TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

<p>Crowdstrike continues to put up impressive quarterly results and guidance that blows away even heightened expectations. The two high profile cyber hacks in the past few months have given a major tailwind to FY2022...and despite guiding 1000bps ahead of consensus revenue growth, we expect 50% growth to be conservative. We remain long. </p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  </p></div>

Crowdstrike continues to put up impressive quarterly results and guidance that blows away even heightened expectations. The two high profile cyber hacks in the past few months have given a major tailwind to FY2022...and despite guiding 1000bps ahead of consensus revenue growth, we expect 50% growth to be conservative. We remain long. Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  

President, Vision Research

Robert C Prather Jr

President

Vision Research

Vision Research was formed in 2004 with the vision of generating the best possible fundamental analysis and investment research for smid cap US equities. In 2008, we broadened our coverage to include mid/large cap US stocks.  After researching a  few ideas outside the US each year for a number of years, we launched a dedicated non-US equity product at the end of 2015.  This was followed by the introduction of a product focused on IPOs in mid-2017.

Fundamental Insight

<p><a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US) </a>officially launched its business in Poland this month, posing significant competition for Allegro.eu (also amidst increasing competition from <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> ) and causing Allegro.eu to provide muted guidance for 2021 in early March.  Subsequently, on March 16th, insiders announced the sale of approximately $1.3bn in shares at a discount to the current price and just ahead of the April 2021 IPO lock up expiration.</p>

Amazon.com Inc (AMZN US) officially launched its business in Poland this month, posing significant competition for Allegro.eu (also amidst increasing competition from Alibaba Group (9988 HK) ) and causing Allegro.eu to provide muted guidance for 2021 in early March.  Subsequently, on March 16th, insiders announced the sale of approximately $1.3bn in shares at a discount to the current price and just ahead of the April 2021 IPO lock up expiration.

Allegro.eu (ALE PW): Insiders Dump $1.3bn Ahead of Lockup Expiration and After Amazon Entry

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Equity Capital Markets

Digitalocean Holdings / Equity Capital Markets

<p>DigitalOcean, a developer-friendly provider of cloud computing services, set terms for an IPO and intends to sell 16.5 million shares at expected price range of $44-$47 per share. Tech unicorn has ~573 000 customers in more than 185 countries and targets specific segment of the cloud market: developers, startups and SMBs. Number of developers to grow from 19 million to 45 million by 2030, according to SlashData and there are 100 million SMBs globally.</p><p>DigitalOcean has raised ~$456 million in funding over 13 rounds, according to Crunchbase. Cloud computing unicorn was backed by leading venture capital firms Access Industries, Andreessen Horowitz, IA Ventures and Viaduct Ventures. We expect net proceeds from the offering may reach ~$700 million and funds affiliated with Tiger Global Management and AI Droplet Subsidiary LLC have indicated an interest in purchasing an aggregate of up to a maximum of $175 million in shares in this offering at the IPO price. Morgan Stanley, Goldman Sachs and J.P. Morgan are the lead underwriters.  </p>

DigitalOcean, a developer-friendly provider of cloud computing services, set terms for an IPO and intends to sell 16.5 million shares at expected price range of $44-$47 per share. Tech unicorn has ~573 000 customers in more than 185 countries and targets specific segment of the cloud market: developers, startups and SMBs. Number of developers to grow from 19 million to 45 million by 2030, according to SlashData and there are 100 million SMBs globally.DigitalOcean has raised ~$456 million in funding over 13 rounds, according to Crunchbase. Cloud computing unicorn was backed by leading venture capital firms Access Industries, Andreessen Horowitz, IA Ventures and Viaduct Ventures. We expect net proceeds from the offering may reach ~$700 million and funds affiliated with Tiger Global Management and AI Droplet Subsidiary LLC have indicated an interest in purchasing an aggregate of up to a maximum of $175 million in shares in this offering at the IPO price. Morgan Stanley, Goldman Sachs and J.P. Morgan are the lead underwriters.  

DigitalOcean IPO. Niche Cloud Provider With Ambitious Growth Strategies

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

<div><p>On 22nd March 2018, after market close in Hong Kong one of the largest overnight placements was launched. On that day, <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> reluctantly sold US$10bn worth of <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> shares.  <span>I say reluctantly because Naspers provided a three year lock-up at the time of the deal. That lock-up will expire next week. </span></p></div><div><p>We have covered the previous placement in our earlier note, <a href="https://www.smartkarma.com/insights/tencent-placement-huge-deal-in-size-small-in-relative-terms-succumbing-to-the-holdco-discount" target="_blank" rel="noopener">Tencent Placement - Huge Deal in Size, Small in Relative Terms - Succumbing to the HoldCo Discount</a> and spoken about the implications of the lock-up expiry in our Feb 2021 note <a href="https://www.smartkarma.com/insights/tencent-placement-lock-up-expiry-us-10bn-block-and-buyback-linked-holdco-trade" target="_blank" rel="noopener">Tencent Placement Lock-Up Expiry - US$10bn+ Block and Buyback Linked Holdco Trade</a>.</p></div><div><p>In this note, I’ll talk about the updates since then.</p></div>

On 22nd March 2018, after market close in Hong Kong one of the largest overnight placements was launched. On that day, Naspers (NPN SJ) reluctantly sold US$10bn worth of Tencent Holdings (700 HK) shares.  I say reluctantly because Naspers provided a three year lock-up at the time of the deal. That lock-up will expire next week. We have covered the previous placement in our earlier note, Tencent Placement - Huge Deal in Size, Small in Relative Terms - Succumbing to the HoldCo Discount and spoken about the implications of the lock-up expiry in our Feb 2021 note Tencent Placement Lock-Up Expiry - US$10bn+ Block and Buyback Linked Holdco Trade.In this note, I’ll talk about the updates since then.

Tencent Placement Lock-Up Expiry -  Block and Buyback Linked Holdco Trade Update

Telco/Internet specialist

Kirk Boodry

Redex Research

<p>Rakuten’s announcement of a ¥242bn investment from Japan Post, Tencent and Wal-Mart is truly a game changer. The proceeds should get it through peak investment for mobile and enhance the value of its fulfilment expansion. It also gives Rakuten, which has looked outmatched in its competitive fight against larger rivals like Softbank/Z Holdings, a trip of powerful allies in eCommerce and fintech. The Tencent participation is particularly interesting as that company expands its own competitive fight with Alibaba. The challenge for Rakuten has not diminished but for the first time since it announced its mobile ambitions in 2017, we feel it has the resources it needs.</p>

Rakuten’s announcement of a ¥242bn investment from Japan Post, Tencent and Wal-Mart is truly a game changer. The proceeds should get it through peak investment for mobile and enhance the value of its fulfilment expansion. It also gives Rakuten, which has looked outmatched in its competitive fight against larger rivals like Softbank/Z Holdings, a trip of powerful allies in eCommerce and fintech. The Tencent participation is particularly interesting as that company expands its own competitive fight with Alibaba. The challenge for Rakuten has not diminished but for the first time since it announced its mobile ambitions in 2017, we feel it has the resources it needs.

Rakuten - Strategic Investments Raise Needed Cash and Level the Playing Field

United States

Amazon.com, Inc. is an online retailer that offers a wide range of products. The Company's products include books, music, videotapes, computers, electronics, home and garden, and numerous other products.  Amazon offers personalized shopping services, Web-based credit card payment, and direct shipping to customers.

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Amazon.com Inc (AMZN US)

Crowdstrike 4Q21: Scaling the Heights

Crowdstrike retains its place as the highest quality high valuation software company, once again beating and raising by a wide margin.

Aaron Gabin

Allegro.eu (ALE PW): Insiders Dump $1.3bn Ahead of Lockup Expiration and After Amazon Entry

Why are insiders dumping stock at a discount prior to the IPO lock-up expiration and shortly after Amazon's official entry?

Robert C Prather Jr

DigitalOcean IPO. Niche Cloud Provider With Ambitious Growth Strategies

DigitalOcean IPO may bring an opportunity for technology investors to increase exposure on fast-growing cloud computing sector

Andrei Zakharov

Tencent Placement Lock-Up Expiry - Block and Buyback Linked Holdco Trade Update

On 22nd March 2018, in Hong Kong one of the largest overnight placements was launched. On that day, Naspers sold US$10bn worth of Tencent shares....

Sumeet Singh

Rakuten - Strategic Investments Raise Needed Cash and Level the Playing Field

The investments in Rakuten solve near-term cash concerns but it is the presence of powerful allies that make this a milestone

Kirk Boodry

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