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.

Equity Capital Markets

<ul>
<li>
<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>’s 180-day lock-up period on its 89.75% <a href="https://www.smartkarma.com/entities/arm-holdings-inc" target="_blank" data-smartkarma-citation="entities:21816:1" rel="noopener">ARM Holdings (ARM US)</a> shareholding expires on 12 March. SoftBank’s stake is worth US$124 billion.</li>
<li>SoftBank will likely monetise its ARM stake using the <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba (ADR) (BABA US)</a> playbook. This playbook uses prepaid forward contracts to raise capital with eventual settlement through shares. </li>
<li>ARM is currently trading 2.6x its IPO price on AI-driven hype. ARM trades at a premium multiple to <a href="https://www.smartkarma.com/entities/nvidia-corp" target="_blank" data-smartkarma-citation="entities:5891:1" rel="noopener">NVIDIA Corp (NVDA US)</a>, despite forecasted lower growth and margin.  </li>
</ul>



Softbank Group (9984 JP)’s 180-day lock-up period on its 89.75% ARM Holdings (ARM US) shareholding expires on 12 March. SoftBank’s stake is worth US$124 billion.
SoftBank will likely monetise its ARM stake using the Alibaba (ADR) (BABA US) playbook. This playbook uses prepaid forward contracts to raise capital with eventual settlement through shares. 
ARM is currently trading 2.6x its IPO price on AI-driven hype. ARM trades at a premium multiple to NVIDIA Corp (NVDA US), despite forecasted lower growth and margin.  


ARM Holdings (ARM US): Lock up Expiry on 12 March

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>The turnaround of sports business at <a href="https://www.smartkarma.com/entities/china-dongxiang-group-co" target="_blank" data-smartkarma-citation="entities:1068:1" rel="noopener">China Dongxiang (3818 HK)</a> is very welcoming. We are glad that sales trend in Oct-Nov is sustained and Phenix brand is well-received.</li>
<li>Reported losses widened as poor market environment enlarged investment losses. However, net cash and investment portfolio are still valued at Rmb8.5bn, or 5.9x its market capitalisation. </li>
<li>CNDX looks comfortably at over 6% full-year dividend yield. Together with just 0.15x P/B, there are enough protections for the downside of the stock.  </li>
</ul>


The turnaround of sports business at China Dongxiang (3818 HK) is very welcoming. We are glad that sales trend in Oct-Nov is sustained and Phenix brand is well-received.
Reported losses widened as poor market environment enlarged investment losses. However, net cash and investment portfolio are still valued at Rmb8.5bn, or 5.9x its market capitalisation. 
CNDX looks comfortably at over 6% full-year dividend yield. Together with just 0.15x P/B, there are enough protections for the downside of the stock.  


China Dongxiang (3818 HK): Turned Around on Sports Business

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>In a surprise, the Hang Seng index committee has decided not to make any constituent changes to the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> at the March rebalance.</li>
<li>We now see the index reaching its 100-member target in 2025 at the earliest, though we would not be surprised to see it spill into 2026 as well.</li>
<li>Free float and capping changes will result in one-way turnover of 1.2% resulting in a round trip trade of HK$4.54bn. <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings (5 HK)</a> is the biggest sell.</li>
</ul>


In a surprise, the Hang Seng index committee has decided not to make any constituent changes to the Hang Seng Index (HSI INDEX) at the March rebalance.
We now see the index reaching its 100-member target in 2025 at the earliest, though we would not be surprised to see it spill into 2026 as well.
Free float and capping changes will result in one-way turnover of 1.2% resulting in a round trip trade of HK$4.54bn. HSBC Holdings (5 HK) is the biggest sell.


Hang Seng Index (HSI) Rebalance: Idling at 82 Members; 100 Members in 2025 at the Earliest

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Thematic (Sector/Industry)

<ul>
<li>Seeing as though it is Chinese New Year week, I thought it might be appropriate to conduct a brief analysis of US-listed China plays.</li>
<li>According to a recent US-China Economic and Security Review Commission report, 265 Chinese companies were listed on the NYSE, Nasdaq and NYSE American exchanges in January 2024 worth US$848bn. </li>
<li>That's down from 252 companies worth US$1.03tn a year ago, a 17.5% decline. 91% of the total market capitalization of Chinese firms listed on U.S. exchanges use VIEs.</li>
</ul>


Seeing as though it is Chinese New Year week, I thought it might be appropriate to conduct a brief analysis of US-listed China plays.
According to a recent US-China Economic and Security Review Commission report, 265 Chinese companies were listed on the NYSE, Nasdaq and NYSE American exchanges in January 2024 worth US$848bn. 
That's down from 252 companies worth US$1.03tn a year ago, a 17.5% decline. 91% of the total market capitalization of Chinese firms listed on U.S. exchanges use VIEs.


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

<ul>
<li>CrossASEAN Ground Zero is a new thematic weekly product that focuses on key Southeast Asian digital themes and technology trends with a core focus on Indonesia.</li>
<li>This week we dive deeper into the reasoning behind the sale of Tokopedia's sale of a 75% stake to TikTok, and what it means for GoTo going forward.</li>
<li>We also look at the recent troubles around the leading Indonesian P2P marketplace Investree, which range from the resignation of its CEO to rapidly rising bad debts.</li>
</ul>


CrossASEAN Ground Zero is a new thematic weekly product that focuses on key Southeast Asian digital themes and technology trends with a core focus on Indonesia.
This week we dive deeper into the reasoning behind the sale of Tokopedia's sale of a 75% stake to TikTok, and what it means for GoTo going forward.
We also look at the recent troubles around the leading Indonesian P2P marketplace Investree, which range from the resignation of its CEO to rapidly rising bad debts.


CrossASEAN Ground Zero - GoTo's Big Plan and Investree's Troubles

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 (BABA US)

ARM Holdings (ARM US): Lock up Expiry on 12 March

SoftBank will likely monetise its ARM stake using the Alibaba playbook. This playbook uses prepaid forward contracts to raise capital with eventual...

Arun George

China Dongxiang (3818 HK): Turned Around on Sports Business

Along with the encouraging 3Q FY24 (Oct-Dec 2023) sportswear sales - Kappa brand sales up mid 40%–50% YoY, China Dongxiang has benefited from the...

Osbert Tang, CFA

Hang Seng Index (HSI) Rebalance: Idling at 82 Members; 100 Members in 2025 at the Earliest

No changes for the HSI in March. There are free float and capping changes though. HSBC is a passive sell due to capping, ICBC and Trip.com are buys...

Brian Freitas

Musings On US-Listed China Plays

Investors in Chinese companies may be willing to support activities that are contrary to US national interests, including technology used for...

David Blennerhassett

CrossASEAN Ground Zero - GoTo's Big Plan and Investree's Troubles

This week we dive deeper into the reasoning behind the sale of Tokopedia's sale of 75% stale to TikTok, and what it means for GoTo going forward.

Angus Mackintosh

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52-week Range

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