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 Bottom-Up

In my previous insight <a href="https://www.smartkarma.com/insights/xero-a-beautiful-business-but-not-pricing-in-much-in-the-way-of-an-sme-rout" target="_blank" rel="noopener">XERO: A Beautiful Business but Not Pricing in Much in the Way of an SME Rout,</a> I mentioned that  XRO mostly caters to small business owners in Australia, NZ, and UK, along with other geographies. With the COVID-19 ravaging small and medium enterprises (SMEs) across its main markets, its questionable if the company can deliver on near term growth.  In this insight, I'll take a look at the company's FY20 results (year ending Mar 20) which were reported earlier today.

In my previous insight XERO: A Beautiful Business but Not Pricing in Much in the Way of an SME Rout, I mentioned that  XRO mostly caters to small business owners in Australia, NZ, and UK, along with other geographies. With the COVID-19 ravaging small and medium enterprises (SMEs) across its main markets, its questionable if the company can deliver on near term growth.  In this insight, I'll take a look at the company's FY20 results (year ending Mar 20) which were reported earlier today.

Xero Results Update: Good Results, Tepid Outlook. Earnings Cut Making It Even More Expensive

<a href="https://www.smartkarma.com/entities/xero-ltd" target="_blank" data-smartkarma-citation="entities:390:1" rel="noopener">Xero Ltd (XRO AU)</a> (Mcap: US$6bn, ADV: US$35m) is as its tagline says a "beautiful business". The company is a classic SaaS business offering cloud based accounting. It was set up in New Zealand in 2006 and was listed in 2007, raising a total of NZ$15m. The business is today worth US$6bn. However, XRO mostly caters to small business owners in Australia, NZ, and UK, along with other geographies. With the COVID-19 ravaging small and medium enterprises (SMEs) across its main markets, its questionable if the company can deliver on near term growth.  If the crisis lasts a few months, its growth over the next 2-3 years might be put in question as well.While the recurring revenue will keep the business running, the valuation isn't really factoring in a slowdown.

Xero Ltd (XRO AU) (Mcap: US$6bn, ADV: US$35m) is as its tagline says a "beautiful business". The company is a classic SaaS business offering cloud based accounting. It was set up in New Zealand in 2006 and was listed in 2007, raising a total of NZ$15m. The business is today worth US$6bn. However, XRO mostly caters to small business owners in Australia, NZ, and UK, along with other geographies. With the COVID-19 ravaging small and medium enterprises (SMEs) across its main markets, its questionable if the company can deliver on near term growth.  If the crisis lasts a few months, its growth over the next 2-3 years might be put in question as well.While the recurring revenue will keep the business running, the valuation isn't really factoring in a slowdown.

XERO: A Beautiful Business but Not Pricing in Much in the Way of an SME Rout

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

Despite negative recent developments, we have remained steadfast in our belief that weakness in May has presented an attractive time to add exposure. In our June International Strategy, we highlight various themes which lead to this belief, along with areas of the market where we see actionable opportunities within our favorite Groups, spanning the Consumer Staples, Technology, Consumer Discretionary, Services, Health Care, and Financial Sectors.

Despite negative recent developments, we have remained steadfast in our belief that weakness in May has presented an attractive time to add exposure. In our June International Strategy, we highlight various themes which lead to this belief, along with areas of the market where we see actionable opportunities within our favorite Groups, spanning the Consumer Staples, Technology, Consumer Discretionary, Services, Health Care, and Financial Sectors.

Global Ex-U.S. Equity Strategy: Cautiously Optimistic Outlook Intact

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.

Event-Driven

On Thursday, <a href="https://www.smartkarma.com/entities/374" target="_blank" data-smartkarma-citation="entities:374:1">MYOB Group Ltd (MYO AU)</a> released its Scheme Booklet in which the Independent Expert, Grant Samuel, valued MYOB between A$3.19 and A$3.69 per share. Consequently, Grant Samuel concluded that <a href="https://www.smartkarma.com/entities/27333" target="_blank" data-smartkarma-citation="entities:27333:1">KKR &amp; Co Inc (KKR US)</a>'s revised proposal of A$3.40 cash per share is fair and reasonable. However, Manikay Partners continues to voice concerns about the KKR proposal as it believes MYOB is worth well in excess of A$4.00 per share.<div class="content-highlight">With the shares 4 cents below KKR’s revised proposal, we continue to believe shareholders should cash out as Manikay’s valuation is only justifiable if MYOB’s delivers flawless execution.</div>

On Thursday, MYOB Group Ltd (MYO AU) released its Scheme Booklet in which the Independent Expert, Grant Samuel, valued MYOB between A$3.19 and A$3.69 per share. Consequently, Grant Samuel concluded that KKR &amp; Co Inc (KKR US)'s revised proposal of A$3.40 cash per share is fair and reasonable. However, Manikay Partners continues to voice concerns about the KKR proposal as it believes MYOB is worth well in excess of A$4.00 per share.With the shares 4 cents below KKR’s revised proposal, we continue to believe shareholders should cash out as Manikay’s valuation is only justifiable if MYOB’s delivers flawless execution.

MYOB (MYO AU): Manikay’s Valuation Requires Flawless Execution

On 5 March 2019, Manikay Partners, an 11% shareholder, wrote to <a href="https://www.smartkarma.com/entities/374" target="_blank" data-smartkarma-citation="entities:374:1">MYOB Group Ltd (MYO AU)</a> chairman Justin Milne to reveal that it believed that <a href="https://www.smartkarma.com/entities/27333" target="_blank" data-smartkarma-citation="entities:27333:1">KKR &amp; Co Inc (KKR US)</a>’s recommended offer of $3.40 cash per share was too low due to the significant market rally and normalisation of financing markets.<div class="content-highlight">Manikay believes MYOB is worth well in excess of A$4.00 per share. Manikay intends to use the threat of a shareholder rejection to get KKR to sweeten its bid, in our view. However, we believe that KKR has little reason to increase its bid. With the shares just 1 cent below KKR’s revised proposal, we believe shareholders should cash out.</div>

On 5 March 2019, Manikay Partners, an 11% shareholder, wrote to MYOB Group Ltd (MYO AU) chairman Justin Milne to reveal that it believed that KKR &amp; Co Inc (KKR US)’s recommended offer of $3.40 cash per share was too low due to the significant market rally and normalisation of financing markets.Manikay believes MYOB is worth well in excess of A$4.00 per share. Manikay intends to use the threat of a shareholder rejection to get KKR to sweeten its bid, in our view. However, we believe that KKR has little reason to increase its bid. With the shares just 1 cent below KKR’s revised proposal, we believe shareholders should cash out.

United Kingdom

Playtech plc develops unified software platforms and content for the online, mobile and land-based gaming industry.  The Company's gaming applications include casino, poker, bingo, sports betting, live gaming, casual and fixed odds games.

GB Group plc develops, sells, and supports business application software.  The Company also provides database management and analysis services, as well as licenses technology.

Kape Technologies PLC provide software solutions. The Company offers security platform to protect from online snoopers, malware, and infected files, as well as solves driver and software problems. Kape Technologies serves customers globally.

Learning Technologies Group plc provides various e-learning services and technologies to corporate and government clients in the United Kingdom, Switzerland, Rest of Europe, the United States, Canada, and internationally. The company produces interactive multimedia programmes. It also engages in mobile e-learning, bespoke e-learning, and educational games businesses, as well as operates employee benefit trust. In addition, the company provides gomo learning, a software as a service, which offers clients solution for creating, hosting, updating, and tracking their multi-device learning content, as well as Rustici Software that connects learning software for organizations and vendors. Learning Technologies Group plc was founded in 1986 and is based in London, the United Kingdom.

FD Technologies PLC provides products and consulting services. The Company offers services encompass consultancy, custom software, systems integration, training, and web designing. FD Technologies serves finance, technology, and energy institutions worldwide.

Idox plc, through its subsidiaries, develops and supplies software solutions and information services for the management of local governments and other organizations worldwide. The company operates in two segments, Public Sector Software and Engineering Information Management. The Public Sector Software segment provides tools to access and manage information and knowledge, documents and content, business processes, and workflow, as well as connecting directly with the citizen through the Web for public-sector organizations. This segment also offers elections management solutions; and decision support content services, such as grants and plans policy information, and corporate compliance services. The Engineering Information Management segment provides engineering document control and project collaboration services to oil and gas, architecture and construction, mining, utilities, pharmaceutical and transportation industries. The company also provides software-as-a-service; integrated intelligence solutions for the management and control of traffic and public transport networks; and digital consultancy services, as well as managed and hosted services, and domain specific solutions. Idox plc was incorporated in 2000 and is based in Reading, the United Kingdom.

dotdigital Group Plc provides intuitive software as a service technology and tools to digital marketing professionals in the United Kingdom. It primarily offers dotMailer, an email and cross-channel marketing automation platform that enables marketers to create, manage, execute, and evaluate targeted campaigns. The company also provides email marketing consultancy and managed services through integrated, multi-channel engagement, conversion, acquisition, and retention; and Web based marketing services to other businesses. dotdigital Group Plc was founded in 1999 and is headquartered in London, the United Kingdom.

Tracsis plc, together with its subsidiaries, provides software, hardware, and associated technology led professional services for resource optimization, rail management, data capture, and reporting. The company provides TRACS-RS, a rolling stock planning software; TrainTRACS and FreightTRACS, which are train crew diagramming software; TRACSRoster, a train crew rostering software; and COMPASS, a performance and safety software. It also offers condition monitoring services, including SA380, a data logger for railway level crossing, interlocking, and monitoring applications; SA380TX, an industrial data acquisition unit for rail applications; SA380TX-L, a data acquisition system designed to connect trackside asset to server-based supervisory and diagnostics systems; and Centrix, a graphical replay and fault prevention software. In addition, the company provides traffic and data services, such as collection, collation, and analytical services of traffic and passenger/customer data within rail, traffic, and pedestrian environments; and data capture and data entry services. Further, it offers rail consultancy and related professional services in the areas of network planning and management, timetable development and performance modelling, rolling stock diagramming, train crew diagramming, and rostering. The company serves transport operators, transport authorities, and infrastructure operators, as well as other engineering/infrastructure companies in the United Kingdom, Australia, and rest of the world. Tracsis plc was founded in 2004 and is headquartered in Leeds, the United Kingdom.

Netcall plc designs, develops, sells, and markets communications, workforce management, and business process management software and services to the healthcare, public, and private sectors in the United Kingdom and internationally. It offers multichannel contact center solutions, including response management, IVR and speech recognition, call back and queue management, unified agent desktop, wallboard reporting, streamlined and integrated workflows and systems, and automated and personalized bi-directional process driven communication and alerts. The company also provides workforce optimization solutions, such as workforce management, quality management, agent evaluation, screen and voice recording, customer survey, and speech analytics, as well as resource management services; and customer and patient self-services through assisted channels comprising email, Web forms, two way SMS, live chat, Web chat, social chat, call back, and social media. In addition, it offers case, records, and document management; patient appointment management cycle; and interactive voice response payment solutions, as well as front desk operator services. Further, the company provides professional, deployment, and support services. Netcall plc was incorporated in 1984 and is based in Hemel Hempstead, the United Kingdom.

Bango PLC develops, markets, and sells technology to enable mobile phone users to make payments for digital content and media on smartphones and tablets. The company offers Bango Payment Platform, a carrier billing solution; Bango Grid that enables the planning, launch, and management of app store carrier billing; and Bango Boost, a measurement and comparative analysis technology that enables maximizing billing revenues by analyzing how payment conversion rates can be increased. It also provides Bango Dashboard, an online analytics tool, which offers a unified view of carrier billing performance to various app stores or operators; Bango 24/7, a comparative monitoring system; and Bango Care for fast customer query resolution. The company operates in the United Kingdom, the European Union, the United States, Canada, Indonesia, and internationally. Bango PLC was founded in 1999 and is based in Cambridge, the United Kingdom.

Xero Limited offers an online accounting system.  The software features bank transaction importing, a cashbook, a general ledger, invoicing, accounts receivable, accounts payable, financial reporting, and management of expense claims.

CAPCOM CO., LTD. develops consumer video game software.  The Company also develops, manufactures, markets, and leases arcade game machines.  Capcom also operates amusement facilities.

Aspen Technology, Inc. provides software solutions. The Company offers asset optimization software that optimizes asset design, operations, and maintenance in complex, industrial environments to enable organizations to meet their business goals for sustainability and profitability. Aspen Technology serves customers worldwide.

Paycom Software Inc provides cloud-based HCM software solution delivered as Software-as-a-Service.  The Company provides functionality and data analytics that businesses need to manage the complete employment life cycle from recruitment to retirement.

Check Point Software Technologies Ltd. develops, markets and supports a range of software and hardware products and services for information technology (IT) security and offers its customers a network and gateway security solutions, data and endpoint security solutions and management solutions.

SS&C Technologies Holdings, Inc. develops and markets computer software for financial services providers.  The software enables trading and modeling, portfolio management and reporting, accounting, performance measurement, reconciliation, reporting, processing, and clearing.

Manhattan Associates, Inc. provides information technology solutions for distribution centers.  The solutions are designed to enable the efficient movement of goods through the supply chain.  The Company's solutions optimize the receipt, storage, and distribution of inventory, as well as manage equipment and personnel within a distribution center.

Oracle Financial Services Software Ltd. provides comprehensive information technology solutions to the financial services industry worldwide. The Company provides transaction processing and accounting software for banks, investment managers and mutual funds. Oracle Financial also provides internet delivery of financial services as well as business intelligence and analytical applications.

Globant S.A. is a software solutions company. The Company provides engineering, design, and innovation services for clients throughout North America and Europe.

Konami Holdings Corporation provides digital entertainment, health and fitness and gaming products. The Company develops and sells video games, mobile games and computer games, gaming machines, pachislot and pachinko machines, and fitness machines as well as operates health and fitness clubs.

The Sage Group plc is a software publishing company. The Group develops, publishes and distributes accounting and payroll software for personal computer systems. Via its subsidiaries, Sage also maintains a registered user database which provides a market for their related products and services, including computer forms, software support contracts, program upgrades and training.

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Sage Group (SGE LN)

Xero Results Update: Good Results, Tepid Outlook. Earnings Cut Making It Even More Expensive

In my previous insight XERO: A Beautiful Business but Not Pricing in Much in the Way of an SME Rout, I mentioned that XRO mostly caters to small...

Sumeet Singh

XERO: A Beautiful Business but Not Pricing in Much in the Way of an SME Rout

Xero Ltd (XRO AU) (Mcap: US$6bn, ADV: US$35m) is as its tagline says a "beautiful business". The company is a classic SaaS business offering cloud...

Sumeet Singh

Global Ex-U.S. Equity Strategy: Cautiously Optimistic Outlook Intact

Despite negative recent developments, we have remained steadfast in our belief that weakness in May has presented an attractive time to add...

Vermilion Research

MYOB (MYO AU): Manikay’s Valuation Requires Flawless Execution

On Thursday, MYOB Group Ltd (MYO AU) released its Scheme Booklet in which the Independent Expert, Grant Samuel, valued MYOB between A$3.19 and...

Arun George

MYOB (MYO AU): Head for the Exit

On 5 March 2019, Manikay Partners, an 11% shareholder, wrote to MYOB Group Ltd (MYO AU) chairman Justin Milne to reveal that it believed that KKR...

Arun George

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