Daily BriefsTMT/Internet

TMT: Chindata Group, Waterdrop Inc, Samsung SDI and more

In today’s briefing:

  • Chindata Group: Data Centre Value
  • Waterdrop IPO – Valuation Has Nearly Tripled over the past Year
  • SDI’s Future Tied to JY Lee?
  • Waterdrop IPO: Attractive at the Lower End of the IPO Pricing

Chindata Group: Data Centre Value

By Arun George

Chindata is a data centre operator. It is the largest carrier-neutral hyperscale data centre operator in Asia-Pacific emerging markets as measured by capacity in service, according to Frost & Sullivan. The MSCI May 2021 review period has just wrapped up, and Chindata is among the stocks with the highest probability of inclusion in the MSCI Standard index and the largest buying impact from passive funds – MSCI May 2021 Index Rebalance Preview: Let The Games Begin.  

After touching $23.65 per ADS on 26 Feb 2021, Chindata has derated and is down 45% YTD. The last close price of $13.19 per ADS is 2% below the IPO price of $13.50 per ADS. The Asia-Pacific hyperscale data centre market remains a structural growth market in part due to the increasing prevalence of outsourcing data centre services, rising client demand for higher power density, and increasing regulatory requirements on data security. Overall, we think that Chindata remains an attractive play on these favourable market dynamics and the shares are worth a closer look. 


Waterdrop IPO – Valuation Has Nearly Tripled over the past Year

By Sumeet Singh

Waterdrop Inc (WDH US), a technology platform for insurance and healthcare services in China, aims to raise up to US$360m in its US IPO. Tencent Holdings (700 HK) owned 22.1% and Swiss Re AG (SREN SW) owned 5.7% of the company prior to its listing.

In this note, we’ll run the deal through our ECM framework and talk about valuations.


SDI’s Future Tied to JY Lee?

By Ken S. Kim

The talk of M&A interest by Samsung Electronics has been making the rounds again and the question is how does Samsung Electronics (005930 KS) grow with the current leader locked up in jail? Samsung SDI (006400 KS) seems to be central to where the Group goes.


Waterdrop IPO: Attractive at the Lower End of the IPO Pricing

By Shifara Samsudeen, ACMA, CGMA

The leading Chinese insurance and healthcare platform Waterdrop Inc (WDH US)  has set the terms for its US IPO. According to iResearch, Waterdrop was ranked the largest independent third-party insurance platform in China in terms of life and health insurance first year premiums (FYP) distributed in 2020.

The company plans to issue 30m ADS’ at an indicative price range of US$10-12 per ADS. Each ADS represents 10 ordinary shares of the company and the offer represents about 7.6% of the company’s total outstanding shares post IPO. At the midpoint of the IPO price of US$11 per ADS, Waterdrop will raise net proceeds of US$301.6m (assuming over-allotment option is not exercised) at a market capitalisation of US$4.3bn and a post-money EV of US$3.7bn.

A number of cornerstone investors have agreed to subscribe for at least US$210m worth of ADS’ offered at the IPO and these investors include Boyu Capital, HOPU Investments and Kevin Sunny Holdings. Waterdrop plans to use approx. 50% of the net IPO proceeds on enhancing and expanding its healthcare service and insurance business, 30% of the net IPO proceeds on R&D and the remainder will be used for general corporate purposes.


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