In today’s briefing:
- Toshiba (6502 JP) Getting Closer to Crunch Time So Ongoing News “Leaks” Likely
- Porsche IPO Preview
- Raysum (8890 JP) Mystery Bidder Is a Hedge Fund – And That Makes It More Interesting
- WCP IPO: Final IPO Price Set, Still an Avoid
- Straits Times Index Quiddity Leaderboard Mar 23: Sembcorp/Keppel Situation Could Cause Index Changes
- Leapmotor IPO – Peers Recent Down Move Won’t Help
- Leapmotor IPO: Valuation Insights
- WCP IPO: Order Table, Revised Terms, & Passive Flow Schedule
- Aier Eye Hospital (300015.CH) 22H1 – More Downside Ahead; The Long Logic Doesn’t Exist
- CALB IPO: What’s It Worth?
Toshiba (6502 JP) Getting Closer to Crunch Time So Ongoing News “Leaks” Likely
- Three interviews and comments by Senior Toshiba Boardmembers (chairperson and head of Special Committee) and the CEO prep the ground for a full company deal, or no deal.
- If no deal, there’s downside to the 5yr average Toshiba/Peers ratio. If you see 50% deal probability, at mid ¥6000s or better, IRRs are OK. But there is jump risk.
- I don’t see the activists just deciding to bail en masse if no deal. I think they take it further, which means I think the Board wants a deal.
Porsche IPO Preview
- The Porsche IPO is expected to be the second largest IPO ever in Germany. Total proceeds from the IPO will be 18.1 billion to 19.5 billion euros.
- The IPO price range is from 76.50 euros to 82.50 euros per share, which suggests a valuation of 70 billion to 75 billion euros.
- After the IPO, Volkswagen will have an extraordinary shareholders meeting in December to propose to pay 49% of total proceeds to shareholders in early 2023 as a special dividend.
Raysum (8890 JP) Mystery Bidder Is a Hedge Fund – And That Makes It More Interesting
- Raysum Co Ltd (8890 JP) has been in a weird kind of limbo for well over a year. The Chairman/Founder resigned late last year for health reasons.
- The company needed to take action to stay listed on TSE Standard. There was a plan to transfer 60+% of the shares to a foundation, through an odd arrangement.
- Then a hedge fund stepped up and said “I’ll have 64% of the company at a near life-time high.” So now we have an interesting deal. And interesting potential future.
WCP IPO: Final IPO Price Set, Still an Avoid
- WCP (WCP KS), a lithium-ion batteries separator company, has set its IPO price at KRW60,000 per share, a hefty 25-40% discount on the “desired” IPO price range of KRW80,000-100,000.
- The target raise has declined from KRW720-900 billion (US$517-646 million) to KRW432 billion (US$310 million) due to the lower IPO price and offer shares.
- While the final IPO price is now reasonable, the process smacks desperation and calls into question the credibility of the syndicate’s forecasts. This is still an avoid.
Straits Times Index Quiddity Leaderboard Mar 23: Sembcorp/Keppel Situation Could Cause Index Changes
- The FTSE Straits Times Index (STI) (STI INDEX) has a quarterly rebalancing cycle with index reviews performed in March, June, September, and December every year.
- The March and September reviews are complete index reviews while the June and December reviews are only for new listings.
- In this insight, we take a look at the potential index changes that can take place between now and the end of the March 2023 index review.
Leapmotor IPO – Peers Recent Down Move Won’t Help
- Leapmotor (LM) aims to raise around US$1.0bn in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.
- As of end Jun 22, it had delivered a total of 104,829 cars with most of its sales coming from its mini units, T03.
- In this note, we will run the deal through our ECM framework and talk about valuations.
Leapmotor IPO: Valuation Insights
- Leapmotor (2007699D HK) has launched its HKEx listing at HK$48.00-62.00 per share to raise up to US$1.0 billion. Books are open from 20 to 23 September.
- We previously discussed the IPO in Leapmotor IPO: The Bull Case, Leapmotor IPO: The Bear Case, Leapmotor IPO: Look Before You Leap, Leapmotor IPO: Valuation First-Look.
- Leapmotor, at best, should trade in line with median peer multiples. Leapmotor is fairly valued at the low end of the IPO price range. We pass on the IPO.
WCP IPO: Order Table, Revised Terms, & Passive Flow Schedule
- WCP’s institutional subscription rate was 33.28 to 1, one of the lowest for an IPO this size. And nearly all orders sit below the lower end.
- WCP set the price at ₩60,000, even lower than the floor, at an implied market cap of ₩2T. And the issuer also reduced the offering volume from 9M to 7.2M.
- Passive flows equivalent to about 3% of SO will likely flow into WCP by March next year. It is substantial enough to consider designing a flow trade setup.
Aier Eye Hospital (300015.CH) 22H1 – More Downside Ahead; The Long Logic Doesn’t Exist
- The fundamental changes in the population structure will lead to a decline in the growth rate of the total retail sales of consumer goods. The long logic doesn’t exist.
- Aier has hit a growth ceiling. As the endogenous demand will be stepped downward gradually, the performance of Aier will further decline. The downward elasticity of valuation is greater.
- It is still difficult for healthcare sector to have its own independent growth logic. The bottom of healthcare sector would appear after the collapse of Aier’s valuation.
CALB IPO: What’s It Worth?
- CALB (CALBLZ CH), a leading EV battery manufacturer, is seeking to raise US$2.0 billion through an HKEx IPO, according to press reports.
- We previously discussed the IPO in CALB IPO: The Bull Case, CALB IPO: The Bear Case and CALB IPO: Updates Support the Bull Case.
- In this note, we present our forecasts and take the first look at CALB’s potential valuation range.
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