KGI DAILY MARKET MOVERS – 15 July 2021
IPO Watch: F45 Training | Market Movers | Trading Dashboard
IPO Watch
F45 Training (FXLV US): Pricing at the US$16 midpoint
- 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.
- F45 will IPO at the midpoint pricing of US$16/share, implying US$1.5bn initial market cap and 19.2x Price/Sales.
- 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 will begin trading tonight, 15 July.
Market Movers
United States
- Apple (AAPL US) rose to a new high after a Bloomberg report mentioned that the company is seeking a 20% increase of iPhone production as compared to the prior year.
- Wells Fargo (WFC US) beat earnings estimates and closed near its US$45 psychological resistance, while Bank of America (BAC US) was the first major bank to miss earnings estimates, sending the share price down.
- The Oil & Gas sector was weak on Thursday with Occidental Petroleum (OXY US) down 7% despite EIA crude oil inventory draw of 7.9 million barrels, which was the second largest US crude draw for this year.
- Meme stocks took a hit with AMC (AMC US) and Virgin Galactic (SPCE US) losing over 10% on Wednesday’s trading. This comes despite AMC posting reopening attendance records with the debut of ‘Black Widow’ last weekend.
Singapore
- Mun Siong Engineering Limited (MSE SP) Shares rose 20% yesterday on higher-than-average trading volumes in the morning session. There was no company specific news yesterday. Most recent news was published on 8 July where the company announced that it would inject additional capital into Pegasus Advance Engineering, by subscribing up to 80mn redeemable convertible preference shares at an issue price of RM0.50 per share. Being an engineering company who services major customers in the petroleum industry, investors’ could have a positive outlook on Mun Siong given the overall positive sentiment in the industry as oil prices continue to rally this year.
- Leader Environmental Technologies Limited (LET SP) Shares rose by 16.4% yesterday. This was due to the company’s Rights Issue announcement on 13 July that Dr Lin Yucheng, the undertaking shareholder, has subscribed and paid in full for 104,926,500 Rights Shares at an issue price of 10 Sing Cents. In addition, Dr Lin also intends to subscribe to an additional 100,000,000 excess Rights Shares. The company has received a total subscription amount of S$20,492,650.
- Chasen Holdings Limited (CHLD SP) Shares rose by 10.3% yesterday, closing at a one-month high. This was due to the announcement of the company’s results for the financial year ended 31 March 2021. Chasen reported outstanding results, a 29% YoY top line growth and a net profit after tax of S$3.4mn, reversing the losses of S$15.2mn recorded in FY2020. On the same day, the company also announced a proposal of renewing the share buy-back mandate, which would be tabled at the AGM meeting held on 29 July.
- Rex International Limited (REXI SP) Shares rose by 7.5% and closed at a 52-week high. There was no company specific news yesterday. Given that the company is an independent oil exploration and production company, the rise in share price could be due the rally in oil prices, which is trading near the 52-week high of US$76.5 per barrel, fuelling investors’ positive outlook on the company. In addition, there were several other positive company news in July, such as Rex investing in a commercial drone company as part of diversification and the completion of the issuance of Lime Petroleum AS’s 2.5-year senior secured bond of NOK 500mn (approximately US$60mn).
- Propnex Limited (PROP SP) Shares rose by 6.4% yesterday, closing at an all-time high, and bringing total one year returns to 290%. While there was no company-specific news yesterday, shares are riding on the positive property outlook in Singapore. The Straits Times reported last week that the Housing Board resale market bounced back quickly last month, with prices continuing to climb and more flats changing hands as tightened Covid-19 measures were eased. Read here to read the article. In addition, The Straits Times also published yesterday that rents have risen for condominiums as well as HDBs, and rental volumes have increased.
- Golden Energy & Resources Limited (GER SP) Shares rose by 3.1% yesterday as the company announced on 13 July that the joint venture company between its subsidiary, Stanmore Resources Limited and M Resources, has completed the acquisition of the Millennium and Mavis Down Mines from Peabody Energy Australia. We currently have a Trading Buy and a TP of 0.43 Sing Cents, a 30% upside from yesterday’s closing price of 0.33 Sing Cents. We covered the company under the 12 July’s Trading Ideas here.
Hong Kong
- Sihuan Pharmaceutical Holdings Group Ltd. (460 HK) Aesthetics healthcare sector jumped. The company made an announcement regarding the potential sale by Bain Capital of a controlling stake in Hugel, Inc, a South Korea-based botulinum toxin manufacturer and the shares of which are listed on the Korea Exchange. The company has entered into agreements with Hugel under which the group has the exclusive rights to distribute Hugel’s products, Botulinum Toxin Type A (Letybo®) and Hyaluronic Acid, in the PRC. The group considered that the Hugel Sale represents a potential strategic opportunity for the Group and the Company will further evaluate the merits of pursuing the Hugel Sale.
- Microport Scientific Corp (853 HK) There was no company specific news. Previously, the company announced that its associate company, Shanghai MicroPort EP MedTech Co., Ltd. had applied for the IPO in the Shanghai STAR board. The Shanghai stock exchange had accepted the application.
- Joinn Laboratories China Co Ltd (6127 HK) The contract research organization (CRO)-themed stocks continued to rally as previously 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. The company is the market leader among the CRO-themed stocks.
- Yanzhou Coal Mining Co Ltd (1171 HK) There was no company specific news today. However, the rise in share price could be due to the rally in coal prices, which traded above US$130/tonne in early July 2021, the highest level since January 2011. Despite China’s efforts to tame rallying commodity prices, coal prices broke through due to supply constraints and higher demand. Investors could be front-running Yanzhou’s upcoming 2021 Interim earnings that is going to be released on 28 August.
- Shanghai Haohai Biological Technology (6826 HK) Shares closed at an all-time high yesterday. There was no company specific news, however, biotech sector stocks rose collectively yesterday. Similar to Sihuan Pharmaceutical, due to the growing aesthetics healthcare sector, investors might have a positive outlook on Shanghai Haohai’s medical aesthetics segment.
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