Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>Softbank will settle all of its forward derivative contracts on Alibaba by the end of September, representing 242mn ADRs. Some had years to run so this is truly surprising</li>
<li>We estimate <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> raised $35b selling BABA-linked derivatives since mid-2020, which would imply average proceeds per ADR of $145 versus the $91 it trades at now</li>
<li>But early settlement also has us wondering when the other show will drop and if that is related to global tech, China or Alibaba specifically </li>
</ul>


Softbank will settle all of its forward derivative contracts on Alibaba by the end of September, representing 242mn ADRs. Some had years to run so this is truly surprising
We estimate Softbank Group (9984 JP) raised $35b selling BABA-linked derivatives since mid-2020, which would imply average proceeds per ADR of $145 versus the $91 it trades at now
But early settlement also has us wondering when the other show will drop and if that is related to global tech, China or Alibaba specifically 


Softbank Group Shock Settlement of Forward Alibaba Contracts Is Worrisome

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.

Event-Driven

<ul>
<li>TPG Telecom was formed by a merger of Vodafone and TPG in Jul 2020. The merger resulted in the shares owned by Vodafone, Hutchison and DavidTeoh, being put in escrow.</li>
<li>The lockup on those shares will expire this month. David Teoh, TPG’s founder, has sold some stock before in Dec 21 and could look to exit his remaining shareholding.</li>
<li>In this note, we talk about the upcoming lock-up release and its dynamics.</li>
</ul>


TPG Telecom was formed by a merger of Vodafone and TPG in Jul 2020. The merger resulted in the shares owned by Vodafone, Hutchison and DavidTeoh, being put in escrow.
The lockup on those shares will expire this month. David Teoh, TPG’s founder, has sold some stock before in Dec 21 and could look to exit his remaining shareholding.
In this note, we talk about the upcoming lock-up release and its dynamics.


TPG Telecom Possible Selldown - Founder Could Look to Raise up to US$1bn with a Clean Exit

Research on Tech Companies

Evelyn Zhang

New Oriental Education & Techn / Equity Bottom-Up

<ul>
<li>Oriental Selection achieves high-speed user growth through bilingual livestreaming, thanks to Douyin's  algorithmic recommendation mechanism before 6/18 ecommerce, after 6/18 the increase in the follower numbers &amp; GMV dropped sharply.</li>
<li>The unit price of the product is below average, due to the focus on produce and books, Agricultural livestreaming has always been a difficult to grow category</li>
<li>10%-15% Commission  is lower than industry average, and subsequent supply chain control and 1st party products have lower margins.</li>
</ul>


Oriental Selection achieves high-speed user growth through bilingual livestreaming, thanks to Douyin's  algorithmic recommendation mechanism before 6/18 ecommerce, after 6/18 the increase in the follower numbers &amp; GMV dropped sharply.
The unit price of the product is below average, due to the focus on produce and books, Agricultural livestreaming has always been a difficult to grow category
10%-15% Commission  is lower than industry average, and subsequent supply chain control and 1st party products have lower margins.


<ul>
<li>Today Prosus announced that it will begin an open-ended share repurchase programme of Prosus and Naspers shares which will be funded by on-market sale of Tencent shares.</li>
<li>Prosus also announced that it has sold its entire shareholding in JD.com, to raise US$3.67bn, on-market in Jun 2022.</li>
<li>In this note, we talk about the implication and timing of today’s announcements.</li>
</ul>


Today Prosus announced that it will begin an open-ended share repurchase programme of Prosus and Naspers shares which will be funded by on-market sale of Tencent shares.
Prosus also announced that it has sold its entire shareholding in JD.com, to raise US$3.67bn, on-market in Jun 2022.
In this note, we talk about the implication and timing of today’s announcements.


Prosus, Tencent, JD.com - Good Intentions but Questionable Timing

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

<ul>
<li>There has been a recent press commentary about <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd</a> laying off staff, which although unpleasant reflects management's decisive and pragmatic decision-making style which is no bad thing.</li>
<li>It is unclear how many staff are being laid off and where but it seems that Indonesia is not impacted in a big way and core markets continue to perform.</li>
<li>We will not follow on the coattails of liquidity with a negative recommendation when what management is doing looks positive and <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> is batting above its peers.</li>
</ul>


There has been a recent press commentary about Sea Ltd laying off staff, which although unpleasant reflects management's decisive and pragmatic decision-making style which is no bad thing.
It is unclear how many staff are being laid off and where but it seems that Indonesia is not impacted in a big way and core markets continue to perform.
We will not follow on the coattails of liquidity with a negative recommendation when what management is doing looks positive and Sea Ltd (SE US) is batting above its peers.


Sea Ltd (SE US) - Navigating Challenging Waters With Sails Set

China

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

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Alibaba Group Holding (9988 HK)

Softbank Group Shock Settlement of Forward Alibaba Contracts Is Worrisome

Softbank has sung Alibaba’s praise for years so an early settlement of derivative contracts and sudden reduction in exposure begs the question of...

Kirk Boodry

TPG Telecom Possible Selldown - Founder Could Look to Raise up to US$1bn with a Clean Exit

TPG Telecom was formed by a merger of Vodafone and TPG in Jul 2020. The merger resulted in the shares owned by Vodafone, Hutchison and David Teoh,...

Sumeet Singh

A New New Oriental?

After the recent doldrums, the education giant New Orient re-entered the spotlight recently with its new found streaming success. But can it last?

Evelyn Zhang

Prosus, Tencent, JD.com - Good Intentions but Questionable Timing

Today Prosus announced that it will begin an open-ended share repurchase programme of Prosus and Naspers shares which will be funded by on-market...

Sumeet Singh

Sea Ltd (SE US) - Navigating Challenging Waters With Sails Set

We will not follow on the coattails of liquidity with a negative recommendation when what management is doing looks positive and Sea Ltd (SE US) is...

Angus Mackintosh

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