Objective
- In this course, you will learn the key tools for conducting IPO research from leading analyst Mr. Ke Yan, CFA, who is an independent research analyst focusing on IPO research. He has more than ten years of experience in investment research and founded DZT Research. The firm’s clients include international hedge funds, sovereign wealth funds, as well as global long-only funds. Ke Yan is frequently quoted by international media such as Bloomberg, Thomson Reuters, S&P Global Market Intelligence, The Wallstreet Journal, and Business Times.
Who should attend this course
- Students wanting to do research for mezzanine funds, investment banks’ ECM (equity capital market) teams, sell-side, and hedge funds
- Job seekers for equity investment roles
- Job seekers working on post-interview assignments
- Individuals who wish to find out how professional analysts look at IPO deals
Pre-requisite skills
- Knowledge of basic financial modelling
- Accountancy Graduates, Finance Graduates or CFA Level 1 candidates
Outcome
- Confidently present an investment thesis and interview for a junior role in ECM (equity capital market)/DCM (debt capital market)/Investment teams
Curriculum
Session 1: IPO fundamentals
- Understanding the IPO Process: Timeline of an IPO Process
- Know the key players and their roles in the IPO process: Pre-IPO investors, manager, lead underwriter, co-underwriter, IPO manager, lawyers, cornerstone investors, anchor investors
- Terminologies you should know: Book building, Allotment Vs Allocation, Draft Offer Document, Red Herring Prospectus, Underwriters, Greenshoe, Clawback, Lock up period
- Apply your understanding using a case study
Homework
With an IPO prospectus given to you, here is a quiz to identify the key players and terms.
Session 2 (part 1): Quantitative Focus
- Answer sharing for Homework 1
- Overview of a typical prospectus
- Identify the key information to extract for the company/sector (eg. Company’s products, services, and underlying industry).
- Collect data and adjust key figures
- Build suitable ratios
Homework
Find key information from prospectus.
Session 2 (part 2): Qualitative Focus
- Shareholders/Investors
- Management team background
- Related Party Transactions: How bad is bad?
- Reputation Risks
Homework
Read the full prospectus and understand what each section is all about.
Session 3: financial analysis and valuation
- What is the typically available financial information
- Collect and organize financials
- Key ratios
- Key valuation metrics
- Pro forma forecast
- How to compare with peers
- How to determine the fair value of the company
- How to use Bloomberg for IPO research
Homework
Organize company financial data into given template
Session 4: Organize the research
- Identify suitable valuation metrics for the company. Case studies: Pharma, Education, Tech, Finance/Fintech, Transport
- Understand market valuation of peers
- What it means at top/mid/ bottom range of the IPO price range
- To subscribe or not to subscribe
Homework
Write your own thesis on the company that you want to cover
