ECM Weekly (20 October 2018) - San Miguel F&B, Mobvista, AoBiome, Stealth Bio, Coronado

Activity in the ECM space has been fairly muted this week. We've only had three listings this week, two in the US and one in Thailand, but no other new IPO being approved or looking to launch any time soon.

Starting off with the US listings, Studio City International Holdings Limited (MSC US) made a decent debut on Thursday, trading +47% at the day high. The strong performance stood out in a period of disappointing tech IPOs and it has been well flagged out by Ke Yan, CFA, FRM in his final valuation note. He pointed out that the IPO is offered at a decent discount to Melco Resorts & Entertainment (MLCO US) and Sjm Holdings (880 HK)'s FY18E EV/EBITDA. The float for MSC is expected to be small with MCE Cotai and Silver Point Capital taking up 15.3m and10.2m ADS respectively.

Niu Technologies (NIU US), on the other hand, closed below its IPO price on its Friday debut. It rallied up as much as 13% in early trading but crashed below its IPO price shortly after. Prior to its debut, the IPO was significantly downsized from 8m ADS to 7m ADS and its price range got cut from US$10.50 - 12.50 down to US$9 - 10. In our earlier note, our blue sky valuation already suggested limited upside at the initial price range. We will follow up with a quick trading update next Monday.

Back in Asia, Osotspa Co Ltd (OSP TB) opened on the first of trading at a high of THB30 but has been continuously sold down since then to close just above its IPO price. In our post-IPO update note, we pointed out that Carabao Group (CBG TB) which was trading at 34.6x FY2019E P/E ratio, down from 38x. But since then, CBG has gone on to fall by another 10% and it is now trading at about 31.5x FY2019E EV/EBITDA which explains the correction in OSP's share price and upside at this price level would still limited since we are pegging OSP's valuation at a discount to CBG. Nevertheless, if at any point OSP trades below its IPO price, we can expect near-term support from bookrunners.

In the pipeline, there are two decent size IPOs coming the way of Malaysia. QSR Malaysia and Leong Hup International both filed their prospectus this week and they are expected to raise US$500m and US$600m respectively. Thailands' TCC Group is also said to be planning an IPO of its domestic property business which could raise at least US$1.5bn.

Next week, Coronado Global Resources Inc (CRN AU) will debut in Australia and Sumeet Singh has covered the valuation in his note. The shares were said to be priced at A$4/share, at the bottom end of its range, as per AFR and prior to the start of bookbuilding, it was reported that books were covered counting the pre-orders and retail orders. However, even at the low-end, the shares are still expensive versus peers.

In the placement space, there is San Miguel Food and Beverage (FB PM) which downsized its re-IPO size from 1.02bn shares to just 523m shares. The selldown is an effort to comply with the minimum public ownership rule in the Philippines. We like the company and its dominant market share but our base case SOTP valuation suggests no upside at the top-end of the price range and a decent upside only from the bottom end.