Daily BriefsTMT/Internet

TMT: Waterdrop Inc, Hoya Corp and more

In today’s briefing:

  • Waterdrop IPO: Valuation Insights
  • Hoya: Strong Demand for EUV Blanks/HDD Drives Better Than Expected 4QFY21 Results

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. 

Hoya: Strong Demand for EUV Blanks/HDD Drives Better Than Expected 4QFY21 Results

By Shifara Samsudeen, ACMA, CGMA

Hoya Corp (7741 JP)  reported its 4QFY03/21 and full-year FY03/2021 results on Friday. The company’s revenue for the fourth quarter grew 12% YoY while operating profit grew 33% YoY during the period. The growth in revenue and OP was driven by strong demand for EUV blanks and 3.5-inch HDD substrates for data centers.

Hoya’s revenues for FY03/2021 declined 5% YoY due to the adverse impact from Covid-19, however, operating profit for the year grew 13.2% YoY compared to FY03/2020. Both revenue and OP for FY03/2021 beat consensus estimates as well as the company’s own guidance.

Hoya’s 4QFY03/2020 earnings were affected by the Covid-19 outbreak and a fine related to a settlement with the US Department of Justice. Following the Covid-19 outbreak, Hoya’s earnings declined YoY during the first two quarters of FY03/2021 and earnings started recovering since the December quarter.

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