Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Shanghai Stock Exchange Composite Index / Technical Analysis

While there are always exceptions at the individual stock level, MSCI Emerging Markets (EEM-US) and Japan (TOPIX, TOPIX Small) have been some of the weaker areas to invest throughout 2021. We now see early signs of positive change and we recommend adding exposure to emerging markets and Japan.

While there are always exceptions at the individual stock level, MSCI Emerging Markets (EEM-US) and Japan (TOPIX, TOPIX Small) have been some of the weaker areas to invest throughout 2021. We now see early signs of positive change and we recommend adding exposure to emerging markets and Japan.

Buying Opportunities Within Emerging Markets and Japan; US Dollar Failing At 93.50

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Simplex Holdings / Equity Capital Markets

Simplex Holding’s shareholders aim to raise around US$300m via selling some of their stake in the company. Simplex has consistently been ranked among the top companies in IDC Fintech rankings over the past nine years.Simplex provides consulting, system development, maintenance and operations to banks, asset managers and insurance companies in Asia. Simplex was established in Sep 97. It was listed on JASDAQ in Feb 2002 and progressed to the First Section in Sep 2005. The company undertook an MBO, in Apr 2013 and was delisted in Oct 2013.Since delisting, Simplex has expanded its product offering further to cover life insurance and non-life insurance companies as well, along with crypto exchanges. It has been reporting steady revenue growth over the past few years, although its margins have been volatile. Its performance prior to delisting wasn’t great, as it missed its medium term targets, and it now appears to be at peak margins.We have looked at the company’s past performance in our earlier note, <a href="https://www.smartkarma.com/insights/simplex-holdings-pre-ipo-steady-topline-growth-but-appears-to-be-at-peak-margins" target="_blank" rel="noopener">Simplex Holdings Pre-IPO - Steady topline growth but appears to be at peak margins</a>.In this note we will undertake a peer comparison and talk about valuations.

Simplex Holding’s shareholders aim to raise around US$300m via selling some of their stake in the company. Simplex has consistently been ranked among the top companies in IDC Fintech rankings over the past nine years.Simplex provides consulting, system development, maintenance and operations to banks, asset managers and insurance companies in Asia. Simplex was established in Sep 97. It was listed on JASDAQ in Feb 2002 and progressed to the First Section in Sep 2005. The company undertook an MBO, in Apr 2013 and was delisted in Oct 2013.Since delisting, Simplex has expanded its product offering further to cover life insurance and non-life insurance companies as well, along with crypto exchanges. It has been reporting steady revenue growth over the past few years, although its margins have been volatile. Its performance prior to delisting wasn’t great, as it missed its medium term targets, and it now appears to be at peak margins.We have looked at the company’s past performance in our earlier note, Simplex Holdings Pre-IPO - Steady topline growth but appears to be at peak margins.In this note we will undertake a peer comparison and talk about valuations.

Simplex Holdings Pre-IPO - Peer Comp, Valuation - Lagging in Size but Leading in Growth and Margins

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> reported its 1QFY03/2022 results on Thursday (12th August 2021) which saw revenues growing 39.8% YoY while operating profit for the quarter almost quadrupled to JPY104.7bn. The adjusted EBITDA for the first quarter grew 135.4% YoY to JPY125.7bn vs JPY53.4bn in the same quarter a year ago.Recruit’s 1QFY03/2022 revenues beat consensus estimates by 15.5% while reported operating profit for the quarter beat consensus by a huge margin of 74.8%. Both HR Tech and Staffing segments have recovered to pre-Covid levels, however, Media &amp; Solutions segment has not yet been able to recover from the pandemic despite showing YoY increase in revenues.The company has revised its guidance for full-year FY03/2022 upwards (from its previous guidance in May 2021) in order to reflect the updated outlook for HR Tech and Staffing businesses.

Recruit Holdings (6098 JP) reported its 1QFY03/2022 results on Thursday (12th August 2021) which saw revenues growing 39.8% YoY while operating profit for the quarter almost quadrupled to JPY104.7bn. The adjusted EBITDA for the first quarter grew 135.4% YoY to JPY125.7bn vs JPY53.4bn in the same quarter a year ago.Recruit’s 1QFY03/2022 revenues beat consensus estimates by 15.5% while reported operating profit for the quarter beat consensus by a huge margin of 74.8%. Both HR Tech and Staffing segments have recovered to pre-Covid levels, however, Media &amp; Solutions segment has not yet been able to recover from the pandemic despite showing YoY increase in revenues.The company has revised its guidance for full-year FY03/2022 upwards (from its previous guidance in May 2021) in order to reflect the updated outlook for HR Tech and Staffing businesses.

Recruit: Strong Performance of HR Tech Drives Earnings Beat; Shares Are Overvalued

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<div>
Nine months after IR solutions provider <a href="https://www.smartkarma.com/entities/51-job-inc-adr" target="_blank" data-smartkarma-citation="entities:532:1" rel="noopener">51 Job Inc Adr (JOBS US)</a> first announced it had received a preliminary non-binding <a href="https://sec.report/Document/0001104659-20-105912/" target="_blank" rel="noopener">Proposal</a> from DCP Capital Partners to acquire all of its shares for US$79.05/common share, 51job <a href="https://sec.report/Document/0001193125-21-195283/" target="_blank" rel="noopener">announced</a> yesterday it has entered into a definitive privatisation agreement. 
The price remains unchanged, which is also in keeping with the non-binding proposal <a href="https://ir.51job.com/ir/php/2021/PreRelease20210504.php?0504" target="_blank" rel="noopener">announced</a> on the 4 May, wherein Ocean Link and CEO Rick Yan joined DCP in the consortium to take the company private.
The big news is that <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a>, 51job's largest shareholder with 34.8%, has now joined the consortium. 
The merger requires the approval of two-thirds of all shareholders at an EGM, and the consortium has 54.9% in the bag. 
This deal is by no means a sure thing. But even if the EGM resolution passes, minorities are afforded dissension rights. And as recently seen in the recent privatisations of <a href="https://www.smartkarma.com/entities/sina-corp-china" target="_blank" data-smartkarma-citation="entities:22691:1" rel="noopener">Sina Corp (Class A) (SINA US)</a> and <a href="https://www.smartkarma.com/entities/china-biologic-products-hold" target="_blank" data-smartkarma-citation="entities:22633:1" rel="noopener">China Biologic Products (CBPO US)</a>, shareholders have taken up that cause. 
</div>
<div>
More below the fold.
</div>


Nine months after IR solutions provider 51 Job Inc Adr (JOBS US) first announced it had received a preliminary non-binding Proposal from DCP Capital Partners to acquire all of its shares for US$79.05/common share, 51job announced yesterday it has entered into a definitive privatisation agreement. 
The price remains unchanged, which is also in keeping with the non-binding proposal announced on the 4 May, wherein Ocean Link and CEO Rick Yan joined DCP in the consortium to take the company private.
The big news is that Recruit Holdings (6098 JP), 51job's largest shareholder with 34.8%, has now joined the consortium. 
The merger requires the approval of two-thirds of all shareholders at an EGM, and the consortium has 54.9% in the bag. 
This deal is by no means a sure thing. But even if the EGM resolution passes, minorities are afforded dissension rights. And as recently seen in the recent privatisations of Sina Corp (Class A) (SINA US) and China Biologic Products (CBPO US), shareholders have taken up that cause. 


More below the fold.


51job’s Privatisation: Firm Offer Is Still The Wrong Price

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<a href="https://www.smartkarma.com/entities/51-job-inc-adr" target="_blank" data-smartkarma-citation="entities:532:1" rel="noopener">51 Job Inc Adr (JOBS US)</a> has entered into a definitive agreement for a privatisation transaction at $79.05 in cash per ADS. The offer price is a premium of 25.38% to the VWAP during the last 30 days and an 18.82% premium to the VWAP during the last 30 days preceding the original proposal (on 17 September 2020).As a reminder, on 17 September 2020, 51job announced a non-binding privatisation proposal from DCP Capital Partners, a PE firm in Asia, at $79.05 in cash per ADS. On 4 May 2021, the proposal was updated by disclosing the formation of an initial consortium consisting of DCP, Ocean Link Partners and Mr Rick Yan, the CEO since 2000. The offer price remained unchanged. Today's announcement notes that <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a>, the largest shareholder which represents 34.8% of outstanding shares, has joined the consortium. The privatisation price is not a knockout bid and is a modest premium to historical VWAPs over a 3-years and 1-year time period. Some shareholders may be reticent about accepting the bid given the stonking share price performance of peer, <a href="https://www.smartkarma.com/entities/kanzhun-ltd" target="_blank" data-smartkarma-citation="entities:33368:1" rel="noopener">Kanzhun (BZ US)</a>, which is trading almost 2x its IPO price. However, we note that the privatisation offer is attractive in the context of 51job’s forecasted growth (PEG basis). Nevertheless, for shareholders seeking to be paid the fair value of their shares, dissenter rights are available.  <div class="content-highlight">As 51job is incorporated in the Cayman Islands, for the privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. Rick Yan, Recruit and certain other existing shareholders have agreed to vote their shares, which represent 54.9% of the voting rights, in favour of the privatisation deal. We think that this level of support should be enough to get past the two-thirds shareholder approval threshold. </div>

51 Job Inc Adr (JOBS US) has entered into a definitive agreement for a privatisation transaction at $79.05 in cash per ADS. The offer price is a premium of 25.38% to the VWAP during the last 30 days and an 18.82% premium to the VWAP during the last 30 days preceding the original proposal (on 17 September 2020).As a reminder, on 17 September 2020, 51job announced a non-binding privatisation proposal from DCP Capital Partners, a PE firm in Asia, at $79.05 in cash per ADS. On 4 May 2021, the proposal was updated by disclosing the formation of an initial consortium consisting of DCP, Ocean Link Partners and Mr Rick Yan, the CEO since 2000. The offer price remained unchanged. Today's announcement notes that Recruit Holdings (6098 JP), the largest shareholder which represents 34.8% of outstanding shares, has joined the consortium. The privatisation price is not a knockout bid and is a modest premium to historical VWAPs over a 3-years and 1-year time period. Some shareholders may be reticent about accepting the bid given the stonking share price performance of peer, Kanzhun (BZ US), which is trading almost 2x its IPO price. However, we note that the privatisation offer is attractive in the context of 51job’s forecasted growth (PEG basis). Nevertheless, for shareholders seeking to be paid the fair value of their shares, dissenter rights are available.  As 51job is incorporated in the Cayman Islands, for the privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. Rick Yan, Recruit and certain other existing shareholders have agreed to vote their shares, which represent 54.9% of the voting rights, in favour of the privatisation deal. We think that this level of support should be enough to get past the two-thirds shareholder approval threshold. 

Japan

Recruit Holdings Co. Ltd. operates information providing services in human resource, housing, bridal, travel, restaurants, beauty, automobiles, and education and more. The company also operate staffing services and advertising business.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Recruit Holdings (6098 JP)

Buying Opportunities Within Emerging Markets and Japan; US Dollar Failing At 93.50

MSCI Emerging Markets (EEM-US) and Japan (TOPIX, TOPIX Small) have been some of the weaker areas to invest throughout 2021. We now see early signs...

Vermilion Research

Simplex Holdings Pre-IPO - Peer Comp, Valuation - Lagging in Size but Leading in Growth and Margins

Simplex Holding’s shareholders aim to raise around US$300m via selling some of their stake in the company. Simplex has consistently been ranked...

Sumeet Singh

Recruit: Strong Performance of HR Tech Drives Earnings Beat; Shares Are Overvalued

Recruit's 1QFY03/2022 revenues grew 39.8% YoY while operating profit almost quadrupled to JPY104.7bn. Both HR Tech and Staffing have recovered but...

Shifara Samsudeen, ACMA, CGMA

51job’s Privatisation: Firm Offer Is Still The Wrong Price

I'd buy here. Given recent Cayman petitions, I would expect this pushback on pricing to continue here, which may avail smaller investors the...

David Blennerhassett

51job Enters into a Definite Agreement

51 job has entered into a definitive agreement for privatisation at $79.05 in cash per ADS. We think that the current level of support should be...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)