Equity House

IFR Asia Awards 2018
4 min read
Fiona Lau, Anuradha Subramanyan

In an extraordinary year for Asia’s equity capital markets, one bank was in the driving seat on the biggest and most important deals across the full range of products. For bouncing back to its best, Goldman Sachs is IFR Asia’s Equity House of the Year.

Goldman Sachs was back at its best in Asia’s equity capital markets in 2018, securing key roles on the biggest capital raisings of the year and showing its strengths across a broad mix of markets and products.

The US investment bank led six of the 11 US$1bn-plus IPOs in the year and topped the equity and equity-related league table for Asia Pacific, excluding Japan.

Goldman’s performance in the technology sector was especially remarkable, as it has worked hard to rebuild its tech franchise after missing out on high-profile listings the previous year. Its strong showing in the equity-linked market also surprised rivals.

“This year, we led all the important transactions in all the relevant markets,” said Aaron Arth, head of the financing group for Asia ex-Japan.

China was again the busiest market for Asian equity offerings during the year with tech issuers in focus. Goldman, after a disappointing 2017, made a strong comeback in 2018 with leading roles on the most high-profile tech IPOs in the region.

The bank was one of the sponsors for the landmark HK$42.6bn (US$5.4bn) Hong Kong IPO of Chinese smartphone maker Xiaomi, the first listing in the city for a company with weighted voting rights under new rules introduced in April to attract tech listings. The bank was also in the driving seat of the HK$33.1bn Hong Kong IPO of Chinese online services provider Meituan Dianping, the second dual-class share listing.

The bank also secured sponsor roles on all four pre-revenue biotech listings in Hong Kong, leading the development of what is expected to become an important funding venue for the sector in the future.

Playing to its strengths, Goldman brought a series of Chinese technology companies to the US market. It led the US$2.4bn Nasdaq IPO of video streaming company iQiyi, the US$1.7bn Nasdaq listing of online group discounter Pinduoduo and the US$1.2bn NYSE float of Chinese electric vehicle startup Nio.

In China’s domestic market, Goldman, through its joint venture Goldman Sachs Gao Hua Securities, arranged the Rmb5.46bn (US$851m) ChiNext IPO of Contemporary Amperex Technology (CATL), China’s largest lithium battery producer.

As well as raising capital for new economy clients, Goldman extended its reputation as the go-to house for the biggest deals in the state-owned sector. It was one of two sponsors on the HK$58.8bn Hong Kong IPO of mobile phone infrastructure company China Tower, at the time the world’s biggest listing in two years.

In the equity-linked market, Goldman shocked rivals with a US$3bn dual-track offering for Chinese property developer Country Garden in January. Leveraging on its long-term relationship with the issuer, Goldman was the sole arranger of a HK$15.6bn 363-day convertible bond and a simultaneous HK$7.88bn primary share placement.

The deal showcased the bank’s ability to spot the best issuance windows, and opened the floodgate for four more CBs from the Chinese property sector in quick succession, raising a combined US$3.2bn.

Beyond the important Chinese market, Goldman handled a broad range of deals across the region.

The bank helped South Korean messaging app operator Kakao raise US$1bn from the sale of global depositary receipts in Singapore. It also helped Temasek Holdings cash in a combined W1.07trn (US$1bn) from the sale of shares in Korean protein producer Celltrion and its distributor Celltrion Healthcare through block trades. As sole bookrunner, Goldman sold a US$500m CB for Singapore-based internet company Sea.

Equity issuance in India and South-East Asia was relatively thin in the period under review, but Goldman featured on a handful of meaningful transactions. In the troubled financial sector, it seized on a short-lived rebound in sentiment in late 2017 to help Punjab National Bank raise Rs50bn (US$705m) from an institutional placement, before acting as one of the bookrunners on the Rs45bn IPO of Bandhan Bank, India’s biggest ever bank listing, and on HDFC Bank’s US$1.8bn American depositary share follow-on later in the year.

In South-East Asia, it was a bookrunner on the Ps34bn (US$634m) follow-on offer in San Miguel Food and Beverage, helping the company meet free-float rules despite tough market conditions.

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Equity House