ECM Weekly (5 Apr 2020) - Kangji Medical, WeDoctor, IDP Edu, NextDC, Coles, and More
Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs.
The talk of the town is, of course, Luckin Coffee (LK US) and their admittance of fraudulent transactions. As a result of it, logically, we aren't going to see any China ADR listings any time soon. The damage is done and this might give Chinese ADRs much needed motivation to start finding their way home. We shared our thoughts in:
This was another week of placements as companies looked to secure some cash to support their balance while some investors were looking to lock in some profits.
In Australia alone, we saw three placements this week and potentially more to come. Coles selldown by Wesfarmers was a surprise considering we were under the impression that they weren't going to sell more after the February placement. Other companies that were looking to secure funding and shore up balance sheet include Idp Education (IEL AU) and Nextdc Ltd (NXT AU).
- Coles Placement - Wider Discount to Account for Overhang
- NEXTDC Placement - Good Track Record but I Wouldn't Bet My House on the Placement
- IDP Education Placement: Testing Times but It Will Pass, Probably with Flying Colours
Back in Hong Kong, new IPO filings were coming through but activity still seemed fairly muted. Viva China Holdings (8032 HK) sold shares in Li Ning Co Ltd (2331 HK) probably to tide through a difficult period. The former has been running into higher leverage over the past few years and has been going bleeding cash in its operations.
Other upcoming IPOs we have covered this week:
- WeDoctor (微医) Pre-IPO - Background and App Walk Through - The Online Medical Directory and More
- Kangji Medical (康基医疗) Pre-IPO: Track Record of Growth but Products Too Concentrated
Trade ideas:
Accuracy Rate:
Our overall accuracy rate is 73.3% for IPOs and 65.3% for Placements
(Performance measurement criteria is explained at the end of the note)
New IPO filings this week
- PTT Oil and Retail (US$1.5bn, Thailand)
- Archosaur Games (~US$100m, Hong Kong)
- Sunkwan Properties (~US$100m, Hong Kong)
Below is a snippet of our IPO tool showing upcoming events for the next week. The IPO tool is designed to provide readers with timely information on all IPO related events (Book open/closing, listing, initiation, lock-up expiry, etc) for all the deals that we have worked on. You can access the tool here or through the tools menu.
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