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

JD.com Inc (ADR) / Equity Capital Markets

<ul>
<li>On 23rd Dec 2021, Tencent declared a special interim dividend in the form of a distribution in specie of 457.326m Class A ordinary shares of JD.com.</li>
<li>While Tencent went ex-div on 20th Jan 2022, the actual settlement of the distribution is expected to happen on or about 25th Mar 2022.</li>
<li>In this note, we talk about the updates since our last note and have a closer look at Prosus and its possible motivation/intention with its JD.com stake.</li>
</ul>


On 23rd Dec 2021, Tencent declared a special interim dividend in the form of a distribution in specie of 457.326m Class A ordinary shares of JD.com.
While Tencent went ex-div on 20th Jan 2022, the actual settlement of the distribution is expected to happen on or about 25th Mar 2022.
In this note, we talk about the updates since our last note and have a closer look at Prosus and its possible motivation/intention with its JD.com stake.


JD.com Tencent Distribution - Updates on the Now US$15bn Overhang and the Prosus Angle

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">Pinduoduo (PDD US)</a> shares dropped 6.1% yesterday following the 4Q21 results as the company's revenue fell short of the consensus estimate by 8.9%.</li>
<li>Pinduoduo’s OP improved 223% QoQ to RMB 6.9bn (consensus RMB 3.2bn) through pushing back sales and marketing investments. However, it affected the company’s user growth as MAUs declined by 8.0m.</li>
<li>Consensus is yet to factor in the impact on user growth through reduced marketing spend, which makes further downside to Pinduoduo shares possible.</li>
</ul>



Pinduoduo (PDD US) shares dropped 6.1% yesterday following the 4Q21 results as the company's revenue fell short of the consensus estimate by 8.9%.
Pinduoduo’s OP improved 223% QoQ to RMB 6.9bn (consensus RMB 3.2bn) through pushing back sales and marketing investments. However, it affected the company’s user growth as MAUs declined by 8.0m.
Consensus is yet to factor in the impact on user growth through reduced marketing spend, which makes further downside to Pinduoduo shares possible.


Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

<ul>
<li>PDD’s total revenue growth was low 4Q21, as the company gave up on direct sales.</li>
<li>However, we believe the revenue growth will bounce back in 2023.</li>
<li>PDD cut sales and marketing expense, so we believe operating margin will improve in following two years.</li>
</ul>


PDD’s total revenue growth was low 4Q21, as the company gave up on direct sales.
However, we believe the revenue growth will bounce back in 2023.
PDD cut sales and marketing expense, so we believe operating margin will improve in following two years.


Pinduoduo (PDD): 4Q21, Undervalued Growth Rate and Record Profit Since IPO, Buy

Shifara Samsudeen, ACMA, CGMA

GoTo Gojek Tokopedia Tbk PT / Equity Capital Markets

<ul>
<li>Superapp <a href="https://www.smartkarma.com/entities/gojek-goto" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo (1379371D IJ)</a> has filed for an IPO to list its shares on the Indonesian Stock Exchange to raise US$1.1-1.25bn at a valuation of about US$24-26bn.</li>
<li>The company plans to use the proceeds to develop its business including for customer acquisition, product development and sales and marketing.</li>
<li>Our SOTP valuation implies that GoTo’s shares are overvalued at the indicative IPO price range.</li>
</ul>


Superapp GoTo (1379371D IJ) has filed for an IPO to list its shares on the Indonesian Stock Exchange to raise US$1.1-1.25bn at a valuation of about US$24-26bn.
The company plans to use the proceeds to develop its business including for customer acquisition, product development and sales and marketing.
Our SOTP valuation implies that GoTo’s shares are overvalued at the indicative IPO price range.


Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>The major trend, witnessed over the past two years, has been the continued loss of relative market share by Alibaba, and the continued market share gains by JD.com.</li>
<li>Alibaba has been able to steadily grow its active user base, on its Chinese retail platforms, by above 10%y/y since at least 2019, off an extremely high base.</li>
<li>Short-Term growth expectations seem relatively conservative, with limited risk for a further negative surprise.</li>
</ul>


The major trend, witnessed over the past two years, has been the continued loss of relative market share by Alibaba, and the continued market share gains by JD.com.
Alibaba has been able to steadily grow its active user base, on its Chinese retail platforms, by above 10%y/y since at least 2019, off an extremely high base.
Short-Term growth expectations seem relatively conservative, with limited risk for a further negative surprise.


China

PDD Holdings Inc. is a multinational commerce group that owns and operates a portfolio of businesses. The Company focuses on digital economy so that local communities and small businesses can benefit from the increased productivity and new opportunities. PDD Holdings has built a network of sourcing, logistics, and fulfillment capabilities for its underlying businesses.

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PDD Holdings (PDD US)

JD.com Tencent Distribution - Updates on the Now US$15bn Overhang and the Prosus Angle

On 23rd Dec 2021, Tencent declared a special interim dividend in the form of a distribution in specie of 457.326m shares of JD.com. In this note we...

Sumeet Singh

Pinduoduo 4Q21: A Big Compromise

Pinduoduo’s OP improved 223% QoQ to RMB 6.9bn (consensus RMB 3.2bn) through pushing back sales and marketing investments. However, it affected the...

Oshadhi Kumarasiri

Pinduoduo (PDD): 4Q21, Undervalued Growth Rate and Record Profit Since IPO, Buy

The total revenue growth was low 4Q21, as the company gave up on direct sales. However, we believe the revenue growth will bounce back in 2023. PDD...

Ming Lu

GoTo IPO: Peer Comparison and Valuation

Even without conservative assumptions, our SOTP valuation implies that GoTo’s shares are overvalued at the indicative IPO price range.

Shifara Samsudeen, ACMA, CGMA

Alibaba Group: Looking Through the Noise

In this insight, we aim to cut through the short-term “noise”, analyse the operational fundamentals for Alibaba Group, and take an updated look at...

Wium Malan, CFA

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