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

<div>
<p><a href="https://www.smartkarma.com/entities/lufax-holdings" target="_blank" data-smartkarma-citation="entities:29690:1" rel="noopener">Lufax Holdings (LU US)</a> (Lufax) raised around US$2.4bn via its US listing. The company is backed by <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a> (Ping An).</p>
</div>
<div>
<p>Lufax is a technology-empowered personal financial services platform in China. The company aims to address the demand for personal lending among small business owners, as well as salaried workers in China. It also provides wealth management solutions to China’s middle class and affluent population.</p>
</div>
<div>
<p>I covered the various aspects of the deal in my earlier notes:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/lufax-pre-ipo-the-positives-able-to-grow-despite-the-headwinds" target="_blank" rel="noopener">Lufax Pre-IPO - The Positives - Able to Grow Despite the Headwinds</a></li>
<li><a href="https://www.smartkarma.com/insights/lufax-pre-ipo-the-negatives-remains-in-flux" target="_blank" rel="noopener">Lufax Pre-IPO - The Negatives - Remains in Flux</a></li>
<li><a href="https://www.smartkarma.com/insights/lufax-pre-ipo-peer-review-bigger-than-ant-s-credittech-in-revenue" target="_blank" rel="noopener">Lufax Pre-IPO - Peer Review - Bigger than Ant’s CreditTech, in Revenue</a></li>
</ul>
</div>
<ul>
<li><a href="https://www.smartkarma.com/insights/lufax-ipo-stuck-with-the-earlier-fundraising-valuation" target="_blank" rel="noopener">Lufax IPO - Stuck with the Earlier Fundraising Valuation</a></li>
</ul>
<div>
<p>In this insight, talk about deal dynamics and provide a table with implied valuation at different ADS levels.</p>
</div>


Lufax Holdings (LU US) (Lufax) raised around US$2.4bn via its US listing. The company is backed by Ping An Insurance (H) (2318 HK) (Ping An).


Lufax is a technology-empowered personal financial services platform in China. The company aims to address the demand for personal lending among small business owners, as well as salaried workers in China. It also provides wealth management solutions to China’s middle class and affluent population.


I covered the various aspects of the deal in my earlier notes:



Lufax Pre-IPO - The Positives - Able to Grow Despite the Headwinds
Lufax Pre-IPO - The Negatives - Remains in Flux
Lufax Pre-IPO - Peer Review - Bigger than Ant’s CreditTech, in Revenue



Lufax IPO - Stuck with the Earlier Fundraising Valuation


In this insight, talk about deal dynamics and provide a table with implied valuation at different ADS levels.


Lufax IPO Trading - Possible FTSE Inclusion Might Help in the Short-Term

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

<p><strong><em>*Strong APT FY 1Q21 Results:</em></strong> Afterpay released a strong quarterly update with momentum across the entire business with further integrations with large retailer contracts ahead of the holiday shopping season. GMV of AUD 4.1 bn during the quarter; active customers are 11.2 mn, up from 9.9m at end of June – ahead of our expectations; and Australia in-store sales are recovering, representing close to 20% of total sales;</p><p><strong><em>*Earning Their Stripe: </em></strong>Afterpay had also announced that it had entered into a strategic partnership with Stripe Payments,  a major global payments company with over 100,000 SMBs, to allow its users to offer Afterpay their customers which should allow it to expand its reach among online shoppers; and  </p><p><strong><em>*Sprinkling More Fairy Dust:</em></strong> Tencent Holdings (700.HK) [Tencent] continues to hit it out of the park with its Afterpay Touch (APT.AU) [Afterpay] stake. In addition to a superb return on investment of 358% over the past five months since the stake announcement, this alliance with Australia’s premier financial technology buy-now, pay later (BNPL) company is paying dividends to Tencent in numerous other ways.</p>

*Strong APT FY 1Q21 Results: Afterpay released a strong quarterly update with momentum across the entire business with further integrations with large retailer contracts ahead of the holiday shopping season. GMV of AUD 4.1 bn during the quarter; active customers are 11.2 mn, up from 9.9m at end of June – ahead of our expectations; and Australia in-store sales are recovering, representing close to 20% of total sales;*Earning Their Stripe: Afterpay had also announced that it had entered into a strategic partnership with Stripe Payments,  a major global payments company with over 100,000 SMBs, to allow its users to offer Afterpay their customers which should allow it to expand its reach among online shoppers; and  *Sprinkling More Fairy Dust: Tencent Holdings (700.HK) [Tencent] continues to hit it out of the park with its Afterpay Touch (APT.AU) [Afterpay] stake. In addition to a superb return on investment of 358% over the past five months since the stake announcement, this alliance with Australia’s premier financial technology buy-now, pay later (BNPL) company is paying dividends to Tencent in numerous other ways.

Tencent Holdings - It Keeps Getting Better

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Event-Driven

<p>Earlier this week, <a href="https://www.smartkarma.com/entities/maanshan-dingtai-rare-a" target="_blank" data-smartkarma-citation="entities:4128:1" rel="noopener">S.F. Holding (002352 CH)</a> and <a href="https://www.smartkarma.com/entities/yto-express" target="_blank" data-smartkarma-citation="entities:20319:1" rel="noopener">YTO Express (600233 CH)</a> became the first two Chinese express companies to report Q320 results.</p><p>Market leader SF Holding continued its recent winning streak in Q3, with Revenue, Gross Profit, and Net EPS climbing YoY by 34%, 25%, and 52%, respectively.</p><p>Meanwhile, YTO Express struggled: Revenue was up 15% YoY on strong volume gains, but Gross Profit declined by 30% YoY and Net EPS fell by 29%. We expect similarly weak results from the other four listed Chinese express companies when they report Q3 earnings in the coming weeks. </p><p>More interesting than the two results themselves is that SF Holding continues to increase its share of the express sector's Gross Profits. From about half of the total in 2017-19, SF Holding's share of the total jumped to over 70% of the total in the first three quarters of 2020. </p><p>Superior profitability matters: it allows SF Holding to invest aggressively in new technologies that should expand its lead over the other express companies. Smaller express companies with declining profitability increasingly face an array of tough choices that include new equity fundraising, CapEx cuts, and lower service quality. </p><p>We believe SF Holding will continue to extend its lead over the rest of the sector, and maintain our BUY rating on the stock. A better way to play sector consolidation, however, could be through <a href="https://www.smartkarma.com/entities/best-inc" target="_blank" data-smartkarma-citation="entities:25494:1" rel="noopener">BEST Inc (BEST US)</a>, a small-cap player that could become a potential acquisition target. </p>

Earlier this week, S.F. Holding (002352 CH) and YTO Express (600233 CH) became the first two Chinese express companies to report Q320 results.Market leader SF Holding continued its recent winning streak in Q3, with Revenue, Gross Profit, and Net EPS climbing YoY by 34%, 25%, and 52%, respectively.Meanwhile, YTO Express struggled: Revenue was up 15% YoY on strong volume gains, but Gross Profit declined by 30% YoY and Net EPS fell by 29%. We expect similarly weak results from the other four listed Chinese express companies when they report Q3 earnings in the coming weeks. More interesting than the two results themselves is that SF Holding continues to increase its share of the express sector's Gross Profits. From about half of the total in 2017-19, SF Holding's share of the total jumped to over 70% of the total in the first three quarters of 2020. Superior profitability matters: it allows SF Holding to invest aggressively in new technologies that should expand its lead over the other express companies. Smaller express companies with declining profitability increasingly face an array of tough choices that include new equity fundraising, CapEx cuts, and lower service quality. We believe SF Holding will continue to extend its lead over the rest of the sector, and maintain our BUY rating on the stock. A better way to play sector consolidation, however, could be through BEST Inc (BEST US), a small-cap player that could become a potential acquisition target. 

Divergent Q320 Results from SF Holding & YTO Express Show Pressure to Consolidate Is Building

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ant-financial-services-group" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Group (6688 HK)</a> has priced above the initial market capitalisation range of USD200 to USD300bn, at USD317bn including its over-allotment option of shares</li>
<li>Ant’s IPO valuation reflects the assumptions in our ambitious scenario SOTP valuation</li>
<li>Based on earnings and EBITDA multiples, Ant Group looks attractive relative to payments companies and fast growth investment and wealth managers</li>
<li>Ant is at a slight discount to the China MegaTech comparables, and we believe that it warrants a premium valuation to its China peers</li>
<li>Ant’s premium growth potential in digital finance, leveraging off its leading digital payments footprint, indicates further upside potential to the shares post IPO, in our view</li>
<li>Risks to our positive view on Ant Group include increased regulatory restrictions in China, heightened geopolitical tensions impacting demand for the shares at IPO and weaker than expected GDP growth limiting growth potential, especially in China</li>
</ul>



Ant Group (6688 HK) has priced above the initial market capitalisation range of USD200 to USD300bn, at USD317bn including its over-allotment option of shares
Ant’s IPO valuation reflects the assumptions in our ambitious scenario SOTP valuation
Based on earnings and EBITDA multiples, Ant Group looks attractive relative to payments companies and fast growth investment and wealth managers
Ant is at a slight discount to the China MegaTech comparables, and we believe that it warrants a premium valuation to its China peers
Ant’s premium growth potential in digital finance, leveraging off its leading digital payments footprint, indicates further upside potential to the shares post IPO, in our view
Risks to our positive view on Ant Group include increased regulatory restrictions in China, heightened geopolitical tensions impacting demand for the shares at IPO and weaker than expected GDP growth limiting growth potential, especially in China


Ant Group (6688 HK): IPO Pricing Warrants a Re-Rating

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>Alibaba allows the five delivery companies it invested in to cut the “to door” service to reduce costs.</li>
<li>On the contrary, JD.com (JD)’s JD Logistics still delivers parcels to consumers' home.</li>
<li>We believe Alibaba is driving consumers to JD.com.</li>
</ul>


Alibaba allows the five delivery companies it invested in to cut the “to door” service to reduce costs.
On the contrary, JD.com (JD)’s JD Logistics still delivers parcels to consumers' home.
We believe Alibaba is driving consumers to JD.com.


Alibaba (BABA): Weakening Delivery Service, a Disadvantage Compared to JD.com

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Alibaba Group Holding (9988 HK)

Lufax IPO Trading - Possible FTSE Inclusion Might Help in the Short-Term

Lufax Holdings (LU US) raised around US$2.4bn via its US listing. The company is backed by Ping An (2318 HK). It might go into the FTSE on fast...

Sumeet Singh

Tencent Holdings - It Keeps Getting Better

TENCENT HOLDINGS: Tencent Keeps hitting The Ball Out of The Park With Afterpay, Who Reported Solid FY 1Q21 Results and Another Partnership

Thomas J. Monaco

Divergent Q320 Results from SF Holding & YTO Express Show Pressure to Consolidate Is Building

SF Holding posted another set of strong results in Q3, while BABA-aligned YTO Express struggled (again). Our view: SF Holding's rising share of...

Tracking Traffic

Ant Group (6688 HK): IPO Pricing Warrants a Re-Rating

Ant Group's share price at IPO is above the original expected range; still, we expect solid share re-rating potential given its growth prospects...

Victor Galliano

Alibaba (BABA): Weakening Delivery Service, a Disadvantage Compared to JD.com

Alibaba allows the five delivery companies it invested in to cut the “to door” service to reduce costs. On the contrary, JD Logistics still...

Ming Lu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)