KGI DAILY MARKET MOVERS – 13 July 2021

IPO Watch: F45 Training | Market Movers | Trading Dashboard

IPO Watch

F45 Training (FXLV US): Fitness, fun and friends? Sign me up!

F45 Training is one of the fastest growing fitness franchisors in the US, known for their functional 45-minute workout programmes.
Despite COVID-19, F45 managed to grow its franchise count by another 352 locations. The company was able to partially pivot towards online workout programs, minimising revenue loss.
At US$15-17/share, F45 will IPO around the US$1.5-1.6bn market cap region, with a high Price/Sales of 19x.
While F45 is going public at a rich valuation, we note that the company is one of the fastest growing fitness franchises in the world with 300-500 new franchises set up yearly. The company also came very close to breakeven in 1Q20,
F45 Training is expected to price on Wednesday and trade on Thursday, 15 July.

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Market Movers

United States

Disney (DIS US) shot up after box office figures for Marvel’s ‘Black Widow’ movie were released. The long-awaited movie debuted over the weekend and grossed US$80mn in theatres while also generating US$60mn on Disney Plus Premier Access, where subscribers pay an extra US$30 to watch newly premiered movies at their own convenience.
Lithium Americas (LAC US) rose alongside other renewable energy plays such as Albemarle (ALB US) and JinkoSolar (JKS US) after the Biden administration announced plans to quadruple the contribution of green energy from 20% to 80% of the economy by 2030.
Virgin Galactic (SPCE US) was up at least 10% in premarket trading before closing 17% lower on Monday after its monumental fully crewed flight with founder Richard Branson onboard. The sell-off could be due to the company’s decision to sell up to US$500mn of common stock on Monday, which is close to 4% of the outstanding shares.
Newegg, Carvana (NEGG US, CARV US) and other meme stocks gave way for newer meme stocks – with Sgoco (SGOC US) and Exela Technologies (XELA) taking the spotlight on Monday.

Singapore

GKE Corporation Limited (GKEC SP) Shares continued to rally over the past week and closed at a 52-week high yesterday. Shares rose by 9.2% on higher than average trading volumes. It was published in The Edge on 8 Jul that CGS-CIMB Research analysts have maintained their “ADD” rating and raised their TP for GKE Corp to 21 Sing Cents, up from previous TP of 18.4 Sing Cents. Key factors that were highlighted included the possibility of dividend payouts resuming (which was suspended since FY2017) and the emergence of twin drivers of growth. China operations are expected to benefit from high ready-mixed-concrete (RMC) volumes and pricing while Singapore operations are to benefit from robust performance in warehousing.
Singhaiyi Group Limited (SHG SP) Shares gained 7.7% yesterday, bringing total gains to 46% over the past one month. There was no company specific news yesterday. The surge in its share price over the past month could be rotational interest among the small-mid cap locally listed property stocks such as Hong Fok and Ho Bee Land. Singhaiyi develops and invests in residential, office and retail properties in the US and Singapore.
Japan Foods Holding (JFOOD SP) rose 4.8% yesterday after RHB Research upgraded the company to a BUY from NEUTRAL and raised its TP to S$0.50 from S$0.37. The research firm increased its forecasts for the company’s profits by 9-12% for FY2023 to FY2024. We currently have an OUTPERFORM recommendation and a TP of S$0.65. Read our report published on 30 June 2021.
IFAST Corporation Limited (IFAST SP) Shares gained ahead of its second quarter results that will be released on Friday, 23 July 2021. The positive sentiments around the stock is also likely driven by recent news that the company is applying for Malaysia’s digital banking license.
Rex International Holding Limited (REXI SP) Shares rose by 2.6% following the news announced last Friday that the issuance of Lime Petroleum AS’s 2.5-year senior secured bond of NOK 500 mn (approximately US$60 mn) has been completed and the settlement date will be 9 July. Rex owns 90% of Lime Petroleum AS.
IX Biopharma Limited (IXBIO SP) Shares rose by 2.1% as the company announced that it intends to restructure its pharmaceutical business to be held by Ligo Pharma, a wholly-owned subsidiary incorporated in the Cayman Islands. Following the restructuring, the spin-off company will be engaged in manufacturing, research and development and sales of pharmaceutical and medicinal cannabis products. The company is hence exploring a spin-off of its pharmaceutical business, including medical cannabis, by way of a listing on HKEX.
Silverlake Axis (SILV SP) Shares gained 1.8% after CGS-CIMB raised the company’s target price to S$0.35 on the back of an earnings recovery. The research firm cited Silverlake’s roll-out of the cloud-based core banking system, Mobius, to lead the earnings recovery. Last week, shares of Silverlake received a boost when The Edge reported that Singapore-based PE firm Ikhlas Capital had formed a partnership with Silverlake’s parent company.
Trading Dashboard: Add Jiutian Chemical (JIUC SP) at S$0.085. Cut loss on Hyphens Pharma (HYP SP) at S$0.315

Hong Kong

ZTE Corp (763 HK) The company announced a positive earnings alert in 1H21 where net profits attributable to common shareholders are expected to increase by between 105% YoY and 132% YoY, implying profits of between RMB3.8bn and RMB4.3bn. Meanwhile, Morgan Staley reiterated an ACCUMULATE rating with an unchanged target price of HK$32 as its gross profit margin is expected to improve consistently in 2Q21, and the recovery of profitability is in line with the bank’s expectation.
CStone Pharmaceuticals (2616 HK) The company announced the final progression-free survival (FPS) analysis results of the registrational GEMSTONE-302 study which evaluates sugemalimab as first-line treatment in patients with stage IV non-small cell lung cancer. After the GEMSTONE-302 study met its primary endpoint in the interim PFS analysis last year, updated data in the recently-conducted final PFS analysis showed that sugemalimab plus chemotherapy demonstrated further improvement in PFS.
Hangzhou Tigermed Consulting Co Ltd (3947 HK) and Pharmaron Beijing Co Ltd (2333 HK) The contract research organization (CRO)-themed stocks jumped as China’s Center for Drug Evaluation released a draft guideline for conducting oncology drug trials last Friday. It stressed that all cancer drug R&D efforts should focus on creating “clinical value,” namely, meeting patients’ needs.
Nongfu Spring Co Ltd (9633 HK) Shares rose in line with the rebound in consumer industry stocks yesterday. Daiwa Securities rated Nongfu Spring as OUTPERFORM with a TP of HK$46.10. It was stated in the report that market data for China’s bottled water is expected to grow at a CAGR of 10.8% from 2019 to 2024. From 2021 to 2023, Nongfu Spring’s bottled water revenue and soft drinks revenue is expected to enjoy a CAGR of 17.3% and 24.6% respectively, driven by the expansion of sales outlets and new products.

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