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

<ul>
<li>Cloud Village Inc. (CVI), also known as NetEase Music, now plans to raise around US$500m in its Hong Kong IPO. </li>
<li>The company has also obtained investments from Baidu and Alibaba, along with other investors.</li>
<li>In this note, we will talk about the updates from the revised PHIP filing and relook at valuations.</li>
</ul>


Cloud Village Inc. (CVI), also known as NetEase Music, now plans to raise around US$500m in its Hong Kong IPO. 
The company has also obtained investments from Baidu and Alibaba, along with other investors.
In this note, we will talk about the updates from the revised PHIP filing and relook at valuations.


Cloud Village (NetEase Music) Pre-IPO - Revised PHIP Updates, Along with Revised Valuation

China and US Equity Analyst

Roger Xie

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/weibo-corp-adr" target="_blank" data-smartkarma-citation="entities:3826:1" rel="noopener">Weibo Corp (WB US)</a> reported stronger than expected quarter earnings driven by resilient ad revenue growth. Its 3Q21 revenue grew +30% year-over-year and monthly active users reached 573 million. </li>
<li>We applaud that <a href="https://www.smartkarma.com/entities/weibo-corp-adr" target="_blank" data-smartkarma-citation="entities:3826:1" rel="noopener">Weibo Corp (WB US)</a> quarter results under tougher regulatory environment (particularly from fandom-related products) and increasing ad impacts from Apple's new iOS IDFA policy. </li>
<li>Weibo estimates 4Q21 revenue to grow 15-20%, consistent with market expectation.  Weibo is traded at forward 15x consensus P/E, which is attractive for Weibo's scale and monetization potential. </li>
</ul>



Weibo Corp (WB US) reported stronger than expected quarter earnings driven by resilient ad revenue growth. Its 3Q21 revenue grew +30% year-over-year and monthly active users reached 573 million. 
We applaud that Weibo Corp (WB US) quarter results under tougher regulatory environment (particularly from fandom-related products) and increasing ad impacts from Apple's new iOS IDFA policy. 
Weibo estimates 4Q21 revenue to grow 15-20%, consistent with market expectation.  Weibo is traded at forward 15x consensus P/E, which is attractive for Weibo's scale and monetization potential. 


Weibo (WB US): Strong Quarter Amid Regulatory Crackdown

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Thematic (Sector/Industry)

<ul>
<li>This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.</li>
<li>Macro data points: Chinese imports, exports and inflation, Philippine GDP growth, Malaysian GDP growth.</li>
<li>Companies: <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a>, <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/tencent-music-entertainment" target="_blank" data-smartkarma-citation="entities:27255:1" rel="noopener">Tencent Music (TME US)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK),</a> amongst others.</li>
</ul>


This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
Macro data points: Chinese imports, exports and inflation, Philippine GDP growth, Malaysian GDP growth.
Companies: Samsung Electronics (005930 KS), SK Hynix (000660 KS), TSMC (2330 TT), Tencent Music (TME US), Tencent (700 HK), Alibaba Group (9988 HK), JD.com Inc. (9618 HK), amongst others.


Global Emerging Markets Weekly: 12 November 2021

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: Singapore Press Holdings, Afterpay, Link Admin, Razer, AusNet, 51job

The sound bite in the last week was <a href="https://www.smartkarma.com/entities/microsoft-corp" target="_blank" data-smartkarma-citation="entities:15273:1" rel="noopener">Microsoft Corp (MSFT US)</a> surpassing <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple Inc (AAPL US)</a> as the world's most valuable company. 
Yet 13 years ago, almost to the day, the world's largest company was <a href="https://www.smartkarma.com/entities/volkswagen-ag" target="_blank" data-smartkarma-citation="entities:21738:1" rel="noopener">Volkswagen (VOW GR)</a>. For one day at least. 
Volkswagen, like a number of large listed companies in Germany, has two classes of shares - ordinary shares, which are carry voting rights, and preference shares, which don't, but are income paying. Below is the ord premium over prefs for the last 18 years.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/239/499/original/image_23964649881635928119230.png?1635928120" class="editor-image img-responsive" data-smartkarma-image-id="239499"></figure>
That extraordinary spike occurred on the 28 October 2008. Just as global markets were imploding. 
Around this time <a href="https://www.smartkarma.com/entities/porsche-automobil-holding-se" target="_blank" data-smartkarma-citation="entities:21691:1" rel="noopener">Porsche Automobil Holding Se (PAH3 GR)</a> held ~35% in VW - the ords - having first taken a 20% stake in 2005, then to 30% in early 2007, triggering a mandatory offer. In March 2008, Porsche's supervisory board gave the green light to hold 50%. 
The ord premium oscillated between ~27%-55% in the early noughts until around 2006 when Porsche began building its stake.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/239/503/original/image_70873068291635928736842.png?1635928739" class="editor-image img-responsive" data-smartkarma-image-id="239503"></figure>
This escalating premium can also be illustrated by the bifurcation in the prices of the two share classes.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/239/520/original/image_637451579121635932198816.png?1635932199" class="editor-image img-responsive" data-smartkarma-image-id="239520"></figure>
The arbitrage  - short the ords, long the prefs - appeared a "riskless trade". And still, the ord premium expanded, closing at a 400+% on the 16 October, before showing some semblance of normalcy and retracing to 247% on the 21 October.
Porsche had made no public announcement about any further share acquisition since the 17 September when it held <a href="https://www.porsche-se.com/en/news/press-releases/details/news/detail/News/porsche-increases-its-vw-stake-to-3514-per-cent-1" target="_blank" rel="noopener">35.14%</a>.  On Sunday the 26 October, it <a href="https://www.porsche-se.com/en/news/press-releases/details/news/detail/News/porsche-heads-for-domination-agreement-1" target="_blank" rel="noopener">announced</a>:
<blockquote>
Due to the dramatic distortions on the financial markets Porsche Automobil Holding SE, Stuttgart, has decided over the weekend to disclose its holdings in shares and hedging positions related to the takeover of Volkswagen AG, Wolfsburg. At the end of last week Porsche SE held 42.6 per cent of the Volkswagen ordinary shares and in addition 31.5 per cent in so called cash settled options relating to Volkswagen ordinary shares to hedge against price risks, representing a total of 74.1 per cent.
</blockquote>
Then that sinking feeling: Porsche holds 74.1%, Lower Saxony 20%, leaving ~6% of ordinary shares in the market to buy. Yet an estimated 12% of the ord shares were short sold. It wasn't possible for all short-sellers to buy back shares and close their positions.
VW touched $999/share on the 28 October,  before finally coming back (ostensibly from the moon) to earth, belatedly helped by Porsche providing 5% to short-sellers (despite <a href="https://www.porsche-se.com/en/news/press-releases/details/news/detail/News/short-sellers-responsible-for-extreme-price-movements-in-volkswagen-ordinary-shares-1" target="_blank" rel="noopener">blaming</a> the shorts for the extreme price movements).
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/239/516/original/image_468353378111635930921766.png?1635930922" class="editor-image img-responsive" data-smartkarma-image-id="239516"></figure>
Porsche subsequently cleared 50% in VW's ordinary shares, but not only lacked the funding to take its stake all the way to 75% - via the options - it had also borrowed heavily to build that 50% stake in VW, to the point the iconic car brand had to stave off possible bankruptcy.
Short-sellers lost around US$20bn which has largely fallen on deaf ears in the <a href="https://www.courthousenews.com/investors-lose-suit-over-porsches-short-squeeze/" target="_blank" rel="noopener">courts</a>. Porsche's CEO Wendelin Wiedeking was booted out. And Ferdinand Piëch, Ferdinand Porsche's grandson, former CEO, then chairman of VW, was sitting pretty as he and family held 50% of the voting rights in Porsche SE. 
The ords moved into negative territory following the carnage, then roughly hugged parity for a few years. The ord premium is on the run again. Time to get short?
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/239/515/original/image_948776569101635930730635.png?1635930743" class="editor-image img-responsive" data-smartkarma-image-id="239515"></figure>

The sound bite in the last week was Microsoft Corp (MSFT US) surpassing Apple Inc (AAPL US) as the world's most valuable company. 
Yet 13 years ago, almost to the day, the world's largest company was Volkswagen (VOW GR). For one day at least. 
Volkswagen, like a number of large listed companies in Germany, has two classes of shares - ordinary shares, which are carry voting rights, and preference shares, which don't, but are income paying. Below is the ord premium over prefs for the last 18 years.

That extraordinary spike occurred on the 28 October 2008. Just as global markets were imploding. 
Around this time Porsche Automobil Holding Se (PAH3 GR) held ~35% in VW - the ords - having first taken a 20% stake in 2005, then to 30% in early 2007, triggering a mandatory offer. In March 2008, Porsche's supervisory board gave the green light to hold 50%. 
The ord premium oscillated between ~27%-55% in the early noughts until around 2006 when Porsche began building its stake.

This escalating premium can also be illustrated by the bifurcation in the prices of the two share classes.

The arbitrage  - short the ords, long the prefs - appeared a "riskless trade". And still, the ord premium expanded, closing at a 400+% on the 16 October, before showing some semblance of normalcy and retracing to 247% on the 21 October.
Porsche had made no public announcement about any further share acquisition since the 17 September when it held 35.14%.  On Sunday the 26 October, it announced:

Due to the dramatic distortions on the financial markets Porsche Automobil Holding SE, Stuttgart, has decided over the weekend to disclose its holdings in shares and hedging positions related to the takeover of Volkswagen AG, Wolfsburg. At the end of last week Porsche SE held 42.6 per cent of the Volkswagen ordinary shares and in addition 31.5 per cent in so called cash settled options relating to Volkswagen ordinary shares to hedge against price risks, representing a total of 74.1 per cent.

Then that sinking feeling: Porsche holds 74.1%, Lower Saxony 20%, leaving ~6% of ordinary shares in the market to buy. Yet an estimated 12% of the ord shares were short sold. It wasn't possible for all short-sellers to buy back shares and close their positions.
VW touched $999/share on the 28 October,  before finally coming back (ostensibly from the moon) to earth, belatedly helped by Porsche providing 5% to short-sellers (despite blaming the shorts for the extreme price movements).

Porsche subsequently cleared 50% in VW's ordinary shares, but not only lacked the funding to take its stake all the way to 75% - via the options - it had also borrowed heavily to build that 50% stake in VW, to the point the iconic car brand had to stave off possible bankruptcy.
Short-sellers lost around US$20bn which has largely fallen on deaf ears in the courts. Porsche's CEO Wendelin Wiedeking was booted out. And Ferdinand Piëch, Ferdinand Porsche's grandson, former CEO, then chairman of VW, was sitting pretty as he and family held 50% of the voting rights in Porsche SE. 
The ords moved into negative territory following the carnage, then roughly hugged parity for a few years. The ord premium is on the run again. Time to get short?


United States

Apple Inc. designs, manufactures, and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related accessories. The Company also offers payment, digital content, cloud and advertising services. Apple Inc.'s customers are primarily in consumer, small & mid-sized business, education, enterprise and government markets worldwide.

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Apple (AAPL US)

Cloud Village (NetEase Music) Pre-IPO - Revised PHIP Updates, Along with Revised Valuation

Cloud Village Inc. (CVI), also known as NetEase Music, now plans to raise around US$500m in its Hong Kong IPO. In this note, we talk about the...

Sumeet Singh

Weibo (WB US): Strong Quarter Amid Regulatory Crackdown

Weibo Corp (WB US) reported stronger than expected quarter earnings driven by resilient ad revenue growth. Its 3Q21 revenue grew +30% year-over...

Roger Xie

Global Emerging Markets Weekly: 12 November 2021

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity...

Wium Malan, CFA

Last Week in Event SPACE: Singapore Press Holdings, Afterpay, Link Admin, Razer, AusNet, 51job

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Volkswagen's Ords Are Acting Up - Again

Why the bifurcation? I see no apparent reason. And without the benefit of understanding why this recent move has occurred, I'd be reluctant to set...

David Blennerhassett

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