lacks near Term Catalysts
- Continuing Positive Outlook for Last Mile Industrial Real Estate Supports New Financings Globally
- Notes from the Silk Road: Nine Dragons Paper Holdings (2689.HK) – Potential Volatility Risk
1. CStone Pharma (基石药业) Post-IPO: Strong Debut but Lacks near Term Catalysts
CStone Pharma’s IPO was priced at HKD 12.00/share and started trading today. In this insight, we summarize the allocation, the use of proceeds and recap our view on our valuation. We also look at past few biotech listings and discuss our thoughts on the market sentiments. We are of the view that despite a strong debut performance, CStone lacks near term catalysts that can continue to drive performance after the first day.
Our Previous Coverage of CStone
- CStone Pharma (基石药业) IPO: Strong Assembly and Backing (Part 1)
- CStone Pharma (基石药业) IPO: Thoughts on Valuation (Part 2)
2. Continuing Positive Outlook for Last Mile Industrial Real Estate Supports New Financings Globally
- We published a series of Insights explaining our positive outlook for the industrial segment of the global Real Estate sector.
- Currently, companies in this segment are capitalizing on strong fundamentals to raise new equity capital. They are using the proceeds from these deals to fund property acquisitions and developments, and to deleverage their balance sheets, thereby setting the stage for continuing growth.
- This trend is especially notable because it is taking place in a range of geographic locations, around the world.
3. Notes from the Silk Road: Nine Dragons Paper Holdings (2689.HK) – Potential Volatility Risk
On the eve of the Chinese New Year holiday Nine Dragon Paper (NDP) released a profit warning regarding their H1 FY19 fiscal earnings. This warning came ahead of the 26th February 2019 Board Meeting.
Management guidance calls for a decrease for H1-2019 of approximately 45% YoY and revenue line of not less than RMB2.4bn. NDP cites an increase in raw materials and a decrease in the selling price of the products.
Despite the negative news, the share price has rallied 15% since the announcement. We examine the implications.
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