In today’s briefing:
- ECM Weekly (10 January 2021) – RLX Technology, Roiserv, Yidu Tech, and Placements
- Aequitas 2021 Asia IPO Pipeline – More Mega IPOs to Come
- SK Holdings: Sum-Of-The Parts Valuation Analysis & Key Catalysts
- TMT Weekly: 3 Things that Stood Out The Week of 1/8/2021
- Renesas – Auto Chip Shortage Could Drive Further Gains
ECM Weekly (10 January 2021) – RLX Technology, Roiserv, Yidu Tech, and Placements
Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs.
To kickstart the new year, we shared Aequitas 2020 IPOs and Placements results. 2020 marked our second full year of operations as an Independent Research Company, and our fifth year covering Equity Capital Markets (ECM). Even though ECM started off on a precarious note, it ended with very strong momentum.
Hong Kong ECM kicked off the year on a strong note with Yidu Tech Inc (2158 HK) closing its bookbuild a day earlier than stipulated. The deal was launched on the last day of 2020. Roiserv Lifestyle Services (2146 HK), the property management arm of Risesun Real Estate Devel A (002146 CH), also launched its bookbuild on the same day.
- Yidu Tech (医渡云) IPO – Expensive but It’s Still Justifiable
- Roiserv Lifestyle (荣万家) IPO – Small, Expensive, and Parent Dependent
There are a few IPOs looking to launch their IPOs soon such as Beijing Kuaishou Technology Co Ltd (1496219D CH), MicroPort CardioFlow (1844972D HK), and New Horizon Health (NHH HK). There is also another wave of secondary listings. We heard that Baidu (BIDU US), Autohome Inc (Adr) (ATHM US), and Bilibili Inc (BILI US) will likely come to market soon.
Other than IPOs, Hong Kong companies/shareholders were eager to sell to lock in some cash. Shareholders of Wuxi Biologics (2269 HK) was back on the market, ahead of lock-up to sell again whereas Haidilao (6862 HK)‘s cofounders, Shi Yonghong and Li Haiyan, sold about 1.4% stake in the company and locked in US$600m in cash on Friday.
- Wuxi Biologics Placement – Well Ahead of Lock-Up, Again
- Haidilao (海底捞) Placement – Founders Back to Sell More
- Akeso (康方生物) Placement – Prepping for Commercialization
- Jinxin Fertility (锦欣生殖) Placement – Only Warburg Selling This Time
There was also a big block in Korea, sold by the ten shareholders of Doosan Fuel Cell Co Ltd (336260 KS) who had earlier failed to sell their entire shareholding last year. Hence, this was likely an expected selldown.
In the US, despite the uncertainty surrounding China ADRs as evidenced from the deletion of the three Chinese telcos from MSCI and FTSE, RLX Technology Inc (RLX US) is looking to raise about US$1bn from its IPO. The company was said to be premarketing its IPO.
- RLX Technology Pre-IPO – The Positives – Fast Growth, Low Penetration
- RLX Technology Pre-IPO – The Negatives – Limited Track Record, and Missing International Ops
In Thailand, market will likely see more deals coming their way after Kerry Express Thailand (KEX TB) strong debut towards the end of 2020. We are hearing that PTT Oil and Retail (PTTOR TB) will likely launch its bookbuild early next week.
Accuracy Rate:
Our overall accuracy rate is 73.5% for IPOs and 66.9% for Placements
(Performance measurement criteria is explained at the end of the note)
New IPO filings this week
- Chaoju Eye Care (Hong Kong, ~US$200m)
- Linklogic Inc. (Hong Kong, >US$100m)
- Toplist (Hong Kong, re-filed)
News on Upcoming IPOs
Analysis on Upcoming IPOs
Aequitas 2021 Asia IPO Pipeline – More Mega IPOs to Come
In this note, we aim to highlight the Asia Pacific IPO pipeline for 2021. This list has been compiled on a best effort basis from tracking the company filings and through various media and other sources.
For readers who are not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific (ex-Korea and A-shares), including China ADRs. Hence, our pipeline will only include companies that fit these criterion.
Feel free to drop us a message for additional information (bookrunners and coverage) on these IPOs
SK Holdings: Sum-Of-The Parts Valuation Analysis & Key Catalysts
In this insight, we provide an updated sum-of-the parts (SoTP) valuation on SK Holdings (034730 KS). There are many moving parts of SK Holdings and it helps to review the main factors that have been impacting its share price. Our base case valuation of SK Holdings is 448,850 won, which represents a 54% upside from current levels.
We believe that the 6 MOST IMPORTANT FACTORS impacting the share price of SK Holdings are currently as follows:
I. A Big Investment ($1.5 Billion) in Plug Power
II. SK IE Technology IPO
III. Sale of SK Lubricants
IV. SK Telecom’s Higher Share Price Trend
V. Changing values of SK Siltron, SK E&S and other private companies
VI. Changing values of SK Biopharmaceuticals (326030 KS), Sk Materials (036490 KS), SKC Co Ltd (011790 KS), and other public companies
TMT Weekly: 3 Things that Stood Out The Week of 1/8/2021
Three things caught our eye this first week of 2021: eBay, Amazon, and the spectrum auction.
Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.
Renesas – Auto Chip Shortage Could Drive Further Gains
Automakers are starting to struggle with chip shortages as the Nikkei reports here, here and here. This is an extension of a broad chip shortage globally as WFH demand, the launch of new consoles, GPUs and CPUs and rapidly recovering auto sales pour some short-term fuel on the long-term fire of expanding electrification and digitalisation. No wonder then that TSMC is up 134% from its March lows, but Renesas is up an even more impressive 248% since its lows of 2020 and could continue to outperform.
Before it’s here, it’s on Smartkarma