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

<p><a href="https://www.smartkarma.com/entities/374" target="_blank" data-smartkarma-citation="entities:374:1">MYOB Group Ltd (MYO AU)</a>'s shares are trading A$3.42, marginally above <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 lower offer of A$3.40 cash per share, due to the expectation of a bidder trumping KKR. The optimism has also been stoked by the sharp market rally since MYOB agreed to recommend KKR's revised lower offer on 24 December 2018. The ASX 200 and ASX 300 Information Technology Index has rallied 10% and 20% respectively from 24 December 2018 to 15 February 2019.</p><div class="content-highlight"><p>While shareholders may feel like KKR is acquiring MYOB at a knockdown price, the market could quickly revert to a downward trend. We believe that shareholders hoping for a white knight to ride to the rescue will be disappointed.</p></div>

MYOB Group Ltd (MYO AU)'s shares are trading A$3.42, marginally above KKR &amp; Co Inc (KKR US)'s revised lower offer of A$3.40 cash per share, due to the expectation of a bidder trumping KKR. The optimism has also been stoked by the sharp market rally since MYOB agreed to recommend KKR's revised lower offer on 24 December 2018. The ASX 200 and ASX 300 Information Technology Index has rallied 10% and 20% respectively from 24 December 2018 to 15 February 2019.While shareholders may feel like KKR is acquiring MYOB at a knockdown price, the market could quickly revert to a downward trend. We believe that shareholders hoping for a white knight to ride to the rescue will be disappointed.

MYOB (MYO AU): KKR Making Out like Bandits Due to a Sharp Market Rally

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

<p>Broad global indexes (MSCI ACWI, ACWI ex-U.S., and EAFE) are showing signs of bottoming due to positive short-term price inflections topside their respective downtrends. Additionally, cyclical Sectors Technology, Consumer Discretionary, and Manufacturing exhibit early signs of price and RS bottoms throughout Europe, Japan, and EM.  In today’s report we highlight attractive and actionable opportunities within these cyclical Sectors, and provide a technical appraisal of major global indexes.</p>

Broad global indexes (MSCI ACWI, ACWI ex-U.S., and EAFE) are showing signs of bottoming due to positive short-term price inflections topside their respective downtrends. Additionally, cyclical Sectors Technology, Consumer Discretionary, and Manufacturing exhibit early signs of price and RS bottoms throughout Europe, Japan, and EM.  In today’s report we highlight attractive and actionable opportunities within these cyclical Sectors, and provide a technical appraisal of major global indexes.

Global Equity Strategy: Global Outlook Improving

<p>On 24 December, <a href="https://www.smartkarma.com/entities/374" target="_blank" data-smartkarma-citation="entities:374:1">MYOB Group Ltd (MYO AU)</a> announced that it entered into a scheme implementation agreement under which KKR will acquire MYOB at $3.40 per share, which is 10% lower than 2 November offer price of A$3.77. MYOB claims its decision to recommend KKR's lower offer was based on current market uncertainty, long-term nature of its strategic growth plans and the go-shop provisions of the deal. </p><div class="content-highlight"><p>We believe that KKR's revised offer is opportunistic, but MYOB's shareholders are caught between a rock and a hard place. Shareholders can take a short-term view and grudgingly accept the revised offer. Alternatively, shareholders can take a long-term view by rejecting the offer and hope MYOB's strategic growth plans and a market recovery can reverse the inevitable share price collapse.</p></div>

On 24 December, MYOB Group Ltd (MYO AU) announced that it entered into a scheme implementation agreement under which KKR will acquire MYOB at $3.40 per share, which is 10% lower than 2 November offer price of A$3.77. MYOB claims its decision to recommend KKR's lower offer was based on current market uncertainty, long-term nature of its strategic growth plans and the go-shop provisions of the deal. We believe that KKR's revised offer is opportunistic, but MYOB's shareholders are caught between a rock and a hard place. Shareholders can take a short-term view and grudgingly accept the revised offer. Alternatively, shareholders can take a long-term view by rejecting the offer and hope MYOB's strategic growth plans and a market recovery can reverse the inevitable share price collapse.

MYOB (MYO AU): Shareholders Are Caught Between a Rock and a Hard Place

<p><a href="https://www.smartkarma.com/entities/374" target="_blank" data-smartkarma-citation="entities:374:1">MYOB Group Ltd (MYO AU)</a> announced that <a href="https://www.smartkarma.com/entities/27333" target="_blank" data-smartkarma-citation="entities:27333:1">KKR &amp; Co Inc (KKR US)</a> had been granted due diligence after lifting its non-binding takeover offer by 2% to A$3.77 cash per share. KKR’s improved price represents a premium of 27% to the undisturbed price of A$2.98 per share. The deal is conditional on the unanimous support of the MYOB board, which has assembled an independent board committee to assess the proposal and make a recommendation in due course.</p><div class="content-highlight"><p>We believe that KKR’s slightly improved proposal fairly values MYOB. While some shareholders are pushing for a higher offer, KKR’s position has got incrementally stronger. We believe that KKR has taken another step towards completion and a further material uplift to the takeover price is unlikely.</p></div>

MYOB Group Ltd (MYO AU) announced that KKR &amp; Co Inc (KKR US) had been granted due diligence after lifting its non-binding takeover offer by 2% to A$3.77 cash per share. KKR’s improved price represents a premium of 27% to the undisturbed price of A$2.98 per share. The deal is conditional on the unanimous support of the MYOB board, which has assembled an independent board committee to assess the proposal and make a recommendation in due course.We believe that KKR’s slightly improved proposal fairly values MYOB. While some shareholders are pushing for a higher offer, KKR’s position has got incrementally stronger. We believe that KKR has taken another step towards completion and a further material uplift to the takeover price is unlikely.

MYOB (MYO AU): A Step Forward Towards Completion

IPO and L/S equity, 2015 Starmine top stock picker, Global Equity Research Ltd

Rickin Thakrar

IPO and L/S equity, 2015 Starmine top stock picker

Equity Capital Markets

<p>Below is a recap of the key IPO and Event-driven research produced by the Global Equity Research team. This week we highlight that <a href="https://www.smartkarma.com/entities/27255" target="_blank" data-smartkarma-citation="entities:27255:1">Tencent Music Entertainment (TME US)</a> 's IPO delay may be partially due to weakness in <a href="https://www.smartkarma.com/entities/26772" target="_blank" data-smartkarma-citation="entities:26772:1">Spotify (SPOT US)</a> shares, highlight a differentiated view on the potential takeover of <a href="https://www.smartkarma.com/entities/374" target="_blank" data-smartkarma-citation="entities:374:1">MYOB Group Ltd (MYO AU)</a> by KKR, which Arun believes is fully-valued. Further, Venkat updates post his excellent cautious call on <a href="https://www.smartkarma.com/entities/26795" target="_blank" data-smartkarma-citation="entities:26795:1">Jiangxi Ganfeng Lithium (1772 HK)</a> while Arun also provides a valuation update on e-scooter company <a href="https://www.smartkarma.com/entities/27469" target="_blank" data-smartkarma-citation="entities:27469:1">Niu Technologies (NIU US)</a> and initiates on online ticketer <a href="https://www.smartkarma.com/entities/27363" target="_blank" data-smartkarma-citation="entities:27363:1">Tongcheng-Elong Holdings Ltd (1629482D CH)</a>. </p><p>All of our recent IPO and fundamental research are listed below.</p><p>Best of luck for the new week - Arun, Venkat and Rickin</p>

Below is a recap of the key IPO and Event-driven research produced by the Global Equity Research team. This week we highlight that Tencent Music Entertainment (TME US) 's IPO delay may be partially due to weakness in Spotify (SPOT US) shares, highlight a differentiated view on the potential takeover of MYOB Group Ltd (MYO AU) by KKR, which Arun believes is fully-valued. Further, Venkat updates post his excellent cautious call on Jiangxi Ganfeng Lithium (1772 HK) while Arun also provides a valuation update on e-scooter company Niu Technologies (NIU US) and initiates on online ticketer Tongcheng-Elong Holdings Ltd (1629482D CH). All of our recent IPO and fundamental research are listed below.Best of luck for the new week - Arun, Venkat and Rickin

Last Week in GER Research: TME Delay Due to Spotify Weakness? MYOB, Ganfeng, Tongcheng, and NIU

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)

MYOB (MYO AU): KKR Making Out like Bandits Due to a Sharp Market Rally

MYOB Group Ltd (MYO AU)'s shares are trading A$3.42, marginally above KKR & Co Inc (KKR US)'s revised lower offer of A$3.40 cash per share, due...

Arun George

Global Equity Strategy: Global Outlook Improving

Broad global indexes (MSCI ACWI, ACWI ex-U.S., and EAFE) are showing signs of bottoming due to positive short-term price inflections topside their...

Vermilion Research

MYOB (MYO AU): Shareholders Are Caught Between a Rock and a Hard Place

On 24 December, MYOB Group Ltd (MYO AU) announced that it entered into a scheme implementation agreement under which KKR will acquire MYOB at $3.40...

Arun George

MYOB (MYO AU): A Step Forward Towards Completion

MYOB Group Ltd (MYO AU) announced that KKR & Co Inc (KKR US) had been granted due diligence after lifting its non-binding takeover offer by 2%...

Arun George

Last Week in GER Research: TME Delay Due to Spotify Weakness? MYOB, Ganfeng, Tongcheng, and NIU

Below is a recap of the key IPO and Event-driven research produced by the Global Equity Research team. This week we highlight that Tencent Music...

Rickin Thakrar

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