Equity Capital Markets

Weekly Top Ten Equity Capital Markets – Feb 11, 2024

By February 11, 2024 No Comments
This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

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1. Metcash Placement – Not One, but Three Synergistic Acquisitions at a Go

By Ethan Aw, Aequitas Research

  • Metcash Ltd (MTS AU) is looking to raise up to A$300m (US$195m) in its primary placement. The proceeds will be used to partially fund the acquisition of three businesses.
  • The deal would be a large one to digest at 22.5 days of three month ADV and 8.4% dilution. 
  • In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

2. Thai Credit Bank IPO Trading – Half the Deal Already Spoken For, the Other Half Should Be Liquid

By Clarence Chu, Aequitas Research

  • Thai Credit Bank PCL (3674238Z TB) raised around US$281m in its Thailand IPO.
  • TCB is a commercial bank that focuses on providing business loans to small and medium-size enterprises (SMEs), nano loans and micro credits to merchants, and home loans for individual customers.
  • We had looked at the firm’s past performance and shared our thoughts on TCB’s valuation in earlier notes. In this note, we will look at the trading dynamics.

3. Apeejay Surrendra Park Hotels IPO – Has Bounced Back Strongly, at a Decent Discount

By Sumeet Singh, Aequitas Research

  • Apeejay Surrendra Park Hotel (PARK IN) (ASPH) plans to raise up to US$111m via selling a mix of primary and secondary shares in its India IPO.
  • ASPH ranks as the eighth largest in India in terms of chain affiliated hotel rooms inventory as of Sep 2023, as per Horwath HTL Report.
  • In this note, we talk about the past performance and our thoughts on valuations.

4. Digital Core REIT Placement – Taking a Turn for the Better After All the Negative News

By Ethan Aw, Aequitas Research

  • Digital Core REIT (DCREIT SP) is looking to raise at least US$100m in its primary placement. The proceeds will be used to fund potential acquisitions and debt repayment. 
  • The deal will be a large one to digest at 72.7 days of three month ADV and 12.8% dilution.
  • In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

5. CaiNiao’s FYQ3: Solid Revenue Growth & EBITA Margin Improvement Distinguish It From Express Peers

By Daniel Hellberg, Tracking Traffic

  • CaiNiao’s revenue growth remained strong, up +24% Y/Y in December quarter
  • EBITA turned positive from loss in prior year period, but margin < FYQ2
  • Overall, an impressive set of results that distinguishes CaiNiao from express peers

6. Kayou Pre-IPO Tearsheet

By Ethan Aw, Aequitas Research

  • Kayou (000KAYOU CH) is looking to raise up to US$500m in its upcoming HK IPO. The deal will be run by CICC, Morgan Stanley and JP Morgan.
  • Kayou is a Chinese pan-entertainment product retailer of toys, with trading cards in particular as its core product. 
  • As of 9M23 (30th Sep 23), it had an IP matrix of 44 IPs through licensing from IP partners and the development of proprietary IPs. 

7. Bharti Hexacom Pre-IPO Tearsheet

By Ethan Aw, Aequitas Research

  • Bharti Hexacom (6597372Z IN) is looking to raise up to US$1bn in its upcoming India IPO. The bookrunners are SBI Capital, Axis Capital, BOB Capital, ICICI Securities and IIFL Securities.
  • Bharti Hexacom (BH) is a communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services to customers in the Rajasthan and the North East telecommunication circles in India.
  • It offers its services under the brand ‘Airtel’. BH relies on a robust network infrastructure with a mix of owned and leased assets.

8. Agilus Diagnostics Limited Pre-IPO – Still Recovering from COVID

By Sumeet Singh, Aequitas Research

  • Agilus Diagnostics Limited (SRLL IN) is looking to raise around US$200m in its upcoming India IPO.
  • Agilus Diagnostics Limited (Agilus) is a diagnostic testing service provider.
  • In this note, we look at the company’s past performance.

9. Samhyun IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of Samhyun is target price of 28,106 won, which is 25% higher than the mid-point of the IPO price range (22,500 won).
  • Given the moderate upside, we have a Positive view of Samhyun IPO. Our base case valuation is based on P/E of 34.6x net profit of 8.6 billion won in 2023.
  • Samhyun developed one of the world’s first CVVD (Continuously Variable Valve Duration) technology for automobile engines, which improves fuel efficiency by controlling the engine’s valve opening time.

10. Pre-IPO Xiaocaiyuan International Holding – A “Dark Horse” In Mass Chinese Cuisine Market

By Xinyao (Criss) Wang

  • Based on effective strategic positioning, Xiaocaiyuan is able to seize the market’s demand for cost-effective catering during consumption downgrade and the trend of increasing restaurant chain rate in China.
  • The key for Xiaocaiyuan to generate increasing profits at low spending-per-consumer is due to its strong supply chain, which will be favored by capital especially when Xiaocaiyuan enters community catering.
  • Xiaocaiyuan International Holding (XCY HK) is better than peers. However, due to poor sentiment in HKEX, it’s not sure if Xiaocaiyuan’s valuation/share price performance could outperform peers as well.