{"status":{"rid":"m+SY4ekyroocCtQuvA==","time-ms":8},"hits":{"found":121,"start":0,"hit":[{"id":"t4771271","fields":{"title":"So-Young International Inc. (SY) Q4 2024 Earnings Call Transcript","author":"SA Transcripts","author_url":"/author/sa-transcripts","content_type":"transcripts","id":"4771271","publish_date":"2025-03-28T13:42:20Z","primary_symbols":["SY"],"tags":["sa-transcripts","sy","transcripts","has-audio","china-country"],"uri":"/article/4771271-so-young-international-inc-sy-q4-2024-earnings-call-transcript","image_url":"/images/user/sa-transcript.png"},"highlights":{"author":"SA Transcripts","content":"Call Start: 07:30 Call End: 08:24 So-Young International Inc&period; (SY) Q4 2024 Earnings Conference Call March 28, 2025 07:30 AM ET Company Participants Mona Qiao - IR Xing Jin - Co-Founder, Chairman, and CEO Nick Zhao - CFO Conference Call Participants Nelson Cheung - Citibank Ivy Li - Haitong Securities Jim Peng - CITIC Securities Presentation Operator Ladies and gentlemen, thank you for standing by for So-Young's Fourth Quarter and Full Year 2024 Earnings Conference Call&period; At this time, all participants are in listen-only mode&period; After management gives their prepared remarks, there will be a question-and-answer session&period; As a reminder, today's conference call is being recorded&period; I would now like to turn the meeting over to your host for today's call, Ms&period; Mona Qiao&period; Please go ahead, Mona&period; Mona Qiao Thank you, operator, and thank you, everyone, for joining So-Young's fourth quarter 2024 earnings conference call&period; Joining me today on the call is Mr&period; Xing Jin, our Co-Founder, Chairman and CEO; and Mr&period; Nick Zhao, CFO&period; Please note that the discussion today will contain forward-looking statements made under the Safe Harbor provisions of the U&period;S&period; Private Securities Litigation Reform Act of 1995&period; Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations&period; Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with SEC, including our annual report on Form 20F&period; So-Young does not undertake any obligation to update any forward-looking statements, except as required under applicable law&period; Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in RMB&period; At this time, I'd like to turn the call over to Mr&period; Xing Jin&period; Xing Jin [Foreign Language] [Interpreted] Hello, everyone, and welcome to today's conference call&period; In the fourth quarter of 2024, our total revenue during the quarter was RMB369&period;2 million&period; Net loss attributable to So-Young was RMB607&period;6 million, while non-GAAP net loss was RMB53&period;2 million&period; The fluctuation in our bottom line was primarily driven by a onetime goodwill impairment charge of RMB540 million for our subsidiary, Miracle Laser, as well as our continued investment in the self-operated aesthetic center network&period; During the quarter, we continued to undertake our vertical integration strategy, leveraging our extensive user base [Technical Difficulty] and upstream supply chain capabilities to drive the rapid expansion of our aesthetic centers&period; Our So-Young Clinic officially launched with a refreshed bright identity that is focused on providing high quality, cost effective light medical aesthetics and anti-aging solutions&period; The bright refreshing is to make medical aesthetics more accessible and empower Chinese consumers to individually pursue aesthetic freedom&period; The continued high growth of our aesthetic center network demonstrates the viability of its business model and growth potential&period; Moving forward, we will continue investing in the business to establish it as a new growth engine for the group&period; Now let me give you a closer look at our quarterly performance&period; In Q4, we have opened 19 So-Young Clinics across nine core cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Chengdu, Wuhan, Chongqing and Changsha<<<, all of which are fully operational&period; Among them, 11 aesthetic centers have achieved positive monthly operating cash flow in December&period; Our customer satisfaction remains at an industry leading 4&period;98 out of 5&period; Revenue from our aesthetic center business surged to RMB81&period;3 million during the quarter, up 79% quarter-over-quarter and 702% year-over-year&period; We recorded over 38,000 verified paid visits&period; Total number of verified paid aesthetic treatments surpassed 81,500&period; As of the end of 2024, total number of active users exceeded 39,500, highlighting the strong appeal of our brand and our deep insight into market demand&period; We successfully acquired a large number of verified users through our pricing strategies for the Double 11 and Double 12 sales events and promotional activities following the debut of our aesthetic center on May 20&period; This, however, led to a temporary decline in our per capita revenue, which was anticipated result of our user acquisition strategy&period; Our Beijing Head Aesthetic Center has now matured with repeat customer revenue accounting for 88% of total revenue, demonstrating the long-term appeal of our uniform high quality services&period; Our Shanghai Center in Super Brand Mall is in [indiscernible] and received over 2,000 monthly visits during its fifth month operation with per square meter sales exceeding 10,000&period; Through strong brand awareness, efficient marketing and robust operational management, we have successfully maintained customer acquisition cost below the industry average&period; During the quarter, our aesthetic centers officially debuted on the Meituanianpil, quickly reinforcing its brand recognition&period; This channel has generated strong ROI and become a [Technical Difficulty] acquisition stores for us&period; To date, none of our aesthetic centers have been integrated into the So-Young app&period; Instead, customer primarily come from various channels, including the brand influence, private domain traffic, other platforms and user referrals&period; Looking ahead, we plan to deepen our presence in core cities, replicating our proven aesthetic centers across more locations to further expand our network&period; Our comprehensive medical aesthetic supply chain is yielding results as well&period; During the quarter, we served over 1,200 medical institutions with our injectable solutions, reflecting continued growth in our customer base&period; Demand for injectable remained robust with over 52,000 units shipped during the quarter, up 20% sequentially&period; This highlights strong market recognition and demand for our products and underscores our product development, quality control and promotional capabilities&period; We continue to carry out the high quality initiatives for POP, which remains the cornerstone for our traditional business and plays a pivotal role in our overall strategy&period; As a key profit driver, it will continue to generate stable earnings to support our new business&period; During the quarter, GMV for verified medical aesthetic services reached RMB356&period;6 million, up 3% sequentially&period; Total transaction volume increased 10% year-over-year, while per capita installed GTV grew by 6% sequentially&period; As light medical aesthetics [Technical Difficulty] the rise of large scale light medical aesthetic change is inevitable&period; Unlike traditional institutions that rely on doctor grinding and personalized treatments to command high premiums, this chance will expand rapidly by offering uniform, highly cost effective services to achieve economies of scale&period; Scale is critical to the success of change&period; First, a sufficient number of locations and market density are essential for building brand awareness and reducing customer acquisition cost&period; Second, great scale in real-estate development and in house supply chain, lowering procurement cost and expanding profit margins&period; Lastly, a large network supports a strong digital operations platform, where comprehensive digitalization reduces reliance on human management and ensures a high degree of standardization and consistency across all locations&period; So-Young’s advantage in building a large medical aesthetic chains allowing our strong brand recognition, a fully integrated product supply chain established over the past four years, our corporate interacting and AI capabilities, which far exceed those of traditional medical aesthetic institutions&period; What we need now is time to consistently expand and establish more high quality aesthetic centers&period; We believe that China will see the emergency of a leading light medical aesthetic chain with over 1,000 locations&period; Even at that scale, it would account for less than 5% of the total number of medical aesthetic institutions&period; This is a long term growth opportunity and we have the patience and commitment to emerge as the market leader&period; Now, I'll hand over to the [indiscernible] Nick, who will walk through the financial results followed by the Q&A session&period; Nick Zhao Hello, this is Nick&period; Please be reminded that all amounts quoted here will be in RMB&period; Please also refer to our earnings release for detailed information about our comparative financial performances on a year-over-year basis&period; Total revenues during the quarter were RMB369&period;2 million, down 5&period;5% year-over-year, primarily due to the decrease in revenue generated by So-Young Prime&period; Information, reservation services and other revenues were RMB201&period;5 million, down 27&period;7% year-over-year, primarily due to a decrease in revenue generated by So-Young Prime&period; Aesthetic treatment services revenues reached RMB81&period;3 million, a remarkable 701&period;6% year-over-year growth increase, primarily due to the expansion of our aesthetic center business&period; Sales of medical products and maintenance services were RMB86&period;2 million, down 15&period;2% year-over-year, primarily due to a decrease in order volume for medical equipment&period; Cost of revenues was RMB153&period;1 million, up 11&period;2% year-over-year, primarily due to the expansion of our aesthetic center business&period; Within cost of revenues, cost of information, reservation services and others were RMB44&period;5 million, down 48&period;","primary_symbols":"SY","summary":"","title":"So-Young International Inc&period; (SY) Q4 2024 Earnings Call Transcript"}},{"id":"a4614281","fields":{"title":"Its Business In Tatters, Could Gome Be Morphing Into A Commercial Property Owner?","author":"Bamboo Works","author_url":"/author/bamboo-works","content_type":"articles","id":"4614281","publish_date":"2023-06-29T05:05:00Z","summary":"[\"Gome’s auditor resigned over a wide range of financial issues disclosed last week, though the company expects to file its overdue 2022 annual report as soon as next month.\",\"The former retailing highflyer may be considering a transformation to property owner, following an acquisition last year and development of a major mixed-use project.\",\"Despite Gome’s woes, it’s worth noting the company still had a sizable market cap of about HK$5 billion ($638 million) at the time of its trading suspension.\"]","primary_symbols":["GMELF"],"tags":["bamboo-works","gmelf","sa-submit","hong-kong"],"uri":"/article/4614281-its-business-in-tatters-could-gome-be-morphing-into-a-commercial-property-owner","image_url":"/images/users_profile/000/977/216/big_pic.png"},"highlights":{"author":"Bamboo Works","content":"As Gome’s woes mounted, its stock has moved steadily downward&period; Before the trading suspension in April, the company’s shares were down about 40% from a peak in February this year&period; The stock has lost almost two-thirds of its value over the last 52 weeks, giving the company a miniscule price-to-sales (P/S) ratio of just 0&period;09 before the trading suspension&period; Gome isn’t alone in its travails&period; Suning, China’s other former electronics retailing giant, is going through similar pains in its own downward spiral&period; Suning has fared just slightly better than Gome thanks to local ties that helped it secure a government bailout&period; The company also counts e-commerce giant Alibaba (BABA) as a major stakeholder with 20% of the company&period; Even so, Suning’s future is anything but guaranteed after it also failed to make the transition from traditional retailing to e-commerce&period; Despite Gome’s woes, it’s worth noting the company still had a sizable market cap of about HK$5 billion ($638 million) at the time of its trading suspension, showing somebody still sees some value there despite the recent struggles&period; The question is where that value is hidden&period; The answer may lie in what’s next for Huang and his Gome brand&period; A clue to what he may try next came at the time of last year’s interim results filing, when the company said it would stick to its brick-and-mortar retailing roots by introducing experiential stores and shopping malls through a share purchase of Eagle Delight Properties (Overseas) from Gome’s affiliated property company&period; Huang’s best bet may be to gradually wind down Gome as a retail brand&period; A multi-use complex called Gome Commercial Capital in Beijing, including an eight-story mall, hotel-apartment building, office tower, and a three-story underground car park, would become the flagship of a new property venture&period; Gome also said it was also developing a smaller second property in the Central China city of Changsha<<<, called No&period; 9 Xiangjiang, though in March media reports said the company was pulling out of that project&period; Such a property-focused strategy certainly seems to hold more promise than traditional retailing, though it comes as China’s long-booming property market heads into its own downturn&period; But that downturn is expected to wreak bigger havoc on the residential property market, with commercial properties like the ones Gome is involved with expected to suffer less&period; One thing that seems relatively certain is that Gome will have to undergo a major transformation and won’t be able to continue in its present form as an electronics retailer&period; Its vision of high-tech “experience centers” could bring it some new life, though first it will have to unwind its current financial mess – quite possibly with the assistance of a bankruptcy court&period; Disclosure: None Original Post Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors&period;","primary_symbols":"GMELF","summary":"["Gome’s auditor resigned over a wide range of financial issues disclosed last week, though the company expects to file its overdue 2022 annual report as soon as next month&period;","The former retailing highflyer may be considering a transformation to property owner, following an acquisition last year and development of a major mixed-use project&period;","Despite Gome’s woes, it’s worth noting the company still had a sizable market cap of about HK$5 billion ($638 million) at the time of its trading suspension&period;"]","title":"Its Business In Tatters, Could Gome Be Morphing Into A Commercial Property Owner?"}},{"id":"a4025402","fields":{"author":"John Sheehy","title":"Recent News From Xinyuan Real Estate In The Context Of Its Market Valuation","uri":"/article/4025402-recent-news-xinyuan-real-estate-context-market-valuation","summary":"[\"Prospects for land acquired by Xinyuan in 2016 look very good, and the company has found success outside of standard public auctions.\",\"Xinyuan has reduced its interest burden through a variety of financing channels.\",\"The company is well positioned to take advantage of the downturn by acquiring new land.\",\"Domestic listing of the property management subsidiary could bring attention to the $40-86 million value of this business and enhance its growth potential.\"]","publish_date":"2016-11-22T11:34:14Z","author_url":"/author/john-sheehy","content_type":"articles","image_url":"/images/users_profile/001/105/088/big_pic.png","id":"4025402","tags":["john-sheehy","long-ideas","xin","industrial-goods","sa-submit","investing-ideas","china-country","residential-construction"],"primary_symbols":["XIN"]},"highlights":{"author":"John Sheehy","content":"home price strength is limited to a few regions, which contain nearly all of the cities that recently imposed housing market restrictions&period; These areas have strong local economies with rising wages and growing populations that create genuine demand for newer and better-quality homes&period; A look at Xinyuan's latest purchases and recent news about some older acquisitions: Zhengzhou (10/26/16 press release) land acquired at a floor price of 2,033 RMB/sqm&period; This parcel is immediately adjacent to Xinyuan's "International New City"鑫苑国际新城 project, which began presales in September 2016 after the land was acquired in April (4/22/16 press release) at a floor price of 1872 RMB/sqm&period; While Xinyuan paid a slightly higher price than in April, home prices in the surrounding district have risen sharply, and the project should earn an excellent gross margin (assuming development and marketing costs of 4000-6000 RMB/sqm) (click to enlarge) The International New City project site falls under Xinyuan's cooperation agreement with the Zhengzhou government&period; The company worked with the government on planning for the site and advanced funds for land preparation&period; These deposits are credited with interest against the acquisition price when related land comes up for public auction&period; In a sense, the cooperation agreement can function like a virtual landbank, providing access to land when the company is ready to use it, without the financial burden of buying the land years in advance&period; However, this year's strong housing market led some to worry that even with the benefit of a discount, Xinyuan could be outbid when these parcels are posted for auction&period; Obviously, that did not happen at Zhengzhou International New City, and Xinyuan was able to expand the project at a very attractive land price&period; Early success of the first phase means the second-phase land purchase is a low-risk investment&period; Changsha<<< (10/26/16 press release) land acquired at a floor price of 3163 RMB/sqm&period; Changsha<<< has not been one of the country's top markets (average home price +4&period;5% in two years ended 9/30/16), but it was one of the strongest in October because it does not yet have the same restrictive housing policies recently imposed in most other central Chinese provincial capitals (e&period;g&period;, Zhengzhou, Jinan, Hefei, Chengdu)&period; Xinyuan's new plot is about 500m from a recent "Land King" transaction in which a developer paid a much higher price of 6115 RMB/sqm&period; New homes in this area are currently selling for 7000-8000 RMB/sqm&period; As of 6/30, Xinyuan was estimating a 27% gross margin from its Changsha<<< Xinyuan Splendid project&period; 70% of the GFA had been sold as of 9/30, but the company had only achieved 45% of projected revenues&period; The remaining space includes three types of units that will sell at a much higher ASP: premium apartments, commercial space, and parking&period; If successful, it would bode well for the prospects of the new land purchase if the project design incorporates some premium space as at Changsha<<< Xinyuan Splendid&period; Queens, New York (8/1/16 press release) land acquired at a floor price of US$175/sf&period; The Flushing neighborhood has become New York's real Chinatown, so the location is a natural fit for a Chinese developer, and apartments should have significant appeal for mainland Chinese buyers&period; The landmark designation of the old theatre at the site was a deterrent to some developers, but gives Xinyuan an opportunity to incorporate historical features in a way that add value at this site and also intangible benefit to the company's brand image in China&period; A photo of the unrestored lobby: Source: Afterthefinalcurtain&period;net (more at Keith-Albee Theatre, or RKO Keith's Theater) Hell's Kitchen, New York (1/14/16 press release) land was acquired at a floor price of about $550/sf&period; The high price relied on the potential return from the 20% of the space allocated for retail use&period; Local media recently reported that XIN cooked up a great deal with Target (TGT) signing a 20-year lease for 80% of the space&period; Having this anchor tenant reduces the risk from this development in a weakening Manhattan condo market and should facilitate project financing on favorable terms&period; During the 3Q conference call, Xinyuan disclosed that it has prepared 2 billion RMB for land acquisitions in 4Q16, with an additional 3-4 billion RMB in 1Q17&period; The company's profitability suffered in the past two years from high prices paid for land at the 2H13-1H14 peak of the last cycle (see "Comments on Xinyuan Real Estate's Gross Margins")&period; Xinyuan's unrestricted cash on hand of $928 million as at 9/30 puts the company in a good position to take advantage of opportunities that may arise over the next six months amid weaker industry sales and tighter access to financing&period; Savvy land acquisitions would build a foundation for much better returns in the next upturn (which the company expects in 2H17)&period; Xinyuan has had a good record over the past year, with land bought outside of traditional public auctions through arrangements that can require months or even years of negotiation and planning&period; Beijing Liyuan and Kunshan Xindo were privately purchased, and both will enjoy excellent margins&period; Zhengzhou International New City was purchased through the long-term cooperation agreement and is likely to also provide an excellent margin with below-average risk&period; It's possible that purchases announced over the next six months will represent the culmination of similar efforts&period; Refinancing Xinyuan refinanced its 13&period;25% US$ 2018 bonds with proceeds of a new 8&period;125% US$ 2019 bond&period; The savings from the lower interest will enhance annual EPS by $0&period;11 (assuming a 25% tax rate)&period; The bond refinancing is one of many steps the company took over the past year to broaden its sources of funding and reduce borrowing costs&period; As of 6/30/15, Xinyuan had $996 million of RMB debt with a weighted average interest rate of 10&period;25%, reflecting heavy reliance on non-bank<<< financing&period; As of 6/30/16, the company had $1181 million of RMB debt with a weighted average interest rate of 8&period;61%&period; The reduction was achieved through increased access to bank<<< loans plus issuance of domestic corporate bonds&period; Further savings are likely over the next nine months as most of the company's high-cost non-bank<<< debt matures&period; Most of the company's borrowed funds are devoted to projects under development, so the related interest expense is capitalized&period; The benefit of lower rates will be realized through lower "cost of real estate sales" leading to higher profit margins&period; 3Q Financial Results and 4Q Guidance Third-quarter results were strong, as should have been expected amid buoyant sentiment in some of the company's markets (see "Xinyuan 3Q16 Contract Sales Estimate from CRIC")&period; Investors may have been disappointed that Xinyuan did not repurchase any shares in the quarter&period; CFO Helen Zhang mentioned in the 3Q conference call that the buyback operates with a price ceiling&period; Observation of trading activity in 2Q led me to believe the ceiling was probably $5, because there seemed to be steady demand under that level, but not above&period; Lack of any repurchase in 3Q when the price surged past $5 also suggests the ceiling was around there&period; A price of $5 appears very cheap based on P/B and P/E, but the share price was under that level for most of the period from 2010 to 2016, so if $5 was the ceiling, it would have been a reasonable decision by management&period; Helen Zhang said, "probably we're going to start repurchase sometime in Q4 depending on the change of the stock price"&period; Some parameters of the share buyback were described in "Xinyuan Real Estate's Aggressive Share Repurchases Send a Strong Signal About Shareholder Value&period;" The bond indentures set an annual cap of $50 million on dividends plus buybacks, and I estimate the company has used $41&period;6 million ($21&period;2 million buyback + $20&period;4 million dividends), leaving $8&period;4 million for potential repurchases&period; Prior repurchases demonstrated the company recognizes the benefit from accreti","primary_symbols":"XIN","summary":"["Prospects for land acquired by Xinyuan in 2016 look very good, and the company has found success outside of standard public auctions&period;","Xinyuan has reduced its interest burden through a variety of financing channels&period;","The company is well positioned to take advantage of the downturn by acquiring new land&period;","Domestic listing of the property management subsidiary could bring attention to the $40-86 million value of this business and enhance its growth potential&period;"]","title":"Recent News From Xinyuan Real Estate In The Context Of Its Market Valuation"}},{"id":"a4307255","fields":{"author":"Renaissance Capital IPO Research","title":"U.S. IPO Week Ahead: IPO Market Cashes In On Crypto As Canaan Leads 5-IPO Week","uri":"/article/4307255-u-s-ipo-week-ahead-ipo-market-cashes-crypto-canaan-leads-5-ipo-week","summary":"[\"Five IPOs and two SPACs plan to raise $634 million in the week ahead.\",\"One of the leading makers of cryptocurrency mining equipment, Canaan plans to raise $100 million at a $1.6 billion market cap.\",\"Being carved out of Consolidated-Tomoka, retail and office REIT Alpine Income Property Trust plans to raise $150 million at a $182 million market cap and a 4% yield at the midpoint.\"]","publish_date":"2019-11-16T18:06:13Z","author_url":"/author/renaissance-capital-ipo-research","content_type":"articles","image_url":"/images/users_profile/000/018/430/big_pic.png","id":"4307255","tags":["renaissance-capital-ipo-research","ipo-analysis","can","pine","yxr","sitm","lmpx","saqnu","amhcu","bcyc","idya","rtlr","investing-ideas"]},"highlights":{"author":"Renaissance Capital IPO Research","content":"Five IPOs and two SPACs plan to raise $634 million in the week ahead&period; One of the leading makers of cryptocurrency mining equipment, Canaan (CAN) plans to raise $100 million at a $1&period;6 billion market cap&period; It originally filed to raise $400 million (and in 2018 was rumored to be targeting over $1 billion)&period; The #2 player in the space, Canaan has shown that it's capable of being highly profitable, with a 61% net margin in the 1Q18&period; However, its performance is heavily influenced by Bitcoin prices; a price slump earlier in the year caused Canaan's sales to fall 96% in the 1Q19&period; Being carved out of Consolidated-Tomoka (NYSE: CTO), retail and office REIT Alpine Income Property Trust (PINE) plans to raise $150 million at a $182 million market cap and a 4% yield at the midpoint&period; Alpine Income is small with a concentrated tenant base, but it has a 100% leased portfolio and a large acquisition pipeline that should drive future growth&period; Chinese debt collector YX Asset Recovery (YXR) plans to raise $81 million at a $541 million market cap&period; YX Asset Recovery is the largest collector of tertiary receivables in China with a 9% market share, according to iResearch, with roughly $4 billion in receivables under collection as of 6/30/19&period; MegaChips spin off SiTime (SITM), a fabless producer of silicon timing systems, plans to raise $60 million at a $200 million market cap&period; The semiconductor industry is highly cyclical and is currently experiencing a downturn, but SiTime has established itself as a leader in the silicon MEMS oscillators market, claiming a 90%+ share&period; Micro-cap auto e-tailer LMP Automotive Holdings (LMPX) plans to raise $18 million at a $51 million market cap&period; The company had high growth in 2018, but revenue fell 28% in the 9mo19, and its gross margin has yet to swing positive&period; Former Ooyala executives' SPAC Software Acquisition Group (SAQNU) plans to raise $125 million, and Metalmark Capital and Avego Healthcare Capital's joint venture Amplitude Healthcare Acquisition (AMHCU) plans to raise $100 million&period; Lock-up periods for Bicycle Therapeutics (BCYC), IDEAYA Biosciences (IDYA), and Rattler Midstream (RTLR) will be expiring this week on Tuesday, November 19&period; U&period;S&period; IPO Calendar Issuer Business Deal Size Market Cap Price Range Shares Filed Top Bookrunners Amplitude Healthcare Acq&period; New York, NY $100M $125M $10 10,000,000 BMO Leerink Blank check company formed by Metalmark Capital and Avego Healthcare Capital targeting healthcare in the US or Europe&period; YX Asset Recovery Changsha<<<, China $81M $541M $7&period;75 - $9&period;75 9,282,000 Deutsche Bank<<< CMB International Capital Provides delinquent consumer debt collection services in China&period; Canaan Hangzhou, China $100M $1,581M $9 - $11 10,000,000 Citi China Ren&period; Leading maker of cryptocurrency mining equipment&period; SiTime Santa Clara, CA $60M $200M $13 - $15 4,300,000 Barclays Stifel Fabless producer of silicon timing systems being spun out of MegaChips&period; Alpine REIT Daytona Beach, FL $150M $182M $19 - $21 7,500,000 Raymond James Baird Single-tenant commercial net lease REIT formed by Consolidated-Tomoka&period; LMP Automotive Plantation, FL $18M $51M $5 - $6 3,227,500 ThinkEquity Operates an e-commerce site where users can buy, sell, and rent cars&period; Software Acquisition Las Vegas, NV $125M $156M $10 12,500,000 B&period; Riley FBR Blank check company led by former Ooyala officers targeting a software company&period; The following IPOs are expected to price this week: Alpine Income Property Trust, a single-tenant commercial net lease REIT formed by Consolidated-Tomoka, plans to raise $150 million by offering 7&period;5 million shares at a price range of $19&period;00 to $21&period;00&period; At the midpoint of the proposed range, Alpine Income Property Trust would command a market value of $182 million&period; Alpine Income Property Trust, which was founded in 2019, booked $14 million in revenue over the last 12 months&period; The Daytona Beach, FL-based company plans to list on the NYSE under the symbol PINE&period; Raymond James, Baird, B&period; Riley FBR, and BMO Capital Markets are the joint bookrunners on the deal&period; Please note: Parent CTO has agreed to invest $7&period;5 million in a concurrent private placement&period; Amplitude Healthcare Acquisition, a blank check company formed by Metalmark Capital and Avego Healthcare Capital targeting healthcare in the US or Europe, plans to raise $100 million by offering 10&period;0 million units at $10&period;00 to command a market value of $125 million&period; Amplitude Healthcare Acquisition was founded in 2019&period; The New York, NY-based company plans to list on the Nasdaq under the symbol AMHCU&period; BMO Capital Markets and SVB Leerink are the joint bookrunners on the deal&period; Canaan, a leading maker of cryptocurrency mining equipment, plans to raise $100 million by offering 10&period;0 million ADSs at a price range of $9&period;00 to $11&period;00&period; At the midpoint of the proposed range, Canaan would command a market value of $1&period;6 billion&period; Canaan, which was founded in 2013, booked $1&period;2 billion in sales over the last 12 months&period; The Hangzhou, China-based company plans to list on the Nasdaq under the symbol CAN&period; Citi, China Renaissance, and CMB International Capital are the joint bookrunners on the deal&period; LMP Automotive Holdings, which operates an e-commerce site where users can buy, sell, and rent cars, plans to raise $18 million by offering 3&period;2 million shares at a price range of $5&period;00 to $6&period;00&period; At the midpoint of the proposed range, LMP Automotive Holdings would command a market value of $51 million&period; LMP Automotive Holdings, which was founded in 2017, booked $14 million in revenue over the last 12 months&period; The Plantation, FL-based company plans to list on the Nasdaq under the symbol LMPX&period; ThinkEquity is the lead bookrunner on the deal&period; Please note: Founder, CEO, and Chairman Samer Tawfik intends to purchase up to $3 million of the IPO (15% of the deal)&period; SiTime, the fabless producer of silicon timing systems being spun out of MegaChips, plans to raise $60 million by offering 4&period;3 million shares at a price range of $13&period;00 to $15&period;00&period; At the midpoint of the proposed range, SiTime would command a market value of $200 million&period; SiTime, which was founded in 2003, booked $79 million in sales over the last 12 months&period; The Santa Clara, CA-based company plans to list on the Nasdaq under the symbol SITM&period; Barclays and Stifel are the joint bookrunners on the deal&period; Software Acquisition Group, a blank check company led by former Ooyala officers targeting a software company, plans to raise $125 million by offering 12&period;5 million units at $10&period;00 to command a market value of $156 million&period; Software Acquisition Group was founded in 2019&period; The Las Vegas, NV-based company plans to list on the Nasdaq under the symbol SAQNU&period; B&period; Riley FBR is the lead bookrunner on the deal&period; YX Asset Recovery, which provides delinquent consumer debt collection services in China, plans to raise $81 million by offering 9&period;3 million ADSs at a price range of $7&period;75 to $9&period;75&period; At the midpoint of the proposed range, YX Asset Recovery would command a market value of $541 million&period; YX Asset Recovery, which was founded in 2015, booked $980 million in revenue over the last 12 months&period; The Changsha<<<, China-based company plans to list on the NYSE under the symbol YXR&period; Deutsche Bank<<<, CMB International Capital, Raymond James, AMTD Global Markets, and SunTrust Robinson Humphrey are the joint bookrunners on the deal&period; Please note: Vice Chairman Joe Zhang intends to purchase up to $5 million of the IPO (6% of the deal)&period; IPO Market Snapshot The Renaissance IPO Indices are market cap weighted baskets of newly public companies&period; As of 11/14/19, the Renaissance IPO Index was up 28&period;6% year-to-date, while the S&P 500 had a gain of 23&period;5%&period; Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (SPOT) and Roku (ROKU)&period; The Renaissance International IPO Index was up 17&period;0% year-to-date, while the ACWX was up 16&period;0%&period; Renaissance Capital's International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and SoftBank&period; Original Post Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors&period;","primary_symbols":"","summary":"["Five IPOs and two SPACs plan to raise $634 million in the week ahead&period;","One of the leading makers of cryptocurrency mining equipment, Canaan plans to raise $100 million at a $1&period;6 billion market cap&period;","Being carved out of Consolidated-Tomoka, retail and office REIT Alpine Income Property Trust plans to raise $150 million at a $182 million market cap and a 4% yield at the midpoint&period;"]","title":"U&period;S&period; IPO Week Ahead: IPO Market Cashes In On Crypto As Canaan Leads 5-IPO Week"}},{"id":"a4330901","fields":{"title":"New World Development: Capital Recycling And Dividends Limit Downside Risks","author":"The Value Pendulum","uri":"/article/4330901-new-world-development-capital-recycling-and-dividends-limit-downside-risks","summary":"[\"Contracted sales for New World Development's projects in Hong Kong and Mainland China will be closely watched, as they are leading indicators of the company's future property development earnings.\",\"The company continues to grow its recurring income streams in the medium-to-long term with a strong pipeline of new investment property projects, but the coronavirus outbreak poses near-term headwinds.\",\"Capital recycling is a key strategy to help New World Development enhance shareholder value, with HK$15 billion worth of non-core asset disposals targeted in the next 18-24 months.\",\"New World Development currently trades at 0.39 times P/B, and offers a consensus forward FY2020 (YE June) dividend yield of 5.5%.\"]","publish_date":"2020-03-10T15:08:46Z","author_url":"/author/the-value-pendulum","content_type":"articles","image_url":"/images/users_profile/005/969/741/big_pic.png","id":"4330901","tags":["the-value-pendulum","ndvlf","financial","sa-exclusive","hong-kong","real-estate-development"],"primary_symbols":["NDVLF"]},"highlights":{"author":"The Value Pendulum","content":"Elevator Pitch I maintain my "Neutral" rating on Hong Kong-listed property conglomerate New World Development Company Limited (OTC:NDVLF) (OTCPK:NDVLY) [17:HK]&period; The current coronavirus outbreak is expected to pose near-term headwinds for the company, but downside for New World Development is limited by the company's capital recycling strategy and its progressive dividend policy&period; Taking into consideration these various factors, a "Neutral" rating for New World Development is fair&period; This is an update of my initiation article published on New World Development on October 22, 2019&period; New World Development's share price has declined by -14% from HK$10&period;94 as of October 22, 2019 to HK$9&period;41 as of March 9, 2020 since my initiation&period; New World Development currently trades at 0&period;39 times P/B, which represents a discount to the stock's historical five-year and 10-year average P/B multiples of 0&period;49 times and 0&period;50 times respectively&period; However, New World Development has traded as low as 0&period;24 times P/B in late-2011&period; The stock also offers a consensus forward FY2020 (YE June) dividend yield of 5&period;5%&period; Readers are advised to trade in New World Development shares listed on the Hong Kong Stock Exchange with the ticker 17:HK, where average daily trading value for the past three months exceeds $18 million and market capitalization is above $12 billion&period; Investors can invest in key Asian stock markets either using U&period;S&period; brokers with international coverage, such as Interactive Brokers, Fidelity, or Charles Schwab, or local brokers operating in their respective domestic markets&period; Contracted Sales For Property Development Business Closely Watched New World Development has set annual contracted sales targets of HK$15-20 billion and RMB20 billion for the company's Hong Kong and Mainland China property development businesses respectively&period; Based on 1HFY2020 numbers, New World Development is on track with its annual contracted sales target for the Mainland China property development business, but it seems challenging for the company's Hong Kong property development business to meet its annual contracted sales target&period; The company's Mainland China property development business achieved contracted sales of RMB11&period;6 billion in 1HFY2020, representing 58% of its annual target&period; In contrast, New World Development's Hong Kong property development business delivered contracted sales of HK$3 billion in 1HFY2020, which is only equivalent to a fifth of the lower end of its annual sales target&period; The key to New World Development achieving its full-year contracted sales target for Hong Kong is the company's upcoming Tai Wai Station residential project in Sha Tin, Hong Kong&period; Over 3,000 residential units for the Tai Wai station project will be progressively launched this year and next year, of which 2,200 units are expected to be introduced to the market this year&period; Demand for the Tai Wai station project should be strong, considering that it "is the only large-scale new project in the district in recent years," as stated in the company's 1HFY2020 results announcement&period; The key risk lies with a potential delay in the launch of the Tai Wai station project, assuming the current coronavirus outbreak gets worse in coming months&period; Hong Kong has 115 confirmed cases of coronavirus infection and three deaths on a cumulative basis, as at the time of writing&period; For the company's Mainland China property development business, New World Development has set an ambitious target of growing its annual contracted sales in the double digits for the next few years, starting with RMB20 billion in FY2020&period; This is supported by New World Development's 6&period;7 million sq ft of land bank<<< in Mainland China, of which the Greater Bay Area contributes 44% of the company's total China land bank<<<&period; In the near term, New World Development's Mainland China property development business is also likely to be affected by the current coronavirus outbreak, similar to its Hong Kong business&period; Bloomberg reported on February 11, 2020 that new home sales in Mainland China plunged approximately -90% YoY in the first week of February 2020, based on initial data compiled from 36 cities in China&period; Showrooms are an integral part of the home-buying process, and it is still uncommon for people to purchase homes online, which explains why the current coronavirus outbreak has dampened home-buying sentiment in Mainland China&period; In the medium-to-long term, New World Development's strategy of focusing on the Greater Bay Area should pay off&period; Plans for the development of the Greater Bay Area were first revealed in early last year, with the aim of establishing a world-class city cluster comprising the two Special Administrative Regions of Hong Kong and Macau with nine cities in Guangdong (Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing)&period; Housing demand in the Greater Bay Area should grow substantially, if and when the multi-year initiatives to develop the Greater Bay Area are implemented and deliver results&period; Notably, New World Development achieved gross margins in excess of 70% for the company's property development projects in the Greater Bay Area in 1HFY2020, which is relatively high compared with gross margins of 48% and 60% for its property development projects in Hong Kong and Mainland China as a whole respectively&period; This is largely attributable to the company's first-mover advantage in acquiring attractive land bank<<< in the Greater Bay Area years ago, particularly in Guangzhou and Shenzhen&period; Looking ahead, contracted sales for New World Development's property development projects in Hong Kong and Mainland China will be closely watched, as they are leading indicators of the company's future property development earnings&period; Headwinds For Company's Recurring Income Assets New World Development's long-term strategy has been to rely on recurring income from the company's investment properties, hotels and infrastructure investments to counter the cyclicality and volatility of earnings generated from its property development business&period; Based on my estimates, recurring income for New World Development declined by more than -20% YoY in 1HFY2020&period; Losses for the company's hotel operations widened from -HK$60&period;5 million in 1HFY2019 to -HK$425&period;2 million, due to lower tourists arrivals in Hong Kong as a result of social unrest in the city, and pre-opening expenses associated with three new hotels in Mainland China&period; This was partially offset by a +36% YoY growth in rental income for its Hong Kong investment properties to HK$1,344&period;4 million in 1HFY2020&period; New World Development's Hong Kong rental income received a significant boost from the full opening of Victoria Dockside, a mega mixed-use development with a total Gross Floor Area of approximately 3 million sq ft located at the Tsim Sha Tsui waterfront in Kowloon&period; Going forward, there are likely to be significant headwinds for New World Development's recurring income assets, as a result of the current coronavirus outbreak&period; New World Development has offered rent concessions to tenants for the company's Hong Kong retail mall K11 MUSEA for a two-month period, while the company's 17 hotel properties (with a total of 7,400 rooms) in Hong Kong, Mainland China and Southeast Asia are inevitably affected by weak travel sentiment&period; With respect to New World Development's infrastructure investments and businesses, the company's toll road investments have been hit by a suspension of toll road fees in Mainland China by the Chinese government since mid-February 2020, and the company's facility management businesses Hong Kong Convention and Exhibition Centre (Management) Limited and Shenyang New World EXPO (Management) Limited are likely to suffer from delays or cancellation of events in the coming months&period; On the positive side of things, New World Development continues to grow its recurring income streams in the medium-to-long term, as evidenced by the company's pipeline of new investment property projects to be completed in the next few years&period; New World Development's New Investment Property Projects In The Pipeline Source: New World Development's 1HFY2020 Results Presentation Slides Capital Recycling Is A Key Strategy To Enhance Shareholder Value Apart from growing recurring income streams, capital recycling is also a key component of New World Development's company strategy&period; New World Development has divested approximately HK$6 billion worth of non-core assets between June 2019 and February 2020&period; These non-core asset disposals include the sale of shares in Hong Kong-listed Chinese airport operator Beijing Capital International Airport (BJCHF) (BJCHY) [694:HK], a property project located in Changsha<<< of Hunan province referred to as Changsha<<< La Ville New World, and equity interests in two shopping malls in Hong Kong, Telford Plaza II and PopCorn 2&period; Looking ahead, New World Development is targeting a further HK$15 billion worth of non-core asset disposals in the next 18 to 24 months&period; The current volatile market environment is expected to be a double-edged sword&period; While it could be more difficult for New World Development to sell its assets at good prices, it could also imply more bargain buying opportunities for the company to redeploy its divestment proceeds into higher-yielding assets and businesses&period; Valuation And Dividends New World Development trades at 0&period;39 times P/B based on its share price of HK$9&period;41 as of March 9, 2020&period; In comparison, the stock's historical five-year and 10-year average P/B multiples were 0&period;49 times and 0&period;50 times respective","primary_symbols":"NDVLF","summary":"["Contracted sales for New World Development's projects in Hong Kong and Mainland China will be closely watched, as they are leading indicators of the company's future property development earnings&period;","The company continues to grow its recurring income streams in the medium-to-long term with a strong pipeline of new investment property projects, but the coronavirus outbreak poses near-term headwinds&period;","Capital recycling is a key strategy to help New World Development enhance shareholder value, with HK$15 billion worth of non-core asset disposals targeted in the next 18-24 months&period;","New World Development currently trades at 0&period;39 times P/B, and offers a consensus forward FY2020 (YE June) dividend yield of 5&period;5%&period;"]","title":"New World Development: Capital Recycling And Dividends Limit Downside Risks"}},{"id":"a3995601","fields":{"author":"Epoch Times","title":"Only In China: Companies Become Banks To Solve Financial Difficulties","uri":"/article/3995601-china-companies-become-banks-solve-financial-difficulties","publish_date":"2016-08-04T10:21:24Z","author_url":"/author/epoch-times","content_type":"articles","image_url":"/images/users_profile/035/453/895/big_pic.png","id":"3995601","tags":["epoch-times","economy","fxi","yinn","fxp","yang","pgj","gxc","mchi","chn","tdf","xpp","yxi","yao","cn","fca","gch","cxse","jfc","market-news-article","macro-view"],"primary_symbols":["FXI","YINN","FXP","YANG","PGJ","GXC","MCHI","CHN","TDF","XPP","YXI","YAO","CN","FCA","GCH","CXSE","JFC"]},"highlights":{"author":"Epoch Times","content":"By Valentin Schmid China is desperate to solve several problems it has due to its debt-to-GDP ratio being north of 300 percent&period; It may have found a pretty unconventional one by letting companies become banks<<<, according to a report by the Wall Street Journal&period; With profits headed south, heavily indebted Chinese heavy-machinery giant Sany Heavy Industries said this week it won approval to set up a bank<<< in the Hunan Province city of Changsha<<<&period; With 3 billion yuan ($450 million) of registered capital, it will be a relatively large institution as Chinese city-based banks<<< go&period; Sany plans to join forces with a pharmaceutical company and an aluminum company&period; Sany already operates an insurance and finance division with the goal of internal financing and insurance services for clients&period; (click to enlarge) Sany Heavy Industries already operates a Finance and Insurance arm, although it's unclear what gold has to do with it&period; (Company Website) Debt Problem One problem is that companies are defaulting on bond payments, and there is no adequate resolution mechanism for bad debts, at least according to Goldman Sachs&period; "A clearer debt resolution process (for example, how debt restructuring on public bonds can be achieved, how valuation and recovery on defaulted bonds are arrived at, the timely disclosure of information and clarity on court-sanctioned processes) would help to pave the way for more defaults, which in our view are needed if policymakers are to deliver on structural reforms," the investment bank<<< writes in a note&period; By becoming or owning banks<<<, the companies can just shift debt around different balance sheets to avoid a default, although this is probably not the resolution Goldman Sachs had in mind when talking about structural reforms&period; Another problem is that the regime has more and more difficulties pushing more debt into the economy to grease the wheels and keep GDP growth from collapsing entirely&period; China needs 11&period;9 units of new debt to create one unit of GDP growth&period; At the same time, the velocity of money, or the measure of how often one unit of money changes hands during a year, has fallen to below 0&period;5 - another measure of how saturated the economy is with uneconomical credit&period; If the velocity of money goes down, the economy needs a higher stock of money to keep the same level of activity&period; (click to enlarge) (Source: Macquarie) So if companies can't pay back loans, old banks<<< don't want to give out loans, and consumers don't want to circulate the money, you can just let some companies become banks<<< to prevent them from defaulting, and maybe even issue new loans to themselves&period; It would not be the first time China has tried a circular financial arrangement to solve some structural issues&period; Sany Not Alone According to the Wall Street Journal report, the Sany Heavy Industries case is only one of a few&period; Other companies in the tobacco and travel sectors, for example, have taken over banks<<< or formed new ones&period; ChinaTopix reports that the China Banking<<< Regulatory Commission (CBRC) has already awarded five licenses for private banks<<< and received another 12 applications during the past year&period; It also mentions that industrial firms are behind this move: "One bank<<<, Fujian Huatong Bank<<<, which has a registered capital of Rmb3 billion ($450 million), was promoted by 10 Fujian-based companies in different sectors, including retail, manufacturing and real estate&period;" We don't know if the regulator had this in mind when it launched the initiative to boost private banks<<< in China in 2014 in order to improve lending to the technology sector, but it did explicitly mention that private companies should form banks<<<&period; "Qualified private enterprises shall be encouraged to set up private banks<<<&period; The innovation of products, services, management, and technology by private banks<<< will inject new vitality into the sustainable and innovative development of the banking<<< sector," the CBRC states in an undated report&period; It remains to be seen whether this is a long-term sustainable solution&period;","primary_symbols":"FXI YINN FXP YANG PGJ GXC MCHI CHN TDF XPP YXI YAO CN FCA GCH CXSE JFC","summary":"","title":"Only In China: Companies Become Banks<<< To Solve Financial Difficulties"}},{"id":"a4299657","fields":{"author":"Donovan Jones","title":"YX Asset Recovery Starts U.S. IPO Effort","uri":"/article/4299657-yx-asset-recovery-starts-u-s-ipo-effort","summary":"[\"YX Asset Recovery has filed for a U.S. IPO.\",\"The firm provides banks and other lenders in China with debt collection services.\",\"YX has grown rapidly, is producing profits and positive cash flow from operations, so I await management's proposed IPO terms.\"]","publish_date":"2019-10-28T18:56:30Z","author_url":"/author/donovan-jones","content_type":"articles","image_url":"/images/users_profile/012/102/811/big_pic.png","id":"4299657","tags":["donovan-jones","ipo-analysis","yx","financial","sa-exclusive","investing-ideas","china-country"],"primary_symbols":["YX"]},"highlights":{"author":"Donovan Jones","content":"Quick Take YX Asset Recovery (YX) has filed to raise gross proceeds of $200 million from a U&period;S&period; IPO, according to an F-1 registration statement&period; The firm provides businesses with delinquent consumer debt collection throughout China with a focus on tertiary receivables&period; YX is a profitable and fast-growing company in an expanding market&period; When we learn more IPO details from management, I'll provide an update&period; Company & Technology Changsha<<<, China-based YX Asset Recovery was founded in 2014 and currently operates as a business services provider of nationwide delinquent consumer debt collection services in China with a network of 34 operating centers spread across 29 cities&period; Management is headed by CEO and Chairman Man Tan, who has been with the firm since 2015 and also currently serves as a director of Tulane-Yong Xiong International Credit Law Research Center and the vice president of the Research Association of the Litigation Law Society of Hunan Law Association, among others&period; The company's primary offerings include collection of delinquent credit card receivables originated by commercial banks<<<, as well as online receivables originated by online consumer finance companies&period; Management says that according to iResearch, the firm is the largest delinquent credit card receivables recovery service provider in China in terms of total value of receivables under collection and number of collection specialists employed as of the end of June, 2019, as well as total commissions for the six months ended June 30, 2019&period; Additionally, for the six month period ended June 30, 2019, management says YX has serviced seven of the top 10 commercial banks<<< as measured by outstanding balance of credit cards issued in 2018, and online consumer finance companies in China&period; According to iResearch, YX Capital are 'pioneers' in the industry as they provide collection services entirely by remote means, including remote collection, without on-site visit or face-to-face negotiation with debtors to avoid physical confrontation&period; Customer Acquisition The firm has a dedicated marketing department that typically responds to requests for proposals from commercial banks<<< to obtain collection service contracts for portfolio collection and provides a trial of YX's services to potential customers&period; Sales and marketing expenses as a percentage of revenue have been miniscule, per the table below: Selling & Marketing Expenses vs&period; Revenue Period Percentage To June 30, 2019 0&period;0% 2018 0&period;1% 2017 0&period;2% Source: Company registration statement The sales & marketing efficiency rate, defined as how many dollars of additional new revenue generated by each dollar of sales & marketing spend, was extremely high in the most recent six-month period, as shown in the table below: Selling & Marketing Efficiency Rate Period Multiple To June 30, 2019 2,036&period;0 2018 312&period;9 Source: Company registration statement Market According to a 2019 market research report by Reuters, China's credit card debt delinquency rate went up by 19% in 2018, reaching RMB79 billion or $11&period;7 billion, representing a 10 times increase since the level in 2010&period; Central bank<<< data shows that the official delinquency ratio of credit cards was 1&period;16% at the end of 2018&period; In 2018, 12 out of 18 listed lenders with disclosed credit card figures showed growth of more than 20% in the number of outstanding credit cards&period; The China CITIC Bank<<< posted a 156% rise in non-performing credit card debt in 2H 2018, nearly doubling the company's bad loan ratio to 1&period;85% at the end of 2018 from 0&period;98% at the end of June 2018&period; The main factor driving forecast market growth is the Chinese government's enforcement activity for banks<<< to provide increased access to consumer finance in an effort to increase retail spending and boost the economy&period; Financial Performance YX's recent financial results can be summarized as follows: Strong growth in topline revenue and at an accelerating rate Accelerating growth in gross profit but reduced gross margin Fluctuating operating profit Uneven cash flow from operations Below are relevant financial metrics derived from the firm's registration statement: Total Revenue Period Total Revenue % Variance vs&period; Prior To June 30, 2019 $ 75,035,000 76&period;7% 2018 $ 110,384,000 26&period;1% 2017 $ 87,541,029 Gross Profit (Loss) Period Gross Profit (Loss) % Variance vs&period; Prior To June 30, 2019 $ 19,403,000 44&period;1% 2018 $ 34,723,000 14&period;0% 2017 $ 30,466,618 Gross Margin Period Gross Margin To June 30, 2019 25&period;86% 2018 31&period;46% 2017 34&period;80% Operating Profit (Loss) Period Operating Profit (Loss) Operating Margin To June 30, 2019 $ 8,220,000 11&period;0% 2018 $ 24,464,000 22&period;2% 2017 $ 22,013,971 25&period;1% Net Income (Loss) Period Net Income (Loss) To June 30, 2019 $ 4,710,000 2018 $ 18,063,000 2017 $ 16,113,088 Cash Flow From Operations Period Cash Flow From Operations To June 30, 2019 $ 5,445,217 2018 $ 9,227,681 2017 $ 20,171,324 Source: Company registration statement As of June 30, 2019, the company had $13&period;6 million in cash and $36&period;1 million in total liabilities&period; (Unaudited, interim) Free cash flow during the twelve months ended June 30, 2019, was a negative ($251,818)&period; IPO Details YX has filed to raise $200 million in gross proceeds from an IPO of ADSs representing Class A underlying shares&period; Class A shareholders will be entitled to one vote per share and the company's founder, Mr&period; Tan, will hold all Class B shares and be entitled to ten votes per share&period; The S&P 500 Index no longer admits firms with multiple classes of stock into its index&period; Per the firm's latest filing, the firm plans to use the net proceeds from the IPO as follows: 60% of the net proceeds to expand our operations and the capacity of our operating centers; 30% of the net proceeds to upgrade our technology and IT infrastructure; and 10% of the net proceeds for working capital and other general corporate purposes&period; Management's presentation of the company roadshow is not yet available&period; Listed underwriters of the IPO are Deutsche Bank<<< Securities, CMBI, Raymond James, AMTD Global Markets, SunTrust Robinson Humphrey, Everbright Sun Hung Kai, Wedbush Securities, Prime Number Capital, and Fortune [HK] Securities Limited&period; Commentary YX is attempting to raise U&period;S&period; public capital at a challenging time for Chinese firms seeking to do so, due to poor post-IPO performance recently and over the past several years&period; However, the firm's financials are impressive, with accelerating topline revenue and gross profit growth&period; Sales and marketing expenses as a percentage of revenue are virtually non-existent&period; YX is producing earnings and positive cash flow even while growing at a high rate&period; The market opportunity for collecting increasing consumer bad debts is large and YX has significant visibility with major non-bank<<< lenders&period; On the legal side, like many Chinese firms seeking to tap U&period;S&period; markets, the firm operates within a VIE structure or Variable Interest Entity&period; U&period;S&period; investors would only have an interest in an offshore firm with contractual rights to the firm's operational results but would not own the underlying assets&period; This is a legal gray area that brings the risk of management changing the terms of the contractual agreement or the Chinese government altering the legality of such arrangements&period; Prospective investors in the IPO would need to factor in this important structural uncertainty&period; The competition is surely seeking such a growing and profitable market, so YX won't have the field to itself&period; I look forward to learning more about the IPO's pricing and valuation details from management and will provide an update then&period; Expected IPO Pricing Date: To be announced&period;","primary_symbols":"YX","summary":"["YX Asset Recovery has filed for a U&period;S&period; IPO&period;","The firm provides banks<<< and other lenders in China with debt collection services&period;","YX has grown rapidly, is producing profits and positive cash flow from operations, so I await management's proposed IPO terms&period;"]","title":"YX Asset Recovery Starts U&period;S&period; IPO Effort"}},{"id":"a2733365","fields":{"author":"AllianceBernstein (AB)","title":"China's Economy Gliding Into 'Long' Landing","uri":"/article/2733365-chinas-economy-gliding-into-long-landing","publish_date":"2014-12-05T08:57:07Z","author_url":"/author/alliancebernstein-ab","content_type":"articles","image_url":"/images/users_profile/001/076/567/big_pic.png","id":"2733365","tags":["alliancebernstein-ab","economy","fxi","pgj","yinn","gxc","fxp","yang","mchi","xpp","yao","yxi","cxse","fca","cn","macro-view"]},"highlights":{"author":"AllianceBernstein (AB)","content":"By Hayden Briscoe, Shamaila Khan and Jenny Zeng China's economy isn't headed for a hard or soft landing - instead, it's more likely to be a long landing&period; That's our perspective, based on our team's recent visit to China to get an up-close look at the economic landscape&period; The country's economy clearly faces another few years of uncertainty and negative headlines, but we think the risks will be contained as long as the government sticks to its reform agenda&period; On our China trip, we assessed conditions in important cyclical sectors, such as banking<<<, basic industries and property&period; Our takeaway: Investors who think the government's recent stimulus tweaks are a prelude to a more general nationwide stimulus - global financial crisis-style - are wide of the mark&period; In our view, the Chinese economy is actually in store for a long landing lasting two or three years&period; Commodity-related industries will face a painful readjustment, and some companies will default and may even collapse&period; This scenario assumes that Chinese Premier Li Keqiang will stick to his structural reform agenda&period; We've said that policy risk is one of the biggest risks China faces: if the government were to abandon its reforms and revert to a broad stimulus, our view would turn negative&period; But we're still convinced - strengthened by the announced formation of a new anti-corruption body at last month's National People's Congress - that reforms remain on track&period; Among the sectors we looked at in detail were banks<<< and the property sector; the display below provides a quick summary of our views&period; Banks<<<: Getting Tough on Steel Mills There are signs that China's large banks<<< were more inclined to increase their property exposures in the first half of the year, as other sectors are facing headwinds that carry higher risks for them&period; Still, we regard short-term liquidity, not oversupply, as one of the two key risks for the property industry (government policy is the other)&period; Banks<<< said they were cautious about lending to developers; some have tightened their lending practices or are being selective, including concentrating on residential loans&period; Banks<<< are reducing their exposure to sectors burdened by overcapacity&period; For the first time, we heard that they weren't renewing loans to weak steel mills&period; This should lead to faster defaults and more consolidation, which would be positive for the sector in the medium term&period; We doubt, however, that smaller banks<<< are reducing their lending to sectors with overcapacity&period; Doing this would create problems for the banks<<<' own cash flows and balance sheets&period; We saw differences in the way banks<<< are managing their exposure to the shadow banking<<< sector&period; One bank<<< we spoke to had increased its exposure; in its view, recent announcements from the China Banking<<< Regulatory Commission signaled an intent to regulate the sector, not slow it down&period; Another bank<<< kept its exposure the same during the first half of the year compared with the previous corresponding period&period; Property: Muddling Through When we visited residential projects in the luxury and mass-market sectors, as well as some commercial projects, all in Changsha<<< and Shanghai, we saw some distinctions&period; Overall sentiment is much more bearish in lower-tier cities than in "Tier 1" cities, even though Tier 1 cities have seen a bigger correction in sales volumes so far this year&period; The companies we spoke to believe that underlying demand remains strong, and that supply and demand are much more balanced in Tier 1 cities, as shown in the display below, while inventories in lower-tier cities have been increasing, and de-stocking has been slow&period; Most property developers remain reluctant to cut prices&period; They're hoping the government will eventually provide significant support for the market, despite the fact that developers who have cut prices by 10% in Tier 1 cities and 20% elsewhere have enjoyed good sales&period; We believe the sector is unlikely to collapse, given the long-term prospects from trends such as continuing urbanization&period; We agree that the sector just needs time to consolidate and absorb the building surplus&period; Managers told us they expected the correction to last 18-24 months; sales should remain flat during 2015, but new construction should start rebounding year-over-year, helped by a low base in 2014&period; These insights largely confirmed our view of the property sector&period; The only new information was that the government has started to allow certain developers to issue onshore medium-term notes&period; We consider the diversification of funding sources a positive for large developers&period; In the second part of this blog, to be published soon, we'll look at prospects for the infrastructure and commodity sectors&period; The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AllianceBernstein portfolio-management teams&period; Hayden Briscoe is Director of Asia-Pacific Fixed Income, Shamaila Khan is a Portfolio Manager in Emerging Markets Corporate Bonds and Jenny Zeng is a Research Analyst in Corporate Credit, all at AllianceBernstein&period;","primary_symbols":"","summary":"","title":"China's Economy Gliding Into 'Long' Landing"}},{"id":"a4293333","fields":{"title":"CIFI Holdings: Property Developer Impresses With A More Diversified Land Acquisition Strategy And Low Funding Cost","author":"The Value Pendulum","uri":"/article/4293333-cifi-holdings-property-developer-impresses-diversified-land-acquisition-strategy-low-funding","summary":"[\"CIFI Holdings has successfully diversified its land acquisition channels in 2019, with new land bank sourced from public auctions decreased from 89% in FY2018 to 61% in 7M2019.\",\"CIFI Holdings' average funding cost is lower than the China property sector's average, and it could continue to trend downwards as the company refinances expensive existing debt.\",\"CIFI Holdings delivered a strong +27% YoY growth in contracted sales for the first eight months of 2019, but August 2019 contracted sales slowed down with a -9% MoM decline.\",\"CIFI Holdings trades at 4.6 times consensus forward FY2019 P/E on par with its historical five-year forward P/E of approximately 4.5 times.\"]","publish_date":"2019-09-24T20:10:42Z","author_url":"/author/the-value-pendulum","content_type":"articles","image_url":"/images/users_profile/005/969/741/big_pic.png","id":"4293333","tags":["the-value-pendulum","dividend-ideas","cffhf","sa-exclusive","investing-income","us"],"primary_symbols":["CFFHF"]},"highlights":{"author":"The Value Pendulum","content":"Elevator Pitch I like Hong Kong-listed Mainland China property developer CIFI Holdings (CFFHF) (CFFDY) [884:HK] for its more diversified land banking<<< strategy in 2019 and its low funding cost relative to peers&period; CIFI Holdings trades at 4&period;6 times consensus forward FY2019 P/E, which is on par with its historical five-year forward P/E of approximately 4&period;5 times&period; The stock also offers a trailing 6&period;9% dividend yield and a forward FY2019 dividend yield of 7&period;6%&period; Taking into account the company's slower contracted sales growth in August 2019, which the company attributed to weak buying sentiment, I recommend a lower entry price of HK$4&period;00 pegged to 4 times forward FY2019 P/E&period; Company Description Started in 2000 and listed on the Hong Kong Stock Exchange in 2012, CIFI Holdings is a Mainland China property developer with a focus on the Yangtze River Delta region (the Shanghai, Jiangsu and Zhejiang provinces) and Tier-1 & Tier-2 cities&period; CIFI Holdings generated 51% of its contracted sales and 54% of its recognized revenue for 1H2019 from the Yangtze River Delta region&period; Tier-1 & Tier-2 cities&period; accounted for 70% and 80% of the company's 1H2019 contracted sales and recognized revenue, respectively&period; The company is primarily a property developer as it generated 74% of its segment profit for 1H2019 from property sales&period; CIFI Holdings derived the remaining 23% and 3% of its 1H2019 segment profit from project management & other property related services and property investment, respectively&period; More Diversified Land Acquisition Strategy There have been concerns in the past regarding CIFI Holdings' future earnings growth&period; This was because the company was perceived to have bid aggressively for land and accepted lower stakes in newly-acquired land bank<<< (when it partnered other property companies in acquiring new land bank<<<) in 2018&period; However, such concerns have been sufficiently addressed with CIFI Holdings' improved land acquisition strategy&period; CIFI Holdings has significantly diversified its land banking<<< sources in FY2019&period; In FY2018, 89% (in terms of attributable land cost) of the company's new land bank<<< was sourced from public land auctions where there is intense competition and high likelihood of overpaying for land&period; In the first seven months of FY2019, CIFI Holdings only sourced 61% of its new land bank<<< from public land auctions&period; Instead, M&A, urban redevelopment (conversion of old existing villages into new homes) and mixed-use developments (mix of residential and commercial properties) accounted for 20%, 17%, and 2%, respectively, of the newly-acquired land bank<<< for CIFI Holdings in 7M2019&period; With respect to M&A, CIFI Holdings has acquired more than 20 land plots in Tier-2 cities with a Gross Floor Area or GFA of approximately 3 million sq m equivalent to RMB5 billion in salable resources this year&period; These included a land plot in Changsha<<< Xiangyin at a cost of RMB2,770 per sq m and a land plot in Dalian Free Trade Zone at a cost of RMB3,400 per sq m among others&period; These land plots were largely bought from local governments in the secondhand market, which explains the low land cost&period; CIFI Holdings acquired a 2&period;5 million sq m land plot in Taiyuan via urban redevelopment in 1H2019, and its current urban redevelopment projects include the 450,000 sq m Shijiazhuang Chang’an District 294 Project and the 520,000 sq m Wuhan Shuguang Village Project&period; Looking ahead, CIFI Holdings continues to actively seek urban redevelopment opportunities&period; For example, it recently started an urban renewal company in Guangzhou and established cooperative relationships with six villages there to explore redevelopment opportunities&period; Mixed-use developments can also be another source of cheap land banking<<<&period; For example, the land for CIFI Holdings' new 270,000 sq m mixed-use development in Chengdu Xindu District was acquired at a cost of RMB2,261 per sq m, versus a land cost of RMB7,000 per sq m for a residential project in the vicinity&period; The results of the improved land acquisitions strategy speak for themselves&period; CIFI Holdings' average land cost for the first seven months of 2019 was RMB4,967 per sq m, representing a -21% YoY decrease, which addressed concerns of the company aggressively bidding for land at public auctions and being burdened with high land costs&period; Furthermore, CIFI Holdings increased its average equity interest in newly-acquired land bank<<< from 54% in FY2018 to 74% in 7M2019&period; The higher equity interest translates into higher attributable earnings for the company and also greater control over the property projects in terms of quality and timing&period; Going forward, CIFI Holdings targets to maintain the equity stake in newly-acquired land bank<<< in the 65-70% ratio&period; Looking ahead, CIFI Holdings targets to source approximately 60% of its new land bank<<< from public land auctions, and the remaining 40% from a mix of M&A and urban redevelopment projects&period; The rationale for the 60-40 mix is to maintain a balance between fast turnover of property development projects and low land cost&period; Public land auctions still have the advantage of time, as the entire process from land acquisition to sales can be completed in a short period of time&period; In contrast, it takes about two to two and a half years on average for urban redevelopment projects to be completed&period; CIFI Holdings also maintained its focus on Tier-1 and Tier-2 cities which accounted for 88% of the new land bank<<< acquired in 7M2019&period; As of end-1H2019, CIFI Holdings has a land bank<<< with a GFA of 46&period;8 million sq m, which is close to five times the GFA sold in FY2018, suggesting that it has sufficient land bank<<< to meet future demand&period; Low Funding Cost CIFI Holdings has historically maintained a relatively low funding cost, with average interest cost at 5&period;5%, 5&period;2%, 5&period;8%, and 5&period;9% for FY2016, FY2017, FY2018 and 1H2019, respectively&period; The China property sector's average interest cost is higher at approximately 6&period;5%&period; This is even more impressive considering that state-owned property developers are typically the ones with low funding costs, and CIFI Holdings is not a state-owned enterprise&period; For 1H2019, CIFI's average onshore financing cost was 5&period;8% and its average offshore financing cost was 5&period;9%&period; In comparison, average offshore financing cost for Mainland China property developers was significantly higher at approximately 8&period;13% for the first five months of 2019&period; CIFI Holdings' funding cost is likely to remain low going forward&period; In July 2019, it issued new $300 million senior notes with a 6&period;55% coupon rate due 2024 and new RMB1&period;6 billion senior notes with a 6&period;70% coupon rate due 2022&period; In August 2019, the company redeemed $250 million of senior notes with a 7&period;75% coupon rate due 2020&period; CIFI Holdings reduced its borrowing cost on the $250 million of existing debt by between 105 and 120 basis points with this recent refinancing, which has not been reflected in the 5&period;9% funding cost as of end-1H2019&period; The company also signed new term loan facility agreements with Hang Seng Bank<<< (HSNGF) (HSNGY) [11:HK] and China Construction Bank<<< (CICHY) (CICHF) [939:HK] in August 2019, amounting to $50 million and $365 million, respectively&period; CIFI Holdings could potentially further lower its interest costs by refinancing existing expensive debt with new bank<<< loans&period; CIFI Holdings has a BB credit rating from Fitch and S&P, while Moody's has given the company a Ba3 credit rating&period; Its other credit metrics are also healthy&period; Net gearing was 69&period;5% as of end-June 2019, or slightly above 80% including perpetual securities as debt; debt-to-EBITDA ratio was 5&period;3 times&period; Refinancing risks are limited, with only 18% of the company's debt due for refinancing within a year&period; CIFI Holdings' short-term liquidity is decent with a cash-to-short term debt ratio of 3&period;3 times and an EBITDA-to-interest coverage ratio of 3&period;8 times&period; Strong Contracted Sales Year-to-date, But August Sales Start To Slow CIFI Holdings delivered a strong +27% YoY growth in contracted sales to RMB116&period;75 billion for the first eight months of 2019, which ranks the company as the 15th largest Mainland China property developer in terms of year-to-date contracted sales&period; However, it is notable that contracted sales of RMB13&period;76 billion in August 2019 represented a +6% YoY growth and a -9% MoM (month-on-month) decline&period; The sell-through rate (contracted sales-to-launches ratio) was also lower in the 55-60% range for July and August 2019, compared with an average sell-through rate of 60% for 1H2019&period; The company attributed the lackluster August 2019 contracted sales to weaker sales in Tier-2 cities and an overall deterioration in buying sentiment&period; However, a list of 30 Mainland Chinese property developers I track have delivered a higher average +14% YoY contracted sales growth in August 2019&period; CIFI Holdings plans to launch more projects in September 2019, so it will be worth monitoring if the sales slowdown in August is temporary&period; Valuation CIFI Holdings trades at 4&period;6 times consensus forward FY2019 P/E and 3&period;7 times consensus forward FY2020 P/E based on its share price of HK$4&period;59 as of September 23, 2019&period; The stock's forward FY2019 P/E is on par with its historical five-year forward P/E of approximately 4&period;5 times&period; Between August 28, 2019, and September 3, 2019, the controlling shareholder, the Lin family, bought approximately 6&period;8 million shares (or 0&period;8% of the company's outstanding shares) a","primary_symbols":"CFFHF","summary":"["CIFI Holdings has successfully diversified its land acquisition channels in 2019, with new land bank<<< sourced from public auctions decreased from 89% in FY2018 to 61% in 7M2019&period;","CIFI Holdings' average funding cost is lower than the China property sector's average, and it could continue to trend downwards as the company refinances expensive existing debt&period;","CIFI Holdings delivered a strong +27% YoY growth in contracted sales for the first eight months of 2019, but August 2019 contracted sales slowed down with a -9% MoM decline&period;","CIFI Holdings trades at 4&period;6 times consensus forward FY2019 P/E on par with its historical five-year forward P/E of approximately 4&period;5 times&period;"]","title":"CIFI Holdings: Property Developer Impresses With A More Diversified Land Acquisition Strategy And Low Funding Cost"}},{"id":"a4307184","fields":{"author":"Donovan Jones","title":"IPO Update: YX Asset Recovery Proposes U.S. IPO Terms","uri":"/article/4307184-ipo-update-yx-asset-recovery-proposes-u-s-ipo-terms","summary":"[\"YX Asset Recovery aims to raise $81 million in a U.S. IPO.\",\"The firm provides consumer credit collection services to organizations in China.\",\"YXR has grown quickly, but the IPO appears pricey, so I'll be watching how it performs in the open market.\"]","publish_date":"2019-11-15T21:29:44Z","author_url":"/author/donovan-jones","content_type":"articles","image_url":"/images/users_profile/012/102/811/big_pic.png","id":"4307184","tags":["donovan-jones","ipo-analysis","yxr","financial","sa-exclusive","investing-ideas","china-country"],"primary_symbols":["YXR"]},"highlights":{"author":"Donovan Jones","content":"Quick Take YX Asset Recovery (YXR) has filed to raise $81 million in gross proceeds from an IPO of its ADSs, according to an amended registration statement&period; The company provides consumer debt collection services to organizations located in China&period; YXR is growing revenue rapidly, but net results are less enticing&period; The IPO appears overvalued, so I'll be watching it from the sidelines&period; Company & Technology Changsha<<<, China-based YX Asset Recovery was founded in 2014 and currently operates as a business services provider of nationwide delinquent consumer debt collection services in China with a network of 34 operating centers spread across 29 cities&period; Management is headed by CEO and Chairman Man Tan, who has been with the firm since 2015 and also currently serves as a director of Tulane-Yong Xiong International Credit Law Research Center and the vice president of the Research Association of the Litigation Law Society of Hunan Law Association, among others&period; The company's primary offerings include a collection of delinquent credit card receivables originated by commercial banks<<<, as well as online receivables originated by online consumer finance companies&period; Management says that according to iResearch, the firm is the largest delinquent credit card receivables recovery service provider in China in terms of total value of receivables under collection and number of collection specialists employed as of the end of June 2019, as well as total commissions for the six months ended June 30, 2019&period; Additionally, for the six-month period ended June 30, 2019, management says YX has serviced seven of the top 10 commercial banks<<< as measured by outstanding balance of credit cards issued in 2018 and online consumer finance companies in China&period; According to iResearch, YX Capital are 'pioneers' in the industry as they provide collection services entirely by remote means, including remote collection, without on-site visit or face-to-face negotiation with debtors to avoid physical confrontation&period; Customer Acquisition The firm has a dedicated marketing department that typically responds to requests for proposals from commercial banks<<< to obtain collection service contracts for portfolio collection and provides a trial of YX's services to potential customers&period; Sales and marketing expenses as a percentage of revenue have been miniscule, per the table below: Selling & Marketing Expenses vs&period; Revenue Period Percentage To June 30, 2019 0&period;0% 2018 0&period;1% 2017 0&period;2% Source: Company registration statement The sales & marketing efficiency rate, defined as how many dollars of additional new revenue generated by each dollar of sales & marketing spend, was extremely high in the most recent six-month period, as shown in the table below: Selling & Marketing Efficiency Rate Period Multiple To June 30, 2019 2,036&period;0 2018 312&period;9 Source: Company registration statement Market According to a 2019 market research report by Reuters, China's credit card debt delinquency rate went up by 19% in 2018, reaching RMB79 billion or $11&period;7 billion, representing a 10 times increase since the level in 2010&period; Central bank<<< data shows that the official delinquency ratio of credit cards was 1&period;16% at the end of 2018&period; In 2018, 12 out of 18 listed lenders with disclosed credit card figures showed growth of more than 20% in the number of outstanding credit cards&period; The China CITIC Bank<<< posted a 156% rise in non-performing credit card debt in 2H 2018, nearly doubling the company's bad loan ratio to 1&period;85% at the end of 2018 from 0&period;98% at the end of June 2018&period; The main factor driving forecast market growth is the Chinese government's enforcement activity for banks<<< to provide increased access to consumer finance in an effort to increase retail spending and boost the economy&period; Financial Performance YX's recent financial results can be summarized as follows: Strong growth in top-line revenue and at an accelerating rate Accelerating growth in gross profit but reduced gross margin Fluctuating operating profit Uneven cash flow from operations Below are relevant financial metrics derived from the firm's registration statement: Total Revenue Period Total Revenue % Variance vs&period; Prior To June 30, 2019 $ 75,035,000 76&period;7% 2018 $ 110,384,000 26&period;1% 2017 $ 87,541,029 Gross Profit (Loss) Period Gross Profit (Loss) % Variance vs&period; Prior To June 30, 2019 $ 19,403,000 44&period;1% 2018 $ 34,723,000 14&period;0% 2017 $ 30,466,618 Gross Margin Period Gross Margin To June 30, 2019 25&period;86% 2018 31&period;46% 2017 34&period;80% Operating Profit (Loss) Period Operating Profit (Loss) Operating Margin To June 30, 2019 $ 8,220,000 11&period;0% 2018 $ 24,464,000 22&period;2% 2017 $ 22,013,971 25&period;1% Net Income (Loss) Period Net Income (Loss) To June 30, 2019 $ 4,710,000 2018 $ 18,063,000 2017 $ 16,113,088 Cash Flow From Operations Period Cash Flow From Operations To June 30, 2019 $ 5,445,217 2018 $ 9,227,681 2017 $ 20,171,324 Source: Company registration statement As of June 30, 2019, the company had $13&period;6 million in cash and $36&period;1 million in total liabilities (Unaudited, interim)&period; Free cash flow during the twelve months ended June 30, 2019, was a negative ($251,818)&period; IPO Details YXR intends to sell 9&period;3 million ADSs representing 1&period;8 million Class A shares at a midpoint price of $8&period;75 per ADS for gross proceeds of approximately $81&period;2 million, not including the sale of customary underwriter options&period; The company's Vice Chairman has indicated an interest to purchase $5 million worth of ADSs at the IPO price&period; The company founder and Chairman will be the sole holder of Class B shares, which will entitle him to ten votes per share versus one vote per Class A shares&period; The S&P 500 Index no longer admits firms with multiple classes of stock into its index&period; Assuming a successful IPO at the midpoint of the proposed price range, the company's enterprise value at IPO would approximate $488&period;6 million&period; Excluding effects of underwriter options and private placement shares or restricted stock, if any, the float to outstanding shares ratio will be approximately 16&period;29%&period; Per the firm's most recent regulatory filing, the firm plans to use the net proceeds as follows: approximately 60% of the net proceeds to expand our operations and the capacity of our operating centers; approximately 30% of the net proceeds to upgrade our technology and IT infrastructure; and the balance, 10% of the net proceeds, for working capital and other general corporate purposes&period; Management's presentation of the company roadshow is not available&period; Listed underwriters of the IPO are Deutsche Bank<<< Securities, CMBI, Raymond James, AMTD Global Markets, SunTrust Robinson Humphrey, Everbright Sun Hung Kai, Wedbush Securities, Prime Number Capital, China Investment Securities International, Guotai Junan International, Tiger Brokers, and Fortune [HK] Securities Limited&period; Commentary YXR is a rapidly growing Chinese firm that is braving U&period;S&period; markets for expansion capital&period; The company's financials show strong top-line revenue and gross profit growth, but less impressive operating and net results&period; The market opportunity for consumer debt collection is significant and likely helped materially by both the increased debt that Chinese consumers have accumulated in recent years as well as currently challenging economic conditions&period; Additionally, the 'shadow banking<<<' sector in China is quite large and charges high interest rates, leading to consumers getting into debt trouble more frequently&period; Deutsche Bank<<< Securities is the lead left underwriter and IPOs led by the firm over the last 12-month period have generated an average return of a negative (12&period;7%) since their IPO&period; This is a lower-tier performance for all major underwriters during the period&period; As a comparable-based valuation, a January 2019 basket of publicly held firms in the Business & Consumer Services category compiled by NYU Stern indicated that the average Enterprise Value to Revenue multiple was 1&period;93x&period; Additionally, a discounted cash flow analysis using generous growth estimates show the expected stock price to be excessive, as shown below: Although YXR is growing rapidly, given that both the public basket of potentially comparable firms and the DCF above indicate the valuation expectations of management are excessive, I'm passing on this IPO&period; Expected IPO Pricing Date: November 19, 2019&period;","primary_symbols":"YXR","summary":"["YX Asset Recovery aims to raise $81 million in a U&period;S&period; IPO&period;","The firm provides consumer credit collection services to organizations in China&period;","YXR has grown quickly, but the IPO appears pricey, so I'll be watching how it performs in the open market&period;"]","title":"IPO Update: YX Asset Recovery Proposes U&period;S&period; IPO Terms"}}]}}