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

APM Human Services / Equity Capital Markets

<p>APM, an international human services provider, aims to raise around US$730m via a mix of selling primary and secondary shares in its Australian IPO. APM runs 800 sites spanning 10 countries with its largest market being Australia. </p><p>In FY21, APM supported over one million individuals which included 600,000 jobseekers; 180,000 people with disabilities; 100,000 people with mental health needs; 50,000 offenders and ex-offenders; and 30,000 veterans. APM’s main services include: Employment services, Health and Wellbeing, Communities and Assessment and Disability and Aged care support services. </p><p>Its revenue grew by 49% YoY in FY20 and was up another 28% in FY21 and is expected to grow by 31% in FY22. Its EBITDA and NPATA growth have been even stronger with EBITDA growing at 50%+ each year while NPATA has more than doubled in each of the past two years. Going forward, APM expects its revenue to grow by 31% YoY in FY22, with services margin growing by 27.7% YoY, EBITDA by 26% and NPATA by 20.7% YoY.</p><p>However, most of the past growth has been driven by M&amp;A and the company hasn’t been very forthcoming with data disclosures. Moreover, both of its largest contracts are due for an overhaul in 2022-23 which could impact its earnings.</p>

APM, an international human services provider, aims to raise around US$730m via a mix of selling primary and secondary shares in its Australian IPO. APM runs 800 sites spanning 10 countries with its largest market being Australia. In FY21, APM supported over one million individuals which included 600,000 jobseekers; 180,000 people with disabilities; 100,000 people with mental health needs; 50,000 offenders and ex-offenders; and 30,000 veterans. APM’s main services include: Employment services, Health and Wellbeing, Communities and Assessment and Disability and Aged care support services. Its revenue grew by 49% YoY in FY20 and was up another 28% in FY21 and is expected to grow by 31% in FY22. Its EBITDA and NPATA growth have been even stronger with EBITDA growing at 50%+ each year while NPATA has more than doubled in each of the past two years. Going forward, APM expects its revenue to grow by 31% YoY in FY22, with services margin growing by 27.7% YoY, EBITDA by 26% and NPATA by 20.7% YoY.However, most of the past growth has been driven by M&amp;A and the company hasn’t been very forthcoming with data disclosures. Moreover, both of its largest contracts are due for an overhaul in 2022-23 which could impact its earnings.

APM Human Services IPO - Strong past Growth but Has Ample Unhappy Employees and Clients

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

Thematic (Sector/Industry)

<p>Among active Global managers, Japan Consumer Discretionary stocks are the 3rd largest country/sector holding in the Asia region.  Average fund weights sit behind Taiwan Tech and Japan Industrials at 1.07%, with 57.1% of the 380 funds in our analysis invested in the sector with combined AUM of $9.18bn.</p><p>Measured against other Asian country/sectors, changes in fund ownership have been positive and among the highest across all measures over the last 6-months.  Against a backdrop of plummeting exposure in China Consumer Discretionary stocks, average weights, funds invested, cash flows and the balance of buyers vs sellers were all positive for Japan Consumer Discretionary stocks.  </p><p>Infact, across most ownership metrics, Japan Consumer Discretionary stocks have overtaken, or at least closed to gap to China Consumer Discretionary stocks since the 'Tech Crackdown' in October of 2020.  We can see evidence of this rotation on a fund level, with Aberdeen's Global Unconstrained Fund, LBPAM's Actions Monde and BNY Mellon's Global Opportunities Fund examples of managers rotating from China Consumer Discretionary and into Japan since October 2020.</p><p><em>Analysis taken from our Global research, covering 380 active Global strategies with combined AUM of $1.1bn</em></p>

Among active Global managers, Japan Consumer Discretionary stocks are the 3rd largest country/sector holding in the Asia region.  Average fund weights sit behind Taiwan Tech and Japan Industrials at 1.07%, with 57.1% of the 380 funds in our analysis invested in the sector with combined AUM of $9.18bn.Measured against other Asian country/sectors, changes in fund ownership have been positive and among the highest across all measures over the last 6-months.  Against a backdrop of plummeting exposure in China Consumer Discretionary stocks, average weights, funds invested, cash flows and the balance of buyers vs sellers were all positive for Japan Consumer Discretionary stocks.  Infact, across most ownership metrics, Japan Consumer Discretionary stocks have overtaken, or at least closed to gap to China Consumer Discretionary stocks since the 'Tech Crackdown' in October of 2020.  We can see evidence of this rotation on a fund level, with Aberdeen's Global Unconstrained Fund, LBPAM's Actions Monde and BNY Mellon's Global Opportunities Fund examples of managers rotating from China Consumer Discretionary and into Japan since October 2020.Analysis taken from our Global research, covering 380 active Global strategies with combined AUM of $1.1bn

Japan Consumer Discretionary:  Benefiting from China's Downfall

Event-Driven

<p><a href="https://www.smartkarma.com/entities/aristocrat-leisure-ltd" target="_blank" data-smartkarma-citation="entities:10303:1" rel="noopener">Aristocrat Leisure (ALL AU)</a> aims to raise around US$1bn (A$1.3bn) via a renounceable entitlement offer to partly fund its acquisition of <a href="https://www.smartkarma.com/entities/playtech-plc" target="_blank" data-smartkarma-citation="entities:22099:1" rel="noopener">Playtech Plc (PTEC LN)</a> for a total enterprise value of around A$5bn.</p><p>Past deals undertaken by Aristocrat have generally done well and the stock has a good track record. In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</p>

Aristocrat Leisure (ALL AU) aims to raise around US$1bn (A$1.3bn) via a renounceable entitlement offer to partly fund its acquisition of Playtech Plc (PTEC LN) for a total enterprise value of around A$5bn.Past deals undertaken by Aristocrat have generally done well and the stock has a good track record. In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Aristocrat Leisure's Playtech Acquisition, Entitlement and Shortfall

Transurban Group / Equity Capital Markets

<div>
<p>Transurban has almost raised (barring the shortfall) around US$3.2bn (A$4.2bn) via a mix of entitlement offer and private placement to fund the acquisition of the remaining 49% stake in WestConnex. In this note, we will talk about the retail entitlement worth US$273m (A$371m) which was launched today.</p>
<p>We have covered most aspects of the deal in our earlier note <a href="https://www.smartkarma.com/insights/transurban-entitlement-and-shortfall-well-flagged-deal-for-a-well-known-asset" target="_blank" rel="noopener">Transurban Entitlement and Shortfall - Well Flagged Deal for a Well Known Asset</a>. </p>
</div><div><p>We have covered some of the prior entitlement offer related shortfall bookbuilds in the past:</p></div><div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/acquisition-appears-attractive-and-track-record-remains-stellar-but-upside-seems-limited" target="_blank" rel="noopener">Nov 2015: Acquisition Appears Attractive and Track Record Remains Stellar but Upside Seems Limited</a></li>
<li>Dec 2017: <a href="https://www.smartkarma.com/insights/transurban-entitlement-offer-uncertainty-abound" target="_blank" rel="noopener">Transurban Entitlement Offer - Uncertainty Abound</a>
</li>
<li>Sep 2018: <a href="https://www.smartkarma.com/insights/transurban-entitlement-and-short-fall-long-term-value-accretion-with-short-term-earnings-drag" target="_blank" rel="noopener">Transurban Entitlement and Short-Fall - Long-Term Value Accretion with Short-Term Earnings Drag</a> and <a href="https://www.smartkarma.com/insights/transurban-retail-short-fall-quick-take-much-better-positioned-now" target="_blank" rel="noopener">Transurban Retail Short-Fall - Quick Take - Much Better Positioned Now</a>
</li>
<li>Aug 2019: <a href="https://www.smartkarma.com/insights/transurban-retail-short-fall-quick-take-much-better-positioned-now" target="_blank" rel="noopener">Transurban Retail Short-Fall - Quick Take - Much Better Positioned Now</a>
</li>
</ul></div><div><p></p></div>


Transurban has almost raised (barring the shortfall) around US$3.2bn (A$4.2bn) via a mix of entitlement offer and private placement to fund the acquisition of the remaining 49% stake in WestConnex. In this note, we will talk about the retail entitlement worth US$273m (A$371m) which was launched today.
We have covered most aspects of the deal in our earlier note Transurban Entitlement and Shortfall - Well Flagged Deal for a Well Known Asset. 
We have covered some of the prior entitlement offer related shortfall bookbuilds in the past:
Nov 2015: Acquisition Appears Attractive and Track Record Remains Stellar but Upside Seems Limited
Dec 2017: Transurban Entitlement Offer - Uncertainty Abound

Sep 2018: Transurban Entitlement and Short-Fall - Long-Term Value Accretion with Short-Term Earnings Drag and Transurban Retail Short-Fall - Quick Take - Much Better Positioned Now

Aug 2019: Transurban Retail Short-Fall - Quick Take - Much Better Positioned Now



<p><a href="https://www.smartkarma.com/entities/scientific-games-corp-a" target="_blank" data-smartkarma-citation="entities:9746:1" rel="noopener">Scientific Games Corp A (SGMS US)</a> aims to raise around US$3.7bn (A$5bn) via selling a majority of its stake in SG Lottery (SGL) in an Australian IPO.</p><p>SGL runs a global lottery business supplying lottery products and services across the lottery ecosystem. It works with various governments globally who use its products and services to run their lotteries. As of FY20, SGL had more than 130 customers in over 50 countries. Revenue from North America and Europe accounted for 73% and 24% of its FY20 revenue, respectively.</p><p>SGL generates most of its sales from instant lottery products. It has supplied instant lottery products to 40 of the 46 US jurisdictions that sell instant lottery products and has sold instant lottery products to customers in approximately 50 countries. Its  relationship with its top 10 customers have been ongoing for an average 35 years.</p><p>SGL has been reporting steady past growth and margins have been relatively stable as well.</p>

Scientific Games Corp A (SGMS US) aims to raise around US$3.7bn (A$5bn) via selling a majority of its stake in SG Lottery (SGL) in an Australian IPO.SGL runs a global lottery business supplying lottery products and services across the lottery ecosystem. It works with various governments globally who use its products and services to run their lotteries. As of FY20, SGL had more than 130 customers in over 50 countries. Revenue from North America and Europe accounted for 73% and 24% of its FY20 revenue, respectively.SGL generates most of its sales from instant lottery products. It has supplied instant lottery products to 40 of the 46 US jurisdictions that sell instant lottery products and has sold instant lottery products to customers in approximately 50 countries. Its  relationship with its top 10 customers have been ongoing for an average 35 years.SGL has been reporting steady past growth and margins have been relatively stable as well.

SG Lottery Pre-IPO - First Look at Possibly Australia’s Largest IPO in 2021

Australia

Commonwealth Bank of Australia provides banking, life insurance, and related services for individuals, small businesses and medium sized commercial enterprises. The Bank provides corporate and general banking, international financing, institutional banking and stock broking and funds management such as superannuation product.

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Commonwealth Bank of Australia (CBA AU)

APM Human Services IPO - Strong past Growth but Has Ample Unhappy Employees and Clients

APM, an international human services provider, aims to raise around US$730m in its Australian IPO. APM runs 800 sites spanning 10 countries with...

Sumeet Singh

Japan Consumer Discretionary: Benefiting from China's Downfall

Against a backdrop of plummeting exposure in China Consumer Discretionary stocks, active Global managers have pivoted towards the Japan Consumer...

Steven Holden

Aristocrat Leisure's Playtech Acquisition, Entitlement and Shortfall

Aristocrat Leisure (ALL AU) aims to raise around US$1bn via a renounceable entitlement offer to partly fund its acquisition of Playtech Plc (PTEC...

Sumeet Singh

Transurban Retail Shortfall Quick Note

Transurban has almost raised around US$3.2bn (A$4.2bn) via a mix of entitlement offer and private placement. In this note, we will talk about the...

Sumeet Singh

SG Lottery Pre-IPO - First Look at Possibly Australia’s Largest IPO in 2021

Scientific Games Corp A (SGMS US) aims to raise around US$3.7bn (A$5bn) via selling a majority of its stake in SG Lottery (SGL) in an Australian IPO.

Sumeet Singh

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