KGI DAILY MARKET MOVERS – 22 June 2021
IPO Watch: Nayuki Holdings | IPO Watch: Full Truck Alliance | Market Movers | Trading Dashboard
IPO Watch
Nayuki Holdings (2150 HK): First listed chinese modern tea stock
- Nayuki represents the emergence of a modern day tea culture in China, especially targeted to the millennial generation.
- Nayuki operates modern teahouses in China serving freshly-made drinks and handcrafted baked goods, while at the same time providing an interior space for customers to socialize. This concept differentiates Nayuki from traditional teahouses and tea stands.
- Nayuki is the second largest player in the modern tea market, with 18.9% market share and is currently expanding its outlets to gain greater market share.
- Modern teahouse industry growth momentum is strong and CAGR is expected to grow at 32.7% from 2020 to 2025.
- Initial mid-pricing (HK$18.50) implies around 8.8x PSR based on FY20 revenue, whereas Starbucks, a mature player, is valued at 5.5x PSR. Assuming a 32.7% CAGR growth rate, current valuation has not fully priced in potential growth.
- Conclusion: Nayuki is priced fairly but we could likely see upside gains during its IPO debut given that this will be the first pure-play tea beverage listing in the world.
- Total offer shares for Nayuki is 257mn and pricing range is between HK$17.20 to HK$19.80.
- Shares begin trading Wednesday, 30 June 2021
Full Truck Alliance (YMM US): Priced at top of range
- Full Truck Alliance (FTA) is the world’s largest digital freight platform by Gross Transaction Value (GTV), and is a key player in transforming China’s road transportation industry.
- The company, now named Manbang (满帮） was formed by a merger of Yunmanman (运满满）and Huochebang（货车帮）in 2017, and saw strong growth during the pandemic as the traditional offline matching of shipping orders to truckers was not allowed. GTV is up over 70% versus 2019, while order counts have more than doubled.
- At US$19 per ADS, FTA raised around US$1.6bn and will trade at around US$20.9bn, at a 45.3x Price/Sales valuation.
- While the IPO is pricey, FTA has an enviable market position, and is expected to see strong institutional backing from the likes of Fidelity, Invesco, Ontario Teachers’ Pension Plan and Mubadala, Abu Dhabi’s sovereign wealth fund.
- FTA is expected to trade later today, 22 June.
Market Movers
United States
- Reflation trades such as banks (WFC US) and infrastructure stocks (ROAD US) rebounded on Monday as concerns over the Federal Reserve’s hawkish view subsided.
- Microsoft (MSFT US) closed above US$262 at an all-time high as tech stocks also saw positive momentum on Monday. The software giant is expected to unveil Windows 11, the update to its Windows operating system on Thursday.
- Ebang International (EBON US), Diginex Limited (EQOS US) and other Chinese cryptocurrency miners led drops in crypto stocks after further news on Chinese authorities cracking down on cryptocurrency mining operations. Various regions in China have outright banned cryptocurrency production, leading to major crypto mining operations looking to shift their bases off-shore.
- ContextLogic Inc (WISH US) climbed as retail interest flooded in, despite meme stocks largely falling on Monday’s trading.
Singapore
- Pan Asian Holdings Ltd (PAWS SP) shares surged by 21% on higher-than-average trading volumes (highest trading volume in more than a year). There was no company-specific news today, but it previously announced on 7th June 2021 of a possible transaction involving shares of the company.
- Nutryfarm International Ltd (NUF SP) shares rose by 18% yesterday. Shares surged following the announcement by Nutryfarm on 10 June where the group’s wholly-owned subsidiary Global Agricapital Holdings entered into a JV agreement with Kong Jun Durian. Shares further surged on 18 June when the group announced that 3Q21 revenue is expected to increase. This was due to the fulfillment of orders worth RMB 117mn with Shanghai Yuqu, coupled with current discussion with Moonda to fulfill durian sales of RMB 130mn. Following the positive sentiment on the stock, share price continued to trade higher on heavy trading volumes.
- MC Payment Ltd (MCPP SP) shares continued to trade higher, surging 17% yesterday, on the back of news last week that OY!, a Temasek and Softbank-linked Indonesian company, was exploring the possibility of taking an equity stake. In addition, MC Payment disputes its controlling shareholder’s allegation of poor corporate governance. In a statement on 19 June, MC Payment assured its shareholders that the group is well familiar with the principles of good corporate governance and has consistently striven to ensure strict compliance.
- Yinda Infocomm Ltd (YINDA SP) The company held its EGM yesterday during noon, after which, shares started to gain in the afternoon trading session. All three resolutions were passed during the EGM, which included the placement of new shares.
- Kimly Limited (KMLY SP) Shares rose by 7% after CIMB Research upgraded its TP to S$0.46. As Singapore continues to shift towards a hybrid work-from-home model, Kimly’s coffee shops are expected to see resilient demand from mass-market consumers, considering that the group’s coffee shops are predominantly located in the heartlands. Additionally, Kimly’s acquisition of Tenderfresh would see a boost in revenue for the group in FY2020, and at the same time provide the group a chance to tap into the halal F&B market.
- Mermaid Maritime (MMT SP) Shares closed 3% higher yesterday. We currently have a Trading BUY on Mermaid Maritime with a TP of S$0.10. See our trading note here.
- Trading Dashboard: Add Geo Energy (GERL SP) at S$0.22 and take profit on Uni-Asia Group (UAG SP) at S$0.825.
Hong Kong
- Greentown China Holdings Limited (3900 HK). The real estate sector rebounded strongly, after previously falling to oversold levels due to cooling measures initiated by the authorities. Shares were trading higher after it dropped to a 52-week low last Friday. Last week, the chairman mentioned it was the best time to buy the stock at the annual general meeting.
- China Telecom Corporation Limited (728 HK). Shares gapped up and closed high after it closed at a 52-week low last Friday. The company announced operating data in May. Mobile users increased by 2.85mn to a total of 360.7mn. 5G package users grew by 6.72mn to total 124.5mn. The company also announced a new dividend policy whereby the dividend payout ratio in 2021 will be no less than 60% and that the payout ratio will be more than 70% within three years after the A-share offering and listing.
- HengTen Networks Group Ltd (136 HK). Evergrande Group related stocks jumped. Construction Bank International initiated coverage with a TP of HK$8.6 and an OVERWEIGHT rating. It is expected to have user base and content expansion, and a net profit CAGR of 124% from 2021 to 2023 accordingly.
- China Evergrande Group (3333 HK) shares jumped after it closed at a 4-year low last Friday. The company sold shares in a Hangzhou unit and collected around US$400mn. Meanwhile, market news said the company planned to repay a $1.5bn bond due June 28 this week.
- Jinxin Fertility Group Ltd (1951 HK). The company announced that Sichuan Jinxin Fertility Medical Investment Management Co., Ltd., an indirect wholly-owned subsidiary of the company will acquire 10% equity interest in Guangdong Kangzhi Hospital Management Co., Ltd at RMB37.74mn. Kangzhi Hospital is an investment holding company and currently holds 51% equity interest in Yunnan Jiuzhou Hospital Co., Ltd., and Kunming Hewanjia Obstetrics and Gynecology Hospital Co., Ltd..
- Trading Dashboard: Take profit on Geely Automobile (175 HK) at HK$25. Cut loss on Ping An Insurance (2318 HK) at HK$77. Add Xinyi Glass (868 HK) at HK$30.5 and TRIP.com (9961 HK) at HK$285.
Trading Dashboard
Related Posts: