Equity Analyst, LightStream Research

Supun Walpola

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 Capital Markets

<a href="https://www.smartkarma.com/entities/ant-financial-services-group" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial (1051260D CH)</a>’s revenue growth and OP margin look attractive to us in the short-term compared to its global fintech peers. However, we believe Ant’s revenue growth would converge towards the peer average over the next 2-3 years when its robust CreditTech business growth moderates. The consensus estimates also suggest that peer OP margins would catch up to Ant’s in the medium-term.
Nevertheless, we find Ant’s IPO valuation highly attractive versus its global fintech peers, and expect further upside over the next 1-2 years, underpinned by its higher growth and margin profile in the short-term.

Ant Financial (1051260D CH)’s revenue growth and OP margin look attractive to us in the short-term compared to its global fintech peers. However, we believe Ant’s revenue growth would converge towards the peer average over the next 2-3 years when its robust CreditTech business growth moderates. The consensus estimates also suggest that peer OP margins would catch up to Ant’s in the medium-term.
Nevertheless, we find Ant’s IPO valuation highly attractive versus its global fintech peers, and expect further upside over the next 1-2 years, underpinned by its higher growth and margin profile in the short-term. 

Ant Group IPO: A Good Bargain Against Global Fintech Peers with Healthy Short-Term Upside Potential

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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 Bottom-Up

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>Internet companies’ revenue increased strongly from May to August.</li>
<li>The growth rate of internet user base accelerated in 2Q20.</li>
<li>Weibo (WB)’s performance was still weak in 2Q20.</li>
<li>Jack Ma resigned as a board member of Alibaba.</li>
</ul>


Internet companies’ revenue increased strongly from May to August.
The growth rate of internet user base accelerated in 2Q20.
Weibo (WB)’s performance was still weak in 2Q20.
Jack Ma resigned as a board member of Alibaba.


China Internet Weekly (5Oct2020): Internet Revenue Overcame Pandemic, Internet User Base Accelerated

Alpha-Centric ESG Research

Kyle Rudden

Sometimes, the "ESG stuff" can really alter the outcome of an IPO. The <a href="https://www.smartkarma.com/entities/saudi-aramco" target="_blank" data-smartkarma-citation="entities:27317:1" rel="noopener">Saudi Aramco (ARAMCO AB)</a> debut was curbed by Environmental concerns. WeWork's failed IPO is a case study in founder-led Governance risk. Palantir quashed its "adjustable voting power for founders" after an uproar.
ESG impacts IPOs. But not Ant's IPO.
Ant's ESG profile is strong. There a few skeletons in the closet if you look hard enough, but they are bygone and irrelevant . Current ESG blemishes are minor. There isn't much dirt for ESG idealists to wallow in. If they are even looking at all; as a "China deal," ESG has a different relevance for Ant.
Ant's IPO is a momentous ESG event, but not in the traditional and obvious way.
This is not about ESG impacting Ant's IPO. This is about Ant's IPO impacting ESG.
Looking at Ant through a typical ESG lens will make one's head spin. But step back and look again, and it becomes clear that Ant is a strategically-integrated masterpiece at the vanguard of a critical crossroads – the intersection of Fintech, financial inclusion, green finance, and sustainability.
It is all a matter of perspective.
Seeing the forest for the trees.

Sometimes, the "ESG stuff" can really alter the outcome of an IPO. The Saudi Aramco (ARAMCO AB) debut was curbed by Environmental concerns. WeWork's failed IPO is a case study in founder-led Governance risk. Palantir quashed its "adjustable voting power for founders" after an uproar.
ESG impacts IPOs. But not Ant's IPO.
Ant's ESG profile is strong. There a few skeletons in the closet if you look hard enough, but they are bygone and irrelevant . Current ESG blemishes are minor. There isn't much dirt for ESG idealists to wallow in. If they are even looking at all; as a "China deal," ESG has a different relevance for Ant.
Ant's IPO is a momentous ESG event, but not in the traditional and obvious way.
This is not about ESG impacting Ant's IPO. This is about Ant's IPO impacting ESG.
Looking at Ant through a typical ESG lens will make one's head spin. But step back and look again, and it becomes clear that Ant is a strategically-integrated masterpiece at the vanguard of a critical crossroads – the intersection of Fintech, financial inclusion, green finance, and sustainability.
It is all a matter of perspective.
Seeing the forest for the trees.

Ant Group Pre-IPO ESG Assessment: Seeing the Forest for the Trees

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Kakao Pay is getting ready to complete its IPO in 1H 2021. Kakao Pay is the leading mobile payment and digital wallet service provider in Korea. Kakao Pay's core service includes allowing users to request and send money to people in their KakaoTalk messenger contacts without using their bank account numbers. 
Kakao Pay has recently hired KB Securities to be the lead underwriter of this IPO. Once Kakao Pay completes its IPO in 1H 2021, two other major Kakao affiliates including Kakao Bank and Kakao Page are expected to complete their IPOs in 2H 2021.

Kakao Pay is getting ready to complete its IPO in 1H 2021. Kakao Pay is the leading mobile payment and digital wallet service provider in Korea. Kakao Pay's core service includes allowing users to request and send money to people in their KakaoTalk messenger contacts without using their bank account numbers. 
Kakao Pay has recently hired KB Securities to be the lead underwriter of this IPO. Once Kakao Pay completes its IPO in 1H 2021, two other major Kakao affiliates including Kakao Bank and Kakao Page are expected to complete their IPOs in 2H 2021. 

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

Thematic (Sector/Industry)

*Export Restrictions On SMIC: The US Commerce Department has reportedly imposed export restrictions on mainland China’s SMIC (largest semiconductor firm), with American US firms being required to apply for a license in order to export certain products to SMIC. These restrictions were reportedly implemented due to "an unacceptable risk of diversion to a military end use" and confirmed the recent market speculation of US action against SMIC;*Unreliable Entity List: Mainland China’s Ministry of Commerce finally issued regulations for its “unreliable entity” list aimed at foreign companies that it deems endanger national sovereignty, security, or development interests. Companies which end up on the list could be banned from importing/exporting from/to mainland China, and may be barred from investing in the country; and*Taiwan Flashpoint Coming: Rhetoric between is also being ramped up militarily between both sides over Taiwan, as the US government is contemplating providing Taiwan with an advanced defensive system and provocations of more "high-level official visits to Taiwan" by U.S. officials.

*Export Restrictions On SMIC: The US Commerce Department has reportedly imposed export restrictions on mainland China’s SMIC (largest semiconductor firm), with American US firms being required to apply for a license in order to export certain products to SMIC. These restrictions were reportedly implemented due to "an unacceptable risk of diversion to a military end use" and confirmed the recent market speculation of US action against SMIC;*Unreliable Entity List: Mainland China’s Ministry of Commerce finally issued regulations for its “unreliable entity” list aimed at foreign companies that it deems endanger national sovereignty, security, or development interests. Companies which end up on the list could be banned from importing/exporting from/to mainland China, and may be barred from investing in the country; and*Taiwan Flashpoint Coming: Rhetoric between is also being ramped up militarily between both sides over Taiwan, as the US government is contemplating providing Taiwan with an advanced defensive system and provocations of more "high-level official visits to Taiwan" by U.S. officials.

Trump Administration Continues to Ratchet Up The Pressure

China

Ant Group Co., Ltd. develops online payment platforms. The Company produces credit system and financial services platforms which provide consumers and small businesses with safe and convenient inclusive financial services globally. Ant Group provides its services worldwide.

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Ant Group (6688 HK)

Ant Group IPO: A Good Bargain Against Global Fintech Peers with Healthy Short-Term Upside Potential

Ant’s revenue growth and OP margin look attractive to us in the short-term compared to its global fintech peers. However, we believe Ant’s revenue...

Supun Walpola

China Internet Weekly (5Oct2020): Internet Revenue Overcame Pandemic, Internet User Base Accelerated

Internet companies’ revenue increased strongly from May to August. The growth rate of internet user base accelerated in 2Q20. Weibo (WB)’s...

Ming Lu

Ant Group Pre-IPO ESG Assessment: Seeing the Forest for the Trees

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Kyle Rudden

Initial Thoughts on the Kakao Pay IPO

Kakao Pay is the leading mobile payment and digital wallet service provider in Korea. Kakao Pay's core service includes allowing users to request...

Douglas Kim

Trump Administration Continues to Ratchet Up The Pressure

*Export Restrictions On SMIC: The US Commerce Department has reportedly imposed export restrictions on mainland China’s SMIC (largest semiconductor...

Thomas J. Monaco

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