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

FWD Group Holdings / Equity Capital Markets

<div><p>FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. </p></div><div><p>FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.</p></div><div>
<div>In our previous note, we spoke about the positive  and negatives aspects of the deal in our earleir notes, <a href="https://www.smartkarma.com/insights/fwd-pre-ipo-the-positives-growing-fast" target="_blank" rel="noopener">FWD Pre-IPO - The Positives - Growing Fast</a>, <a href="https://www.smartkarma.com/insights/fwd-pre-ipo-the-negatives-strategy-remains-unclear" target="_blank" rel="noopener">FWD Pre-IPO - The Negatives - Strategy Remains Unclear </a>and <a href="https://www.smartkarma.com/insights/fwd-pre-ipo-peer-comparison" target="_blank" rel="noopener">FWD Pre-IPO - Peer Comparison</a>.</div>
<div></div>
<div>In this note we will talk about valuations.</div>
</div>

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.
In our previous note, we spoke about the positive  and negatives aspects of the deal in our earleir notes, FWD Pre-IPO - The Positives - Growing Fast, FWD Pre-IPO - The Negatives - Strategy Remains Unclear and FWD Pre-IPO - Peer Comparison.

In this note we will talk about valuations.


<div><p>FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. </p></div><div><p>FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.</p></div><div>In our previous note, we spoke about the positive aspects of the deal, <a href="https://www.smartkarma.com/insights/fwd-pre-ipo-the-positives-growing-fast" target="_blank" rel="noopener">FWD Pre-IPO - The Positives - Growing Fast</a>.</div><div></div><div>In this note we will talk about some of the not so pleasant aspects. </div>

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.In our previous note, we spoke about the positive aspects of the deal, FWD Pre-IPO - The Positives - Growing Fast.In this note we will talk about some of the not so pleasant aspects. 

FWD Pre-IPO - The Negatives - Strategy Remains Unclear

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

<div class="content-highlight">
<p>The week that was in <a href="mailto:ASEAN@Smartkarma" target="_blank" rel="noopener">ASEAN@Smartkarma</a> is filled with another eclectic mix of differentiated, substantive, and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.</p>
<p>We add below a NEW section, which includes emerging themes in ASEAN and selects important news flow or developments for commentary, which may impact SE Asian companies and markets.</p>
</div><h3>Macro Insights</h3><p>In<a href="https://www.smartkarma.com/insights/singapore-taking-the-pulse-of-the-labour-market-recovery" target="_blank" rel="noopener"> Singapore: Taking the Pulse of the Labour Market Recovery</a>, economist<a href="https://www.smartkarma.com/profiles/nigel-chiang" target="_blank" rel="noopener"> Nigel Chiang</a> discusses Singapore's labour market that has recovered slowly in 2Q21 and its economic outlook. </p><p>In<a href="https://www.smartkarma.com/insights/covid-19-too-much-pessimism-over-southeast-asia" target="_blank" rel="noopener"> Covid-19: Too Much Pessimism Over Southeast Asia</a>,<a href="https://www.smartkarma.com/profiles/nicholas-chia" target="_blank" rel="noopener"> Nicholas Chia</a> discusses Southeast Asia's poor pandemic management and a slow vaccine rollout has raised pessimism over the region’s prospects but sees more optimism ahead.</p><h3>Equity Bottom Up</h3><p>In<a href="https://www.smartkarma.com/insights/bank-negara-indonesia-bbni-ij-revealing-a-new-digital-skin" target="_blank" rel="noopener"> Bank Negara Indonesia (BBNI IJ) - Revealing a New Digital Skin</a>,<a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener"> Angus Mackintosh</a> takes a closer look at<a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" rel="noopener"> Bank Negara Indonesia Persero (BBNI IJ)</a> after<a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" rel="noopener"> Bank Negara Indonesia Persero (BBNI IJ)</a> revealed some interesting views on its strategy for expansion in a recent webinar. <a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener"></a></p><p>In<a href="https://www.smartkarma.com/insights/erajaya-swasembada-eraa-ij-better-reception-ahead" target="_blank" rel="noopener"> Erajaya Swasembada (ERAA IJ) - Better Reception Ahead</a>, CrossASEAN insight provider<a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener"> Angus Mackintosh</a> circles back to<a href="https://www.smartkarma.com/entities/erajaya-swasembada-tbk-pt" target="_blank" rel="noopener"> Erajaya Swasembada (ERAA IJ)</a> after an interaction with management. </p><p>In<a href="https://www.smartkarma.com/insights/erajaya-eraa-beneficiary-of-whatsapp-and-google-update" target="_blank" rel="noopener"> Erajaya (ERAA): Beneficiary of WhatsApp and Google Update</a>,<a href="https://www.smartkarma.com/profiles/henry-soediarko" target="_blank" rel="noopener"> Henry Soediarko</a> revisits<a href="https://www.smartkarma.com/entities/erajaya-swasembada-tbk-pt" target="_blank" rel="noopener"> Erajaya Swasembada (ERAA IJ)</a> after it registered strong growth, partly driven by Google and WhatsApp security updates that require new smartphones. </p><p>In<a href="https://www.smartkarma.com/insights/bukalapak-buka-ij-fast-entry-to-idx30-lq45-idx80-msci-on-track-for-november" target="_blank" rel="noopener"> Bukalapak (BUKA IJ): Fast Entry to IDX30, LQ45, IDX80; MSCI on Track for November</a>,<a href="https://www.smartkarma.com/profiles/brian-freitas" target="_blank" rel="noopener"> Brian Freitas</a> discusses<a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" rel="noopener"> Bukalapak (BUKA IJ)</a>'s entry to IDX30, LQ45, IDX80, JII and JII70 Indexes. This follows a recently proposed change to the indices to allow for Fast Entry inclusions. </p><p>In<a href="https://www.smartkarma.com/insights/scb-scbx-will-unlock-potential-growth-in-the-long-term" target="_blank" rel="noopener"> SCB: SCBX Will Unlock Potential Growth in the Long-Term</a>,<a href="https://www.smartkarma.com/companies/country-group" target="_blank" rel="noopener"> Country Group</a> circles back to<a href="https://www.smartkarma.com/entities/siam-commercial-bank-pub-co" target="_blank" rel="noopener"> Siam Commercial Bank Pub Co (SCB TB)</a> post the analyst meeting showed that the management plan to set up SCBX, a newly established holding company in place of SCB.</p>


The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive, and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.
We add below a NEW section, which includes emerging themes in ASEAN and selects important news flow or developments for commentary, which may impact SE Asian companies and markets.
Macro InsightsIn Singapore: Taking the Pulse of the Labour Market Recovery, economist Nigel Chiang discusses Singapore's labour market that has recovered slowly in 2Q21 and its economic outlook. In Covid-19: Too Much Pessimism Over Southeast Asia, Nicholas Chia discusses Southeast Asia's poor pandemic management and a slow vaccine rollout has raised pessimism over the region’s prospects but sees more optimism ahead.Equity Bottom UpIn Bank Negara Indonesia (BBNI IJ) - Revealing a New Digital Skin, Angus Mackintosh takes a closer look at Bank Negara Indonesia Persero (BBNI IJ) after Bank Negara Indonesia Persero (BBNI IJ) revealed some interesting views on its strategy for expansion in a recent webinar. In Erajaya Swasembada (ERAA IJ) - Better Reception Ahead, CrossASEAN insight provider Angus Mackintosh circles back to Erajaya Swasembada (ERAA IJ) after an interaction with management. In Erajaya (ERAA): Beneficiary of WhatsApp and Google Update, Henry Soediarko revisits Erajaya Swasembada (ERAA IJ) after it registered strong growth, partly driven by Google and WhatsApp security updates that require new smartphones. In Bukalapak (BUKA IJ): Fast Entry to IDX30, LQ45, IDX80; MSCI on Track for November, Brian Freitas discusses Bukalapak (BUKA IJ)'s entry to IDX30, LQ45, IDX80, JII and JII70 Indexes. This follows a recently proposed change to the indices to allow for Fast Entry inclusions. In SCB: SCBX Will Unlock Potential Growth in the Long-Term, Country Group circles back to Siam Commercial Bank Pub Co (SCB TB) post the analyst meeting showed that the management plan to set up SCBX, a newly established holding company in place of SCB.

The Week That Was in ASEAN@Smartkarma - BNI More Digital, Erajaya on Fire, and Siam Commercial Bank

<p>FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. </p><p>FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.</p><p>In this note, we will talk about the positive aspects of the deal.</p>

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.In this note, we will talk about the positive aspects of the deal.

FWD Pre-IPO - The Positives - Growing Fast

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p><em>There is a BIG trade coming up starting next Monday. If you have exposure in Indonesia, it is worth thinking about. </em></p><hr><p>Back in January 2021, Bloomberg reported that <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia Persero (BBRI IJ)</a> - the country's largest lender by assets - was <em>"exploring a plan to raise at least US$1bn through a rights issue."</em></p><p>Almost a year ago in October 2020 BBRI signed a conditional deal to merge their Shariah-compliant unit with those of <a href="https://www.smartkarma.com/entities/bank-mandiri-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:441:1" rel="noopener">Bank Mandiri Persero (BMRI IJ)</a> and <a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara Indonesia Persero (BBNI IJ)</a> and there had been talks (since Feb 2020?) with the government for BBRI to take over state-owned pawnshop lender PT Pegadaian and financing firm PT Permodalan Nasional Madani to provide affordable loans to SMEs. A deal for BBRI to take over those two firms was <a href="https://www.reuters.com/article/bank-bri-ma-idUSL4N2KE2J5" target="_blank" rel="noopener">decided</a> in early February, and the need for a rights issue was set, though this required parliamentary approval and BBRI needed shareholder approval for the rights issue - which it announced in June and <a href="https://www.thejakartapost.com/adv/2021/07/23/bri-egms-approves-rights-issue-of-28-billion-shares.html" target="_blank" rel="noopener">received</a> in July - under the mechanism of <em>Capital Increase by Granting Securities Subscription Rights First</em> (PMHMETD). <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> discussed the bank's initiatives and aspirations in the micro lending space in <a href="https://www.smartkarma.com/insights/bank-rakyat-indonesia-bbri-ij-both-micro-and-digital" target="_blank" data-smartkarma-citation="insights:48613" rel="noopener">Bank Rakyat Indonesia (BBRI IJ) - Both Micro and Digital</a> in February followed by a discussion of the rights issue itself in early July in <a href="https://www.smartkarma.com/insights/bank-rakyat-indonesia-bbri-ij-ultra-micro-and-digital-aspirations-in-place" target="_blank" data-smartkarma-citation="insights:54111" rel="noopener">Bank Rakyat Indonesia (BBRI IJ) - Ultra-Micro and Digital Aspirations in Place</a>. Angus made a strong case for the bank in both insights and they are worth a read. </p><p>The shares have basically had an overhang in place since early this year but in June when it became clear the rights issue would be Very Large, that overhang became more pronounced. </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/528/original/Screenshot+2021-09-08+at+2.18.15+PM.png?1631081912" class="editor-image img-responsive" data-smartkarma-image-id="228528"></figure><p></p></section><p>The presentation made to get this past shareholders (never really in doubt as the govt owns 57%) announced the development of an "Ultra-Micro segment" to create an <em>Ultra-Micro Ecosystem</em> as the foundation for further growth, structured under <strong>Ultra Micro Holding</strong> owned by BRI, in the form of previous precedents of SOE development platforms such as Biofarma/<a href="https://www.smartkarma.com/entities/indofarma-tbk-pt" target="_blank" data-smartkarma-citation="entities:5319:1" rel="noopener">Indofarma (INAF IJ)</a> and Inalum's investment in Indonesian mining companies. </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/527/original/Screenshot+2021-09-08+at+2.02.45+PM.png?1631080980" class="editor-image img-responsive" data-smartkarma-image-id="228527"></figure></section><p>The way this would be done is a rights offering to offer 230,128,553 rights for every 1,000,000,000 Existing Shares (roughly 0.23013 for 1), with the government contributing its ownership of Pegadaian and PNM in kind to fulfil its rights exercise consideration payment.</p><p>That means the ~0.23 to 1 Rights Offering would be in effect for the other 43% of holders, which is a vast array of local and international institutions and local retail shareholders, with an Exercise Price of IDR 3400/share, and assuming 100% participation, that would garner IDR 41.15trln in proceeds, which, according to the roadshow <a href="https://www.ir-bri.com/misc/PS/2021/RI-Deal-Roadshow-Presentation-Final.pdf" target="_blank" rel="noopener">presentation</a> released in early September, <em>"will be used for working capital for BRI in order to develop an ultra-micro ecosystem as well as micro and small businesses."</em></p><p>The shares traded on the regular market went ex-rights today. Rights will be distributed on 10 September, traded from 13-22 September and exercised in the same period, with the last day for Excess Rights Subscription the 24 September and allotment of Excess Rights on 27 September.</p><p>There is considerable opportunity here. Some short-term, some longer-term. But it is considerable because there is a fair bit of potential overhang here.</p><p>I consider the opportunity set below the fold. </p>

There is a BIG trade coming up starting next Monday. If you have exposure in Indonesia, it is worth thinking about. Back in January 2021, Bloomberg reported that Bank Rakyat Indonesia Persero (BBRI IJ) - the country's largest lender by assets - was "exploring a plan to raise at least US$1bn through a rights issue."Almost a year ago in October 2020 BBRI signed a conditional deal to merge their Shariah-compliant unit with those of Bank Mandiri Persero (BMRI IJ) and Bank Negara Indonesia Persero (BBNI IJ) and there had been talks (since Feb 2020?) with the government for BBRI to take over state-owned pawnshop lender PT Pegadaian and financing firm PT Permodalan Nasional Madani to provide affordable loans to SMEs. A deal for BBRI to take over those two firms was decided in early February, and the need for a rights issue was set, though this required parliamentary approval and BBRI needed shareholder approval for the rights issue - which it announced in June and received in July - under the mechanism of Capital Increase by Granting Securities Subscription Rights First (PMHMETD). Angus Mackintosh discussed the bank's initiatives and aspirations in the micro lending space in Bank Rakyat Indonesia (BBRI IJ) - Both Micro and Digital in February followed by a discussion of the rights issue itself in early July in Bank Rakyat Indonesia (BBRI IJ) - Ultra-Micro and Digital Aspirations in Place. Angus made a strong case for the bank in both insights and they are worth a read. The shares have basically had an overhang in place since early this year but in June when it became clear the rights issue would be Very Large, that overhang became more pronounced. The presentation made to get this past shareholders (never really in doubt as the govt owns 57%) announced the development of an "Ultra-Micro segment" to create an Ultra-Micro Ecosystem as the foundation for further growth, structured under Ultra Micro Holding owned by BRI, in the form of previous precedents of SOE development platforms such as Biofarma/Indofarma (INAF IJ) and Inalum's investment in Indonesian mining companies. The way this would be done is a rights offering to offer 230,128,553 rights for every 1,000,000,000 Existing Shares (roughly 0.23013 for 1), with the government contributing its ownership of Pegadaian and PNM in kind to fulfil its rights exercise consideration payment.That means the ~0.23 to 1 Rights Offering would be in effect for the other 43% of holders, which is a vast array of local and international institutions and local retail shareholders, with an Exercise Price of IDR 3400/share, and assuming 100% participation, that would garner IDR 41.15trln in proceeds, which, according to the roadshow presentation released in early September, "will be used for working capital for BRI in order to develop an ultra-micro ecosystem as well as micro and small businesses."The shares traded on the regular market went ex-rights today. Rights will be distributed on 10 September, traded from 13-22 September and exercised in the same period, with the last day for Excess Rights Subscription the 24 September and allotment of Excess Rights on 27 September.There is considerable opportunity here. Some short-term, some longer-term. But it is considerable because there is a fair bit of potential overhang here.I consider the opportunity set below the fold. 

Bank Rakyat Indonesia (BBRI)'s Mega Rights Issue - Plenty of Opportunity Short-Term and Long-Term

Thailand

SCB X Public Company Limited provides banking services. The Bank offers accounts, loans, cards, deposits, insurance, investment, payment, digital banking, and other related services. SCB X serves customers worldwide.

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Siam Commercial Bank (SCB TB)

FWD Pre-IPO - Thoughts on Valuation

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. In this note we will talk about our thoughts on...

Sumeet Singh

FWD Pre-IPO - The Negatives - Strategy Remains Unclear

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. In this note, we will talk about the not so pleasant...

Sumeet Singh

The Week That Was in ASEAN@Smartkarma - BNI More Digital, Erajaya on Fire, and Siam Commercial Bank

The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive, and actionable insights from across South...

Angus Mackintosh

FWD Pre-IPO - The Positives - Growing Fast

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. In this note, we will talk about the positive...

Sumeet Singh

Bank Rakyat Indonesia (BBRI)'s Mega Rights Issue - Plenty of Opportunity Short-Term and Long-Term

Bank Rakyat (BBRI) Indonesia's largest bank by assets, has a rights issue (stock went ex-rights today). The bank hopes to raise $2.8bn from its...

Travis Lundy

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