Investment Research - Asia Consumer Sector, Investory

Devi Subhakesan

Investment Research - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Event-Driven

Bajaj Holdings and Investment / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bajaj-holdings-and-investment-ltd" target="_blank" data-smartkarma-citation="entities:11930:1" rel="noopener">Bajaj Holdings and Investment (BJHI IN)</a> is expected to be included in the MSCI India Index at the November SAIR (Read more about the index inclusion here: <a href="https://skr.ma/xhbPx" target="_blank" rel="noopener">https://skr.ma/xhbPx</a>)</li>
<li>Bajaj Holdings, a holding and investment company, with significant stakes in <a href="https://www.smartkarma.com/entities/bajaj-auto-ltd" target="_blank" data-smartkarma-citation="entities:3613:1" rel="noopener">Bajaj Auto Ltd</a> and <a href="https://www.smartkarma.com/entities/bajaj-finserv-ltd" target="_blank" data-smartkarma-citation="entities:5669:1" rel="noopener">Bajaj Finserv </a>has historically traded at a steep discount to the market value of investments. </li>
<li>Its Holdco discount has narrowed to around 53%  and has the potential to narrow further with greater ownership and visibility post the likely index inclusion.</li>
</ul>



Bajaj Holdings and Investment (BJHI IN) is expected to be included in the MSCI India Index at the November SAIR (Read more about the index inclusion here: https://skr.ma/xhbPx)
Bajaj Holdings, a holding and investment company, with significant stakes in Bajaj Auto Ltd and Bajaj Finserv has historically traded at a steep discount to the market value of investments. 
Its Holdco discount has narrowed to around 53%  and has the potential to narrow further with greater ownership and visibility post the likely index inclusion.


Bajaj Holdings (BJHI IN): Potential Index Inclusion Can Narrow Hold Co. Discount Further

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

Go Digit General Insurance / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/go-digit-general-insurance" target="_blank" data-smartkarma-citation="entities:36266:1" rel="noopener">Go Digit General Insurance</a> is looking to raise about US$503m in its upcoming India IPO. The deal will be run by ICICISec, MS, Axis, Edelweiss, HDFC Bank and IIFL.</li>
<li>Go Digit General Insurance is a digital full stack insurance company, offering motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products.</li>
<li>In this note, we talk about the positive aspects of the deal.</li>
</ul>



Go Digit General Insurance is looking to raise about US$503m in its upcoming India IPO. The deal will be run by ICICISec, MS, Axis, Edelweiss, HDFC Bank and IIFL.
Go Digit General Insurance is a digital full stack insurance company, offering motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products.
In this note, we talk about the positive aspects of the deal.


Go Digit General Insurance Pre-IPO - The Positives - Has Been Growing a Lot Faster than the Industry

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

Research Analyst Contact Details:
Address: A-412, Shilp Aaron, Sindhu Bhavan Road, Ahmedabad, Gujarat - 380059
Email: services@yellowstoneequity.com
Mobile: +91-7575817289

Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

<ul>
<li>BAF reported strong Q4FY22 earnings led by 1) healthy AUM growth and 2) decline in provisioning. YoY, the NIM growth was similar to the AUM growth suggesting no margin compression.</li>
<li>However, QoQ, BAF witnessed NIM compression, partly driven by interest reversal from a corporate account that became NPA. Overall, the management is confident of maintaining NIMs at current level. </li>
<li>The pace of core AUM growth also declined QoQ. However, this could be due to seasonality and despite declining pace, Q4FY22 core AUM growth was still healthy at 5%+.</li>
</ul>


BAF reported strong Q4FY22 earnings led by 1) healthy AUM growth and 2) decline in provisioning. YoY, the NIM growth was similar to the AUM growth suggesting no margin compression.
However, QoQ, BAF witnessed NIM compression, partly driven by interest reversal from a corporate account that became NPA. Overall, the management is confident of maintaining NIMs at current level. 
The pace of core AUM growth also declined QoQ. However, this could be due to seasonality and despite declining pace, Q4FY22 core AUM growth was still healthy at 5%+.


Bajaj Finance (BAF): Back to Pre-COVID Like Stellar Performance!

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>Exposure in Indian Financials has reached peak levels among Asia Ex-Japan managers.  A key overweight, 77% of Asia Ex-Japan managers are now positioned above benchmark.</li>
<li>HDFC Bank Limited is the most widely held stock, with Housing Development Finance Corp, ICICI Bank Limited and Kotak Mahindra well held stocks and net overweights in Asia Ex-Japan portfolios</li>
<li>HDFC Bank Limited is a key holding for many investors, with the bulk of allocations above 2% and high conviction positions well above that</li>
</ul>


Exposure in Indian Financials has reached peak levels among Asia Ex-Japan managers.  A key overweight, 77% of Asia Ex-Japan managers are now positioned above benchmark.
HDFC Bank Limited is the most widely held stock, with Housing Development Finance Corp, ICICI Bank Limited and Kotak Mahindra well held stocks and net overweights in Asia Ex-Japan portfolios
HDFC Bank Limited is a key holding for many investors, with the bulk of allocations above 2% and high conviction positions well above that


Indian Financials: Momentum Returns to Key Overweight

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.

<p><a href="https://www.smartkarma.com/entities/ngern-tid-lor" target="_blank" data-smartkarma-citation="entities:31103:1" rel="noopener">Ngern Tid Lor (NTL TB)</a>/TIDLOR is the leading auto-for-cash loan provider in Thailand with a 16% market share as measured by the outstanding vehicle title loans in 2019, according to Oliver Wyman. TIDLOR is an affiliate of <a href="https://www.smartkarma.com/entities/bank-of-ayudhya-pcl" target="_blank" data-smartkarma-citation="entities:136:1" rel="noopener">Bank Of Ayudhya (BAY TB)</a> (Krungsri), which is a strategic member of <a href="https://www.smartkarma.com/entities/mitsubishi-ufj-financial-group" target="_blank" data-smartkarma-citation="entities:218:1" rel="noopener">Mitsubishi UFJ Financial (MUFG) (8306 JP)</a>. </p><p>At the IPO price range of THB34.00-36.50, TIDLOR will raise total gross proceeds of THB30.9-33.1 billion ($1.0-1.1 billion). The offer comprises a primary/secondary spilt of 23:77. A total of 32 domestic and foreign cornerstone investors will subscribe for a total of 626.0 million shares or 69.0% of the offer shares. The foreign cornerstone investors include FIL Investment Management, JP Morgan Asset Management, Lion Global Investors and Neuberger Berman. </p><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/ngern-tid-lor-ipo-initiation-finance-on-four-wheels" target="_blank" data-smartkarma-citation="insights:50448" rel="noopener">Ngern Tid Lor IPO Initiation: Finance on Four Wheels</a>, we noted that the timing of the IPO is not ideal as a new COVID-19 outbreak has swept through Thailand. Nevertheless, for investors willing to ride the current market uncertainty, we believe that TIDLOR is well placed to capture the long-term opportunity of Thailand’s vehicle title loan market. Our valuation analysis suggests that TIDLOR is fairly valued at the proposed IPO price range.     </p></div>

Ngern Tid Lor (NTL TB)/TIDLOR is the leading auto-for-cash loan provider in Thailand with a 16% market share as measured by the outstanding vehicle title loans in 2019, according to Oliver Wyman. TIDLOR is an affiliate of Bank Of Ayudhya (BAY TB) (Krungsri), which is a strategic member of Mitsubishi UFJ Financial (MUFG) (8306 JP). At the IPO price range of THB34.00-36.50, TIDLOR will raise total gross proceeds of THB30.9-33.1 billion ($1.0-1.1 billion). The offer comprises a primary/secondary spilt of 23:77. A total of 32 domestic and foreign cornerstone investors will subscribe for a total of 626.0 million shares or 69.0% of the offer shares. The foreign cornerstone investors include FIL Investment Management, JP Morgan Asset Management, Lion Global Investors and Neuberger Berman. In Ngern Tid Lor IPO Initiation: Finance on Four Wheels, we noted that the timing of the IPO is not ideal as a new COVID-19 outbreak has swept through Thailand. Nevertheless, for investors willing to ride the current market uncertainty, we believe that TIDLOR is well placed to capture the long-term opportunity of Thailand’s vehicle title loan market. Our valuation analysis suggests that TIDLOR is fairly valued at the proposed IPO price range.     

India

Bajaj Finserv Ltd. is currently engaged in life insurance; general insurance and consumer finance businesses and has plans to expand its business by offering a wide array of financial products and services in India. The Company is also active in wind-energy generation.

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Bajaj Finserv (BJFIN IN)

Bajaj Holdings (BJHI IN): Potential Index Inclusion Can Narrow Hold Co. Discount Further

Holdco discount, currently at 53% of NAV, has the potential to narrow further with greater ownership and visibility post the likely index inclusion

Devi Subhakesan

Go Digit General Insurance Pre-IPO - The Positives - Has Been Growing a Lot Faster than the Industry

Go Digit General Insurance is looking to raise about US$503m in its upcoming India IPO. Go Digit is a digital full stack insurance company.

Sumeet Singh

Bajaj Finance (BAF): Back to Pre-COVID Like Stellar Performance!

BAF reported stellar Q4FY22 earnings led by growing AUM and declining provisions. As per our estimates, an investment in BAF's stock presents an...

Ankit Agrawal, CFA

Indian Financials: Momentum Returns to Key Overweight

Exposure in Indian Financials has reached peak levels among Asia Ex-Japan managers. A key overweight, 77% of Asia Ex-Japan managers are now...

Steven Holden

Ngern Tid Lor IPO: Valuation Insights

At the IPO price range of THB34.00-36.50, TIDLOR will raise total gross proceeds of $1.0-1.1 billion. Our valuation analysis suggests that TIDLOR...

Arun George

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