Gapping down
In reaction to earnings/guidance:
- TU -2.7%, WWE -1.4%
Other news:
- DPW -3.9% (announces that it has established an "at-the-market" equity offering program under which it may sell shares of its common stock for proceeds of up to $50 mln)
- WRK -3.6% (confirms that on Jan. 23, 2021, the Company detected a ransomware incident impacting certain of its operational and information technology systems)
- FRSX -2.8% (files for $180 mln ADS offering)
- SILK -2.2% (voluntarily recalling additional lots of its ENROUTE Transcarotid Stent System, manufactured by Cordis, a Cardinal Health (CAH) company)
- HEP -1.9% (maintains quarterly dividend at $0.35/unit; also says, in 2021, it expects to hold the quarterly distribution constant at $0.35/unit; current yield is 9.3%)
- RUN -1.6% (reports 10% sequential increase of Q4 Megawatts Deployed; proposes private offering of $350 mln of convertible senior notes)
- TCDA -1.3% (files for $250 mln mixed securities shelf offering)
- INTC -1% (files for mixed securities shelf offering, no amount given)
- MRK -1% (discontinues development of SARS-CoV-2/COVID-19 vaccine candidates; continues development of two investigational therapeutic candidates)
Analyst comments:
- USFD -2.8% (downgraded to Neutral from Overweight at JP Morgan)
- KEYS -2.2% (downgraded to Hold from Buy at Deutsche Bank)
- PLNT -1.6% (downgraded to Neutral from Overweight at JP Morgan)
- IMAX -1.2% (downgraded to Neutral from Buy at Goldman)
- MGNI -1.1% (downgraded to Hold from Buy at Truist)
- TXRH -1% (downgraded to Underweight from Neutral at JP Morgan)
Early premarket gappers
- Gapping up:
- TSIA +96.2%, EXPR +49.7%, GME +47.7%, GEVO +20.8%, CLF +8.4%, LX +8.2%, CLPT +3%, PHG +2.6%, KRNY +1.6%, AUPH +1.6%, NTAP +1%, QQQ +1%, AZN +0.7%, NFLX +0.7%
- Gapping down:
- FRSX -3.6%, HEP -1.9%, TCDA -1.3%, GNOG -0.5%
China’s Love of TikTok-Style Apps Powers $5 Billion IPO
Kuaishou Technology targets world’s largest IPO since late 2019
Kuaishou Technology has its eyes on the world’s biggest initial public offering in more than a year, seeking to raise about $5 billion from a Hong Kong share sale as short-video and live-streaming apps surge in popularity in China.
Kuaishou—which competes with ByteDance Ltd., the rival Chinese company behind TikTok and its sister app Douyin—started taking investor orders Monday. With the offering, which could value it at more than $60 billion, Kuaishou is joining a string of tech companies from China that have listed in Hong Kong.
Kuaishou, which means “fast hand” in Chinese, is backed by Tencent Holdings Ltd. It was co-founded by Su Hua and Cheng Yixiao, software engineers who previously worked for Google China and Hewlett Packard, respectively.
Both Kuaishou and ByteDance have capitalized on growing demand from younger Chinese people to watch and record short videos on their smartphones. Its namesake short-video platform is the world’s second-largest, according to data cited in its prospectus, and there were 305 million average daily active users of its apps and mini-programs in China for the nine months as of September.
With a minimum deal size of $4.95 billion, the IPO would be the largest in the world since late 2019, when state-controlled Saudi Arabian Oil Co., commonly known as Aramco, raised $29.4 billion, Dealogic figures show.
At the top of the range, the deal implies a market capitalization of $60.9 billion, showing how Kuaishou’s valuation has risen rapidly. It was valued at $28.6 billion last February after obtaining $3 billion in funding from a Tencent-led consortium, according to PitchBook, a data provider. In total, the company has raised more than $4 billion in multiple funding rounds, PitchBook data shows.
Kuaishou takes a more democratic approach than rival services, saying its systems deliberately show users a broader range of videos, rather than just content from star creators. Its prospectus says that nearly 40% of videos get more than 100 views and that its co-founder, Mr. Cheng, believes Kuaishou should be somewhere that “champions ordinary people.”
Still, the listing document also highlights a few creators who have achieved widespread popularity, including a young inventor who goes by “Hopeless Edison,” a couple farming cordyceps fungi in Sichuan province, and a British professor based in Beijing who performs chemistry experiments online.
The company is selling 365.2 million new shares at an indicative range of 105 to 115 Hong Kong dollars, according to a term sheet seen by The Wall Street Journal. It plans to fix the offer price on Jan. 29.
The offering size could increase to up to $6.2 billion if underwriting banks exercise an option to sell 15% more shares.
Kuaishou has secured 10 cornerstone investors, including Capital Group, Temasek, BlackRock Inc., Canada Pension Plan Investment Board and Boyu Capital. They agreed to buy a combined $2.45 billion worth of the stock wherever the deal prices.
Units of Morgan Stanley, Bank of America Corp. and China Renaissance Holdings Ltd. are acting as joint sponsors for the deal.
>>> Up
* ArcelorMittal Raised to Overweight at JPMorgan; PT 26.50 euros
* Direct Line PT Raised to 395 pence from 362 pence at Berenberg
* Evraz Raised to Overweight at JPMorgan; PT 650 pence
* Fluidra Raised to Buy at HSBC; PT 23 euros
* Fugro GDRs Raised to Buy at ABN Amro Bank; PT 11.50 euros (+)
* Hannover Re Raised to Buy at SocGen; PT 160 euros
* JM Raised to Buy at Handelsbanken; PT 350 kronor
* Leoni Raised to Neutral at JPMorgan; PT 9 euros
* Novozymes Raised to Overweight at Barclays; PT 390 kroner
* Novozymes Raised to Overweight at Barclays; PT 390 kroner
* Outokumpu Raised to Overweight at JPMorgan; PT 4.90 euros
* Ratos Raised to Buy at SEB Equities; PT 49 kronor
* Sage Raised to Neutral at UBS (+)
* Salzgitter Raised to Neutral at JPMorgan; PT 21.50 euros
* Schaeffler Raised to Buy at Oddo BHF; PT 8 euros (+)
* Sika Raised to Buy at HSBC; PT 339 Swiss francs
* Standard Chartered Raised to Buy at Deutsche Bank; PT 560 pence
>>> Down
>>> Down
* Aperam Cut to Neutral at JPMorgan; PT 30.70 euros
* Arjo Cut to Hold at Pareto Securities; PT 67 kronor
* Avanza Cut to Sell at ABG; PT 200 kronor
* Banca Sistema Cut to Accumulate at Banca Akros (ESN) (+)
* Cie des Alpes Cut to Sell at SocGen; PT 16.90 euros (+)
* Duni Cut to Hold at Handelsbanken; PT 110 kronor
* Gjensidige Cut to Hold at DNB Markets; PT 220 kroner
* Hikma Cut to Hold at Peel Hunt; PT 2,640 pence
* Lundin Energy Cut to Sell at SocGen; PT 205 kronor (+)
* Medica Cut to Sell at Peel Hunt
* Netcompany Cut to Hold at SEB Equities; PT 590 kroner
* Netcompany Cut to Hold at SEB Equities; PT 590 kroner
* Olav Thon Eiendomsselskap Cut to Hold at ABG; PT 175 kroner
* Pandox Cut to Sell at SEB Equities; PT 110 kronor
* Serica Cut to Hold at Investec; PT 120 pence (+)
* Scandic Cut to Sell at SEB Equities; PT 25 kronor
* SEB Cut to Hold at Handelsbanken; PT 94 kronor
* Silence Therapeutics Cut to Hold at Peel Hunt; PT 605 pence
* SpareBank 1 Nord Norge Cut to Sell at ABG; PT 66 kroner
* Topdanmark Cut to Hold at ABG; PT 310 kroner
* Vectura Cut to Hold at Peel Hunt; PT 134 pence
>>> Initiation
>>> Initiation
* CA Immo Rated New Buy at Jefferies; PT 43 euros
* Chrysalis Investments Rated New Hold at Jefferies
* Oakley Capital Investments Ltd Rated New Buy at Jefferies
* Princess Private Equity Rated New Hold at Jefferies
* Prosus Rated New Buy at Renaissance Capital; PT 130 euros
* Securitas Reinstated Buy at ABG; PT 167 kronor
* Schiehallion Fund Rated New Hold at Jefferies
* Supermarket Income Rated New Buy at Berenberg; PT 130 pence
* Urban & Civic Reinstated Hold at Panmure Gordon; PT 345 pence
>>> Call
* Urban & Civic Reinstated Hold at Panmure Gordon; PT 345 pence
>>> Call
* ABB Seen Topping Expectations in 4Q, Jefferies Says
* Asos Buying Topshop Brand Would Make Strategic Sense: Berenberg (+)
* Boohoo’s Debenhams Purchase Is a Big Opportunity, Jefferies Says (+)
* European Staples Likely to Remain ‘Un-loved’ for Now: Citi (+)
* Eurofins 4Q Sales Better Than Expected, Outlook Unchanged: MS (+)
* Galp Seen at Strategic Crossroads After CEO Change: RBC Capital
* Health-Care Outperformance May be Held Back in 2021: Peel Hunt
* Philips 4Q Shows ‘Good Finish,’ Connected Care Leads: Bernstein (+)
* Siemens Energy Profit Beats, Guidance Conservative: Jefferies (+)
* Siemens PTs Rise at Deutsche Bank, Jefferies on Digital Strategy (+)
* Siemens Gamesa 1Q Beat Boosts Confidence in Turnaround, JPM Says (+)
* Swedbank Top Pick Ahead of Nordic Bank Earnings at Handelsbanken
* Swedbank Top Pick Ahead of Nordic Bank Earnings at Handelsbanken
TikTok rival Kuaishou to raise up to $6.3bn in Hong Kong IPO
Deal a measure of investor demand for Chinese tech groups as Beijing cracks down on sector
Chinese livestreaming and short video group Kuaishou is set to raise up to $6.3bn in a Hong Kong initial public offering in a test of investor appetite for China’s tech sector as it faces growing regulatory scrutiny.
The deal could value Kuaishou, which competes with ByteDance’s TikTok, at up to $61.7bn and would be the largest tech IPO since ride-hailing company Uber went to market in 2019.
The listing will raise between $4.9bn and $5.4bn, but that could rise to $6.3bn if bankers exercise an overallotment option to increase its size, according to a term sheet seen by the Financial Times. Shares are expected to price on Friday between HK$105 (US$13.55) and HK$115 (US$14.84) and begin trading on February 5.
The flotation comes as Chinese tech companies face an increasingly uncertain regulatory environment. The $37bn Hong Kong and Shanghai IPO of payments firm Ant Group was halted by Beijing at the last minute in November, while its ecommerce affiliate Alibaba is subject to an antitrust investigation.
Kuaishou, which is backed by Chinese internet group Tencent, earns most of its revenues from users sending virtual gifts to livestreaming hosts. The company takes roughly half of the gift price, which can range from a few cents to Rmb2,000 (US$309).
Livestreaming rules announced in November ban teenagers from purchasing virtual gifts on platforms such as Kuaishou and limit total spending by any single user. The regulations also tighten controls on livestreaming ecommerce, where video hosts promote goods to shoppers, a growing business for Kuaishou.
Kuaishou competitors including TikTok have faced controversy over their operations and use of data amid tensions between the US and China. In December, a deadline for ByteDance to restructure TikTok’s US operations passed without a deal, and the company remains in negotiations about the short video app’s status in the country.
Kuaishou’s app had about 262m daily viewers in the first nine months of last year, who on average spent 86 minutes per day watching videos. The company reported an operating loss of Rmb9bn on Rmb41bn in sales during the same period.
The company has spent heavily on bringing in new users as it faces an increasingly crowded online video market in China.
Cornerstone investors in Kuaishou’s IPO include asset managers Invesco and Fidelity as well as Singaporean state-backed investors Temasek and GIC, which will together buy shares worth up to $2.5bn with a six-month lock-up period.
“The quality and size of cornerstone investors are some of the highest we have seen in Chinese tech companies to come to market,” said one banker on the deal. “It shows that the market is still crying out for more liquidity in sizeable, high-growth tech companies.”
Kuaishou will use the funds for purposes including research and development, acquisitions and investment and expanding its ecosystem, according to the term sheet.
Tencent holds a roughly 22 per cent stake in Kuaishou after leading a $3bn financing round last year. As the number-two player in China’s online video market after Douyin — the Chinese version of TikTok — “Kuaishou is less susceptible to political noise”, according to one banker working on the IPO.
Kuaishou has hired Bank of America, China Renaissance and Morgan Stanley to work on the IPO.
Boohoo to buy Debenhams brand for £55m
Deal does not include the store portfolio, which is likely to be wound down
Boohoo confirmed on Monday that it would buy the intellectual property assets of department store chain Debenhams for £55m in a deal that will expand its reach and take it into new categories such as beauty and homewares.
The online fashion retailer said it intended to “rebuild and relaunch the Debenhams platform” and create “the UK’s largest marketplace across fashion, beauty, sport and homeware”.
John Lyttle, the former Primark executive recruited by Boohoo to oversee its expansion into a retailer of genuine scale, said: “The acquisition of the Debenhams brand is an important development for the group, as we seek to capture incremental growth opportunities arising from the accelerating shift to online retail.”
Mahmud Kamani, co-founder and executive chairman, added that it “represents a huge step which accelerates our ambition to be a leader, not just in fashion ecommerce, but in new categories”.
Debenhams will relaunch on the group’s online platform in the first quarter of next year.
The transaction does not include any of the chain’s department stores, which are set to be wound down with substantial job losses among its workforce. Boohoo is also not acquiring any of the group’s stock or its financial services operation.
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Prosus (1TY TH) +5.7%
- Prosus Rated New Buy at Renaissance Capital; PT 130 euros
- Tencent Jumps as Citi Boosts Target, Kuaishou Seeks $5.4b IPO
- Teleperformance (RCF TH) +3.2%
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Siemens Gamesa (GTQ1 TH) +3.1%
- Siemens Gamesa Prelim 1Q Underlying Ebit Beats Estimates
- Siemens Energy (ENR TH) +2.9%
- Siemens Energy Sticks to Guidance Despite 1Q Earnings Beat
- Ryanair (RY4C TH) +2.7%
- Nokia (NOA3 TH) +2.6%
- Enel (ENL TH) +2.5%
- Snam (SNM TH) +2.2%
- Orange (FTE TH) +2%
- Orange to Sell 50% of Orange Concessions at EU2.675B Valuation
- Carnival Plc (POH1 TH) +2%
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Telefonica (TNE5 TH) -0.7%
- Telefonica O2-Virgin Antitrust Nod in Sight With Simple Remedies
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Philips (PHI1 TH) -0.9%
- Philips 4Q Adjusted Ebita Meets Estimates
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AstraZeneca (ZEG TH) -1%
- AstraZeneca Says Calquence Met Primary Endpoint vsIbrutinib
- AstraZeneca to Cut EU Vaccine Deliveries in 1Q by 60%: Reuters
- Banco Santander (BSD2 TH) -1.1%
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Swedish Match (SWM TH) -1.4%
- European Staples Likely to Remain ‘Un-loved’ for Now: Citi
- AMS (DQW1 TH) -1.4%
- Pandora (3P7 TH) -1.4%
- NatWest (RYS1 TH) -1.5%
- TUI (TUI1 TH) -1.6%
- Rational (RAA TH) -1.7%