Equity Capital Markets

Weekly Top Ten Equity Capital Markets – Mar 24, 2024

This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

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1. TCS US$1.1bn Placement – Relatively Small but Isn’t Well Flagged, Could Have Implications for Others

By Sumeet Singh, Aequitas Research

  • Tata Sons, holding company of Tata Group, is looking to raise around US$1.1bn via selling a 0.65% stake in Tata Consultancy Svcs (TCS IN).
  • The deal doesn’t appear to be well-flagged although it could be part of Tata Sons’ recent moves to avoid an RBI mandated listing next year.
  • In this note, we talk about the deal dynamics and run the deal through our ECM framework.

2. ECM Weekly (18th Mar 2024) – ITC, Interglobe (Indigo), MS&AD, GlobalWafer, Belle, Auntea, Trial

By Sumeet Singh, Aequitas Research

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • On the IPO front, Hong Kong appears to be heading towards its first US$100m+ IPO for the year.
  • For placements, after a flurry of placements in the prior week, past week was relatively quiet with only the US$2bn ITC Ltd (ITC IN) block.

3. Akeso Biopharma Placement (9926.HK) – Would Investors Be Willing to Take a Gamble?

By Xinyao (Criss) Wang

  • Akeso’s product sales grew rapidly in 2023, mainly driven by off-label use of AK104. Since AK104’s commercialization potential on other indications was “overdrawn” in advance, sales growth would slow afterwards. 
  • The key investment logic of Akeso is whether/how much its BsAb pipelines would grab shares from PD-1. The high valuation has somewhat priced in AK112’s successful head-to-head trial with pembrolizumab.
  • If AK112 does beat Keytruda, valuation will reach a new level. If AK112 fails in critical clinical trials, it would cast a shadow on the entire BsAb pipeline of Akeso.

4. Trial Holdings IPO: Trading Debut

By Arun George, Global Equity Research Ltd

5. Trial Holdings IPO Trading – Demand and Valuation Are Towards the Higher Side

By Sumeet Singh, Aequitas Research

  • Trial Holdings (5882 JP) (TH) raised around US$259m after pricing its IPO at the top-end in its Japan IPO.
  • TH operates a network of retail stores that offer one-stop shopping under its everyday low price model, across a variety of daily necessities, food items and other products.
  • We have looked at the company’s past performance in our previous notes. In this note, we talk about the trading dynamics.

6. Tencent 4Q2023: Gaming Declines Yet Again, Margins Have Further Upside

By Shifara Samsudeen, ACMA, CGMA, LightStream Research

  • Tencent (700 HK) reported 4Q results today. Both revenues and OP increased 7.1% and 42.0% YoY, however, both revenue and OP fell below consensus estimates.
  • The company also announced an increase to 2023 dividends and more than doublethe size of the company’s share buyback in 2024 compared to 2023.
  • We expect Internet VAS to grow at single-digits in 2024, however, high-margin new products to help boost margins in 2024.

7. Ceigall India Pre-IPO Tearsheet

By Ethan Aw, Aequitas Research

  • Ceigall India (1605242D IN) is looking to raise at least US$100m in its upcoming India IPO. The deal will be run by IIFL Securities, JM Financial and ICICI Securities.
  • Ceigall India is an infrastructure construction company with experience in undertaking specialized structural work such as elevated roads, flyovers, bridges, railway over bridges, tunnels, highways, expressways and runways. 
  • Its principal business operations are broadly divided into EPC and hybrid annuity model (HAM) projects, which are spread across ten states in India.

8. MIXUE Pre-IPO – Initial Thoughts on Valuation

By Sumeet Singh, Aequitas Research

  • Mixue Group is looking to raise about US$1bn in its upcoming Hong Kong IPO.
  • MIXUE Group (MIXUE) is a freshly-made drinks company providing affordable products to consumers, including freshly-made fruit drinks, tea, ice cream and coffee, typically priced at around one USD per item.
  • In our earlier notes, we have looked at the past performance and undertaken a peer comparison. In this note, we provide our initial thoughts on valuation.

9. Akeso Inc Placement – A Small One to Digest, Momentum Has Been Strong

By Clarence Chu, Aequitas Research

  • Akeso Biopharma Inc (9926 HK) is looking to raise US$155m from its primary placement.
  • Proceeds from the deal would be geared towards R&D expenditure for its preclinical programs, expediting clinical trials, and towards commercializing its existing approved products.
  • Accounting for 3% of shares outstanding, and representing 5.7 days of its three month ADV, the deal would be a relatively small one for the firm to digest.

10. Jeil Machine & Solution IPO Preview

By Douglas Kim

  • Jeil Machine & Solution is getting ready for an IPO in April in the Korean stock market. The IPO price range is 15,000 won to 18,000 won. 
  • The total offering amount ranges from 36 billion won to 43.2 billion won. The book building for the institutional investors will last from 5 to 12 April. 
  • According to the bankers’ assessment, the implied market cap of the company ranges from 309 billion won to 371 billion won.