The IPOX® Update 8/23/23
UK Chipmaker Arm Faces China Risks Ahead of IPO
British semiconductor designer Arm, currently owned by Japanese multinational conglomerate SoftBank, is gearing up for an IPO amid substantial concerns about its exposure to the China market. A significant 24.5% of Arm's 2023 revenue, which amounted to $2.7 billion, stems from China, as per SoftBank's financial documentation. Tensions arise from trade restrictions on chip exports to China and the escalating risk of China being barred from using Arm's advanced IP designs. This scenario is further complicated by the fact that Arm only holds a mere 4.8% stake in Arm China, its sole distributor, through the company Acetone. It's worth noting that the company's Chinese sales dipped by 16% to $140 million in Q2 2023 due to a weak smartphone market. Furthermore, many Chinese chip entities are now leaning towards the RISC-V architecture to decrease their reliance on Arm. (Source)
Sports IPOs Underperform in 2023
IPO expert Jay Ritter pointed out that numerous inexpensive IPO stocks in the sports sector are currently lagging in earnings and substantial revenue. The U.S. sports IPO segment in 2023 witnessed an aggregate return of a negative 43%. One notable example is the California-based golf equipment producer Sacks Parente, whose shares plummeted by 90% following a staggering 624% surge on its IPO debut. Even though sports stocks saw a 13% uptick this year, freshly launched sports IPOs have been consistently struggling. This phenomenon can be attributed to the low initial IPO prices, which often indicate a tepid interest from major institutional investors and consequently lead to erratic share price movements. It's imperative to underscore that companies like Sacks Parente and Interactive Strength have reported only minimal revenue, sparking skepticism about their valuations. (Source)
Doosan Robotics Aims for Top South Korean IPO in 2023
South Korean robotics firm Doosan Robotics is on track to secure the leading IPO spot in the country this year, targeting a $314 million raise. The company has announced a share pricing range with the final price set to be disclosed on September 19. Backed by the major industrial conglomerate Doosan Co., Doosan Robotics is spearheading the rapid robotics growth in South Korea, a sector that's garnering substantial investments from both the government and other major corporations like Samsung. The Korean IPO market has been relatively sluggish this year, with only one significant debut surpassing $100 million. It's also worth highlighting that auto manufacturer Hyundai Motor acquired the renowned robot developer Boston Dynamics in 2020, further emphasizing the sector's potential. (Source)
Chinese EV Maker Zeekr Targets $1.36 Billion US IPO
Chinese electric vehicle manufacturer Zeekr, operating under the well-known automaker Geely, is embarking on a $1.36 billion US IPO journey. The company is aiming for a valuation surpassing $13 billion, consistent with its private funding round earlier in February. As part of its investor outreach, Zeekr will be conducting meetings spanning various global hubs, including Hong Kong, Singapore, London, several US cities, and the Middle East. If successful, this would mark the most significant US listing by a Chinese firm since Didi's $4.4 billion IPO back in 2021. Established in 2021, Zeekr emerged in response to the burgeoning demand for luxury EVs in China and has since unveiled three vehicle models. They've recently announced plans for a new luxury sports car and aim to amplify their vehicle deliveries to 140,000 units this year. (Source)
Gissah Perfumes Shifts Base to Saudi Arabia Pre-IPO, Attracting Jadwa Investment
Gissah, a prominent fragrance company domiciled in Kuwait, is strategically relocating to Saudi Arabia as part of its preparations for an upcoming IPO. This significant move is punctuated by the acquisition of a 35% stake in Gissah Perfumes by Saudi private equity firm, Jadwa Investment. The infusion of this investment is envisioned to enhance Gissah's market footprint, as articulated by its CEO, Bashar Al-Ameer. Presently, Gissah boasts a retail presence with 80 outlets dispersed across key Middle Eastern nations, including Saudi Arabia, Kuwait, UAE, and Bahrain. Furthermore, Jadwa Investment has set its sights on bigger ambitions, revealing plans to take three of its portfolio entities public by the year 2025. (Source)
Thai Retail Giant Big C Eyes $1 Billion Dual Listing in Hong Kong and Bangkok
The Thai supermarket chain, Big C, owned by billionaire Charoen Sirivadhanabhakdi's business empire, which encompasses Thailand's largest brewer, plans a listing in Hong Kong and Bangkok, targeting a substantial $1 billion in Q4. Notably, Big C's foray into the Hong Kong market signifies its maiden venture beyond Southeast Asia. In line with its expansion blueprint, the retailer has earmarked an investment of HK$158 million with aspirations to unveil 99 new stores in Hong Kong by the end of 2026. The underlying motivation behind this dual listing is to tap into Hong Kong's robust trading volumes and gain visibility among global investors. (Source)
