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.

Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/tdcx-inc" target="_blank" data-smartkarma-citation="entities:34187:1" rel="noopener">TDCX (TDCX US)</a>, which is headquartered in Singapore, is a digital customer experience (CX) solutions provider for innovative technology and other blue-chip companies. </p></div><div><p>At the mid-point of the proposed IPO price range of $16.00-18.00 per ADS, TDCX will have a market cap of $2.4 billion. At the mid-point of the IPO price range, the net proceeds are $294.5 million, below the rumoured $400 million raise target. TDCX has received indications of interest worth 2% of the ADSs being offered from the founder, directors and officers. The IPO proceeds will be used to repay $188.0 million of the Credit Suisse facility (related to the acquisition of the founder’s interests in TDCX KY) and to expand into new markets.</p></div><div><p>In <a href="https://www.smartkarma.com/insights/tdcx-ipo-initiation-good-service" target="_blank" data-smartkarma-citation="insights:57442" rel="noopener">TDCX IPO Initiation: Good Service</a>, we stated that in a competitive market, TDCX’s differentiated value-added services are reflected in market share gains, high growth and sector-leading margin. The key risk is the high dependence on two customers, <a href="https://www.smartkarma.com/entities/facebook-inc-a" target="_blank" data-smartkarma-citation="entities:665:1" rel="noopener">Facebook Inc A (FB US)</a> and <a href="https://www.smartkarma.com/entities/airbnb-inc" target="_blank" data-smartkarma-citation="entities:431:1" rel="noopener">Airbnb Inc (ABNB US)</a>. This customer risk is partly mitigated by long-standing relationships. We concluded that TDCX’s fundamentals are attractive.</p></div><div><div><div class="content-highlight"><p>Our valuation analysis suggests that TDCX is attractively valued to its customer experience (CX) centric peers, particularly at the low-end of the IPO price range.  </p></div></div></div>

TDCX (TDCX US), which is headquartered in Singapore, is a digital customer experience (CX) solutions provider for innovative technology and other blue-chip companies. At the mid-point of the proposed IPO price range of $16.00-18.00 per ADS, TDCX will have a market cap of $2.4 billion. At the mid-point of the IPO price range, the net proceeds are $294.5 million, below the rumoured $400 million raise target. TDCX has received indications of interest worth 2% of the ADSs being offered from the founder, directors and officers. The IPO proceeds will be used to repay $188.0 million of the Credit Suisse facility (related to the acquisition of the founder’s interests in TDCX KY) and to expand into new markets.In TDCX IPO Initiation: Good Service, we stated that in a competitive market, TDCX’s differentiated value-added services are reflected in market share gains, high growth and sector-leading margin. The key risk is the high dependence on two customers, Facebook Inc A (FB US) and Airbnb Inc (ABNB US). This customer risk is partly mitigated by long-standing relationships. We concluded that TDCX’s fundamentals are attractive.Our valuation analysis suggests that TDCX is attractively valued to its customer experience (CX) centric peers, particularly at the low-end of the IPO price range.  

<p><a href="https://www.smartkarma.com/entities/tdcx-inc" target="_blank" data-smartkarma-citation="entities:34187:1" rel="noopener">TDCX (TDCX US)</a>, which is headquartered in Singapore, is a digital customer experience (CX) solutions provider for innovative technology and other blue-chip companies. TDCX has filed for an NYSE IPO to raise proceeds of $400 million, according to press reports. The IPO proceeds will be used to repay US$188.0 million of the Credit Suisse facility (related to the acquisition of the founder’s interests in TDCX KY) and to expand into new markets.</p><p>The business Support Services (BSS) industry has moved from a focus on cost arbitrage solutions to driving business outcomes and creating value for customers. There remains a significant portion of higher value-added workstreams that remain reliant on human expertise as businesses continue to deal with customers who request more engaging experiences. CX services, which is a subset of the BSS industry, is forecasted to grow 6.6% CAGR from 2021 to 2025 to reach US$100.4 billion in 2025, according to Frost &amp; Sullivan. </p><div class="content-highlight"><p>In a competitive market, TDCX’s differentiated value-added services are reflected in market share gains, high growth and sector-leading margin. The key risk is the high dependence on two customers, <a href="https://www.smartkarma.com/entities/facebook-inc-a" target="_blank" data-smartkarma-citation="entities:665:1" rel="noopener">Facebook Inc A (FB US)</a> and <a href="https://www.smartkarma.com/entities/airbnb-inc" target="_blank" data-smartkarma-citation="entities:431:1" rel="noopener">Airbnb Inc (ABNB US)</a>. This customer risk is partly mitigated by long-standing relationships. Overall, we believe that TDCX’s fundamentals are attractive.</p></div>

TDCX (TDCX US), which is headquartered in Singapore, is a digital customer experience (CX) solutions provider for innovative technology and other blue-chip companies. TDCX has filed for an NYSE IPO to raise proceeds of $400 million, according to press reports. The IPO proceeds will be used to repay US$188.0 million of the Credit Suisse facility (related to the acquisition of the founder’s interests in TDCX KY) and to expand into new markets.The business Support Services (BSS) industry has moved from a focus on cost arbitrage solutions to driving business outcomes and creating value for customers. There remains a significant portion of higher value-added workstreams that remain reliant on human expertise as businesses continue to deal with customers who request more engaging experiences. CX services, which is a subset of the BSS industry, is forecasted to grow 6.6% CAGR from 2021 to 2025 to reach US$100.4 billion in 2025, according to Frost &amp; Sullivan. In a competitive market, TDCX’s differentiated value-added services are reflected in market share gains, high growth and sector-leading margin. The key risk is the high dependence on two customers, Facebook Inc A (FB US) and Airbnb Inc (ABNB US). This customer risk is partly mitigated by long-standing relationships. Overall, we believe that TDCX’s fundamentals are attractive.

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

SPDR S&P Oil & Gas Exploration / Technical Analysis

<p>Weak market dynamics continue to be counterbalanced by the fact that there is an absence of breakdowns at the index and Sector level; even the weakest Sectors such as Energy (<strong>XLE, XOP, RYE</strong>) and Transportation (<strong>IYT, XTN, JETS</strong>) are holding above key supports. Until we start to see breakdowns at the Sector and index level, we remain constructive overall.</p><p>Charts highlighted: XOP, JETS, S&amp;P 500, IWM, IWC, WTI Crude Oil, Copper, US dollar, CMCSA, CHTR, LBRDA, AMT, SBAC, ACN, INFY, EQIX, WIT, CTSH, IT, WM, RSG, WCN, and ROL</p>

Weak market dynamics continue to be counterbalanced by the fact that there is an absence of breakdowns at the index and Sector level; even the weakest Sectors such as Energy (XLE, XOP, RYE) and Transportation (IYT, XTN, JETS) are holding above key supports. Until we start to see breakdowns at the Sector and index level, we remain constructive overall.Charts highlighted: XOP, JETS, S&amp;P 500, IWM, IWC, WTI Crude Oil, Copper, US dollar, CMCSA, CHTR, LBRDA, AMT, SBAC, ACN, INFY, EQIX, WIT, CTSH, IT, WM, RSG, WCN, and ROL

U.S. Equity Index and Sector Breakdowns Remain Absent; Buying Communications & Services Stocks

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Palantir Technologies  / Equity Capital Markets

<p>Palantir is ready to complete its Direct Public Listing on September 23rd. </p>
<p>Our valuation analysis suggests an implied market cap of $29.7 billion and a target price of $13.7 per share for Palantir (49% higher than the base price of $9.2 per share). The IPO price range is from $11.1 (low) to $16.6 per share (high). Assuming Direct Public Listing (DPL) market cap of $20 billion and diluted shares of 2.17 billion, this suggests $9.2 per share. Given the solid upside, we have a positive view of this DPL.</p>
<p>There are three key positives with Palantir which we believe are likely to outweigh its negatives, leading many investors to value this company at nearly $30 billion.</p>
<ul>
<li>First, we believe the <strong>company's accelerating sales growth</strong> since the launch of its Foundry product in 2017 is likely to be valued highly. The company's sales growth is clearly much higher than its peers in 2020. </li>
<li>
<div class="content-highlight">Second, Palantir has picked a <strong>great time</strong> to complete its public offering with great investors demand high-quality software-related stocks this year.</div>
</li>
</ul>
<ul>
<li>Third, Palantir has been enjoying a noticeable improvement in its operating margins and the company possesses a strong balance sheet. </li>
</ul>

Palantir is ready to complete its Direct Public Listing on September 23rd. 
Our valuation analysis suggests an implied market cap of $29.7 billion and a target price of $13.7 per share for Palantir (49% higher than the base price of $9.2 per share). The IPO price range is from $11.1 (low) to $16.6 per share (high). Assuming Direct Public Listing (DPL) market cap of $20 billion and diluted shares of 2.17 billion, this suggests $9.2 per share. Given the solid upside, we have a positive view of this DPL.
There are three key positives with Palantir which we believe are likely to outweigh its negatives, leading many investors to value this company at nearly $30 billion.

First, we believe the company's accelerating sales growth since the launch of its Foundry product in 2017 is likely to be valued highly. The company's sales growth is clearly much higher than its peers in 2020. 

Second, Palantir has picked a great time to complete its public offering with great investors demand high-quality software-related stocks this year.



Third, Palantir has been enjoying a noticeable improvement in its operating margins and the company possesses a strong balance sheet. 


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.

Happiest Minds Technologies / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/happiest-minds-technologies" target="_blank" data-smartkarma-citation="entities:29128:1" rel="noopener">Happiest Minds Technologies (HAPPY IN)</a> (HM) is an information technology services company providing end-to-end solutions in the digital space. Its offerings include digital transformation, product engineering, infrastructure management and security services to its clients. It aims to raise around US$100m in its India listing.</p><p>HM was started by Ashok Soota, who earlier worked with Wipro Limited as Vice Chairman and Mindtree Limited as Chairman and CEO. He was one of the co-founders of Mindtree.</p><p>HM’s revenue has grown at 23% CAGR over FY18-20 and the company has managed to turn profitable owing to improving employee utilization. In addition, the industry outlook remains robust with IT spending on HM’s chosen areas of focus expected to grow at 20%+ CAGR.</p><p>At the same time, the company’s average revenue per customer has been growing faster than its overall revenue. This is because the number of customers has been declining. Even if one looks at its largest customers, there are no clear signs of growth picking up. </p><p>Furthermore, the company’s acquisition track record hasn’t been all that great and the founder has already pledged a substantial part of his shareholding.</p>

Happiest Minds Technologies (HAPPY IN) (HM) is an information technology services company providing end-to-end solutions in the digital space. Its offerings include digital transformation, product engineering, infrastructure management and security services to its clients. It aims to raise around US$100m in its India listing.HM was started by Ashok Soota, who earlier worked with Wipro Limited as Vice Chairman and Mindtree Limited as Chairman and CEO. He was one of the co-founders of Mindtree.HM’s revenue has grown at 23% CAGR over FY18-20 and the company has managed to turn profitable owing to improving employee utilization. In addition, the industry outlook remains robust with IT spending on HM’s chosen areas of focus expected to grow at 20%+ CAGR.At the same time, the company’s average revenue per customer has been growing faster than its overall revenue. This is because the number of customers has been declining. Even if one looks at its largest customers, there are no clear signs of growth picking up. Furthermore, the company’s acquisition track record hasn’t been all that great and the founder has already pledged a substantial part of his shareholding.

Happiest Minds Pre-IPO - Decent Growth, Reputed Founder but Less than Reassuring Metrics

United States

Cognizant Technology Solutions Corporation provides custom Information Technology (IT) consulting and technology services as well as outsourcing services. The Company's core competencies include technology strategy consulting, complex systems development, enterprise software package implementation and maintenance, data warehousing and business intelligence.

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Cognizant Tech Solutions A (CTSH US)

TDCX IPO: Valuation Insights

Our valuation analysis suggests that TDCX is attractively valued to its customer experience (CX) centric peers, particularly at the low-end of the...

Arun George

TDCX IPO Initiation: Good Service

TDCX has filed for an NYSE IPO to raise proceeds of $400m. TDCX’s differentiated value-added services are reflected in market share gains, high...

Arun George

U.S. Equity Index and Sector Breakdowns Remain Absent; Buying Communications & Services Stocks

Until we start to see breakdowns at the Sector and index level, we remain constructive overall. Charts highlighted: XOP, JETS, S&P 500, IWM, IWC,...

Vermilion Research

Palantir DPL Valuation Analysis

Our valuation analysis suggests an implied market cap of $29.7 billion and a target price of $13.7 per share for Palantir (49% higher than the base...

Douglas Kim

Happiest Minds Pre-IPO - Decent Growth, Reputed Founder but Less than Reassuring Metrics

Happiest Minds Technologies (HAPPY IN) (HM) is an information technology services company providing end-to-end solutions in the digital space. Its...

Sumeet Singh

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